TAXATION IN BRITAIN

Evening Post, Volume CVII, Issue 16, 19 January 1924, Page 23

TAXATION IN BRITAIN

Motorists in England are waiting for the long overdue report of the committee which has been inquiring into the possibility of removing the tax on motors and putting it, or the bulk of it on petrol. . Meanwhile, says the "Manchester Guardian," the motorist oontinues to pay ar tax which has an unfair basis, and manufacturers continue to develop the small and light types of car on lines that do not help them to re-enter the foreign markets. It is high time now that some lead was coining from the cbmmittee. It is divulging no secret to say that no relief for-the motorist is expected : the heavy tax on cars will continue with perhaps some modification, but there is apparently to be no attempt to relate the duty to user of the road. That sound principle, therefore, continue to be ignored. The small-car man will be penalised, and he can least afford it, and the big-car man, who broadly stands for the "wealthy and more leisured classes, the long mileage classes, to state it in motoring terms, will continue to get his ,motoring at a cost relatively cheaper than any other class. ; IN FAVOUR OF PETROL TAX. It is interesting to note that all tho car interests, users, and makers are on the side of a petrol tax, and the heavymotor interests are against it. In that long-drawn-out fight before the committee these latter, it must be admitted, handled their case remarkably well. As a fighting force, though a minority force, they were far (better manned and led, with the result that the inquiry was trailed off along the line of defining motor spirit, and the difficulties of putting a tax upon a commodity so uncertain of clear-cut definition were made much of. On the merits of the struggle they deserve to win, but on the merits of the real question they have no real case. What helps them, of course, is the fact tEat the motor taxes are.yielding a large sum, and no Chancellor of the Exchequer will too willingly give up a certainty for what he can be persuaded to believe is an uncertain return. The country needs money; the roads, for which these taxes are levied, are already a big drain on our resources and promise to become a bigger drain,, and there is need for the burden of this cost to be more equally shared between the public and the road users. The case of a tax on spirit is simple, it is effective,, and it ought not to go under because of any difficulty of defini- ; tion; ...- As for these difficulties, there is .■the!;awkward fact that a spirit tax ha 3 fbeenMeVied, and that it works well, certainly from the user's point of view. He* ,!had..,tp~.gay t . it, and he did pay it, "and jknoTrarig-^that'. the proceeds were being devoted" to the betterment of the roads he paid it without grumbling more than ;ordijiSfi}y.... When the present basis of taxation was. adopted, however, it was another matter. One of its faults is that it stakes no cognisance of the fact that .the.'systom of ascertaining the horse power of.an engine, horse power being th& basis of the tax, is not an accurate ode. It takes into account only the bore of a .cylinder, and not the stroke. As one result we get engines" described, and by the 4nanuf acturers, as 15-30 h.p., 23-70'h.p., 38-90 h.p., which illustrates better than- anything else the wide difference between the taxed power and the actual power developed. And other vital points are overlooked, points such as speed arid weight. These are related to user, or, in. other "terms, destructiveness of the road, and it is on a basis that relates; the tax to the amount of destruction .done to road surface that the! duty 'ought to be levied. A big car of 30* hip. or 40 h.p., with a.heavy' saloon body, travelling at speed, does more damage proportionately because of its weight and speed of travel than does the small owner's 10 h.p. or 12 h.p., which is lighter, and does not travel at so high an average rate of speed, and, moreover, stated as a broad proposition, does not/ do the same yearly mileage. But proportionately it pays a higher tax, THE FAIREST SYSTEM. The case for the spirit tax can be stated in few words. It is that petrol consumption is _. a closer reflection of power, weight, 'speed, and, of course, mileage, than any other'method of computation, and that accordingly it ought to form the basis-of; taxation. The fear is, of course, that commercial vehicles and public service buses and coaches would be hard hit by a tax so bpsed. That does not follow, but in any case their owners would be able to pass on the charges to the consumer, and there is plenty of room for economies in other directions. Meanwhile the car manufacturer has to cater for a, public that demands an engine of cheap rating but of high performance, so that he has ,gone out for the small high-speed prime mover. Bat in doing so ho has evolved a motor-car which does not meet overseas conditions, and so he has to a large extent lost his export trade.' • One o£ the arguments in favour of a spirit tax is that it would swing engine design in such a direction that overseas or colonial models that would equally well suit the conditions in- this country under a tax of this sort could be evolved. Given a developing export trade, then overhead charges would be spread, out over a bigger production, and prices in this country could then .come down. This in turn would stimulate the home market, and activity at the works' would be "still further increased. . This is no bright but fragile theory.. It is seriously held by the motor trade, and it is soundly based; Of course the question goes deeper, for there Is the matter of service, both at Home and overseas, a point that the British makers' chief competitor, 'the American manufacturer, has studied with no small advantage. There are signs that our own makers are .realising that something on the same lines must be done. As the recent show revealed, they-are now making models of medium power, with all the well-known British quality, built .with the desirable width of track and sufficiency of road clearance, at com-' petitive prices, and .they are'sending out representatives abroad to go thoroughly into this question of 'service 'on the spot. There is. in fact, iniich hope for the British trade,-yet,.even-in overseas markets. - There; a s . at. Home, the price factor js.mudi more-!of a secondary one pive-ii tbut.'tlie c.-v- is of quality,' that it s sufficiently' equipped, and that Kood service is behind tlie selling agency We arc rebuilding; an export trade on thef-e lines, and with results sufficiently encounwfinpr. We should do much more'; vii should have a stirrins; of the Home market, if a reasonable tax on an equitable basis was imposed in place of thn Lsraerit one* For such a .tax iye shall

have to fight, and that fight ought to begin right away, so that there will be some prospect of a new system being introduced into the next finance Bill.