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£40,908 Grant to Thames Valley: Welsh Applications Resisted

11th January 1957
Page 44
Page 44, 11th January 1957 — £40,908 Grant to Thames Valley: Welsh Applications Resisted
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Which of the following most accurately describes the problem?

FARE increases expected to yield £40,908 a year have been granted to the Thames Valley Traction Co., Ltd., by the South Eastern, Metropolitan and East Midland Traffic Commissioners.

Decision on applications for higher fares made by the Western Welsh Omnibus Co., Ltd., and Rhondda Transport Co., Ltd.. were last week deferred by the South Wales Traffic Commissioners. The proposals of four other major bus companies in the area are to be heard later this month.

The Thames Valley application was heard at a joint sitting at Reading. Mr. Maurice Holmes, for the company, said that since their fares were last raised early in 1956 costs had increased by £45,600.

The other South Wales applicants are South Wales Transport Co., Ltd., J. James and Sons, Ltd.. Red and White Services, Ltd.. and United Welsh Services, Ltd.

Reconsider Surcharge Mr. F. A. Stockdale said the increased revenue of £71,000 being sought by Western Welsh was to cover permanent rises in costs amounting to £86.610 in

a full year A surcharge had been operating since December 23, but if it was found that any revenue difference could be attributed to the fuel emergency, the company would reconsider. the surcharge.

Mr. T. G. Davies, general manager of Western Welsh, said wages and salaries accounted for nearly £50,000 of the increased costs.

Opposing the application on behalf of about 40 local authorities, Mr. Meurig Evans submitted that Western Welsh did not need the extra £71,000. The estimates had always been pessimistic, and there was no reason to suppose that they would not be made to favour the company on this occasion.

He also contended that if the increased fares were justified they should be spread more equitably.

Current Assets

Mr. F. E. Price, accountant, said the company's balance sheet revealed current assets of £688.000, more than half of which had not been used inside the business. The company evidently had more money than it needed.

Current ass et s were replenished annually to the extent of £240,000 by awards made by the Commissioners, he added, and it was clear that the applicants had distributed part of that money for replacements as dividends.

Mr. Evans submitted that the company were powerful enough to absorb increased costs due to wage claims. Mr. Stockdale replied that the company was absorbing £15,000 of the higher costs.

Complaints that Rhondda Transport had consistently underestimated their revenue were made by Mr. Meurig Evans for the local authorities, when their application came before the Com missioners. Mr. Evans said he was willing to stake his reputation that the company's income during the coming r6 year would be more than they estimated.

For the company, Mr. Stockdale said they had to meet extra costs of £35,220 in a full year, and the proposed new fares would bring in an additional £20,000.

For single tickets, it was suggested that the mileage should be reduced for each denomination of fare up to 7d.. inclusive. There would be no increase for journeys over three miles, and the company wanted to introduce a new 7d. return fare against a 4d. single.

Mr. T. L. C. Strange, general manager, said that in calculating the net revenue from the increases, passenger resistance had been put at 30 per cent. Replying to Mr. C. R. Hodgson, chairman, Mr. Strange said he did not expect a great increase in the number of bus travellers because of the increase in fuel prices.

Not Fairly Spread Mr. Meurig Evans submitted that, as was the case with Western Welsh, the proposed increases were not fairly spread. They were concentrated on some 13 per cent. of the total fare stages, and in the lower fares the increases were some 2030 per cent. The company would get about £32,000 additional revenue if the increases were granted, and that there was not likely to be a fare resistance of 30 per cent.

Mr. Evans said the company had been making sufficient profits in the past few years to replace and modernize their entire fleet, in addition to paying not unreasonable dividends," while still increasing their capital by siphoning out of undistributed profits. He complained that whereas Western Welsh had absorbed 20 per cent. of their increased costs, Rhondda Transport were seeking to pass the entire burden on to the public.

Replying, Mr. Stockdale submitted that the yield as against capital employed would be 7.58 per cent.. which was not unreasonable.

The hearing was adjourned until January 21. when the application of Red and White will be considered.

A proposal that Chester Corporation should apply to the Traffic Commissioners for permission to continue their temporary fare increases for a longer period than two weeks after the extra Is. tax on fuel ceases to apply has been made by the transport committee. The committee want time then to apply for permanent increases.

The bus undertaking's temporary increases are expected to yield about £14,000 a year, which is roughly the amount the department estimates it will lose in the next financial year. The loss is blamed largely on the recent wage rise, which will cost 6,000 a year, and the higher price of fuel, representing about £9,750 a year.

An application by Lincoln Transport Department, for increases designed to meet an estimated deficit of £27,000, is expected to be heard on February 5. The higher cost of fuel is not included in this figure,

Cowes to Oppose

An application for higher fares by the Southern Vectis Omnibus Co., Ltd., is to be opposed by Cowes Council.

Halifax Town Council have approved recommendations for fare increases in two phases. The first phase will cover temporary increases to meet the higher tax on fuel, the second being designed to meet •other increases in costs.

South Shields Corporation have also approved revisions in fares. Birmingham Transport Committee have recommended that application for higher fares be made to the West Midland Traffic Commissioners "at an opportune time."

A • report considered by the city council on Tuesday, revealed that recent rises in costs are expected to total £548,674 in a full year. Fewer people using the buses was "most marked." the report stated.

Wolverhampton and Blackburn Corporations are also to apply for permanent increases.

An application by Southdown Motor Services, Ltd., is to be heard by the South Eastern Traffic Commissioners at Brighton on Wednesday.


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