`...to ask how well nationalized road haulage fared in 1963'
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nN the whole the Transport Holding Company, in its
first annual report, has kept the right balance between business euphoria and bureaucratic caution. However carefully it has been disguised by legislation as a commercial enterprise, it will never be able to disguise even from itself that it is insulated against the main commercial risks of liquidation as a result of bankruptcy and a take-over bid by someone who is prepared to offer enough money. Like the railways the company or its constituents would almost certainly be kept in being and almost certainly under State ownership even if it made a loss.
Under this handicap, if it can be called such, the company has done its best to present that brisk air of business efficiency which characterizes most annual reports. It claims the status of a commercial enterprise and adds that its annual accounts are drawn and presented on a basis comparable with that of the best commercial concerns. It might almost be described as brash in its boast of the wide range of subjects to which it gave detailed consideration during 1963, including the possible use of hovercraft and the provision of ski-lifts. "Vitality and change are the hallmarks of a successful competitive enterprise," says the report. No transport operator under free enterprise could have put it better. • On some points the attitude of the company is little short of truculent. It goes much further than the general run of hauliers in its misgivings about liner trains. In introducing the report, Sir Philip Warter, the chairman, stressed that the future of general haulage was on the roads. We intend to retain our business and not lose it to the railways," he said. The company would use the railways for part of the journey if it were made economically possible to do so. " But it could be too costly," said Sir Philip.
The report contains other 'indications of the side on which the company would range itself if a controversy developed between road and rail. One of the questions affecting the future of road haulage was said to be the extent to which the railways would be subsidized and the extent' to which "profits on quasi-monopoly traffic" would be employed to undercut on competitive traffic. Would road transport be used as an instrument of national taxation? asked the report. Would congestion restrictions be imposed upon road transport which would greatly reduce its effectiveness?
A certain petulance crept into the report when it came to consider how the revenue surplus had been allocated. "In commercial terms ", as the report put it, the company earned 11 per cent and paid 7+ per cent to the Minister of Transport. The greater part of this payment was made on the instructions of the Minister himself. Evidently the company felt it should have been allowed to keep some of the money. It records its view that "it would have been more in accord with the practice of successful commercial enterprises for the company to have been permitted to retain profits in the business to a greater extent ".
c34 It might be rash to intervene in this controversy between the company and the Minister, which should continue for some time inside and outside Parliament. Road operators might still be disposed to offer a few opinions on the report in general. The contention by the company that it is being forced to disgorge a large portion of a massive profit may lead the public to accept that estimate of the profit without critical examination. It is opportune to ask how well the nationalized road haulage companies fared during 1963.
Much stress is laid in the report on the record profits all along the line. The road haulage subsidiaries made £4,679,000 and this was £1,189,000 better than in 1962. The improvement is impressive, but the shrewd inquirer would wish to know not merely whether one year's profit was more than another's but also whether the results for either year were satisfactory in comparison with the figures for other road haulage businesses. These figures are not easy to obtain as so few hauliers even now have formed themselves into public companies. The question remains whether an efficient haulier would be satisfied with a gross profit (before taxation and payment of interest and dividends) of less than £300 per vehicle per annum, or less than £6 per week. The line between profit and loss might seem too finely drawn.
The results for the individual companies may seem more disturbing. The mainstay should be the general haulage companies. It was for them that the whole process of road haulage nationalization was set in train. The parcels services and the specialized traffics came over for the most part fortuitously with the acquisition of the railways. In 1963 the general haulage companies of the Transport Holding Company operated 10,400 vehicles and earned profits of £1,706,000. This amount was a considerable improvement over the figure for 1962. It still represents only £160 per vehicle for the whole year, or £3 per week, and once again it should be remembered that deductions must be made for taxation, interest and dividends.
With only 4,100 vehicles the parcels services earned more profit than the general haulage companies. Their average of £518 per vehicle per year was somewhat higher than the average of £472 for the 1,800 vehicles on specialized traffics, where the financial result was depregsed by the loss on meat haulage.
The report admits that general haulage proper is likely to remain a rather difficult and uncertain field ". Independent road haulage companies would hardly include statements of this kind in their annual reports, if only out of consideration for the shareholders. Even when this is taken into account it still seems true to say that the epithets chosen by the Transport Holding Company would not be the first to come to the minds of hauliers in general. The reasonable conclusion to draw from the report is certainly not that British Road Services should be put up for sale, but that there is no justification for the kind of experiment which the Labour Party seem anxious to try.