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The Licensing System a Travesty of Faith

22nd October 1937
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Page 63, 22nd October 1937 — The Licensing System a Travesty of Faith
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Which of the following most accurately describes the problem?

By R. P. Bailey

Secretory, National Road Transport Employers' Federation, and London and Home Counties Haulage Contractors Association.

Reference to the Salter Report and the Intentions of Parliament Shows Marked Differences Between the Theory and Practice of Goodstransport Licensing IT is now three years since the licensing system for goods vehicles came into operation, andit may be found profitable to pause at this juncture to consider how its theory and intentions have worked out in practice. In our approach to the subject, consideration on the following lines will be found convenient :—

(1) The licensing system as proposed in the Salter Report.

(2) The licensing system as provided in the Road and Rail Traffic Act, 1933, to which the Salter Report gave rise.

(3) The licensing system as,it has operated in practice.

The essential characteristics of the licensing system envisaged by the meinbcrs of the Salter Conference will best be exemplified by the following quotations from their report:—

" We are impressed with the evil of any system which would prevent trade and industry from securing the forin of transport which is best adapted to its everchanging needs at the lowest practicable cost that can be obt,aitted on a salutary basis: Every form of transport needs adaptatiOn to the changing requirements of economic enterprise and any system which discouraged this adaptation would obviously be against the public interest." (Para. 100.)

No Wholesale Restriction . . .

" In the case of hauliers, so distinguished from ancillary users, we think that the Licensing Authority may properly have regard to any such excess in existing transport facilities as may make the grant of a licence for the full number of vehicles asked for against the public interest. We consider that any such restriction of the free normal development of transport facilities must be applied with great care; it must reflect a general policy adapted to the needs of different periods; and it must be developed as a national policy on careful consideration of all the interests involved and applied subject to a convenient and inexpensive machinery of appeal, through local licensing authorities." (Para. 107.) " In applying for a licence the applicant shall attach a list of the vehicles which he desires to be licensed. . . . If a margin is required for permissible expansion during the licensing period, the requirement shall be stated in the application, and registration particulars and other information supplied as the vehicles are brought into use." (Para. 111C.) " The licensing authority shall grant the licenses requested, except where the grant would be in whole or in part against the public interest on consideration of the following factors :(i) any excess in the existing transport facilities suitable -to meet the public requirements to be served by the applicant. . . . " (Para. 111D.) " There should be a right of appeal from the decisions of the local licensing authorities . . . We consider it of great importance that this should be such as to avoid delay and, in particular, legal expense, the procedure being such, for example, as to make the ernfgornent of counsel unnecessary and unsuitable." (Para. 11W.) -The report was received with the greatest disfavour

by a large section of the industry, but had restrictions, in fact, been confined to the limits contemplated by the Salter Conference, there would have been little at which the industry could have complained. It should also be noted that the managers of the four railway companies were parties to these moderate proposals.

In the licensing system provided by the 1933 Act, we find the interests of the public provided for in Section 6(2), the right of objection, on the ground that suitable transport facilities would be in excess of requirements, in Section 11 and the right of appeal' in Section 15. A comparison between the system contemplated and that provided by the Act would reveal a number of differences, but a detailed examination would be somewhat academic and less profitable than a survey of the system in operation.

Legal Whirlpool . . .

The most striking feature of the licensing system in operation is the legal nature which its administration has acquired. Instead of the inexpensive procedure contemplated, applicants have been compelled to follow the railway objectors in briefing counsel. Although the Appeal Tribunal has stated that it has no power to make a pronouncement. of principle (Smart case), reasoned decisions are invariably declaratory of principles by which the Licensing Authority must be bound. Procedure in the licensing courts confirms this view, as solicitors acting for objectors frequently base their submissions on appeal decisions.

It may well be that the law is so framed that such a state of affairs is inevitable, and the layman cannot do more than direct attention to the evils which result. Within the compass of a short article of this description, it is possible to refer only briefly to one or two of the more prominent of these evils.

The Salter Report contemplated a margin for permissible expansion during the licensing period (Para. 111C), but, in practice, the position is governed by the Hawker formula. It would appear that, as a result of the application of the formula, additional vehicles can

not be authorized until the expansion of business resulting in the need for the vehicles has been reflected in the tonnage or turnover figure.

In other words, additional business available to a haulier must actually be handled for a period before authorization for the necessary vehicle can be obtained. This cannot fail to militate against normal expansion and is undoubtedly contrary to the view of the Salter Conference that restriction of free normal development should be applied with great care: (Para. 107.)

Industry First . .

The members of the Salter Conference were impressed with the evil of anysystem which would prevent trade and industry from securing' the form of transport which is best adapted to their ever-changing needs, at the lowest possible cost that can be obtained on a salutary

basis, Nevertheless, in the Stevenson decision, the Appeal Tribunal has laid down that the legislature did, not intend that questions. relating to rates should be taken into consideration when deciding whether or not an objector had proved that "suitable transport facilities existed."

In this case, the traffic had-at one time been tarried by the railways, but, for reasons of cost, had been transferred to the road. The fact that the railways had once carried thg goods was he1G1 to prove that they possessed the necessary suitable facilities. From this proposition it would appear that the railways can obtain the traffic at an agreed rate and later increase the figure to any within their -statutory powers, secure in the knowledge that traffic cannot be taken by the road haulier. The freedom of choice contemplated by the Salter Conference is, to-day, practically non-existent.

In the Stuart case the Tribunal held that an established haulier who applies for a new A licence in continuation of his expiring licence must satisfy the Licensing Authority, inter alia, that there has been no material change in the circumstances relating to his business. This dictum is, no doubt, connected with the question of facilities being in excess of requirements, yet it is difficult to believe that the legislature contemplated so hidebound a restriction.

Industry Last • • •

Such a restrictive interpretation is hardly in keeping with the discretion conferred upon the Licensing Authorities by Section 0 of the Act and would seem to create just that interference with the trader's choice which the Salter Conference was so anxious to avoid. (Para. 100.)

These observations may appear to some to be unduly critical. Criticism is, of course, easy, but it must be remembered that the licensing system is in the nature of an experiment and unforeseen difficulties are, therefore, bound to occur. It is idle either to deny that fundamentally the principles of the licensing system are sound, or to pretend that a return to the status quo ante is 'in any sense desirable. Nevertheless, there is undoubtedly considerable room for improvement.


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