West Yorkshire Road Car Appeal—Minister's Decision
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NEW OPPORTUNITY FOR COMMISSIONERS TO REVIEW FARES'
1HE Minister of Transport has
made no order on the Yorkshire Traffic Commissioners following an appeal by the West Yorkshire Road Car Co. Ltd. against the refusal of a fares application for stage carriage services.
The Minister felt that the Commissioners should consider any application for increased fares on its merits, bearing in mind "the need adduced for the increased fares, the financial performance of the company over past years, and the level of return that will be established by the current application ". The interests of the public and of the company must be weighed in determining "a reasonable level of operating profit to which the undertaking may for the time being work "Such a decision is a pragmatic one, taking full account of all the circumstances; the level of return that is established, therefore, will be related directly to the facts of the particular case, add will have little relevance in attempted comparisons with other undertakings, where the circumstances will be to a greater or lesser degree different. Nor will a level of return once accepted necessarily serve as a yardstick for the undertaking in the future; it may be that differing circumstances will suggest to the Commissioners that an alteration should be made."
The attempted comparison of the position of the appellant company with other companies on the basis of the profit earned in terms of pence per car mile was noted by the Minister, who agreed that this form of comparison " may be of more value than one based on level of return on capital, in that it avoids the necessity of making allowance for variations in the method of computing capital; he can see no objection . . to this form of test, but would emphasize the danger of allowing a particular rate of profit to become the accepted norm. .
There may be circumstances in which a higher than average rate of profit calculated on this basis may be fully justified. The Minister agrees . . . that such comparative tests, whilst they should be used with a -degree of caution, can give some indication of the reasonableness or otherwise of a company's proposals ".
The Minister concluded that the appellants had established their case
for some increase in fares, but not to the full level which they had sought.
"The Minister understands that a further fares increase application . . is now pending and suggests that this will give a suitable opportunity for the Commissioners to review the matter in the light of the considerations set out in this letter and of the company's present trading position. He does not in these circumstances feel it appropriate to indicate what in his view the correct level of return would be."