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industrial Development and the B.T.C.

10th September 1948
Page 47
Page 48
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Page 47, 10th September 1948 — industrial Development and the B.T.C.
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Which of the following most accurately describes the problem?

By C. S. Dunbar


Dispersal of Industry and Promotion of Agriculture Depend on Provision of Efficient Road Transport. How Distressed Areas Can Be Assisted THERE can be only four arguments for nationalization: (1) That pfivate services are inefficient; (2) that the essential forms of transport cannot pay their way or raise capital for fresh developments whilst competing against each other in private ownership—if, therefore, a monopoly is necessary it obviously must be publicly owned; (3) that strategical conditions demand a closer co-ordination than privately owned undertakings can give; (4) that a national economic plan can be successfully implemented only when the means for transport which are so vital to a modern industrial State are completely at the disposal of a government. I propose to deal solely with the last point.

Industry Must Be Dispersed

The Government is faced with the necessity of dispersing industry, of developing agriculture and of encouraging the establishment of new enterprises in under-developed or semi-derelict areas. The solution to this problem is inseparably bound up with the question of transport costs. There is every likelihood of the Government finding itself faced with the problem of reconciling the needs of a particular development area with the obligation on the British Transport Commission to pay its way.

Section 3 (4) of the Transport Act, which creates this obligation, is laudable in its intent, but its rigid application may jeopardize the success of the Government's economic plans. There may be a tendency to rely on the "swings and roundabouts" argument and to say that if the B.T.C. has to grant low rates for certain traffic in and out of certain areas, then what it may lose in such cases will have to be made up from the profits on its normaland higher-rated traffics.

This argument-may be a dangerous one to push too far, because the point may be reached when the roundabouts are unable to continue paying for the swings unless the former earn more revenue. Thus the general body of transport users may be compelled to offer an indirect subsidy to a particular trade or district.

To consider how this can be overcome let us take two examples of development which might call for a shady of the transport costs involved.

The county of Radnorshire is for the most part a poor district with few industries, the local authorities of which have always had ,difficulty in providing public services because of the low rateable value. The largest town in the county is Llandrindod Wells, entirely dependent on visitors and with a population of about 3,000. Knighton, a sheep-marketing centre, has about 1,800; Presteigne, the county town, about 1,100; Rhayader fewer than 1,000 and New Radnor only 500.

Now suppose that the Government has decided to help Radnorshire in pig-breeding on a large scale with an annual target of 25,000 tons of bacon and pigmeat derivatives—an average of 100 tons each working day

Some of the fodder (especially for those reared out of doors) might come from the county, but no doubt much would have to be imported.

To encourage pig breeding on this scale by loans or subsidies would be a good thing, but it would not give Radnorshire the maximum benefit unless the curing of the bacon and the canning were undertaken in the county. This would necessitate careful consideration of a site for a factory.

The only town I can think of almost entirely devoted to the pig is Caine, Wilts, with a population of about 4,500. It is unlikely that the erection of a factory in Radnorshire would swell the population of the selected locality to so high a figure, but it is reasonable to assume that the erection of such a factory in Radnorshire would add substantially to the population.

It is usually easier and cheaper to make provision for the necessary public utilities to serve an increased population by tacking the increase on to an existing fairly large concentration, although it is unfortunate in many ways that this is so

With this in mind, the factory ought ,to be sited at Llandrindod Wells, but we will assume that the residents of the spa successfully resist the attempt to industrialize their surroundings, and that eventually Rhayader is chosen. This selection will at once bring the transport question into prominence. It is situated on-a single-line railway which leaves the old Cambrian main line at Moat Lane. crosses the Craven Arms-Swansea line at Builth Rad and eventually reaches Three Cocks on the Hereford and Brecon route.

Urgent Perishable Traffic It will be remembered that the target is 100 tons a day. Usually bacon is sent out from the factories in consignments of one or two sides (usually weighing about 24 cwt.) together with a box or two of "preserves." Sausages move in smaller quantities—usually only a few pounds weight per consignment. There may, therefore, be as many as 600 consignments in the daily output of the new factory, and most of the traffic will be urgent, easily perishable and requiring careful handling.

Although, no doubt, steps would be taken to prevent long, Wasteful, cross-country hauls of the new factory's products, the distribution would necessarily be fairly widespread and we might suppose that it would be

something like this:— Generally speaking, next-day delivery of this traffic is desirable and almost essential. Could it be dealt with by the existing rail facilities or by any that could be introduced without a large and unprofitable expenditure? This seems doubtful. A special covered siding would be necessary, and it would be in use for only about 30 hours a week. The pigs could not possibly be brought in by rail without great expense, waste of time and unnecessary handlingIf the factory were railconnected, wagons could be loaded direct and the cost of loading and booking would fall on the factory organization.

If the factory were not so connected, the railway might find it necessary to engage upwards of 20 additional men (for, only 30-hours' work a week) to check, sort, book and load the outgoing consignments as they arrived from the factory. Even if they were willing to do this or even if the factory were rail-Connected, would next-day delivery be practicable in the area the factory is intended to serve. Remembering that the factory will be working until 5 p.m. or later it seems unlikely, except for small consignments taken by late passenger trains.

Mixed Trains Would Not Help To make the last departures mixed trains would hardly solve the problem, because they might well disorganize the time-table, with an adverse effect on the junctions at both ends of the line, nor, in all probability, could more than a fraction of the traffic be handled in this way without so lengthening the trains as to cause difficulties at stops.

Special goods trains leaving at 6 p.m_ or later would seem to be ruled out by the widespread destinations, as the trains would have to be split up, and the wagons would have to take their chance of getting forward from several points. The problem of wagon supply would arise, as there would be no balancing traffic into the factory and probably nothing like 100 tons a day for the population of the extended town.

I will therefore assume that the B.T.C. has decided that road distribution is the only practicable method of handling the factory's output, except for the West Wales traffic. A programme is arranged based on trunk runs from the factory to depots of the Road Transport Executive. The programme might be:— Such a service would be expensive to operate with no back loading. The population of Rhayader would have to multiply many times to provide an additional 100 tons of traffic inward five days a week. Even back loading part way would be barred except from depot to depot, as the services would be working at night except those to Worcester and Shrewsbury. Depot loads from Birmingham to Worcester or Gloucester to Hereford are about the only possibilities.

No doubt the B.T.C. will allow for 20 per cent., or even 25 per cent. of empty running by its road vehicles, but here we have almost 50 per cent. If the Rhayader factory were charged rates equal to those for equivalent mileages from other bacon-producing centres, it is obvious that the services put on would operate at a loss. Should the B.T.C. bear this in the interests of national development? Obviously, it could not do so without creating a dangerous precedent which might eventually undermine its whole fabric. On the other hand, if charges adequately covered cost of service, the factory's output might be so dear as to make it impossible to compete with other factories.

Under existing conditions of fixed maximum prices the result might be the operation of the factory at a loss and the consequent need for a Government subsidy. One wonders whether, eventually, the B.T.C. and its Executives will have any power to charge above the normal tariffs in such a case. They may find themselves practically compelled to operate such services at a loss.

Before making a suggestion as to how this state of affairs might be dealt with, let us consider a very different area—West Cumberland—for which a detailed development plan has been put forward by a reputable authority.

West Cumberland in the 1930ewas one of the most distressed areas in the kingdom with a large percentage of its population unemployed, so that the plan produced in 1944 by Mr. W. C. Jevereux for the Cumberland Development Council was intended to absorb the surplus labour rather than encourage any immigration into the county.

The Configuration of the district has always been a handicap to the development of trade with the rest of England, for only towards Carlisle is there an easy route! To the east and south, Icing detours and severe gradients are a feature of both rail and road routes. A new road from the south-west of the county, cutting direct across Furness and the arms of Morecambe Bay, has long been recognized as necessary, yet little progress seems to have been made towards its realization.

Curiously enough, the plan, although otherwise so detailed, makes only one brief reference to transport, when it points out that the ample water supplies make Cumberland peculiarly fitted for paper making, but that it would not be economic to produce newsprint and book papers as they could not bear the substantial freight charges to the principal centres of news and book production.

Cumberland Hindered by Bad Roads The defective road system has militated against the linking up of Cumberland with other parts of the country. By 1939 it was possible, through the interworking arrangements of the members of the National Conference of Express Carriers, to send " smalls " to and from almost all parts of the country by road, but it was never possible to cover the stretch from Whitehaven to Barrow. Even to serve Whitehaven and places north of it, it was necessary to take traffic to Newcastle first!

Absurd as it may seem, goods were regularly being sent from Birmingham to places on the Cumbrian coast by this circuitous route, and even then the senders found they were getting a better service than by rail. The mileage might have been considerably lessened if there had been a transport depot open all night in Carlisle and a trunk operator willing to call there en route to Scotland, but even if this had been arranged the journey would still have been too long to be really economic.

Until the direct southern road is constructed, the R.TE., if it attempts to link up West Cumberland as part of its nation-wide road service, will be faced with excessive costs. Yet many of the industries which it is proposed to introduce or develop are particularly suitable for road transport. They include paper, rayon staple fibre and staple-fibre textiles, woollen textiles, clothing, canned meat and vegetables, boots and shoes, and technical apparatus, etc.

In the -case of both examples quoted the transport undertakings are faced with the dilemma that they must either subsidize the development of the county by making charges no higher than those for similar traffics over comparable distances, even if the transport service is thereby run at a loss, or penalize the nascent industries and perhaps kill them by making charges which adequately pay the cost of carriage.

There is a slight difference between the official Cumberland proposals and the imaginary scheme for Radnorshire, in that in the latter case, there is only one industry and one factory to be considered, instead of a number • of trades as in Cumberland, but this does not affect the problem of transport charges.

As far as I can discover, although pre-war governments appointed Commissioners for special areas and subsidized the work of development councils and such like, the question of financing transport costs was never consiihred.

County Development Committees

My suggestion is that in each county where special trade-development measures are necessary, the council of the administrative county, together with the councils of any county boroughs geographically situated within the county, should be empowered to set up a special statutory development committee.

The committee would be nominated by the councils and consist of a majority of council members plus certain co-opted members with appropriate qualifications: It would be definitely empowered, inter alia, to finance the transport operations of new or developing industries by paying to the B.T.C. or its Executives, for a limited number of years, the additional costs above the normal incurred in handling the new traffic. The committee would obtain the funds to do this by means of a long-term loan (50 years, perhaps) from the Government, free of interest for the first five years, and at a very low rate thereafter.

The sinking fund and interest on the loan would be a charge on the local rates, and rightly so, for eventually it would be the local inhabitants of the county who would benefit most from the establishment of new industries. The effect of the development should be such that eventually the carriers would not operate the additional services at a loss and there would be no need for the development committee's subsidy.

Funds to Help New Industries

It can hardly be expected, perhaps, that the Government would consider the establishment of such county funds purely to deal with the problem of transport charges, but as there is so much other useful expenditure which could be similarly dealt with, I hope that the scheme may at least be considered in the right quarters.

If no progress can be made in this way, it would seem that the carriers will be forced to show separately in their accounts, their "gut of .pockets " incurred in assisting in initial development. If these became so high as to make it impossible for the B.T.C. to meet its statutory obligations, the Minister would be forced to ask Parliament for amending legislation or for the voting of moneys to cover the cost.

The latter arrangement, by putting the burden on to the whole of the taxpayers, would not seem to be as fair as my scheme for development committees, nor, of course, would the local people, who are most nearly concerned, have the same control over the matter.

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