The Birth of Private Monopoly ?
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The New Transport Act Restricts the Opportunities of Small Operators to Sell Out and May Deprive Parts of the Country of Long-established Bus Services By Aeneas
THE editor is allowing me to state a view which is opposed to his own when I say that the new Transport Act is almost wholly pernicious and in its clauses relating to road passenger transport contains the potentialities of a private monopoly which could exercise a stranglehold on great areas of the country. The Act is a shocking example of an out-dated political theory being allowed to triumph over experience and prudence; the national interest is to be sacrificed on the altar of Bentham ism. s
Why have the Conservatives been so anxious to provide machinery for disposing of the publicly owned shares in bus companies? Is it seriously alleged that the managements of the National companies or of Eastern Counties or of Scottish Omnibuses or any of the others have been any less efficient since the change of ownership than they were before? Is it possible to pick out any one of these companies and contrast it unfavourably in respect of vehicles, fares or services with a privately owned undertaking of similar size and circumstances?
Benefits of Common Ownership In fact, common ownership has in many cases brought about decided improvements, of which a good example is the sorting out in the Forest of Dean and Stroud areas. The isolated Red and White and Western National services around Stroud have been put under Bristol management, whilst Bristol's detached group in the Forest of Dean has gone to Red and White. London Transport have taken over the local services in Grays, which can be better worked under their control than by Eastern National. The latter company have also lost their completely separate western area, which has been transferred to United Counties' control, where it naturally belongs according to geography.
In Durham, several small concerns have been merged and their services rationalized. The divided control in Inverness has been eliminated and so on throughout the country, It is often claimed that the interworking and pooling arrangements which exist between so many operators provide an efficient alternative to common ownership. But the person who studies this subject closely and objectively cannot agree with this conclusion. I certainly do not.
Interworking arrangements are good and it would be a great loss if they were discarded, but they are usually expensive and cumbersome to handle administratively and they often add to operating problems instead of easing them. In particular, they frequently provoke difficulties over such matters as peak-hour shorts, limited-stop workings over ordinary routes and concession tickets. The multiplicity of ownership in some conurbations is bewildering and the travelling public would undoubtedly benefit in such cases by a reduction in ownerships.
This does not mean that I favour the area schemes proposed in the 1947 Act, nor do I want to see the complete elimination of the rural operator. Sooner or R30 later some government will have to create powerful local authorities coming between Parliament and the present county and county borough councils. I feel strongly that any move which would make it more difficult when the time comes for such authorities to take over the principal passenger undertakings in their areas ought to be restricted.
Perhaps it will be said that I am looking a tong way ahead, so let us return to the present. Section 18 (5) of the new Act forbids the British Transpbrt Commission absolutely to buy out any one-man or private-partnership road passenger transport business and forbids them, without the consent of the Minister, to buy sufficient shares in a limited company or other body corporate to give them control.
• This is all very well in theory, but, as has been pointed out recently in The Commercial Motor, the present Government's ill-advised increase in the fuel tax has brought many country operators to the verge of bankruptcy. Many of them would be glad to sell out if they could find purchasers. If something is not done, wide stretches of the countryside will be without facilities that they have enjoyed for 20 or 30 years.
These small men cannot find independent purchasers because their undertakings, considered by themselves, are, not, to use a now-fashionable word, viable. But where such businesses are located inside or adjacent to the territory of an " area-agreement " operator, they will often be worth something to the larger concern for incorporation into its system.
A Business for Nothing Should one of these small men ",go broke "---and I emphasize from personal knowledge that this is by no means an impossibility—and he happens not to have turned his business into a limited company—the B.T.C. now have no power whatever to buy the business, nor can the Minister give them the power. If, therefore, his business is in a B.T.C.-controlled area, either that part of •the country will be deprived completely of services or the larger company (or someone else) will step in and take over the routes in the public interest without paying a penny to the man who has perhaps given a lifetime to transport and has been ruined by circumstances dictated by the Government, and not his fault at all.
The next sub-section (6) of Section 18 is even more sinister. It gives fantastic powers to the Minister— powers which no Minister ought to be accorded. He can direct the Commission to sell the majority holding in any of their bus companies to anybody he may care to select. It is true that he has to obtain Treasure agreement, but is it likely that the Treasury will raise any objection if a fair market price is offered?
This sub-section makes it possible for the whole of the " area-agreement " companies to be brought under the control of one group of financiers and they could even acquire control of London Transport as well if they could raise the capital! And Parliament could not do a thing about it!