HIDDEN GRANTS
Page 67
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ONCE people have made their minds up on a subject, they may forget the reasons and have to invent new ones. For a long time it has been widely believed that certain railway services are indispensable even if they operate at a loss. If the Government can be brought to this opinion, the argument proceeds, they must make themselves financially responsible for the services and relieve the railways of the cost. At some time or other people must have known, or thought they knew, how there came to be such starved and bankrupt services, but for a long time nobody has even asked the question.
Perhaps more bold than prudent, Mr. Geoffrey Wilson, M.P., has tried to give an answer in a pamphlet setting out a Conservative's view on Britain's transport crisis. He maintains that competition in the transport industry is no longer between road and rail, but between on the one hand all public services by road and rail, whether nationalized or not, and on the other hand the private-car owner and the C-licence holder.
In support of this, Mr. Wilson quotes familiar statistics. Between 1948 and 1958 the total number of vehicles on the roads more than doubled and it is still increasing. Practically the whole of the increase is to be found among cars and vehicles on C licence. This development must plainly have something to do with the fact that some railway services no longer attract the custom they did. If these services were abandoned, says Mr. Wilson, many -of them would not be replaced by bus or lorry services available to the public, for the number of vehicles on such services is remaining almost stationary.
The conclusion is. . . .
But before coming to the conclusion it may be as well to examine Mr. Wilson's argument a tittle more closely. His statistics are correct, but he has overlooked the simple reason for the relatively precipitate rise in the total of private vehicles. There is no restriction on their growth, whereas a strict licensing system curbs the expansion of professional road carriers, whether of goods or passengers.
Different Problems
As often happens when the subject is transport in general, Mr. Wilson has assumed that the carriage of goods and of passengers is essentially the same thing. In practice the problems that goods and passenger operators have to face are completely different. Certainly many road passenger operators are finding difficulty in attracting traffic and making a profit, and this is largely because of the ever-growing competition of the private car, augmented by the activities of the pirates, as Mr. J. S. Wills, chairman of the Western Welsh Omnibus Co.; Ltd.. has recently pointed out. So that to this extent Mr. Wilson is partly right. But the haulier does not find C-licence operation anything like so great a menace. He is often in the happy position of having far more traffic offered to him than he can carry.
Mr. Wilson's somewhat dubious line of argument need not mean that his conclusion is wrong. If some degree of state aid is to be given to the railways—and he believes that this is inevitable—and if the aid ought to be in accordance with public need, as is evidently desirable, two things must be done, says Mr. Wilson, First, the railways must be run as strictly commercial undertakings on a profit-making basis by the regional boards. Second, each particular unprofitable service that the Government require to be continued shall be paid for in whole or in part by a grant out of public funds.
Perhaps Mr. Wilson is anxious to find an honourable basis for the payment, so that the railways will not feel humiliated and thus lose the will t6 make a profit. Perhaps Mr. Wilson's ideas, or something like them, are or will become in line with the policy of the present Government. Mr. Wilson is chairman of the transport committee of the Parliamentary Conservative Party, and his expressions-of opinion must be given the weight that that position deserves, although his new pamphlet is not an official document. Whatever his intention or his influence May be does not alter the fact that the payment cannot be anything else than a subsidy, nor will the railways be able to deceive themselves on this point.
It is all very well to insist that the regional boatds should make a profit. They may still show a loss. When that happens, presumably the railways will be expected to say on which services the loss occurred, and will leave the Government with the burden of deciding whether those services should continue at the taxpayer's expense.
" Economically Wise"
Approaching the subject from a different angle, the select committee on nationalized industries appear to agree with Mr. Wilson about what should be done with the uneconomic services provided by the railways. According to the recent report from the committee, an important reason for the difficult situation in which the railways now find themselves is that "they have been guided in a number of decisions by what seem to them to be social needs, as well as by what is economically wise." The committee recommend that, where there are considerations that make it desirable for 'traffic to be carried at prices below cost, the decision should rest with the Government.
Strict accounting is not always practised by independent operators. The haulier will often carry out an uneconomic job in order to please a customer, or he may run some services that do not pay so that he can make good his claim to cover a certain defined area. Like the railways, he is not devoid of a social conscience, and can sometimes exercise it the more freely in that he is his own master and does-not have to answer to a higher -financial authority.
Providers of road passenger services may be compelled by the conditions of their licences to operate over some routes where they cannot make a profit. They may do this willingly, like the British Transport Commission, accepting it as a social obligation. Mr. Wilson agrees that in these cases also compensation from public funds would be admissible, in the form either of direct grants or of tax remission. Many people would look askance at the payment of public money to private concerns, just as they would at another suggestion mentioned, but not necessarily approved, by Mr. Wilson, that uneconomic transport services by road should be provided by the Post Office, as in Germany.
Unlike Mr. Wilson, one may feel that almost any solution of the railway problem is preferable to the subsidization of poorly supported services. If those services cannot be made to pay their way, the aim should be to find some other form of transport where this is possible. For the carriage of goods this should rarely be difficult, and the problem on the passenger side, although greater, 'may have been exaggerated. Perhaps the Jack committee, when at last they report, may have something to say on the point.