AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

ANOTHER GOOD YEAR FOR THC

17th June 1966, Page 46
17th June 1966
Page 46
Page 46, 17th June 1966 — ANOTHER GOOD YEAR FOR THC
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

Continued expansion of road services

FROM OUR POLITICAL CORRESPONDENT ATOTHER handsome profit was earned by the Transport Holding Company in 1965. The annual report and accounts, published on Wednesday, revealed a credit balance on the year's work of £17,570,000, which was only a fraction below 1964's much-praised result.

Road haulage and bus operations again provided the lion's share of the profits despite many adverse conditions. At £7m. and £84m. respectively, both were slightly lower than in the previous year—but road haulage in particular clung tenaciously to most of the improvements made over 1963.

The purchase of new undertakings, according to the accounts, cost the THC and sub sidiaries some £7,752,000. Referring to the expansion of road services, which is clearly going to continue, the report said that the Holding Company had now accumulated free reserves of "some magnitude" out of its profits, so that expansion could as far as possible be self-financed.

The balance sheet also showed that revenue reserves rose at the end of the year to £13,550,000 for the THC and its subsidiaries combined, and £3+rn. for the THC itself. But there was no indication of how much of this was earmarked for future takeovers.

NO BACKDOOR NATIONALIZATION There had been no expansion for the sake of it, said the report, and the political charge of "backdoor nationalization" was not justified.

The THC had emerged from a period in which Government had shown no great eagerness to support expansion, particularly where this took the form of acquisition. With a change of Government, however, the Company was encouraged to pursue what it regarded as a normal commercial policy.

The report revealed that, during 1965, the THC received "a steady and growing stream" of inquiries from privately owned businesses about the possibility of being acquired.

This could have been because ofuncertainty about the outlook; or because haulage pioneers were facing the problems connected with providing for future succession and continuity; or because the private haulier had come to see less disadvantage ofjoining the successful THC family—whatever it was, once it was clear that joining did not necessarily involve a complete sacrifice of identity, or subordination in a monolithic structure, the inquiries started to come in.

The discriminating approach of the THC was then proved by the fact that although well over 100 cases were registered for consideration, acquisitions actually completed in 1965 consisted of two major cases (Tayforth and Harold Wood) plus eight other undertakings with just over 300 vehicles.

There were, however, other cases where negotiations had reached an advanced stage by the end of the year, but the backdoor nationalization charge was clearly unjustified.

The report went on to explain that a business acquired by the Holding Company would often, as a matter of policy, be allowed to preserve and develop its separate identity, with its own goodwill and trading connections. It would be folly, especially in the case of the big and efficient concerns, to begin by breaking them up for piecemeal absorption.

But this did not mean the companies would run exactly as before. Their freedom and responsibility would have to be matched by the acceptance of new responsibilities as a "member of the family".

For the road haulage business of the THC, 1965 was not an easy year. Higher costs were bedevilled by industrial strikes which affected business, and the raising of charges was delayed by Government action.

TRUE POSITION CLOUDED Political disagreements about the extent of the expansion going on led to discriminatory attention, where the true position was exaggerated and misunderstood. The many inquiries, like the Hinton Inquiry, and political moves generally, diverted energies that ought to have been directed to policy and management.

One instance of the political arguments raging about THC activities was the reaction to the commercially sound merger of the meat business with the Union Cartage Co. One school of thought hailed it as "nationalization by the backdoor", another as "selling out to private enterprise-.

This perhaps showed, said the report, how far from objectivity the commentator on transport was apt to get.

Despite all the difficulties, however, the main part of the general haulage reorganization was completed, and British Road Services now had a closely-knit organization divided into 13 districts and sub-divided into branches.

INCREASED EFFICIENCY

It was a year of steady and almost unremarked increase in efficiency, and although the future was more than usually difficult to forecast. the Holding Company and its subsidiaries in this field would press on "as though nothing was toward-.

On bus operations, the report pleaded strongly that the industry should not be allowed to drift towards subsidy. While this was a popular and easy way out, it would create very great problems of its own.

Last year was also a difficult one in this sector, particularly regarding costs which were accompanied by the continued decline in the public use of bus services, an accentuation of the peak problem, the disruption caused by labour shortages, and the damage done by a whole series of unofficial strikes.

"The need to increase fares was not surprising", said the report, adding that the Tilling and Scottish groups also had to ask the railways to contribute £120,000 towards rail closure replacement services.

Looking to the future, the report said that despite the car, the daily life of the community would still depend on the bus for a long time to come.

-It is therefore important that bus companies should be supported in their endeavours to remain viable." After recording its warning that the easy way out by subsidies was neither necessary nor desirable, it listed some "constructive measures" which would help the industry far more.

These included the greater use of oneman buses and the recasting of labour practices; greater flexibility of labour to overcome temporary shortages of staff; improved traffic arrangements to increase reliability of services; amendment of p.s.v. regulations to assist single-manning and coping with peaks; higher speeds where suitable; staggering of times for schools, offices, shops and holidays; school, mail and other contracts to be given to stage carriage operators; a clamp down on unlawful operations; a wider, though careful application of -averaging" to promote cross-subsidy, and a reduction in the fuel duty.

UNHELPFUL TO BUSMEN Also, the report listed actions which would NOT be helpful to the bus industry in finding its feet.

These included the transfer of the -plums" to conurbation authorities; the creation of "co-ordinatedoperating organizations that were too big; the transfer of financial responsibility to ownerships that would be regarded as bottomless purses, and the unthinking adoption of out-of-date remedies.

More than £10+m. of the THC's big profit for 1965 went to the Minister of Transport as a dividend. Some £3,800,000 represented interest on the capital debt and the rest represented her share of the surplus. Just over £6m. was retained by the THC for its own use,. and the rest went in taxation and so on.

Proudly the report stressed that good profits were often a natural by-product of a first-class commercially based service— which the THC had striven to give.

1 here was more than a broad hint that the State could reap a better bonus from a mixed-ownership and competitive industry than it would from a nationalized, subsidized one.

Tags


comments powered by Disqus