25and 40-mile Limits in
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NATIONALIZATION BILL
EVERYONE interested in inland transport has been anxious to know what will be contained in the Transport Bill, which was submitted to Parliament on November 27. The purpose is to set up a publicly owned system of inland transport (other than by air) and of port facilities.
A British Transport Commission, with a chairman and four other members, is to be established, with general powers to carry goods and passengers by rail, road and inland waterway and provide port facilities. It is empowered to carry on any activities for which any of the acquired undertakings was authorized. The Commission is to conduct its undertaking so that the revenue is not less than sufficient to meet charges properly chargeable to revenue, taking one year with another, and a copy of its report is to be laid annually before each House of Parliament.
Bodies will be established to assist the Commission in its functions. At the outset there will be a Railway Executive, a Docks and Inland Waterways-Executive, a Road Transport Executive, and a London Passenger Transport Executive,
whilst provision is made for one for hotels. Possibly another body will be set up to deal with passenger transport on an area basis.
The Minister may give to the Commission directions of a general character in matters which appear to him to affect the national interest.
A Central Transport Consultative Committee and, for such areas as the Minister may direct, Transport Users Consultative Committees, in respect of passenger and goods traffic, are to be established, with separate Committees for Scotland and Wales.
On January 1, 1948, railway and canal undertakings, including the London Passenger Transport Board, specified in the Third Schedule of the Bill, are to be transferred to the Commission. hese are at present under control by virtue of Orders made under Defence Regulation 69.
All privately owned railway wagons requisitioned by the Minister are to be transferred to the Commission, and, subject to certain exceptions, on and after the date of transfer, no privately owned wagon is to be used on any of the railways of the Commission.
An obligation is placed on the Commission to acqtere those road haulage undertakings which were, during 1946, mainly engaged in ordinary long-distance traffic under A or Ii licences. Such traffic is defined as " the carriage of goods by a person carrying on the undertaking for a distance of 40 miles or 'towards in one goons vehicle, or a succession of these, in such circumstances that the vehicle or one or more vehicles is, at some time during the carriage, more than 25 miles from its operating centre." This 40 miles is to be measured along the route actually taken. The conveyance of liquids in bulk in tank's, also of meat, livestock, heavy indivisible loads and ordinary furniture removals, are not to be treated as ordinary long-distance carriage.
On and after an appointed date, it is to be a condition of every A and B licence that goods shall not be carried for hire or reward beyond 25 miles from the haulier's operating centre, except with a permit from the Commission. This does not apply to the above-mentioned exempted traffics.
The properties to be transferred are the vehicles and what was held for the purposes of their operation (including contracts), which are to be vested in the Commission free front any mortgage or like encumbrance.
Truncated Businesses: Interests Safeguarded
If the Commission's decision on an application to permit operating beyond 25 miles involves substantial interference with the carrying on by a haulier, in business at the date of the introduction of the Bill, of his existing activities, he may require the Commission to acquire either his complete undertaking, or specified vehicles and assets.
It is to be a condition of every B and C licence that goods carried otherwise than for hire or reward are not to be conveyed more than40 miles from the operating centre of the vehicle, except with a permit from the Licensing Authorit es. They must have special regard to the effect on the applicant's business of their decision, the extent to which it is necessary for him to employ his own vehicles for connecting two or more sets of premises to maintain a continuous process of production, and the extent to which additional costs in handling, packing or extra risk of damage is likely to be incurred if he be unable to use his own vehicles. The Licensing Authorit:es must also have regard to representations made by the Commission, and must comply with any direction the Minister, at the instance or with the consent of the Board of Trade, may give to facll tate the operations of persons in any development area.
Compensation is to be in the form of British Transport Stock, guaranteed by the Treasury, of a value equal, in the opinion of the Treasury, on the date of issue to the amount of compensation. Where the amount payable to a road haulier or private railway wagon owner does not exceed £2,000, it may be paid in cash. Compensation for road haulage undertakings is to be based on the net value of the assets, plus, in certain cases, sums in respect of compensa
tion for cessation of business and severance. For local authorities' undertakings, payments are to cover the interestand sinking-fund charges on the debt of the undertaking.
A Transport Arbitration Tribunal is .to settle disputes arising in respect of compulsory acquisition. Provision is made as to the terms and conditions of employment of staff, pensions and compensation of displaced staff. The Commission is to be emoowered to create and issue British Transport Stock for the purpose of borrowing money for capital charges, not exceeding £250,000,000. In addition, it will be permitted to raise temporary loans not exceeding £25,000,000.
The Commission is to be required to establish an additional reserve, one of its purposes being to prevent frequent fluctuations. None of this money is to be applied otherwise than for the purposes of the Commission.
It is estimated that the value of British Transport Stock for the acquisition of the railway and canal undertakings, including the L.P.T.B., will be £1,065.000,000. It is not possible to form an estimate of the compensation payable in respect of other undertakings and assets.
The Commission is not to engage, otherwise than for the purposes of experimental research, in the manufacture of chassis for road vehicles.
Nothing in the Act shall be deemed to exempt the Commission from liability for any tax, duty, rate, levy or other charge whatsoever, whether general or local.
The activities of an undertaking in 1946 so far as they consist in the carriage of goods in goods vehicles, in respect of which licences were in force, shall be deemed to have consisted to a predominant extent of ordinary longdistance carriage for hire or reward, if one or other of the following conditions was satisfied:—(a) The total sleight of the goods which were the subject of ordinary longdistance carriage exceeded half the total weight of all the goods carried in the vehicles; (b) the receipts of the undertaking from ordinary long-distance carriage for hire or reward exceeded half the total value to the undertaking of the services of the vehicles.
Where charged for by volume, weight is to be taken as one ton for every 80 cubic ft., and proportionately for volumes not an exact multiple of this figure.
Special provision is to be made for vehicles which were operated by, or under hire to, the Road Haulage Organization.
Basis of Compensation
In respect of any goods vehicle vesting in the Commission by virtue of a notice of acquisition, the Commission shall pay to the person who transfers it compensation equal to the cost, as at the date of transfer, of replacing the vehicle by a new one of similar type. This figure may, however, be adjusted in two ways.
The first is by deducting, where one or more complete years have elapsed between the date when the vehicle was registered under the Roads Act, 1920, and the date of transfer, one-fifth of the cost in respect of the first year, and for each subsequent year one-fifth of the progressively reduced cost.
Secondly, if the physical condition of the vehicle be materially better or worse at the date of transfer than the normal for a vehicle of the same type and age, a sum may be added to or deducted from the cost, as reduced by the deductions, if any, under the provision of the previous paragraph. The sum to be added or deducted shall be an amount that fairly represents the difference between the value of the vehicle and that of a normal vehicle of the same type and age.
In respect of any property, other than a goods vehicle, vesting in the Commission by virtue of a notice of acquisition, the Commission shall pay to the person who transfers it compensation equal to the amount which the property would fetch if sold in the open market, estimated as at the date of transfer and as if the Act had not been passed.
In respect of the total or partial cessation of business caused to the transferor, the Commission shall pay such sum as may be just, and calculated by reference to the average net annual profit as defined in the Seventh Schedule to the Act. The amount to be paid shall not be less than twice nor more than five times the average net annual profit.
In considering the compensation, regard should be had to the likelihood or otherwise that profits at the rate represented by the average net annual profit might, but for the operation of this Act, have been made after the date of transfer by carrying on the undertaking. Compensation may also be paid when overhead expenses are likely to be increased by the acquisition of only part of the activities of a .concern. This may fairly represent the burden of that increase over the five years beginning with the date of transfer, and it must be shown by the transferor that the increase could not reasonably be avoided.
Where notice of acquisition has been given in respect of an undertaking, the transferor shall, until the date ottransfer, carry on the undertaking in the ordinary course of business and maintain it in as efficient condition as it was in before the notice was given.
There are other stipulations as to selling land or vehicles or for hiring such land or vehicles for more than six months, entering into contracts extending over more than 12 Months, or undertaking any new works estimated to cost more than £500 in all.
On the passenger side, the Commission may also prepare, for any area approved by the Minister of Transport, schemes of co-ordination, whether by road or rail. The body established to provide such passenger transport may be the Commission or any other form for this purpose. Any area scheme may include the transfer to such a body of the whole or part of a road passenger-transport undertaking.
As regards the members of the British Transport Commission, all are to be appointed by the Minister from among persons who appear to him to have had wide experience and shown capacity in transport, industry, commercial or financial matters, in administration or in the organization of workers. They will receive approved salaries or fees and allowances.
Explanatory Notes
THE interpretation we place on certain sections of the Bill may help readers to understand it more clearly. The date, January, 1948, concerns only the vesting in the Commission of the railways and canals. Other interests affectcd will have their appointed days.
The passenger side of the industry has already a fair measure of co-ordination, and it seems that it is felt that the urgency with this is not so great; it may therefore be dealt with in a different manner to give greater elasticity. Possibly some existing Joint Boards, etc., may carry on under the Commission.
" Vesting " does not necessarily mean the complete settlement of the financial arrangements. Compensation might be arranged later. Only small undertakings with a compensation value of up to £2,000 will be able to obtain cash. Larger concerns will be compensated entirely in British Transport Stock.
An operator who, in the ordinary way, would not have his business acquired can, if part of his transport be adversely affected by the restrictions, require the Commission to take over a part or the whole of the vehicles concerned. In such event, however, no compensation would be payable in respect of loss of business, but only for the estimated value of the assets acquired by the Commission. The Commission may, in taking over these, require also the surrender of others necessary for the effective operation of those acquired, i.e., garages, etc.
In ascertaining what concerns shall be acquired, four figures will be taken into account, two concerning tonnage and two receipts. Thus if the tonnage carried on long distance be more than half the total, then vesting will take place. The same applies to receipts for traffic.
The limitations on the non-acquired will be entirely on the radii. In the case of hauliers, any sanctions to operate over the 25-mile radius must be obtained from the Commission, but there is no appeal against refusal. So far as C-licensees are concerned, such permission must be obtained from the Licensing Authority, and in this case there is a right of appeal to the new Transport Tribunal.
The life of permits to A and B operators working for hire and reward will, in the first instance, last for a year. but upon renewal will last for consecutive periods of three years unless revoked for breach of conditions, etc. In the case of the permit for the C-licensee, this will run the life of the ordinary C carrier's licence.
Some people may be a little puzzled over the definition of long-distance carriage as 40 miles or more in connection with A or B licensees, and think that this conflicts with the 25-mile radius. The former limit, except where it applies to ancillary users and B licensees when carrying their own goods, is of value only in connection with the acquisition of haulage businesses. Thus if an A or B operator at present exceeds the 25-mile radius, but does not carry for 40 miles. then he is not within the scope of the Commission, but, of course, later he will have to conform to the 25-mile radius limit unless he has obtained a special permit.