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TAX BOMBSHELL FOR ROAD OPERATORS BUT SUBSIDY FOR NFC

FROM OUR POLITICAL CORRESPONDENT ASWINGEING new tax on heavy lorries is Mrs. Barbara Castle's recipe for bringing greater competition between road and rail. This special "road haulage charge" was the bombshell for the industry contained in her long-awaited Freight Transport White Paper, issued yesterday.

The reason for the charge: Roads have to be better and maintenance higher because of lorry wear and tear. Therefore there should be a special payment by operators of all goods vehicles over 3 tons unladen weight to reflect these "extra costs".

The new tax will be additional to all other taxes, and be collected by the Ministry of Transport. The rates will be: • £50 a year for a lorry just over 3 tons unladen, rising with vehicle size to • a maximum of £190 a year for vehicles over 8 tons unladen.

There will also be a new special charge for the movement of abnormal loads by road, assessed on mileage and varying according to dimensions and weight from is a mile for a load just within the category to £15 a mile for the very largest and heaviest loads.

This, says the White Paper, should encourage consignors "to look for other ways of moving them—and also give some compensation to the public for the social costs imposed".

The new taxes, it is claimed, are backed by Ministry research into track costs which is now complete, and will be published. But in the same breath the Minister admits that the wider research into trunk route transport costs, on which long-term investment results can be based, is a "continuing operation".

However, the White Paper makes no bones about the objective of the integration policy. Wrapped up in a six-point declaration early in the Paper is the pledge to: "Make the maximum economic use of our railways as well as our roads by promoting the transfer of all suitable traffic from congested roads on to the railways."

The other five objectives are: the creation of a more efficient door-to-door public freight system; the elimination of wasteful competition in the public sector; the use of road and rail assets more efficiently; the modernization of carriers' licensing; and the association of transport workers more closely with managements.

The White Paper also gave the final decision on drivers' hours which, like all else, will be included in the Transport Bill.

The maximum permissible length of a driver's working day will be reduced to 11 hours from the present total of 14. The new 11-hour limit will include an allowance of no more than nine hours actually at the wheel compared with 11 at present allowed for being at the wheel or working in connection with the vehicle or load.

The minimum daily rest period will go up from 10 to 11 hours and will have to be taken immediately before starting a day's work, and to combat the build-up of fatigue a new limit of 60 hours' total work in any week will be introduced, together with a new requirement for at least one 24-hour rest period each week.

Compulsory recorders All goods vehicles except the lightest (not exceeding 30ewt unladen) will have to carry tachographs to give accurate and permanent records of driving time and other information about vehicle operation. Their drivers will carry a new personal log book recording their hours of work.

The licensing proposals in the White Paper generally follow what was predicted. There will be:

• Complete exemption of more than 900,000 goods vehicles which do not exceed 30cvrt unladen. They will, however, still be subject to annual tests and roadside spot checks.

• Quality licensing of 600,000 goods vehicles over 30ewt, involving good maintenance, sound finances plus a special system of "personal responsibility".

• Quantity licensing of up to 100,000 heavy goods vehicles (over 16 tons gross)involving a frank bias in favour of rail.

It is proposed that quantity licensing shall not be enforced until the Minister is satisfied that the Freightliner service has proved itself in practice as capable of being able to object to the granting of long-distance and special-haul licences.

Thus, the present A, B and C licensing system will remain in force until an Order is made on an appointed day. Also the present system will run in parallel with the quality licence system for some time after the quality system begins to operate, which will be as soon as possible after the Bill becomes law.

The form will be, according to the White Paper, that after the appointed day for quantity licensing, operators of vehicles over 16 tons gross which are used for purposes requiring the licences will have to apply for them when their existing A, B or C licences expire. It is expected that not all the 100,000 in this category will want these licences.

An operator may surrender his old licence before it expires and apply for a quantity licence if he wants, but otherwise the existing licences will normally be allowed to run for the full term.

But to cope with cases like a five-year licence issued in 1968, the Government will take powers to limit the duration of current licences "if this should prove necessary to confine the period of transition within reasonable limits".

Quality licences will be granted to operators who satisfy the Licensing Authority that they can and will secure adequate maintenance facilities for vehicles, keep proper control over loading and arrange satisfactory checks on hours worked; that their financial resources (and where appropriate the amount of business in prospect) are sufficient to enable them to maintain vehicles properly; and that they hold a personal "transport manager's" licence issued by the Licensing Authority and entitling them to manage a transport undertaking—or that they employ a holder of such a licence in a position of responsibility.

Rights of existing carriers to object to a licence being granted will be replaced by a new right of objection to bring to the Licensing Authority "any relevant facts", and will be exercisable by trade unions in the industry, employers associations representing operators, police, and certain local authorities. Some operators are warned in the White Paper that they can expect "the most searching inquiries" to be made. New entrants will be treated similarly.

Licensing Authorities will refuse licences to those who cannot stand up to the standards, but in cases of real doubt a short-term licence could be granted for a year or so to give an applicant time to prove himself. Otherwise, quality licences will be granted for a full term of five years.

In smaller concerns, the personal "manager's licence" holder will often be the owner himself. In larger fleets it will be held by the transport manager, with some firms perhaps having more than one. Ultimately, applicants for these licences will have to show evidence of professional competence by passing examinations and eventually the Government wants to hand over the administration to a professional body organised by the industry itself.

The system will provide strong disciplinary powers against defaulting operators. When there has been a breach of the law relating to vehicle operation, the LA will be required to consider suspending or removing from the quality licence one or more of the operators' lorries, or suspending or revoking the licence altogether.

In serious cases of mismanagement the transport manager's licence will also be at risk. There will be a right of appeal to the Minister.

The applicant for a quantity licence will go to the LA and state the type of goods he intends to carry and the areas between which he will operate. An applicant will be a person engaged on hauls of over 100 miles or in the carriage of specified bulk materials such as coal, some categories of iron and steel and various extracted materials -over both long and short distances". Significantly, the proposed 25mile minimum has now disappeared.

A copy of his application will be sent to the National Freight Corporation and to British Railways. The sole basis for objection from these bodies will be that rail or road-rail by the State operators can provide a service which overall is as satisfactory as that of the applicant, taking into account a combination of speed, reliability and cost in relation to the needs of the consignors and the traffics concerned.

Says the White Paper: "It is not the Government's intention that the licensing system should be capable of being used as a means of diverting traffic to rail uneconomically".

An objector to a quantity licence will have to give supporting reasons. If a prima facie case is made out, the LA will hold a public inquiry, at which each side will develop its case orally. But the onus of proving his own service is better than those offered by the State will rest entirely with the applicant. And if the Licensing Authority finds that neither the applicant's case nor that of the objector is conclusive, the Government considers that the need to ensure maximum use of rail transport should tip the balance toward the objector. The Authority will grant a licence, subject to appropriate conditions, "only if, and to the extent that, he is satisfied that rail does not provide a service which is as satisfactory as that of the applicant in terms of speed, reliability and cost". Licensing Authorities will have access to detailed "Ministry research into the relative costs of carrying goods by road or by rail". There will be provision for appeals by applicants and objectors, to an independent tribunal.

An unsuccessful applicant can re-apply with obviously greater chance of success, if the rail service proves significantly inferior, or significantly dearer, than he had been led to expect. Conversely, a Licensing Authority will be able to use his discretion to call on a licence holder to show why his licence should not be revoked.

The NFC will itself be required to show why its traffic could not be carried by rail if it applies for a quantity licence.

In justification of the system, the White Paper refers to a "natural reluctance" by consignors to alter habitual arrangements for transport of their goods.

Boosting rail by one-third The Paper estimates that a Freightliner network based on 50 terminals could cope with some 4,500m. ton-miles of traffic of a kind now moving by road by the early 1970s, rising to 6,000m. tonmiles by 1980. Although this would only be about 10 per cent of road ton-mileage it would boost rail ton-mileage by about one-third.

The National Freight Corporation will have a vesting day target of January 1, 1969. On that day, it will formally take over from the THC all its general and specialist road haulage services, together with its shipping services (excluding its interest in MacBraynes).

It will take over from BRB the depots, vehicles, warehouses, containers and other equipment— but not the trains—employed in the Freightliner and sundries service, and the railways, other cartage vehicles.

Thus it will take commercial responsibility for all freight movements which originate by road, and leave British Railways responsible for the marketing and operation of freight traffic which originates by rail.

State transport integration will be concentrated where it will be most productive—general merchandise, and parcels and sundries. Pointing Out that the THC has been conspicuously successful in handling general merchandise and parcels, while British Rail last year lost £61m. on general merchandise and sundries, the White Paper says: "The combination in one organization of the THC's experience of road haulage and the BRB's Freightliner concept will pave the wayfor a

vigorous new service to industry, commerce and the public."

The Freightliner Company will be a subsidiary of the NFC, but the railways will have a 49 per cent shareholding and an appropriate number of seats on the Board, which will be appointed by the Board of the NFC. This Freightliner Co. will have commercial freedom in setting its charges policy. It will sell space to other hauliers, and the terminals will continue to be open to private hauliers and own-account operators "without discrimination either as to the charges levied or the services provided".

There will be a statutory duty on the NFC to send freight by rail where it is economic to do so, and the Railways Board will charge for providing and hauling the trains on a commercial basis. Profit made by the Freightliner Co, will be divided between British Rail and the NFC in proportion to their shareholdings.

Expansion plans for N FC The role of the NFC will be to set the framework in which its subsidiaries will work, rather than manage them. Its duty will be "to expand vigorously as a commercial enterprise and it will seek every opportunity, as the THC has done, to acquire new businesses by voluntary agreement and to integrate them with its functional subsidiaries".

The NFC will have a duty to at least break even financially. Road haulage which is taken over from the THC and the Freightliner services taken from British Rail will be on a commercial basis from the start and are expected to make profits.

A subsidy But it will be impossible for the sundries service which the NFC takes over from British Rail— eventually to merge with BRS Parcels Ltd.— to break even in early years.

So Mrs. Castle—who proposes to tax large sums of money out of road hauliers—pledges that, subject to an overall limit to be imposed by the Bill, the NFC should be given a grant in respect of the full loss on this sundries service for three years after vesting day, and further sums to cover two-thirds of the estimated loss in the fourth year and one-third in the fifth year.

After dealing with the Freight Integration Council, the White Paper says that the transfers will still leave the railways with the great bulk of their present traffic of 200m. tons a year. The large part of it which stays unremunerative must be reorganized and rationalized by the Board so that it travels in the most economic way. "This", it says, "presents a major challenge to the railways."