SWEET PARTING
Page 54
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Political Commentary By JANUS
COLD and businesslike in tone and contents, the White Paper on the reorganization of the nationalized transport undertakings no doubt correctly reflects what the Minister of Transport intended to convey. The influence of the still copious stream of literature about the railways, which for maximum effect should always be read by gaslight, has in the past penetrated into the annual reports of the British Transport Commission and thence even into Government pronouncements, so that they have tended to mist over unpalatable facts such as a loss running into thousands of millions of pounds
Only at one point is the White Paper guilty of wishful thinking. Out of liabilities and debts amounting to £1,603m., the railways are to be relieved of £1,200m. One third of this is to be written off at once. The remaining £800m., carrying neither fixed interest nor fixed repayment obligations, is to be placed to suspense account. It is stated that the existence of this account "will enable the Exchequer to obtain some return if railway finances improve sufficiently."
Need All They Can Get
The Government should know there is no prospect that this will ever happen. The White Paper anticipates that the railways will not be solvent for at least five years, during which time additional "large sums will have to be provided from the Exchequer" to meet deficits. Even if the anticipation proves well-founded, one may be sure that the railways will continue to need all the money they can get to meet competition, without resuming the burden of what will seem an ancient debt.
The optimism that supposes this to be possible is uncharacteristic of the White Paper. For the most part it surveys the situation with clear eyes and sets down unsentimentally the steps that will have to be taken. Something very much along the lines laid down is inevitable if one accepts the Government's assumptions, and in particular the assumption that, in the words of the White Paper, "a railway system of the right size is an essential element in our transport network and will remain so for as long as can be foreseen." This has been the constant theme of all parties ever since the war, and the same idea in different words will be found in the White Paper on transport policy that the Conservatives issued in May, 1952, not so long after they took office.
It may be significant that the Government have to keep reassuring themselves on the point, for the price of continued confidence in the railways is high and is going up all the time. However, the assumption is honestly stated and logically worked out. There is no room in the White Paper for other somewhat fanciful contentions, such as the idea, so often given expression in pamphlets and in Parliament, that there must somewhere be uneconomic railway services that nevertheless have a vital social or strategic role, and must therefore be preserved by means of a subsidy. So far from conceding this, the White Paper emphasizes the intention to lift restrictions on the commercial activities of the railways.
There is no attempt to appraise the part that road transport will play in the future. British Road Services are to be placed almost literally out on a limb, almost as far away as possible from the role originally assigned to them in the Transport Act, 1947, as very much the junior partner in an integrated transport system. They are now to be one of seven companies grouped together under a holding company, which like the British Railways Board, 00 the London Transport Board, the Docks Board and the Inland Waterways Authority, will be ultimately responsible to the Minister.
The new proposals will dissipate any suspicion that B.R.S. are not standing upon their own feet and are somehow siphoning away public money that is supposed to be plugging up the railways' financial gap. The Treasury will assume all responsibilities for existing British Transport stock, but will transfer appropriate amounts of debt to the new boards. No doubt the holding board will be able to determine how much of its own share applies to B.R.S. The board will have to secure from B.R.S. "the best possible results for the public purse."
Co-ordination of policy between the new boards will be the responsibility of the Minister, assisted by a new body, the Nationalized Transport Advisory Council. This appears to contradict an assurance, also in the White Paper, that the Minister's existing statutory powers and responsibilities will not be extended. There seems a danger that, whatever the intention, the Minister as co-ordinator will inevitably be drawn into the operating problems of the boards, particularly where there is likely to be some clash of opinion, as between road and rail.
"The heart of the problem is in the railways." So states the White Paper, and there is no doubt that the main energies of the Minister and of his advisory council will be devoted to making the railways pay. The interests in the holding company are "expected to yield a good return," and while they come up to expectations will probably be left alone. The exception will be where they conflict with the railways, as for example when B.R.S. win traffic that the railways would very much like to have for themselves. The temptation of the Minister as co-ordinator will be to tip the balance in favour of the railways.
Diversionary Iniluence
Independent hauliers may run into similar difficulties. The testing time may come when there is a large block of Government or nationalized traffic in the market. The Minister would have more influence to divert this to the railways than ever the B.T.C. possessed. He may not use his influence, but the fact that it exists causes disquiet.
Even in a document mainly devoted to a rival form of transport they might have expected some brief reference to themselves. Step by step the White Paper seems to have removed the handicaps that were supposed to make restrictions on them necessary. All statutory control is to be removed from railway charges except for fares in the London area. The obligations of the railways as common carriers are not specifically set aside, but this is what will happen in practice. The crushing financial burden that the railways have accumulated since nationalization is to vanish in one great glittering golden handshake. Hauliers may feel that now, if ever, is the time for seriously considering loosening the chains of the licensing system. If something is to be done about this, there is no hint in the White Paper. It states that the functions of the Transport Tribunal are to be reduced, but not abolished.
Nor is the prospect of the further disposal of B.R.S. assets any more likely. There is a genuine attempt to make B.R.S. look as much like an ordinary business as possible, except that the profits, through the holding company, "will accrue to the Exchequer in the form of dividends and should be some offset to losses on other nationalized transport undertakings." There is not even a hint that part or all of B.R.S. should go back to free enterprise.