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10th July 1970, Page 54
10th July 1970
Page 54
Page 54, 10th July 1970 — topic
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Which of the following most accurately describes the problem?

To bury Caesar not to praise him by Janus

STRONG suspicions were felt from the first that the concept of quantity licensing was a relic from the days when an old-fashioned brand of fiery Socialism was distinguished by the promotion of the nationalized railways and the suppression of free enterprise road transport. Even some of the Ministers and other government spokesmen concerned with the Transport Bill seemed to find it difficult to take quantity licensing seriously. They were constrained to fall back upon mumbled phrases to the effect that operators could easily spare the mere 10 per cent of their, traffic which by a miracle became a 30 per cent increase when it was transferred to the railways.

Legislation ought not to be built on this kind of sleight of hand. It was more than time that the supposed benefits of quantity licensing were examined with a cold, impartial and expert eye. After all, the discovery by the Ministry of Transport's own team that road transport was paying far more than its total track costs was followed by the disappearance from the Bill of the clauses which would have imposed heavy special taxation on the larger and heavier lorries.

THE Ministry did not actually ask Dr Clifford Sharp of Leicester University to give them his views on quantity licensing. His recently published survey on ' "Allocation of Freight Traffic" was intended to complement the previous Ministry report, "Transport for Industry," published in January 1969. Dr Sharp was commissioned to investigate how the decisions to allocate traffic were reached by individual firms.

On this subject he has much tc; say that is interesting. The studies it was necessary to make then led him to set down some personal reflections on, among other things, the relevance of quantity licensing to the problems of traffic allocation. In a permissive mood the Ministry bravely concealed whatever disdain it may have felt that he should thus bite the hand that fed him and included the fruit of his reflections as a postscript to the main report. If the new Government had any doubts on quantity licensing his report would be more than enough to dispel them.

Dr Sharp puts his finger on the fundamental fallacy in the White Paper on the Transport of Freight which formed the basis of the road transport provisions of the Transport Act. The White Paper, says Dr Sharp, "assumes that it is an established fact that more freight traffic should be carried by rail". His polite comment is that this is still an open question. .

He begins the search for an answer by drawing attention to some of the contradications in the White Paper. At times it speaks of making the maximum economic use of rail only, and at other times of all forms of transport. "If the aim of national transport policy," says Dr Sharp, "is to bring about an optimum allocation of traffic between all transport agencies, the instruction to optimize the use of the railways as well is clearly unnecessary."

The "curious instruction" which singles out rail presumably implies that there is a major distortion in the present traffic allocation and that this results in the under-utilization of rail freight services. There is nothing in the White Paper, says Dr Sharp, to explain how the mis-allocation has arisen.

He has a sly comment on the reference in the White Paper to the inertia of transport users who are accused of reluctance to change "the habitual arrangements for the transport of their goods". This would have to work both ways. It can hardly hold water, says Dr Sharp, or else it would have hindered the transfer of traffic from rail to road which has been taking place continuously in recent years "and which the policy recommended in the White Paper is intended partly to reverse".

DR SHARP has similarly short shrift for 1 two further arguments: that the transfer to rail would reduce road congestion and that Freightliner services have brought about a fundamental change in the competitive position of the railways. In the Geddes report as long ago as 1965, says Dr Sharp, it was emphasized that transfer of goods to rail would have a very limited effect, if any, on congestion. It has nowhere been shown, he continues, that investment in rail Freightliner services would help to relieve road congestion to a greater extent than would an equivalent direct investment in road improvement.

Similarly, there are no arguments to prove that Freightliner services are more economical than road services. The onus of proof, says Dr Sharp, should lie with the railways or the National Freight Corporation. The White Paper's assumption of a self-evident proof that freight ought to be transferred from road to rail must be rejected and replaced by a hypothesi§ which can be tested by investigatiot and experience.

Dr Sharp rehearses once again the many fears on quantity licensing that have been expressed, and not only by operators. Since the Licensing Authorities are enjoined to act in the best interests of the consignor, says Dr Sharp, it would be very difficult for them to reject the consignor's own estimates of the importance to him of the different . quality variables. If, for example, the Freightliner service costs less but takes, longer than the use of the trader's own vehicle, there is no criterion for a decision on which item is the more important.

EVENTUALLY some routine manner of dealing with the problem would no doubt be developed, says Dr Sharp, "but this could itself be disastrous if a rigid formula was used which could not be adjusted to constantly changing circumstances". The history of carriers' licensing, with the development of a body of Case law based on precedent, gives no grounds for confidence that the Licensing Authorities or the Transport Tribunal would be able to cope with the complexities of quanitity licensing.

Dr Sharp perceives the obvious problem which would arise if the railways object successfully and their performance then deteriorates. The naive suggestion in the White Paper that the applicant could then apply again for a special authorization would have "a very disruptive effect," he says. Traders and hauliers cannot be expected to keep vehicles idle for several months or a year while the railways are revealing their shortcomings.

An inevitable surplus of road vehicle capacity would arise if quantity licensing were enforced, and this would create considerable hardship for hauliers and for traders on own-account. There would be strong claims for compensation, for which the Act makes no provision. A more sensible although not entirely satisfactory solution suggested by Dr Sharp would be to enforce the transfer of traffic only after existingvehicles fell due for replacement.

DR. SHARP also sees the danger of distortions in the pattern of demand for lorries when it becomes possible to use vehicles with a plated weight of up to 16 tons for journeys on which vehicles above that weight would require special authorization. The best lorry would not be

chosen for the job. .

On the assumption that the provisions of the Transport Act are immutable—writing before the election Dr Sharp could not know he was pronouncing a funeral oration —he puts forward proposals based on his arguments. Road and rail charges should be strictly comparable and the rail charge should not be calculated on short-run marginal costs except as a temporary measure, perhaps to meet capital expenditure which has turned out to be a mistake. Applications for special authoriza-. tions should be decided solely on the basis of economic criteria and should not be influenced by any overriding obligation to move traffic from road to rail.

Possibly in reaching this conclusion Dr Sharp had his tongue in his cheek. On the criteria that he suggests it would seem extremely unlikely that a special authorization would ever be refused. In these circumstances the railways or the NFC would hardly ever think it worth while to object and the unwanted machinery would quietly rust into oblivion.

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