Disappointing Document
Page 65
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CHAMBERS OF COMMERCE have not always held identical opinions on the subject of road transport. The differences came out most strongly at the time when plans were being laid and put into effect by the Government for the disposal of British Road Services, The Association of British Chambers of Commerce must have had a difficult task. They were expected to make national statements of policy that might well be repudiated
by many of the individual chambers.
When the Conservative party published their views on transport soon after taking office in 1951, the A.B.C.C. thought it worth while to issue a report to the chambers and to criticize the Government's plan. The main objection was against the hurried breaking-up of B.R.S. The alternative proposed was to simplify the B.R.S. system of depot working, and make the operational and administrative machine more flexible. This would have been done by forming small and autonomous units, each able to operate on its own and to show a profit. When by such measures as this B.R.S. had become virtually indistinguishable from a group of undertakings under free enterprise, then—and only then--would the A.B.C.C. be prepared to agree to their sale.
Later the Association supported, if they did not help to inspire, the Government's change of mind, which resulted in leaving the job of denationalization half done. Once the process of disposal was well on the way, they seemed to find advantages in not disturbing the network of services. that B.R.S. had established, Against this background of the past, it seemed likely. that the -latest publication of the A.B.C.C., entitled " Free Enterprise or Nationalization," would contain some interesting views and information. It is a disappointing document. Although in the course of a few pages it assembles a handy glossary of unkind epithets about nationalization, it fails to avoid the impression of pleading a special case.
"Firm Believers"
The booklet begins on a doubtful note by attempting to draw a distinction between the political and the economic aspect of the ownership of industry. The A.B.C.C. proclaim themselves "firm believers" in the superiority of free enterprise over "any other form of organization of business which has yet been evolved." The belief is said to be based, not on any political theory but " on the knowledge that free enterprise is more efficient than State trading." No doubt this is sincere, whatever it means. But a belief in free enterprise is, to say the least, convenient for people running independent businesses.
To support their belief, the A.B.C.C. examine the record of 10 years of nationalization. For the most part, they are no better equipped to do so than any other observer. They have no difficulty in making a strong case, for there is abundant evidence. They sum up this part of the story by saying that there is "something wrong in the very idea of State trading and in public ownership of industry," and a growing number of people would 'be prepared to agree with this.
The Association then find it necessary to relate this indictment to their own previous statement of belief. They will seek to "identify the trouble! Free enterprise, they point out, means freedom of choice and opportunity, freedom to the supplier, freedom to the worker and freedom to the customer. The great virtue of free enterprise is its vitality, which comes from the ever-present spur of competitiOn. Nationalization destroys this vitality.
In fairness, the A.B.C.C. have to add that most of the nationaliZed industries are not complete monopolies. Three of them, coal, gas and electricity, compete with each other, and with oil. British Railways have to compete with independent road operators. The spur of competition is, therefore, not the answer to nationalized inefficiency. The A.B.C.C. more or less abandon their argument in mid-course, and turn to other solutions.
State-owned businesses, says the policy statement, suffer from rigidity because they are too big. They also suffer from over-centralization. Staff have less incentive than under free enterprise. The administration plays for safety and aims to avoid criticism, especially in Parliament. The ability to fall back, in the last resort, on the taxpayer weakens the spur to the main purpose of business management. which is to reduce costs. The failure to make a profit increases the taxation burden upon the more efficient independent concerns.
At Their Mercy
"Free enterprise finds it difficult to live with State-owned business." With this statement, the document comes to grips for the first time with problems related directly to the business of members of Chambers of Commerce. There are dangers, it is pointed out, that have not yet come to anything,. but remain as unpleasant possibilities. A nationalized monopoly might decide to manufacture its own supplies instead of buying them from free enterprise. The trader who does a large amount of business with a State-owned concern may find himself at their mercy. Some nationalized businesses have the power to carry on ancillary trades.
Where there is not a complete monopoly, say the A.B.C.C., a nationalized industry may try to avoid corn. petition by means of legislation, regulations and licences. This could apply to the British Transport Commission. The A.B.C.C. do not suggest that the Commission have done more than their predecessors to oppose the grant of A and B licences, "but it would be a very serious matter to kill competition by nationalizing the Aand B-licence operators and by drastically reducing the number of C licences."
The document would be more satisfying if it had more to say about transport. The other nationalized industries to which reference is made include the providers of fuel, the airlines, Cable and Wireless, and even the B.B.C. In order to cover this varied field, the A.B.C.C. have to make generalized statements that they are no better qualified to express than anybody else.
In particular, it would be helpful to know what their present opinion is of the merits of B.R.S. Apart from the question of monopoly as against competition, the document comes down heavily in opposition to public ownership of industry. Rigidity, over-centralization and other faults, including the taint of politics and the unhappy history of industrial disputes, are laid at the door of nationalization. The conclusion might almost be in favour of a complete return to free enterprise, but the A.B.C.C. content themselves with condemning the proposal of the Labour party to extend State ownership.