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33 Scottish Councils Lose Fares Appeals

24th October 1952
Page 28
Page 28, 24th October 1952 — 33 Scottish Councils Lose Fares Appeals
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Which of the following most accurately describes the problem?

APPEALS by 33 local authorities against the higher fares granted to the Scottish Omnibuses group by the Scottish Licensing Authority have been dismissed with costs.

In his observations on the proceedings, Mr. J. G. Leechman, an inspector of the Ministry of Transport, held that the appellants' case had been based on the fallacy that because the whole of the share capital of the five companies concerned was held by the British Transport Commission, their operating figures could be treated as the operating figures of the Commission. The B.T.C. and the companies were separate entities.

The five companies were Scottish Omnibuses, Ltd., Western S.M.T. Co., Ltd., Central S.M.T. Co., Ltd., W. Alexander and Sons, Ltd., and David Lawson, Ltd.

Representing the majority of the appellants, Mr. J. 0. M. Hunter, Q.C., held that the group, by presenting the application as a group application, had not presented its case in the proper way, with the accounts and statements of the various companies produced for the Licensing Authority. If the group declared that the companies were separate eatities and should be treated so, where were the individual trading figures?

The respondents' case was based on the need to set aside surpluses as a reserve for capital works—which was money they had never had before. The B.T.C., on the other hand, wanted to use these surpluses to offset losses incurred on other B.T.C. undertakings.

Facts Not Challenged

Mr. R. P. Morison, for the companies, held that the appellants attacked the grant of higher fares without challenging the facts. Because the five concerns were associated, the application had been properly presented on the basis of the aggregate figures. The fares increases granted in 1950 had been accepted as reasonable; how could it be claimed that no change should be made if costs had gone up by £1.6m.?

To say that the concerns should fix•charges by reference to the amounts

they contributed to the parent body would not stand examination. Prima facie, increased costs of £1.6m. meant that there was a need for higher fares to a like extent. This gave only 8 per cent, on the capital of the group, an amount which the Licensing Authority

considered reasonable. The respondents had to provide, first of all, interest on the money borrowed, amounting to £900,000.

Companies Right

In his observations, Mr. Leechman considered that the companies had not made out a case for a total net income of £2.4m. But so long as the concerns owned and operated their own services, they had to provide stations, garages, etc., which they could do only by building up a reserve fund. The concerns' attitude to the matter was right, and the objectors' wrong.

Furthermore, the Authority had had sufficient evidence to show that if a net revenue of £2.4m. were permitted, £1.6m. could be regarded as needed for interest payments. The tax apportionment of the concerns for 1952 was £1,159,000, which, with the £900,000 referred to, made £2,059,000, not £1.6m. By cutting down the application to the extent of £300,000, the Authority had made ample provision for overstatement of the case by the applicants.

The Licensing Authority had also been right in believing that funds would be put into reserve to provide and improve amenities.


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