DIVISION IS NOT SUBTRACTION
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INTS of order were more numerous than points of substance
in the House of Commons during the confused discussion which followed the announcement on the new railway network by the Minister of Transport, Mrs. Barbara Castle. A more appropriate occasion may arise later for examining some of the implications in a calmer atmosphere.
Road operators have a double interest as taxpayers and as competitors in the amount of future railway deficits which is to be regarded as tolerable. Division of the annual figure into losses, subsidies, contributions from local authorities and other categories will merely confuse the issue. While the railways remain a single organization there is something a little spurious in the notion that bits and pieces of the railway network can be costed in isolation or that the revenue earned by each section can be allocated with complete precision.
GOVERNMENT DETERMINATION
The railways and the Minister might not agree with this. They have already decided to keep 11,000 miles of track open on the assumption that some parts of the network will not pay their way. Full weight has been given, said Mrs. Castle, to the Government's determination that "broader social and economic needs, not just narrow profitability, should count when it comes to national decisions on priorities". The railways will decide whether or not to apply for the closure of lines left outside the newly agreed basic network.
Although the future railway framework has thus been fixed, presumably irrevocably, the cost to the community is as yet unknown. A steering committee with the Joint Parliamentary Secretary as chairman is conducting a study with the railways to identify, in the words of the Minister, "these socially necessary unprofitable lines and decide the amount of subsidy that will be necessary". It seems a sterile pursuit. If a line loses money the taxpayer will have to meet the cost in any case by whatever name one chooses to call it.
There might be some purpose in the investigation if the steering committee had the power to close down lines where in its opinion the loss involved in continuation would be intolerable. The committee's task is merely one of assessment. Even outside the basic framework the Minister's decision on closing a line would be made only after examination by the appropriate Transport Users Con
sultative Committee and Economic Planning Council.
Keeping losses and subsidies in separate accounts is an admirable policy in theory. "It is obvious common-sense", Mrs. Castle told the House of Commons, "to have a separate social account so that, Parliament having willed a line to be kept open, Parliament will put it not on the deficit but under a special social subsidy". The amount involved could not be foreseen, she continued, until the joint survey had examined each socially necessary line, what economies could be made and what size of subsidy would be required.
What seems not even to have been contemplated is that the determination of these items may be found impossible. The steering committee no doubt has already decided what items of cost it will take into consideration and what principles it will use in arriving at the cost in each case. It does not follow that there will be general agreement on the choice of the items or on the choice of the principles. Without such agreement the work of the committee becomes no more than an academic exercise.
The Minister showed some awareness of this although not consciously. The industry and the country can be proud of the railway network, she said. "It will give a muchneeded boost to railway efficiency and morale." In addition the 11,000 miles of track will not "simply remain in being." They must be a working system, continually developed with the aid of modern research and technology. Presumably the Minister would feel very much the same about other sections of track which it may ultimately be decided to keep open.
EXHILARATION
In any business with doubtful financial prospects there would be a feeling of exhilaration that even departments which are making a loss will be kept open indefinitely. Just by remaining in existence the departments concerned will therefore help to increase efficiency all round which should in turn lead to a reduction in the total loss. In these circumstances how does one distinguish between loss and subsidy? The same confusion must arise from development and research. They might be facilitated by the use for experimental purposes of stretches of line for the operation of which the railways receive a subsidy. This would give them an unfair advantage over competitors who must provide out of their own resources the proving ground for new ideas and new techniques.
SYSTEM AS A WHOLE
It is at this point that the road operator and particularly the haulier may feel that he is affected. He is not accustomed to dividing his track system into those roads which make a profit and those which make a loss. For the services he provides he uses the system as a whole. The presence or absence of a certain stretch of road affects his business generally and not merely one identifiable portion of it.
The circumstances cannot be greatly different on the railways. Indeed they must be more conscious than the haulier that they are running a unified system which it is impossible to parcel out into neat sections of track. The assumption that they can in fact do so is a polite fiction convenient and even necessary if social considerations are to be mixed up with commercial operations.
RATIONAL CONCLUSION
Even the necessity has not gone unchallenged. There are reports that in many cases where a railway closure has taken effect in spite of a good deal of passionate local protest impartial inquiry fails to find any members of the public who have actually been adversely affected. There seems to be some truth after all in the rational conclusion that the reason why certain railway services do not pay is simply that nobody uses them.
In spite of this the social argument appears to have won the day. Whoever loses from keeping a rail service open, the railways are bound to win. Hauliers would be justified in making their own analysis of the consequences. The railways are spending a good deal of money on developments which will help them to compete with road transport. The precise source from which the money comes ought to be made known.