Aligning Fares Not Improper : Ministry Ruling Wanted
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A PPEALS by 44 local authorities and a private committee in South Wales against fare. increases granted earlier this year to six bus companies by the South Wales Licensing Authority were adjourned at Cardiff, last Friday, by Mr. W. Tudor Davies. The hearing will be resumed at Cardiff on September 28.
As reported in last week's issue of The Commercial Motor, the operators involved are the Western Welsh Omnibus Co., Ltd., Red and White Services, Ltd., J. James and Son, Ltd., South Wales Transport Co., Ltd., United Welsh Services, Ltd., and the Rhondda Transport Co., Ltd.
Mr. D. M. Evans, representing 31 of the local authorities, said that the six companies had an annual revenue of £.6m. and that the new increases would give them, an extra £450,000 a year.
The Western Welsh company, alleged Mr. Evans, did not need the £124,000 in higher fares for which they had applied. Between November, 1950, and November, 1952, they had been granted advances in fares of £325,000, which, except for £11,000, covered all their increased costs during that period. They had increased their dividends since the war, had made a bonus issue of £750,000, and had expanded their .fleet of buses by 140.
Instead of continually going to the Licensing Authority for higher fares when costs went up, they should have used some of their reserves as a "cushion," said Mr. Evans.
Replying for the company, Mr. F. A. Stockdale said the reserves belonged to the shareholders and were essential to finance expansion and replace vehicles. In ploughing back profits they were following a common business practice.
Referring to a statement made on behalf of the local authorities that one municipal bus undertaking had had to raise fares against its will to keep in step with private companies which had secured increases, Mr. Stockdale said there was no impropriety in a "coming-into-line policy." It was essential if fares were to be co-ordinated.
Mr. Stockdale said it was the duty of Licensing Authorities to satisfy themselves that fares were not unreasonable, and no • detailed consideration of the financial structure of a company was relevant. .
"If the Ministry [of Transport' could give some ruling on these lines it would greatly shorten the awful waste of time that is going on up and down the country in these fares applications," he said. The fare revisions which had taken place in South Wales marked a step forward in the introduction of a logical structure.