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The Industry's Case ,

Against Nationalization

The 13.R.F., in Conjunction with the R.H.A., issues a Comprehensive Memorandum which Sets Out, in Lucid Detail, Logical and Convincing Arguments Against State Monopoly of Road Transport

WE give below, in full, the statement just issued by the British Road Federation, in conjunction with the Road Haulage Association, against State control of the road haulage industry, and it is deserving of the closest attention by all those whose interests and livelihood are in road transport.

I. The Government's " Mandate " to Nationalize The Governmen? states that it has a " mandate " from electors, who voted in its favour at the recent General Election, to nationalize the road haulage industry.

These electors were not told that nationalization would mean the ruthless liquidation of more than 60,000 small, independent, family businesses; that many thousands of these businesses were started by ex-Servicemen after the 1914-1918 war, and that many thousands more are providing a livelihood for fighting men now returning to civil life, and for their families; that a single, all-powerful Government monopoly would be set up in place of these businesses, which have been built up by years of hard work and initiative, and on the basis of personal and efficient service to the public.

Because the road hauliers believe that they have nothing to fear from an impartial investigation into their industry, they have asked for a public inquiry in order that the facts may be made clear. The Government has refused this inquiry without giving any reasons whatsoever why it should not be held.

The road hauliers do not seek public sympathy or a change of intention on the part of the Government merely because their means for livelihood in a democratic state are threatened. They maintain that there is no practical case for the nationalization of an industry which is not a monopoly, is efficiently conducted, has excellent relations with its labour, gives its customers a square deal, is already largely controlled by Government regulations, and does not require a subsidy from public funds for its further development.

They are convinced that nationalization will not bring any benefits to the community, but that, on the contrary, industry —large and small—traders and the public will all suffer if a rigid State-controlled monopoly is substituted for the flexible, efficient services which the haulage industry offered before the war and which, to an increasing extent, it aimed to provide after the war.

II. Road Haulage is not a Monopoly The road haulage industry is not a monopoly. Control of the industry is not vested in a small number of individuals, whose power to exploit the public might give grounds for concern.

The industry is composed of about 60,000 operators owning, on the average, about three vehicles apiece. The reason for the existence of these small units lies in the fact that the varieties of goods handled are extremely numerous, and each operator serves a particular need. For example, there is the village carrier, who transports packages and parcels from the village to the market town, and delivers the villagers' bulkier purchases from the town shops; the livestock carrier who collects livestock from the farms and carries it to and from market; the small general haulier who works principally for firms too small to own or to need vehicles of their own.

There are contractor hauliers who operate for one or two firms only, and really act as road-transport departments for those firms. Some hauliers carry only frozen meat, or bulk ,iquids such as milk or beer. Some carry newspapers, others films, others furniture.

Every day in the year, for instance, between 4,000,000 and 5,000,000 gallons of milk are moved in England, Scotland and Wales, mainly by small hauliers; 4,000,000 tons of sugar beet are lifted between October and January each year—the equivalent of the present sugar ration. Over 4,000,000 head of cattle are moved from collecting centres.

There are haulage concerns which specialize entirely in the collection and delivery of " smalls" for the railways, and are mostly owned by them. There are hauliers who specialize in the carriage of goods on the network of cross-country roads not served by operators on the main routes, or inadequately by the railways.

The different kinds of traffic demand different types of vehicle and methods of operation, and the road haulage industry is really a grouping of a large number of highly specialized services linked with every aspect of the national life—industry, agriculture, trading—and ultimately affecting the well-being of the ordinary man and woman. If these hauliers had to confine themselves to a limited radius, there would remain a tremendous number of jobs which no one could competently handle.

The day-to-day business of the industry, consists of hundreds of thous-ands of separate operations each demanding individual attention, quick decision and prompt action; it does not depend on a small number of large-scale transactions in a few standardized products with a limited number of clients. The personal contact between haulier and customer is all-important.

It is precisely for the reasons outlined in this brief note on the structure of road haulage that the industry has not been concentrated into a few unwieldy corporations.

Its conversion into a huge State monopoly, with all the inevitable weakening of the responsibility for decisions on the spot, the red tape, and impersonal control from Whitehall, would be an act of political folly from which even the most rabid advocate of wholesale nationalization would be wise to refrain.

M. The Industry is Efficient No industry is free from faults, especially if the policy which it pursues is progressive and not static. On the basic question of efficiency, however, the road haulage industry claims that before the war the road transport of this country was highly efficient, both by itself and by comparison with systems anywhere else in the world. There was no evidence of any public consciousness of inefficiency in the service provided then, nor is there any general acceptance by the public to-day of any necessity drastically to change the prewar structure of the industry.

Any disturbance in the public mind before the war arose mainly from the not unnatural and, from the community's point of view, not unhealthy stir that was created when, in the pioneering period, the new methods of road transport , began to challenge long-established monopolies.

The Traffic Acts of the 1930s went a long way towards establishing the haulage industry on a sound and healthy basis both internally and for the user. Considerable progress had also been made up to the outbreak of war in the discussions betWeen road and rail for the development, in the national interest, of each form of transport for the job for which it is most fitted.

IV. Square Deal for Road Haulage Users In those road/rail discussions, it is important to note, the interests of the trader had been fully safeguarded. First, an undertaking was given by both road and rail to consult with the trader before rates were finally fixed. Secondly, it was proposed that a road frail tribunal should be set up, to which traders and others could appeal against a road or rail rate. The unfettered right of the trader to carry his own goods in his own vehicles was never questioned—a right that will be necessarily withdrawn if nationalization is ever brought in. V. Labour Relations and Statutory Control

Relations between hauliers and their drivers, old with the men's unions, are excellent. There has, in fact, been no trouble between employers and employees since the General Strike of 1926.

Since 1930 there has been statutory control of hours of work, and the Road Haulage Wages Act of 1938 set up a central wages board, which has led to all negotiations about wages being amicably settled, including those during the war years. Similar machinery exists for the London Passenger Transport Board, the unenviable record of strikes and disputes, of whioh, over a period of 20 years, is an instance of the internal troubles inseparable from State monopolies or the equivalent, and an example of what the public might expect if the road haulage industry were to become Statecontrolled. Ultimately, it is always the public which suffers.

Speeds, weights and safety measures are also subject to statutory control.

VI. No Government Subsidies Required The industry does not require any subsidies from public funds for its further development. The motor vehicle has one great technical advantage over other forms of transport. It is relatively cheap to buy and can be operated efficiently and flexibly in small units.

VII. The Government's Case for Nationalization In contrast to the foregoing facts, which the road haulage industry is prepared to submit to the most searching public scrutiny, the Government's case for nationalization—so far as it has made any attempt to put forward a reasoned case— rests largely on the alleged efficiency with which the Ministry of War Transport's Road Haulage Organization operated during the war. The case will not stand up to investigation.

The Ministry's Organization did not come into operation until the spring of 1943, and the sole reason why it was set up was to save petrol and rubber. Up to that date, long-distance road haulage, operated by professional hauliers, had done a magnificent job 'm overcoming the serious dislocations caused by the Blitz.

It has become a major point in the case of nationalization that the R.H.O. has been able to allocate to rail and road the jobs for which each method is most fitted. The opposite happened. The real purpose of the Government's organization was to use the vehicles and men it took over as little as possible. It achieved this end by overwhelming the railways with all sorts of traffic, suitable or unsuitable, before allocating the remainder, suitable' or unsuitable, to R.H.O. vehicles, which achieved the Organization's purpose the more effectively they remained idle.

The arbiters of "the most suitable traffic " were either those who decided that 60 miles was the magic dividing line between rail and road, or Government departments which forced the organization to use its vehicles by claiming high priority—an arrangement fundamentally different from the flexibility and the local initiative needed in peace-time road-haulage practice.

The standard of road-haulage operation under Government control did not begin to compete with the efficiency of the haulier-owned organization it took ever in general efficiency, detailed control, speedy movement, return loads or flexibility.

Traffic often moved by rail one way alongside lorries running empty after delivering loads the opposite way. Road-rail co-ordination by unit controllers was impossible since the decision to send goods by road rested entirely in the hands of various Government departments controlling the traffic. Co-ordination was possible only when by chance different Government departments happened to be sending traffic over the same roads. No pre-planning of traffic could be effected since controllers were not permitted to canvass for business Drivers' times were seriously affected by insistence on rail priority. Drivers would often have to wait several hours at a loading point until the last railway truck had been loaded, the surplus only going by road. There were cases where drivers worked over 30 hours at a stretch.

Idleness of vehicles led to discontent among both administrative and driving staff. There was no incentive to do a good job; in fact, anyone doing a good job that was a slight infringement of the rigid regulations was reprimanded. Staff remuneration was strictly controlled and Treasury consent was necessary for increases.

So far the Road Haulage Organization can serve as a guide, it can hardly be quoted as an argument for, but rather as -a. recommendation against, nationalization.

• VEIL Failure of Northern Ireland Experiment

The Northern Ireland Road Transport Board is an outstanding example of complete failure on the part of the State to substitute its own monopoly for independently operated transport services. The latest development is an admission by the Ulster Government that without further regulation and Merging the Board has no chance of becoming solvent. During the first three years of its existence, the Board lost more than £400,000, the loss falling on the Northern Ireland taxpayer. Two commissions had to be set up to inquire into its operations.

This is not all. Owing to extreme dissatisfaction with the operations of the Board, traders increased the numbers of their own vehicles and this, in turn, led to a rise in the cost of marketing with corresponding increases in the cost of goods to consumers.

(Note: A special investigation is being raade into the workings of the Board, and an additional report will shortly be nvailable.)

IX. The Human Aspect Very few of the 60,000 A and B haulage operators could be described as great capitalists. They are little men who, by thrift and hard work, have built up a business of their own. They operate on the average about three lorries apiece. It is d.fficult to conceive a scale of compensation which would adequately recompense them for the loss of their small businesses and give them enough to live on.

In the event Of nationalization, the best that would happen to the majority of A operators is that the nationalized road transport corporation would employ them as drivers—hardly an ideal form of employment for men who have been their own masters and built up businesses of their own, with the freedom and independence of mind which goes with a self-made career The position of the B operators will be even more precarious. The scale on which they operate is even smaller than that of the A licensees. In order to make a living they have, in fact, to run two businesses, one road haulage and the other farming or ereengrocery or whatever it may be. If these men are to be deprived of the onnortunity to carry their neighbour's goods for hire, they will be thrown hack entirely on their other businesses which, in many cases, are barely sufficient to yield them a livelihood at all! Many of them will have to give up both their haulage and their other business and will inevitably be driven on to the general labour market.

The ruthless subordination of the individual to the State and the liquidation of whole classes of individuals are practices previously associated with Communism and Fascism rather than with democracies. In this instance, there is not even the justification that the public would gain anything, for the hauliers, as individuals, are performing a specialized service for the community which no unwieldy and impersonal corporation could equal.

X. Traders and Industry Will Suffer The Government, in announcing its intention to nationalize long-distance road haulage services, has so far refrained from defining precisely what it means by long distances. Under the present restrictions, long-distance road haulage is traffic passing over 60 miles. But there is no assurance that the Government's proposals. will follow those principles.

Whatever the limit-100, or 60, or 40, or 20—the trader's right to carry his own goods in his own vehicles must be drastically affected, if not ultimately .denied to him.

In 1938, there were nearly 180,000 traders (C licensees) operating about 365,000 vehicles. An important item in the goodwill of these traders was the ability to deliver promptly to their customers. When war broke out, the liberty of this class of operator was restricted as a war-time measure by the introduction of pool transport (now abolished) and a special regulation (73B), which is still in force, confining the trader's right of delivery to within a radius of 60 miles of his place of .business.

An indication of the Government's intentions has been given by the T.U.C., which recommended that the existing restrictions on the C licensee should not be relaxed, but that his activities should be further curtailed. Other Socialist bodies and leading spokesmen of the Socialist party have 'confirmed this • policy, which must be considered the logical outcome of the establishment of a State monopoly.

The failure of the Northern Ireland Transport Board was caused primarily by the operation of traders owning their own vehicles who were outside the scheme. Faced with a monopoly, they naturally tended to protect their trading efficiency by increasing the number of vehicles in their own fleet to the detriment of the Board's own operation. Traders in Northern Ireland are now being threatened with further restrictions, even extending to the limitation of the use of private cars.

Obviously, no Government will willingly accept financial Joss in any State-controlled enterprise. The process of nationalization cannot stop short at one section of road haulage, nor can a Government, which has directly involved itself in one branch of an industry's activities, permit the remainder for long to carry on freely an independent policy of its own.

Left to themselves, the industrialist And the trader choose. the form of transport they employ on the basis of the relative cost and convenience of the different kinds of transport at their disposal. Thus the efficiency of all public transport is tested by the need to sell their services to the trader and not merely reap automatically the fruits of a monopoly. Once this freedom of choice is removed the trader—and the public—will risk a loss in cheapness and convenience, and there cannot possibly be the same inducement towards efficiency in the various methods of transport if a "take it or leave it" State monopoly is in operation.

XL Conclusion: Nationalization is Against the General Public Interest The road haulage industry is dependent for its successful operation on the existence of small units, each of which is a separate economic entity. Local flexibility and initiative, and the personal contact between haulier and customer, are the factors which make the system Work. The highly centralized control, which would be the inevitable outcome of nationalization, would have the reverse effect.

It is accepted that in certain directions—for example, safety, wages, conditions of work and of service and stabilization of fates—a measure of Government control and policy direction is not only necessary but desirable.

The ultimate objective, which must be to give the country the best possible transport system, can be achieved only, by co-ordinating the potentialities of newer methods such as road transport with older methods such as the railways. Rule-of-thumb methods, such as the regimentation of road haulage into a State monopoly, will leave the .fundamental issues untouched.

It is recognized that, if Britain is to survive as a world power, exports must be at least double. Transportation is one of the biggest single items in the production cost of practically every commodity produced in this country. Unless the Nation can have speedy, efficient and competitive transport, British goods will be handicapped in all overseas markets. Transport costs must be competitive in the real sense: that is, the real costs must be evident and not a camouflaged rates structure which is ultimately subsidized by -the taxpayer.

The road haulage industry is convinced that if the Government pursues its intention of dealing with road haulage as part of its general political programme of nationalization and without taking into account the special structure of the industry and its methods of operation, industry, trade and the general public will suffer, and, by depriving a whole class of workers of their means of livelihood, a social injustice will be perpetrated without parallel in British history.