THE MOTOR TAXATION INQUIRY.
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Aspects Interesting to Commercial Vehicle Users. The Alteration of the Incidence of Taxation to the Disadvantage of the Commercial Vehicle.
N INQUIRY of considerable moment to users
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of commercial meter vehicles was opened in
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the Middlesex Guildhall, Westminster, on Friday, January 26th, and resumed or Tuesday and Wednesday last.. The committee was that appointed by the Ministry of Transport on Taxation and Regulation of Road Vehicles, and it sat under Sir Henry Maybury (Director-General of Roads, and chairman of the Departmental Committee), for the purpose of considering the proposed alternative scheme for the taxation of mechanically propelled road vehicles by means of a. combined petrol and modified vehicle tax.
Other members of the committee present at the first sitting were Sir Thomas Berridge (R.A.C.), Mr. E. S. Shrapnell-Smith, C.B.E. (Commercial Motor Users Association), Mr. F. H. Berryman (Local Authorities), Mr. W. H. Pascoe (Board of Customs and Excise), Mr. C. W. Hurcomb (Finance . Department, Ministry, of Transport), Mr. Sidney Straker (deputy for Mr. W. Rees Jeffreys, Society or Motor Manufacturers and Traders), Major Stenson Cooke (A.A. and Motor Union), Mr. C. W. Tindall (Agriculture), Mr. F. L. D. Elliott (Police Authorities), and Mr. F. -Pick (London and Provincial Omnibus Owners' Association):
Taxation Proportionate to Road Use.
Evidence was first given by Sir Arthur Stanley, chairman of the Royal Automobile Association for ten years. He asked that earnest consideration should be given to the proposed new system of taxation, and said it was suggested that the old rebate in favour of commercial goods and hackney vehicles should be abolished. Witness conceived that the legislature must recognize that the time had gone for the differentiations for taxation requirements of the purposes to which the various classes of vehicles might be put.
Replying to the chairman, Sir Arthur said that the object of the new .scheme was to make the tax on a vehicle commensurate with its use of the roads.
Witness told Sir Thomas Berridge that the whole question of road user should be taken into consideration, also the question of damage done to roads by particular classes of vehicles.
Shifting the Burden from the Private Vehicle.
-Further evidence was given by Col. J. A. Cole, president or the Society of Motor Manufacturers and Traders. Ltd., and managing director of Humber, Ltd., of Coventry. He said there appeared to be a suspicion that the adoption of the system submitted would necessarily be, the effect of shifting the burden of taxation from vehicles now taxed on h.p. to commercial and hackney vehicles. This would, to some extent, undoubtedly be the fact, but witness observed that whereas any system of taxation on the lines recommended would increase the burden of taxation on large omnibus companies and a certain section of goods vehicle proprieters, whose business enabled them to employ their vehicles to a maximum extent, tn both eases involving a very large annual mileage per vehicle, it would, on the other hand, . tend to decrease the burden on a far larger number of commercial • vehicle proprietors, the nature. of whose business limited theni to a comparatively smelt annual mileage: The Society. of Motor Manufacturers and Traders was as much representative of the commer
cial vehicle industry as the private car industry.
Witness was questioned by the chairman regarding statemont in his proof of evidence that certain classes of vehicles enjoyed somewhat privileged conditions under the present system of taxation, and replied that he alluded to vehicles which practically lived on the roads, as distinct from those which were used in the ordinary average way for passengers, commerce, and locomotion. "Take a manufacturing concern," witness proceeded, " with one lorry which goes to the station twice a day. That lorry pays just as much as a lorry making a regular nightly journey between Manchester and London. We say that that is not in the interests of trade," Mr. Shrapnell-Smith : "I put it to you that the effect of the scheme must shift a considerable part of the burden from the 'non-trade' to the trade ' ? "— " I would not go so far as to agree to that," replied Col. Cole.'
" If we take the petrol tax as it existed at the end of 1920, and the tax as it would come in according to the scheme before the committee, the effect would be that whereas the private car paid 6d. per gallon, you are now going to eay 4d. or 5d. Is that a reduction or an increase? "—" To the private car " Yes! "—" Are you talking per car or the whole class of car? "
"Is the new proposal an increase upon the trade motor, or is it a reduction, or is it the same ? "— " It is obvious that if an increase takes place some cost is involved."
"Are you not prepared to give me a definite yes ' or no' to the question? The merits of the case are arguable afterwards. On the figures I cannot see any answer but that it is an increase on the trade motor? "—" I don't want to be involved in something I am not in agreement with. The point that we are discussing really is the difference between the incidence of taxation under the h.p. and the flat rate scheme and the suggested petrol tax that we are putting forward. Now you are taking me back to something I am not conversant with— some previous petrol tax."
" I am entitled to put the question, I think. When the petrol tax previously existed do you know what the tax was? "—" No, I don't."
"And you are president of the Society of Motor Manufacturers and Traders? "—" I can look up the figures, but I haven't got them in my head." In reply to succeeding questions, witness said he had been told by a driver of a regular nightly service between London and Manchester.
Mr. Shrapnell-kith commented that it seemed an exceptional occurrence to run 180 miles in a night With a commercial vehicle.
Replying to Mr. Pick, witness said he thought the new scheme would not result in a great shifting of the burden as between the private car and the commercial ear, but there would be a readjustment of the bUrden in the heavy vehicles class. Re said his general observation led him to believe that if certain main roads (tar-macadam) were closed to all vehicles above a certain weight or certain horse-power the roads would last indefinitely.
The next witness' Mr. H. A. Bennett, chairman of the Motor Agents' Association, Ltd., and managing director 'of H. A. Bennett, Ltd., of Nottingham, also gave evidence in support •of the proposed. scheme.
The hearing was adjourned until Tuesday.
THE SECOND DAY'S PROCEEDINGS.
When the committee resumed on -Tuesday, evidence was given by Mr. J. Maughtling, president of the Association of British Motor Manufacturers, Ltd.., a 'body representing 46 British manufacturers ortouring. 'cars and 21 British manufacturers of commercial and public service vehicles. Witness is also director of Messrs. John I.Thornycroft and Co.. Ltd. He said that the tendency of the present system Was to pro-, duce a seasonal trade for touring and commercial cars. If machinery could be devised to cover the various grades of motor spirit used by private and commercial vehicles a, thosrate (wry voiaid oe very largely proportionate to those factors which bore relation to the weight of the vehicle, speed, and the degree of usage. From that point of view it was the opinion of the Association of British Motor Manufacturers that the suggested method of taxation, if based on an amount not exceeding 5d. per gallon, would not only produce a large and progressive revenue, hut would adjust the burden between the classm of vehicles and the individual owners on the one hand in the most equitable manner, and on the other in a manner which would least prejudice British manufacturers.
The Effect of the Introduction of a Flat Rate.
Sir Henry Maybury : "You are suggesting a flat rate duty instead of the preferential duty which the commercial vehicles previously enjoyed. That will alter the incidence of charge ?"—It-will alter the incidence of charge upwards and downwards. Those with low mileage will pay less, and those with high mileage will pay more."
Mr. Shrapnell-Smith : "Do you ascribe depression in the commercial vehicle section partly to the disposal of Government lorries at Slough ?"—" Undoubtedly."
Evidence was next given by Mr. 13. Coathupe, a member of the Council and Management Committee of the Motor Agents' Association, and he said that a large number of the members of the Association were also owners of commercial goods vehicles, and carried on a general business as hauliers. Witness is also managing director of the London Motor Garage Co., Ltd.
Witness said he was aware that it was suggested that the recommendations now submitted did not commend themselves to commercial vehicle interests. Steps were therefore taken to ascertain the views of the principal motor hirers in London, and it was instructive to find out that, out of some 60 firms, all owning a greater or leas number of motor coaches, all but six would prefer the adoption of a scheme which would produce the bulk of the revenue from a flat-rate duty of 4d. or 5d. per gallon.
Appeals to 90 per cent. of Road Users.
There was no dclubt that the suggested system of taxation would increase the burden on those companies whose business enabled them to carry on a• continuous service, either for passenger or goodscarrying purposes, throughout the year. But the principle of adjusting taxation according to user was one which commended itself to at least 90 per cent, of the owners of all classes of motor vehicles.
Sir Henry Maybury : " Would not a flat-rate duty' on spirit have the effect of increasing the. net burden of taxation upon owners of lorries, etc.'? "—" There are -circumstances, of course, in which it might be so shown, but in the main-90 per cent, of the cases—it would be of advantage to the vehicle owners."
"Then how do you propose to raise the revenue 1 "— "Under the present system there are many vehicles out of action, under a more equitable system' which would enable a vehicle owner to pay for such use as n36
he made of the roads, vehicles would be used instead of being laid up."
The committee adjourned until the following day.
THIRD DAY'S PROCEEDINGS.
The Committee sat for the third day on Wednesday.
Licut.-Col: Charles Jarrott, the first witness, said he was chairman of the Automobile Association and Motor Union, including in its membership 100,000 owners of private motorcars, over 50,000 owners of motorcycles, and over 4,000 owners of industrial vehicles—goods and passenger carrying. It was the opinion of the Association that, while the comparatively few large transport undertakings (whose business enabled them to use _their individual vehicles constantly, and up to as much as 40,000 miles per annum) would find their taxation materially increased, as the tax was a road tax, such increase was perfectly just and -equitable. In the opinion of the witness, it was for the big transport Concerns to face up to this position from the standpoint of commercial vehicle users as a whole. It was simply a question of the greatest good for the greatest number.
Higher Taxation for -Abnormal Mileages.
It would be necessary for the private motorist with abnormal mileage to realize that the general equity of the case demanded a readjustment of the allocation of the tax, and witness suggested that, as regards those concerns operating commercial goods and public service vehicles, it was equally desirable that the direct tax now borne by such vehicles should be re-allocated, so that a more equitable share of the burden might be borne by those large companies whose fleets of vehicles were in constant use. .
A criticism of the effect of the operation of the proposed scheme had been ,directed to show that in the aggregate the result might be to transfer the burden from vehicles now taxed on horse-power to commercial goods and hackney vehicles.
Witness agreed that vehicles taxed on horse-power would find their total direct and indirect tax reduced to a greater extent than the other types of vehicles, but submitted that, from the point of view of actual wear and tear of roads, that could not reasonably he opposed.
In reply to the Chairman, witness agreed that the commercial motor section to-clay paid one-half of the taxation revenue.
Answering other questions\ from the Chairman, witness said that his Association were opposed to anysystem of rebates, and agreed that-if the cost of commercial transport was increased by reason of taxation, the commodities thus carried would he dearer.
Mr. Pick "If we want the cost. of living to come down, we should make the costs of trade transport as cheap as possible
Further evidence in favour of the proposed scheme was given by Mr. H. E. Watling, general manager of the British Cycle and Motor Cycle Manufacturers' and Traders' Union, Ltd., an association representing nearly 400 members engaged in the cycle and motorcycle industry and representing a capital of £30,000,000, and also by Mr. T. W. Loughborough, secretary of the Auto-Cycle Union,
The latter witness urged that the principle of paying in proportion to user would remove a sense of injustice, an anomaly inseparab!e from the present scheme, which was not without its prejudice to the normal development of the motorcycle movement.
The Committee then adjourned until to-day (Tuesday).