25-mile Limit May be Dropped
Page 32
If you've noticed an error in this article please click here to report it so we can fix it.
LFT me state first that it is my earnest regret that the wiser counsels of the leaders of commerce and industry in this country did not prevail, and that the Government did not accede to the reasonable request for a public inquiry. Had such an inquiry been held, the weight of evidence against nationalization would have been so strong that the project must have been dropped and the country saved from catastrophe. With a well-drilled and well-disciplined majority such as this Government has, there seems little doubt that the Bill will become an Act in less than a year.
We have, theretore, to proceed on the assumption that the Transport Bill will become law in a period of time which will be all too short—not, we hope, in its present unadulterated form, but after much amendment. Such amendment is greatly needed, especially. for example, with regard to the iniquitous restriction of the haulier to a 25-mile radius, to the limitations placed upon the trader who asks the right to use his own vehicle to carry his own goods, and the inadequate compensation which is proposed for the small haulier in return for the loss of his livelihood.
Operators in Confusion
Operators, I find, do not know what to do for the best Save in rare instances, the time for disposing of a business at a good price has now gone. What most of them want to know is how to proceed until the time comes when either their businesses are confiscated or they are forced to confine their operations within a 25-mile radius.
Many operators are adopting the attitude that the best course is to spend an absolute minimum on repairs, maintenance or equipment, and to buy no new vehicles. They are, in my view, wrong, and I can give two principal reasons why.
First, the time element. How long will it be before the Act is implemented, i.e., before the confiscation begins and hauliers' businesses are taken from them? in this connection, it should be noted that no date is stipulated in the Bill; the reference is to an "appointed day."
Naturally, no one is in a position to quote even an approximate date for that day, but we have at least a precedent which may serve to some extent as a guide. It took three years for the Northern Ireland Board to put the corresponding Act into effect. The equivalent procedure in this country relates to a much larger number of operators and will be correspondingly more difficult and protracted. Knowledgeable people estimate the time necessary as five to 10 years.
It is obviously going to be impossible for any operator to continue the " stone-walling " procedure suggested, for even the minimum period just mentioned The result will be that he will have no tangible assets to rate for compensation when the time comes. Incidentally, there is the chance that a change of Government may come before the Act is implemented, in time to have the whole measure quashed. • My second argument turns on the method of assessing ' compensation. This, as was explained in "The. Commercial Motor" on December 6 and 13, is in two parts. One is what would be termed, in any commercial transfer of a business, payment for goodwill. It is calculated on the average annual net profits of three years now gone. Clearly, nothing can be done now to affect that aspect. The other is payment for tangible assets, which, in the case of most small operators, will be the vehicles they own.
Now, in assessing the price to be paid for vehicles, two things are taken into consideration—age and con-. dition. The payment of compensation for goods vehicles shall be "equal to the cost, at the date of transfer, of replacing the vehicle by a new vehicle of a similar type adjusted, however, (a) by deducting, where one or more complete years have elapsed between the date when the vehicle was bought . . . and the date of transfer" one-fifth of that cost per annum on the falling value. That is the age factor.
Furthermore, "if it is established that the physical condition of the vehicle is materially better or worse at the date of transfer than the normal condition . ." addition or deduction shall be made from the said cost as above determined. That is the condition factor.
Consider the case of a man who has vehicles bought about three years ago, moderately maintained up to now and left to run for another few years. They wilt, on assessment as mentioned earlier, be worth nothing.
Keep Vehicles in Good Condition
On the other hand, a man who keeps his vehicles up to date and maintains them well, will get almost what he paid for them. That• applies particularly when a vehicle is bought subject to the conditions of the Income Tax Act, 1945, whereby an -allowance is granted, as a business expense, of one-fifth of the initial expenditure, plus, in the case of an A licence, of 311 per cent. for wear and tear. The net saving, in income tax, on an £800 vehicle is £210, so that the vehicle has really cost the operator only £590. If it be a year old, he gets I:640 for it, plus, if it be well maintained, a little extra for its good condition.
My advice to the operators is: keep your fleet up to date and in tip-top condition. It will pay.
As regards the 25-mile limit, in my opinion, it will never be imposed. It is practically unworkable, in that its enforcement would require an army of "snoopers" to the number of one to every driver. It is my belief that the 25 miles is put in for bargaining purposes and that the Government will give way in the Committee stage as a sop to opponents.
It will surprise me if the 60-mile limit, or something near it, is not reinstated. That will, I estimate, relieve. the minds of not less than 80 per cent. of short-distance operators. At least, my advice to them is the same as to all others—keep going at your best speed.
• Several passenger-vehicle operators, particularly those who run services to collieries and factories, have asked me how they stand. The immediate answer is, of course, easy. There is at present no intention of confiscating passenger-vehicle businesses. According to the Bill, the Minister, through the Transport ColnMission, is to co-ordinate passenger services in each area, Such co-ordination, as I see it, will be mainly concerned with the Operation of buses and will ridp for some time at any rate, affect such special services as are indicated by these inquirers. My advice to them is the same as to hauliers—carry on and keep your vehicles im to date and well maintained. S.T.R.