AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

Wither Away

21st March 1958, Page 63
21st March 1958
Page 63
Page 63, 21st March 1958 — Wither Away
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?

By JANUS

ACADEMIC studies in transport ought to be encouraged. They provoke thought and sometimes controversy, and help to prevent practical operators from getting into a rut. But it would be unfortunate if anybody took the professors too seriously. Bloggs. I reported the other week, has some unusual ideas about taxation and the ways in which it can best be modified to help the road transport industry. His speculation seems almost timid in comparison with that of Mr. J. S. Sargent, Fellow of Worcester College, Oxford, who has recently written a book on "British Transport Policy."

A member of the Fabian Society, Mr. Sargent does not trouble to hide his political views. They are apparent in the very first sentence of the book. "That co-ordination and integration should be the aims of transport policy is one of those things that every schoolboy knows." Nevertheless, this proposition does not lead him on to suggest nationalization. In fact, at one point he rejects it, because it would too obviously make nonsense of his central idea.

Co-ordination he defines in a rather special way as "ensuring that, wherever a transport service is required, it is provided by the method which causes the lowest cost in terms of the nation's real resources." He retreats slightly from this extreme point of view by conceding that the user should still be left with the ultimate choice, for the good reason that he knows his own business better than a "central co-ordinating organization." The meaning of co-ordination is, therefore, modified to the enforcement of "a structure of relative charges (for given services by road and rail) which reflect their relative costs." The rates for road and rail would be fixed according to actual costs, but if the customer preferred to use the dearer service he could do so.

Divergent Policies

On the subject of relative costs, Mr. Sargent has some interesting observations. He notices the tendency of road and rail operators to adopt divergent policies on rates. With their new merchandise charges scheme, he says, the railways will maintain the principle of what the traffic will bear. This is possible because what Mr. Sargent calls the indirect costs (mainly the cost of the permanent way) can be spread over rates pretty well as the railways wish, whereas the heavy fuel tax, which in a roundabout way may be said to cover the cost of the roads, is levied on the mileage run by operators.

In the interests of Mr. Sargent's version of co-ordination. "this divergence of policy towards indirect costs must be checked." He therefore calls upon the railways to abandon their proposed plan of discrimination as a means for meeting their indirect costs. These costs for both road and rail must be evenly distributed over the mileage. Mr. Sargent cannot devise an exactly equitable way of doing this. On the railways, he suggests, the indirect costs are known, and a fairly accurate estimate can be made of the annual tonmiles and passenger-miles. All that is necessary is to divide one figure by the other. The road transport figures are not so readily accessible, and the fuel tax would have to be used, although this would apply to all miles run, and not merely to loaded mileage.

The fuel tax, as Mr. Sargent recognizes, is primarily a Treasury device for raising revenue. If it is to continue to serve this purpose, the money must be contributed by both rail and road transport. Mr. Sargent is compelled to acknowledge that the unregenerate public can spoil the tidiest. of schemes. The powerful demand for unremunerative services will have to be met. Transport users, he proposes, would be able to appeal to the single road-rail authority that would take the place both of the Transport Tribunal and of the Licensing Authorities. The new body would have power to require any transport operator to provide a service at less than cost, where it seems necessary in the interests of users as a whole. The money to subsidize these compulsory losses would be found from the fuel tax and railway surcharge already proposed, part of which would be diverted from the Exchequer to the new road-rail authority.

Under Mr. Sargent's scheme, therefore, the fuel tax would serve several purposes. It would provide a fund for uneconomic but essential services; it would give the Chancellor whatever revenue he 'fancies the transport industry ought to contribute; and it would meet the cost of providing an efficient road system. Responsibility for this would be consigned to Mr. Sargent's other national body, to which he gives the title of British Roads Corporation.

Convincing Case

Still further benefits would be conferred upon road users by Mr. Sargent. He would abolish the registration duty, unless a convincing case could be made out for taxing different classes of vehicle differently, perhaps on the grounds that some of them wear out the roads more quickly than others. He would also get rid of the licensing system, both for goods and passenger vehicles. He would issue one type of road licence freely, subject only to the observance of proper standards of safety and satisfactory conditions of work.

When all these benefits are offered them, road operators might think it churlish to raise doubts. Mr. Sargent, however, has left a number of loose ends. In particular, he has not made clear how he would force road operators to charge the proper rates. At present, the basic costs of running their businesses are known to hauliers, or ought to be known, but this does not prevent many of them from cutting their rates when they think it desirable. It is hardly in these circumstances, of course, that Mr. Sargent would recommend a subsidy. The drawing up of a national schedule of rates, every one of which precisely balanced costs, would be an impossible undertaking.

Trade and industry would not welcome Mr. Sargent's proposals. They know too well what happens when rates and fares are revised. He himself refers a little distastefully to the "concerted howl" from the people for whom the revision means an increase. Too often in the past, however, a new look in charges means on balance that more money has to be paid. An increase in the nation's total transport bill would hardly compensate for the most scrupulously fair system of equalization.

Mr. Sargent may not have realized that his plan might produce more changes than he bargains for. He can suggest calmly enough that in the new era the licensing system would wither away rather like the communist state. Among other things that would also wither away are almost certainly British Railways. They find road competition hard enough as it is, without having to share with road operators the cost of taxation. Without the railways, there would hardly be the burning need (recognized by every schoolboy) for co-ordination and integration, and Mr. Sargent would have to begin his book all over again.

Tags

People: J. S. Sargent
Locations: Oxford

comments powered by Disqus