MANY RIVULETS
Page 52
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WOULD many people choose the Transport Act, 1953, as the turning-point of transport history in the mid-20th century? This bold simplification was made by Mr. Gilbert J. Ponsonby, of the London School of Economics, in a lecture to the Royal Society of Arts on the structure and organization of the transport system. Mr. Ponsonby sees the comparatively modest measure of denationalization brought in by the Conservatives as a decisive battle, a watershed dividing the age of the Ivory Tower from the age of free enterprise and competition.
Although there may be reservations on details, Mr. Ponsonby in general makes his case good. He may be going too far in suggesting that the tendency towards large size, controlled monopoly and centralization "reflected a big majority of public opinion 7 throughout the period from 1920 to 1952. This was true in the early days. The amalgamation of the railways in 1921 was generally approved. Mr. Ponsonby makes the point that the London Passenger Transport Act, 1933, was introduced by a Socialist Minister of Transport, carried further by a Liberal, and finally approved under, a predominantly Conservative Government. The prevailing wind was unmistakable at that time, but had already begun to ehange within a year or two after the end of the war.
In the same way there have been checks to free enterprise since 1953. Only three years later came an Act of Parliament putting a stop to the disposal of the assets of British Road Services. There is no doubt that this legislation was against the general trend. If the politicians thought it was good politics to act on the proposal of certain Conservatives and to sell off the remainder of B.R.S., as well as other bits and pieces now owned by the British Transport Commission, the public would be in agreement.
Politics come very prominently into the picture painted by Mr. Ponsonby, who observes that no branch of industry can be said with more truth to have been "the sport of politics" than road haulage. He notes two main influences that have helped to shape the structure of transport. There has been the market factor dependent upon a free association between willing buyers and willing sellers; and there has been the market factor dependent upon a free associaand degree of monopoly thought to he required for the provision of public services.
Prolonged Supremacy
Mr. Ponsonby has several reasons for the prolonged supremacy of the influence of the State as agaitist the market factor. There were many "rivulets of thought," as he puts it. Among them were the alleged wastefulness of competition, the supposed economies of large-scale operation, and political dogma. Most persistent was the assumed desirability of vhat it is the fashion to call "crosssubsidization," whereby one form of transport supports another, or one traffic is carried at a high profit so that another traffic can be run at a loss. So long as this was the policy, says Mr: Ponsonby, it dictated the degree of monopoly and the size, and they may not have been the best from the point of view of providing an efficient service.
What Mr. Ponsonby avoids saying is that the habits of thought that influenced politicians of all parties until recently were those of the railways, carefully propagated over as wide a field as possible. True competition is difficult among railways and more often than not is obviously wasteful. They had come to accept the idea of
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a monopoly as the natural culmination of their evolution over the best part of a century. The idea was tenacious, it did not readily die when a new competitor came on the scene, and it was obviously useful as a means of curbing that competitor's activities. We shall never know how far the railwaymen's disgust at the coming of the road operator was genuine and how far it was hypocritical.
The struggle has been not merely between control by the State and control by the market. It has also been between the railway mentality and the road mentality. The proper distinction between passenger and goods traffic is another factor. Because both are carried by rail, the idea was held for a long time that both could be treated in the same way. Even as late as 1947, the Labour Government, in their Transport Act passed that year, had plans for area passenger boards. The reasoning appeared to be that, if road haulage were to be nationalized, toad passenger transport must follow suit, and there was even to be a single Executive to control both.
Becoming Appreciated
What is revealing in Mr. Ponsonby's analysis is the relatively small space that he gives to the railways. In a sense this may be regarded as an acknowledgment that road transport is now more important and that the gap will increase as time goes on. The significance of the surveys of goods transport carried out by the Ministry of Transport in 1952 and 1958 is now becoming generally appreciated. Up to about the year 1953 selected by Mr. Ponsonby as decisive, the volume of traffic carried by rail, whether reckoned in tons or ton-miles, kept ahead of the road total. The situation is now reversed.
Mr. Ponsonby is unduly cautious on the subject of politics. If asked what he regarded as the right size for an undertaking in any one branch of transport, his reply would be: "It all depends on whether or not you want a system of which cross-subsidization, mutual financial support and the provision of unremunerative services are to be permanent features." He catalogues the choice as a matter of politics and not economics. This seems a dangerous principle, for it assumes that the divergence of opinion on transport will never be resolved.
When driven into a corner, individual Socialists have argued, with more ingenuity than conviction, that nationalized transport should be a service before anything else, and that whether it makes a profit or not is a secondary consideration. The more general view of the Labour party has been—and has had to be—that their politics are also sound economics. They proclaimed the belief in 1947 that nationalized transport would be more efficient than free enterprise and would pay its way. If they can be persuaded to see that this was a mistake, there is still a hope that transport can be taken out of politics. Otherwise, they will be left with no criterion by which to judge whether transport nationalization is good or bad, and will be all the more inclined to keep it as part of their permanent policy.
Leaving politics on one side, the question posed by Mr. Ponsonby answers itself. There is no most appropriate size for the country as a whole, whether for goods or passenger traffic. Quality is just as important as cost, so that Mr. Ponsonby's reply is simply that the organization "which, in the opinion of the customers, can give hest value for money," in the sense of providing the most popular or preferred type of service, should be regarded as the most appropriate.