HC Deb 25 April 1939 vol 346 c994

I must get a proper contribution from the direct taxpayer by other means. The first resource to which I apply is the horse-power Duty on motor cars. For a long period prior to 1935 the licence duty on private motor cars was £1 per annum per horse-power. The Budget of 1934 afforded opportunity for large remissions of taxation and side by side with the reductions of Income Tax my predecessor reduced the private car Duty to 15s. per horse-power. I am well aware of, and I have by no means overlooked the consideration which can be urged against this Duty, but when increases in taxation have to be devised the question is always between alternative evils, and the circumstances at the present time appear to me to justify the decision to which I have come. The users of private cars, who very largely correspond to the Income Tax paying classes, have for five years enjoyed the benefit of this reduced scale of taxation. Therefore, I feel bound to ask them, in these stern times, to submit to a substantially increased scale. Just as the reduction of Income Tax from 5s. to 4s. 6d. in 1934 has already been reversed by the increase to 5s. 6d., I propose that for the year commencing 1st January next the Duty on private cars should be fixed at 25s. per horse-power. The Duties on motor cycles will be correspondingly increased, and details will be found in the White Paper. These changes will provide £6,250,000 in the first year and £11,500,000 in a full year.