USERS STILL DISSATISFIED WITH THE BILL
Page 38
Page 39
If you've noticed an error in this article please click here to report it so we can fix it.
Denationalization Too Hasty: Levy Shows Government's Lack of Confidence in its Own Plan: Inadequate Safeguards for Railway Users
By Aucourant
who speaks for a large body of trade and industry FOR the users the new Transport Bill has three outstanding defects. These are concerned with the method of denationalization, the retention of the major part of the levy, and the Government's failure adequately to safeguard the interests of users in granting the railways wider flexibility in charges schemes.
The first and most fundamental defect in the method of denationalization indicates that the Minister of Transport may have failed to assess accurately the full weight of opinion behind the user interests with which he has discussed the original draft of the Bill. This is unfortunate, for the vast majority of users is in complete agreement with the Government's basic aim to restore road haulage to private ownership and management.
Transport users' contentions that denationalization should be more gradual and orderly have been reinforced by the even greater weight of public opinion expressed since the Government published its White Paper on Transport Policy. Similarly, it has generally • been agreed that the future structure of road haulage should provide for a wider measure of public s'uper vision than obtained before nationalization. Despite this overwhelming weight of opinion the new Bill preserves almost intact the unpredictable "bargain sale."
• A.B.C.C. Proposals . Proposals suggested by leading bodies representative of trade and industry have been many and varied. But among the more practical ideas have been those advanced by the Association of British Chambers of Commerce, details of which have only recentlybeen available. In broad outline, these proposals advocated the immediate removal of British Road. Services from the control of the British Transport Commission, folldwed by a complete reorganization and capital
reconstruction of the undertaking. A five-stage plan suggested how, through the formation of companies cornPrising flexible and efficient road haulage units, ownership and operation would eventually pass into the hands of private invistors. At the same time it was suggested that the railways should be entitled to maintain a financial interest in road haulage activities, the level of which, tentatively put at 30 per cent., would be determined by statute.
In a memorandum addressed to the Minister of Transport the Association summarized its proposals as a ". break down" rather than a "break up" of the road ' haulage undertaking. A further interesting feature of the plan--which, if applied, should do much to reconcile purely political conflict—was the suggestion that there • should ultimately be a supervisory board, based on regional representation, through which the new owners: organized labour, and the Government would together exercise " a wise measure of public supervision."
Political Domination
There may well be technical and administrative difficulties in such a plan, but it is remarkable that the Government should have failed to recognize its implied principles in framing the new Bill. Doubtless many views similar to these have been put to the Minister during the past three months, but it is apparent that an altogether unjustified fear of losing the political initiative has dominated Government thinking in deciding on the ultimate method of disposal.
In the event it is now even less likely that a substantial part of B.R.S. will be tendered for at a reasonable price: in fact, the Government's very proper action in granting • the railways a greater degree of flexibility in charging under the new conditions may still further prejudice the chances of resale at anything like the true value. 134 Throughout this protracted and tortuous auction sale the hapless Commission must continue to operate its road haulage service "without avoidable disturbance of the transport system of the country." Users will not readily forget the chaos experienced during the first three years of integrating many hundreds of road haulage companies into a national undertaking. They must. therefore, be excused if they apprehend further serious difficulties during the next two or three years of disintegration.
It is hoped that even now the Government will have further thoughts and perhaps draw up a scheme for a more gradual and orderly denationalization which could form a basic directive to the proposed Road Haulage Disposals Board.
By retaining intact the levy on road haulage vehicles to amortize losses sustained in the resale of B.R.S. assets, the Minister has virtually admitted his lack of confidence in the Method of denationalization adopted. The Government has throughout maintained that in disposing of the road haulage assets acquired under the 1947 Act there must be no loss of public money. Pursuing this remarkable point of view the levy was the only available idea to offset the loss.
The whole basis of the Government's reasoning here is surely misconceived, and it is a typical example of how basic economic facts can be obscured and even distorted by purely political red herrings. If there is a difference between the price of purchase and thZ value of sale no amount of thaumaturgie bookkeeping can change that simple fact; it can only make the loss more palatable.
, The Public Will Tay The levy paid by hauliers and C-licence operators will at once become part a operating costs; as such if must be reflected in charges. In turn, the user must pass it on to the consumer in. the form of increased prices. Hence in the end the general public must pay—as, indeed, it always pays—for errors of government. •
This question of loss on resale has two answers. First, the B.R.S. undertaking must be placed on a sound financial and operational footing before being placed on the market. In this way the ultimate value of the assets to be resold would be enhanced. Secondly, any remaining deficit should be met from Government reserves or from such other sources as the Road Fund.
It should be borne in mind that the more gradual and orderly disposal of assets advocated by users would do much to reduce the level of loss. Moreover, a less dogmatic insistence on the speed with which resale should take place would do much to create a demand for the undertakings eventually to be sold. All of this should be possible if the Government will have confidence in its continued leadership and refuse to subordinate sound economic policy to mere political expediency. A strong case for granting the railways a wider • measure of flexibility in applying its charges schemes has existed apart from the wider issue of denationalizing road transport. Given conditions under which the full force of private road haulage competition must be met, the case for wider flexibility becomes urgent, incontrovertible and acute.
These principles have readily been .conceded by user interests, which realize that the railways cannot meet the challenge of the internal-combustion engine and at the same time be restricted by a century-old system for obtaining its revenue. It would, however, be wise to recognize that the extent to which these archaic restrictions are eased and modified should bear some relationship to the changes that have taken place and are likely to take place in the foreseeable future. There is much to show that the Government is going too far and too fast in this important matter.
Given an ultimate return to private road haulage, the user's position will be safeguarded through the resulting competition as between one haulier and another. There will still, however, be only one railway undertaking, and the rate quoted cannot be compared with any competitive railway rate. If "freedom of choice" is to have any real force and meaning for the user, it is clear that he must, if he so desires, be allowed to enjoy the same railway rate (for the same traffic in the same or similar circumstances) which is quoted to another customer.
Moreover, he must be in a position to know that he is, in fact, being quoted the same rate.
The Transport Bill proposes to repeal all sections of previous legislation relating to exceptional and agreed charges,. undue preference and equality of treatment, and the publication of railway rates. In future only the statutory maxima would be published, and British Railways would be allowed to quote any rate below the
maxima. If a user feels that he is being unfairly discriminated against, he may state a case to the Transport Tribunal, but only if the traffic in question is of a kind that cannot reasonably be carried by any other means for transport. Under such restrictive conditions the Tribunal may hear the case, and if it ultimately agreed with the user, it may direct that a more reasonable rate should be quoted.
Protracted Procedure
At best, this lengthy procedure can hardly be com pleted within a month. Having secured a just and perhaps favourable decision from the Tribunal, the user might well find that the traffic in question was no longer available because of the activities of a competitor who was already enjoying a preferential railway rate. The Commission will, in fact, have handed on to the user the shackles it will have thrown off by the passing of the Bill.
Clause 20 affords not the slightest vestige of protection for the uSer. It was negotiated at high speed chiefly with a few " big guns" of industry, primarily concerned with achieving a measure of protection for heavy industry—a protection which, in fact, it does not really need. The Government's insistence that adequate flexibility in railway charging depends upon concealed railway rates is without justification. When the last passenger charges scheme was before the Tribunal in the latter part of 1951, a major part of the Commission's case to justify higher fares was the need to apply the principle of equality in charging. On this plea many substandard season ticket rates were increased, workmen's fares abolished, and traders' season tickets and bulk travel discounts rescinded. When the Central Transport Consultative Committee considered representations against this principle it upheld the views expressed by the Commission.
The user is now to be told that the publication of railway freight charges is to be discontinued in order that the Commission may pursue a policy of unequal charging. There can be no other valid reason for demanding this unwarranted privilege.
It is clear that throughout the Parliamentary stages of the Bill the Government must expect strong opposition to those clauses of the Bill which deal with railway charges. If through the use of the guillotine, debate on the disputed clauses is restricted and they remain substantially unaltered, the Government will have forfeited a valuable measure of confidence from industry generally, but particularly from the smaller industrialists.
The Government has yet to realize that a new charges scheme based on the principle of loadability, as opposed to the more archaic idea of what the traffic can bear, would be the most potent single weapon in the hands of British Railways to enable them to face road haulage competition.
Improvement on Earlier Bill
In general terms the present Bill is an improvement upon its predecessor. Greater recognition is given to the importance of the railway's position, and consultation with users will take place before any new scheme for the reorganization of railways is approved.
Some recognition is given to the existing private haulier's position by fixing a date for the removal of mileage restrictions, although the Government has ignored the fact that the most certain method of introducing competition in road haulage would be to lift the 25-mile limit as soon as possible.
Whilst the user is only indirectly concerned, it still seems a strange justice which imposes upon existing hauliers a levy to finance the purchases of their competitors, and concurrently prevents them from competing for at least some time to come. If mileage restrictions on existing hauliers are to remain until the end of 1954, it is only just and reasonable that the levy should not be imposed upon them until after that same date.
Throughout discussions on the previous Bill, the Minister of Transport has demonstrated a broadminded attitude towards ideas put forward by the many interests consulted. In particular, the users have succeeded in procuring a number of detailed but important modifications. On the fundamental principles of disposal, however, the Minister has maintained a firm stand, although to be fair he may feel that the full weight in favour of alternative ideas can be assessed only by Parliamentary debate.