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Motor Taxation

Volume 436: debated on Tuesday 15 April 1947

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I turn to motor taxation. In my first Budget, adopting a provisional decision of my predecessor, and following, according to the best evidence then available, the wishes of the great majority of the motor manufacturers, I changed the basis of taxation of private cars, by substituting, for the cylinder bore, the cubic capacity of the cylinder. I made it clear that the change must be so arranged that I lost no revenue, though I asked for no more than I was then getting. This new tax came into effect for new cars less than four months ago, but many of the manufacturers, to whom some of the epithets applied to the betting population could be applied, now seem to have changed their minds once more. Many of them—although even now they are not unanimous; they never are—urge me to base the tax not on the cylinder bore at all, but on a combination of a flat rate licence fee and an increased petrol tax. That is a debatable and discussable proposition. But they also ask for a reduction in the total weight of taxation. That, for me, is not a discussable matter. I can hold out no hope of a reduction in the total weight of taxation for the present.

Whatever form motor taxation may take, the present revenue must at least be maintained, for the time being. As to the basis of the tax, I am very anxious to do all I can to help the motor industry, and most of all to help their exports to reach the highest possible figure. There are serious difficulties—I have looked at this question several times—in the way of adopting these latest proposals, which I cannot enlarge upon today. I make no commitment at all one way or the other, except to say that I am prepared to examine the whole question, in consultation with competent people who know the problem, between now and the Committee stage of the Finance Bill, subject to losing no revenue.