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The third man
LITTLE ATTENTION has so far been paid to the role of the National Freight Corporation in quantity licensing. Publicity against the Transport Bill often leaves the impression that the railways alone or the railways principally will be concerned with objections to the grant of special authorizations.
The NEC as the third man may well turn out the true villain of the piece. The possibility was made clear even in the White Paper on the transport of freight which preceded the Bill. The Freightliner subsidiary of the NFC, it was said, would be the objector to an operator whose traffic could be carried by Freightliner. The railways would be objecting only if the traffic could be "carried otherwise by rail".
In these circumstances the railways would be entitled to object to applications for special authorizations from the road transport subsidiaries of the NFC. The Freightliner company will not be given the same right, presumably because it would seem absurd for two branches of the same organization to be arguing with each other in front of an independent Licensing Authority. Differences of opinion would be settled within the family.
Railway objections to the NFC could in theory be taken to the traffic court and might even go further to the Transport Tribunal on appeal. In practice the dispute would more likely be one of the few matters which fall to be determined by the new Freight Integration Council.
Natural successor
Although the NFC is to take over some of the functions at present performed by the railways, it is generally regarded as the natural successor of the Transport Holding Company. Where liabilities are being taken over there is provision for the transfer also of the appropriate rights to a subsidy. For example, to meet the estimated losses on freight sundries traffic over a period of five years• the Minister may make grants of up to £60m.
The people responsible for running the NFC will seek in the accounts to maintain a sharp distinction between subsidized and other activities. The THC has built up its considerable prestige partly by operating as nearly as possible on the lines of a commercial concern, competing on equal terms with other hauliers and aiming each year at a reasonable profit.
There is no suggestion in the White Paper or the Bill that the policy should alter. The various THC subsidiaries may change their names when they pass to the NFC but the personnel will for the most part be the same, and the aim will continue to be the provision of a highly efficient service at rates which give a proper return.
Justice will seem to be done in this sector. The railways are to be given advantages which are commercially unfair and these will extend to those subsidiaries which the NFC inherits from the railways. But where the NEC is running road freight services it will be in no better position than other operators.
Those operators may still wonder whether justice in fact is being done. When the Bill is put into effect their fears may prove groundless. In the meantime they are bound to note that the NFC as well as the railways are being given wide powers which could cause a great deal of harm if they were used ruthlessly.
Assurances that the powers will be applied with moderation have a double aspect. An independent operator with the law on his side might feel that he should take full advantage of it in the interests of his shareholders. He might even consider it a national duty in this way to increase his productivity at the same time as his profits.
As a commercial undertaking should the NFC not do the same? The machinery to be set up by the Bill may give many opportunities not always foreseen by the legislators. The officials of the NEC responsible for getting traffic will wish to use those opportunities. They may even search them out.
Matter of policy
It may be decided as a matter of policy not to take an unfair and unforeseen advantage provided by the Bill. Once this becomes the practice there is the danger that it will spread to other activities of the NFC. Frustration breeds rapidly. The NFC will face a dilemma from which the THC is free. On the one hand it will wish to operate on as nearly as possible the same terms as hauliers under free enterprise; on the other it will be haunted by the suspicion that the law gives it a head start.
Hauliers and traders may share that suspicion. They fear that the Bill will not give them a fair deal in a dispute with the railways or with the Freightliner company. It will be difficult not to suppose that some of the injustice could seep from the company to the benefit of other NFC subsidiaries.
The process may do no great harm to the firms concerned. Many a trader, for example, at present carrying his own traffic under a C licence, may be seriously considering the possibility of contract hire. If his application for a special authorization is turned down he may be compelled to send his goods by Freightliner.
Perhaps after all this is not found suitable for his particular purposes. He will have the right to re-apply for a special authorization. Marshalling the evidence might entail a considerable effort and in any case he would probably have disposed of his former fleet of vehicles.
The simple way out would be to ask the appropriate contract hire subsidiary of the NEC to take over the work. If the customer seemed prepared to make a fuss the NFC would be unlikely to object. An application from the subsidiary for a special authorization would meet no resistance from its associated Freightliner company and the railways would be in no position to intervene.
There is no reason to suppose that the trader would be worse off apart from his unfortunate interlude as a prisoner of the Freightliner. On the other hand his freedom has been curtailed. He would prefer to run his own vehicles and his first choice of an alternative might have been to pass the traffic to an independent haulier.
The permanent gain will have accrued not to the railways but to another haulier who happens to be State-owned. This result can hardly be described as fulfilling the purpose of the Transport Bill. Nor would the NEC be entirely satisfied. It would have preferred to win the traffic in open and equal competition.
From whatever angle they are approached the quantity licensing provisions in the Bill are seen to contain many flaws. It is not surprising that, encouraged by one or two ambigious statements from the new Minister of Transport, Mr. Richard Marsh, representatives of hauliers and of traders have suggested that the quantity licensing clauses should be struck from the Bill and that a new method should be worked out for protecting the railways.
There are few practical difficulties in the way of this. For traffic which is to be subject to special authorizations the present licensing system will in any event continue for two years or more. There should be ample time in the interim to work out a suitable alternative.
Time for proper consideration is a necessity. It might make matters worse to run up a hasty compromise designed to soothe everyone's susceptibilities. The only proper course would be to withdraw from the Bill sections 67 to 77 headed "Special authorizations for use of large goods vehicles," with the understanding that separate legislation better suited to the purpose would be introduced in due course.
With much of the heat removed from the subject one might hope that all the interests concerned, including the political parties, would agree to joint discussion. They might have to agree in advance that the purpose of their ultimate proposals would be in the words of the White Paper to "promote the transfer of all suitable traffic from the roads on to the railways".
On the assumption that the railways know better than anybody else what traffic is suitable for them the conclusion might well be that, in place of the cumbersome machinery machinery proposed in the Bill, the railways should have the responsibility of saying what goods now carried by road they wish to carry by rail. They would then be expected to prove they could make a better job of it.