News from the Market
Page 53
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Janus comments
FREEDOM of choice in transport was the aim of road operators in their campaign against the Transport Bill last year and the same slogan will no doubt be resurrected if the Government makes any move to introduce quantity licensing. An additional obstacle to this part of the Act lies in the current consensus of opinion, at least among the political parties, that further efforts should be made to join the Common Market.
A recent reminder on this point has come from a body representing Common Market road operators with the impressive title of Liaison Committee of the European Community Professional Road Hauliers. In a memorandum in 1961, says the committee, the European Commission proclaimed equal treatment between transport media and free choice by users as cardinal principles of a common transport policy.
British operators can only find this encouraging. The liaison committee was, in fact, not thinking of them but facing in another direction. The focus of its criticism is the discriminatory tax imposed on road goods transport since the beginning of the year as part of the Leber plan for reorganizing transport in Western Germany. The tax is unfair, says the committee, not only because rail transport is exempt but because the proceeds (estimated at 250m DM) are put at the disposal of the German Minister of Transport and used ultimately for the benefit of the railways.
Not in the bond The committee is in a strong arguing position. The plea for freedom of choice made the British Government uneasy because of the powerful association of ideas that came with it. Little attempt was made to answer it, but the Government may have had at the back of its mind the consoling reflection that there was no constitutional right to freedom of choice and to non-discrimination. It is not in the bond, as Shylock would have said.
No such escape route is open to Herr Leber. The liaison committee points to the firmly closed doors. The EEC treaty lays down precepts which have to be followed. Article 74, says the committee, implies identical rules for all measures in the field of transport. A subsequent decision on harmonization in May 1965 lays down that the common turnover tax must apply to goods transport by road, rail and waterway.
The committee finds the German law at fault on three counts. It contradicts the aims of the common transport policy laid down by the EEC. It accentuates the differences between the transport policies of the EEC countries. It adds to the difficulties of making progress towards the common transport policy. The very fact, says the committee, that Germany had moved towards this policy by introducing the added value tax appeared to indicate acceptance of the principle that individual countries could not make changes unilaterally.
For the objector to independent action the EEC treaty provides ample scope. The committee next comes to article 37-2. This lays down that a member state shall not introduce fresh legislation which discriminates between individuals in other member states. The Germans have tripped over this point also.
The tax does not merely interfere with their own freedom of choice. It is applied to foreign operators whose journeys take them into Germany. The artificial dominance given to the German railways, says the committee, also has an effect on a "substantial part" of the Common Market in the border areas of the other EEC countries.
Their own line As a natural consequence of this exhaustive list of offences committed by the German Government the committee calls upon the EEC to take action and deplores the fact that something has not already been done. The theme seems to be familiar and not only in the field of transport. Time and again those countries in the Six who do not like the way in which the EEC treaty is working itself out appear to follow their own line.
If Britain does finally move towards the Common Market the principles brought into the •light by the liaison committee will have to be taken more seriously. Whether this will involve any drastic change in, for example, the Transport Act, is doubtful. The pressure to abandon quantity licensing will increase but will mainly come from within this country. The other states will still be struggling with many items of more direct concern. They will find it hard to understand how the restriction threatened in Britain can affect their interests, whatever violation it may do to the Treaty of Rome.
Similarly, those British operators who worry about the German tax are only the comparatively few who are engaged in international traffic. They are hoping through the Ministry of Transport to extend the present quota agreement to include a mutual waiver of taxation. If this can be done the amount and incidence of the German tax, will become of less interest.
It is one of the paradoxes of international transport that the foreigner can sometimes (though not always) expect preferential treatment. This may cover other things besides taxation. The draft regulations for operators' licensing require the British operator to provide far more detailed evidence than the operator from abroad of his resources and ability and of his past record.
This was to be expected. If the foreigner was subjected to the same stringent inquisition as the native there would be retaliatory action by other countries. This would be far more effective since the British international operator has often to cross more than one border. For the same reason it is certain that the proposed restriction on journeys beyond 100 miles or with certain bulk traffics will not apply to the visitor from abroad.
The British international operator will receive a bonus in that the restriction will also not apply to him. On the other hand he may be competing for traffic with foreign carriers who have had to satisfy far less onerous requirements in obtaining permission to run their vehicles. It is already proposed that Swedish operators will be able to come into Britain as they please.
Against the spirit Like quantity licensing the German tax (which seems to have caused an even greater outcry) is intended to protect the railways. This is the main reason why the tax flouts the spirit of the Treaty of Rome and why much the same objection would be raised to quantity licensing if Britain entered the Common Market.
Other countries have their railway problems. It is almost a refreshing change to learn of one case in which the complaint is against the growth of railway power. The Reverend Emile Bouvier, SJ, director of the department of economics, Sherbrooke University, Canada, has claimed that Canadian National and Canadian Pacific are using government subsidies to finance the expansion of their road transport activities in competition with private operators.
"The railroads are trying to protect themselves by invading a field that should belong to private enterprise," says Father Bouvier. He is preparing a study on transport economics for the Trucking Association of Quebec. He would certainly, one feels, have supported those provisions in the Transport Act which have led to the formation of National Carriers Ltd.—and perhaps even thek. Freightliner Company—under the control of the roadoriented National Freight Corporation.
Another conclusion towards which the study is pointing is the elimination of the small haulier in the next few years. Father Bouvier gives as reasons the strain of competition from railways and the coming of big business into the road haulage industry. The only hope he sees for operators with between 25 and 30 lorries is to merge with the large firms owning 300 vehicles or more.
Father Bouvier joins the Quebec Minister of Transport and Communications in opposing any attempt to regulate road transport from Ottawa. Transport policy, he believes, should remain in the hands of the province. By way of contrast across the border in the US, President Nixon has just proposed that the White House should in future appoint the chairman of the Interstate Commerce Commission which has jurisdiction over the whole of American transport apart from local carriers.