Cooking the books
Page 44
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THE NEW Secretary of State for Transport has taken office in the middle of the controversy revived by the determination of his officials to prove that the heavy lorry is not paying enough in taxation to meet its share of track costs. He may wonder why so much energy and ingenuity is being expended.
The issue has never been authentic, except possibly in the beginning when it was decided to pay the revenue from fuel taxation into a road fund. As the money accumulated, Chancellors found other uses for it. The title of the fund became meaningless many years before it was abolished.
Subsequently, road interests found it an advantage to continue drawing attention to the large gap between taxation and expenditure. The Government had no need to enter into the argument while it was getting two or three times as much as it paid out.
Attention was aroused in the Transport Department only when it seemed possible that some road users might be paying less than their fair share. If this could be proved, then those users could be taxed more heavily — it seems no part of the Department's plan that other users should pay less — and the national revenue would be increased almost painlessly
• When it turned out that the most likely victims were the operators of the heaviest vehicles, the situation seemed ideal. The more vocal sections of the public had shown their dislike for these vehicles, and would not object if their operation became more expensive.
The heavy lorry also is the main competitor of the railways in the carriage of freight. Higher taxation could mean the transfer of traffic to rail, and even a reduction in rail losses.
The calculations might be more convincing if they did not lead to what one must suspect to be the desired conclusion. Scepticism is increased by the very different attitude towards the awkward fact that the ratio between taxation and road costs for buses and coaches is no better than for heavy lorries.
Apparently this discrepancy can be tolerated. There are no votes in higher bus fares. The road transport associations have reacted vigorously to the official view on track costs. Their task is hampered because the Department not only makes up its own rules but changes them if they do not seem to be producing the desired result. Each item in the allocation of costs is questionable, from the £75m ascribed to pedestrians to the notorious fourth power principle.
Even the assessment of the total costs varies according to the items to be included, the period covered, adjustments to anticipate inflation, and so on. To make the confusion absolute, the Department then suggests that the tax on commercial vehicle operators must be sufficient to cover social or environmental costs, although no sensible reason is given.
The Government is clearly uncertain whether it ought to bring these items in or not. The suspicion grows that the assessment and distribution of road costs is more akin to cooking the books than to a proper accounting procedure. The ingredients in the recipe can be added or left out at the whim of the chef, who is also at liberty to vary the amounts In any case, the ultimate decision on a change in taxation rests with the Chancellor. Provided he has the consent of Parliament, he can charge what he likes. A budget increase in the vehicle or fuel duty will upset all the bizarre calculations of the Department, as was demonstrated by the last Budget.
The Chancellor's main interest is, and always has been, in the total revenue from all sources. If he bothered at all about apportioning the burden among road users, his preference would probably be for placing the greatest increase on the private motorist, so as to avoid the risk of adding to the costs of trade and industry.