Minister dismisses fares appeal
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• The Minister of Transport has dismissed the appeals by Wakefield Corporation and 1B other local authorities against the decision of the Yorkshire Traffic Commissioners granting a fares increase for stage carriage services to the West Riding Automobile Co. Ltd.
The fares application was the first to be made following the acquisition of the company by the Transport Holding Co. in the autumn of 1967. It was made on the grounds of costs, other than labour costs, and was designed to produce a gross increase in revenue of £302,000 per year (or £203,000 in terms of actual operating receipts after allowing for estimated passenger loss).
The appellants considered that while some fares increase was called for it should have been substantially less then that granted by the Commissioners. They did not consider that the Commissioners had taken the right approach to the Government's prices and incomes policy.
It was suggested by the appellants that it was inappropriate during a period of price restraint to introduce for the first time an allowance for the depreciation of land, buildings, etc. The Minister agreed with the Corn missioners' view that it was reasonable in principle to make this provision. But he suggests that the precise methods of costings used in the calculation for this provision should be more fully shown by the company on the next occasion.
As regards the general effect of the Commissioners' grant, the appellants pointed out that this represented an increase of 12.; per cent in the gross revenue of the company. The respondents contended that the return on capital of 7.2 per cent in a full year was intended to secure no more than a reasonable improvement in the company's earnings, which had never exceeded this figure.
While the fare scale applied for was not out of line with that charged by neighbouring company undertakings, it represented a heavy increase for passengers of the West Riding company as compared with their previous fares. The Minister felt bound to conclude that a lower fares increase in this instance would have been compatible with the company's purpose, with the Road Traffic Act considerations and with the considerations of the Government's prices policy.
He has no doubt that the Commissioners will take into account all these considerations when hearing the company's pending fares application,