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C-Licensees Curb Rail Rates
Page 84
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TRAFFIC carried by traders in their own vehicles was now so great that the C-licensees' costs, transmitted through the rate forced on the public road carrier, were now enough to prevent the railways from charging anything more for the competitive •classes of traffic.
This statement was made by Prof. Gilbert Walker, Dean of the Faculty of Commerce and Social Science, Birmingham University, in a paper to have been presented to the congress of the Institute of Transport, which was, but for the railway strike, to have taken place this week.
Rates Regulation
Prof. Walker reviewed the development of railway services in this country and observed that the contemporary student, reflecting upon the extent of the railway network and the number of independent companies 50 years ago, could not avoid the conclusion that the regulation of rates and facilities was required as much as to avoid the consequence of competition as to protect the public from monopoly.
The alleged sins of road carriers between the two wars were that they carried cheaply when costs were low • and charged more when costs were high. Railway charges were based on principles of securing equity between traders,, uniformity between one place and another, and stability through time.
Where justice demanded that the railway rate be raised in relation to cost (as it did for full loads over wellpatronized routes at a popular time of the year) the railway lost to the road carrier; and when rates were reduced in relation to costs, as for smalls and traffic to remote destinations, the railway was left with the privilege of continuing to discharge its statutory obligations to carry.
Entry Restricted
First attempts that provided for the continued existence, side by side, of railways and competing road carriers took the form of an increase in taxation to ensure that heavy vehicles, particularly, paid for the highway that they used, and a restriction of entry to the haulage industry to avoid wasteful competition.
Nothing came of the Square Deal for the railways in 1938, and after the war both the railways and long-distance hauliers were vested in one common ownership by the 1947 Act. Nationalization was presented as the means for avoiding the wastes of competition and of reaching the "glittering opportunities" for adequate, efficient and economical services provided by integration.
It was explained that only a unified system, in which costs could be spread over the whole undertaking, could integrate transport services and ensure D18 that all parts of the country were adequately served. As long as competition remained there could be no guarantee that the transport needs of a less remunerative kind would be met.
Prof. Walker took Mr. Herbert Morrison to task for contending, in the debates preceding the passing of the Transport Act, 1947, that a public inquiry into transport was not needed because all necessary facts were known. There were no comprehensive statistics of the volume of traffic carried, either in terms of tons or ton-miles, or of the -mileages:run by road goods vehicles at that time.
There were no figures upon which ideas of the length of haul of various sorts of vehicle could he based, and nothing was known in specific terms about the numbers of vehicles engaged in carrying different kinds of goods. Subsequently, remarkable and illuminating details were revealed by two official statisticians, who introduced in 1954 their analysis of the road goods transport industry. This showed that road transport, in all its forms, carried 72 per cent, of all tonnage consigned and accounted for 37 per cent. of tonmileage.
Prof. Walker, who entitled his paper "New Thinking in Transport," believed that the British Transport Commission did not feel entirely easy about the freedom of the C-licensee. The railways, in competition with road carriers, could not charge more than hauliers, and the rates of hauliers, whether private or State-owned, were governed by the costs of the C-licensee. So long as the private trader had the right to put his own vans on the road, the question of the ownership of the public road carrier for long -distances or short was quite immaterial to transport policy.
The greater the efficiency of British Road Services under this stimulus, the more effectively would one side of the British Transport Commission compete with the other. The policy of the Stateowned road transport undertaking could be no different from that which would be enforced on a private haulier by the blind forces of the market.
Competition, whatever might be the success of the Disposal Board, was now openly restored as the regulator of the transport market after a lapse of well over 50 years. Some people felt that
B.R.S. should be wholly dissolved and the private haulage section of the industry properly reconstituted before the railways began to exercise freedom in charging. Others said that free competition between road and . rail, asenvisaged by the Transport Act, 1953, would not work. The small trader was to be left with no more protection than that offered by the re-entrant road carriers, who seemed singularly reluctant to concede tonnage rates for small consignments, or to run off their usual routes as a gesture of goodwill.
Protect Provider
If some services were charged below cost, and yet the whole of the transport system was to pay, then some other services had to be • charged above the average and the provider protected from competition. That was the end to which transport had been bought by' practice and was implicit in the drafting of the 1947 Act.
This system, Prof. Walker stated, however much it was in keeping with ideas of equity between traders and of justice to the small man, did not conform with the principles of economics. Equity had gone from the determination of rates for goods traffic and had soon to go from the structure of passenger fares. The principle could not be reinstated without controlling competition so tightly that transport was regulated out of existence and, at the same time, depriving the private trader of the right of running his own ancillary vehicles.
"I will not follow in my thought the fortunes of the private motorist, though I cannot refrain from reminding my audience of the urban bus operator who complained before the war of the passenger who cycled to work when it was fine, but expected the bus to be there when it rained," stated Prof. Walker.
Release of Resources
Those who were concerned with the most productive use of resources had every reason to be shocked by the suggestion that road transport should help out when the railways were in difficulties. Where there was loss, there was the sign in times of full employment, when resources were everywhere scarce, that some of these scarce resources were making a smaller contribution to total output than if they were differently employed. Output could be increased if the unremunerative services were withdrawn and the resources released for consumption in some more rewarding occupation.
Any loss incurred in providing a service at less than average should always be looked upon with suspicion as a first indication Of a distribution of national resources different from that allocation which would secure maximum output.