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29th July 1966, Page 105
29th July 1966
Page 105
Page 105, 29th July 1966 — WHERE DOES THE BUCK STOP?
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Which of the following most accurately describes the problem?

QOMEWHERE or other in the north of England there is bound to be at least one operator who makes it his business to carry coals to Newcastle. More likely than not he also has the condition written into his licence. The apparent irrationality provides the ideal example for the worshippers of integration who believe that the movement of every piece of traffic should be controlled by a system of rationalization.

Even more familiar examples abound. There is the refrigerated vehicle which takes fish from Grimsby to Cornwall and brings fish back. There are the eight-wheelers taking one type of bricks from the West Country to the London area and carrying another type of bricks as a return load. There is the export consignment which travels 300 miles from Scotland to meet a vessel in the Port of London which started its journey in Glasgow. Vans have been hired on occasions to carry one small parcel.


Productivity hardly seems to be a prominent feature in this type of operation. On the other hand a national attempt by some well-meaning body to iron out the anomalies might do more harm than good. It would involve a good deal of unproductive work as well as interfering with other people's freedom of choice. It is no idle phrase which describes transport as the servant of industry. The individual operator has to adapt himself to what the customer demands rather than build up an elaborate organization to suit his own tastes.

The need to meet extremely diverse requirements calls for equal diversity in the road transport industry. This is unfortunate for operators in one respect which seems to be growing in importance. Statements which are true of some of them are seldom true of them all. It is hardly ever safe to generalize.

In their strictures the Prices and Incomes Board has turned this fact to good account. It has condemned blanket rates recommendations by the Road Haulage Association on the grounds that the breakdown of every operator's costs is different and that there may not be a single haulier whose circumstances precisely fit the percentage increase specified. The inference is that national pronouncements on rates can never have validity.

It might be interesting to speculate how the Board sees the impact on road transport of the 10 per cent increase in fuel duty. In its final report on road haulage charges it made a few calculations based on the response to a questionnaire sent to operators. In some cases, said the Board, fuel and lubricants represented about one quarter of the operators' total costs. At the other extreme the proportion was no more than 5 per cent.

Assuming that they were entitled to pass on to their customers the effect of the tax change, operators in the first category might reasonably ask for a 2 per cent increase in their rates. Operators with a relatively small fuel bill would have difficulty in justifying any increase on this single factor. Because of the variations and in the light of past experience. the q RHA would come under severe criticism if it issued a statement not merely drawing attention to the undoubted fact that operating costs had increased by up to 2 per cent. but adding the suggestion that hauliers should open negotiations with their customers for an increase in rates.

The Association may have felt tempted to take the risk after examining the statement by the Prime Minister in the House of Commons. The Government called fora 12-month standstill on prices of all goods and services, said Mr. Wilson, "except to the limited extent that increases are necessitated by increases in the cost of imported materials, by seasonal factors or by the action of the Government". His single example of such action was an increase of taxation.


Here is a pretty problem for the haulier. There is no specific ban on a price increase. In the first instance the Government is relying on voluntary action. On the other hand the Prices and Incomes Bill is being hurried through Parliament and the Prices and Incomes Board has once again been rattled in the sheath. Where increases take place outside the policy laid down, the Government would not hesitate to act within "the powers they enjoy", said Mr. Wilson with perhaps an unfortunate choice of words.

In other words any haulier who acts does so at his own risk. If he were selling the fuel he would have no hesitation in adding the tax to the selling price. The question he must ask himself is whether the use of the fuel for the benefit of his customers comes within the same category.

Presumably the intention is that the process must stop at some stage. If the haulier increases his rates the transport costs of the customer will go up by that amount. He may already be considering whether this will affect the price of his products. He is confronted with the same extra cost on the operation of his own vehicles, including company cars.


In equity the operator whose costs go up through deliberate Government action outside his control should be allowed to adjust his own prices accordingly. There is another aspect which is worth attention. Receipts from motor fuel tax, which were £560m. in the year ended March, 1965 rose to £67 lm. in the following 12 months. For the first time in that period total motor taxation exceeded the £1,000m. mark. Total road expenditure, complete details of which are not yet available, may have been as much as £400m.

Under the new austerity measures road expenditure is likely to slow down this year, whereas fuel taxation alone will rise by considerably more than £100m. The majority of road users—in other words, the motorists —may face this prospect with comparative equanimity. Their protests will be no greater than at the other steps taken by the Government to put a brake on personal spending.

The commercial operator, and particularly the haulier, cannot see the situation in this light. When there are many influences at work in favour of the railways the haulier is being forced by direct taxation into a more difficult position than ever. However determinedly he may try to absorb higher costs they continue to come at him from all directions. The extra cost of new vehicles will probably not lead to any appreciable decline in the growth in the number of private cars. The brake on the road programme, on the other hand, can only lead to an increase in congestion in the areas concerned.

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