More Compensation for Hautiers?
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TiTransport Bill may be amended in the House of Lords to provide for cinEmpensation to be paid to hauliers for cessation of business. This possibility was suggested by Mr. A. Barnes, Minister of Transport, in the House of Commons on Monday, when certain sections of the Bill were recommitted to the House.
The report stage of the Bill was due to take place on the first three days of this week, but when the House rose on Monday night It was still discussing the recommitted amendments. The report stage proper was expected to start on Tuesday.
Two amendments were coupled by Mr. Peter Thorneycroft, the first referring to the amount of compensation in relation to net annual profit, and the second to the possibility of paying a haulier, not for his vehicles and property on any -valuation system, but on a basis of 15 times his net annual profit.
Mr. Thorneycroft moved that "not less than twice nor more than five times" the annual profit should be amended to "not less than five times nor more than 71 times" in Clause 46. Giving an illustration of the effect of the Government's proposed compensation, he said that a man of 50 years of age who was earning £1,000 a year after 20 years of building up his business, would have his net income cut to something a little over £200 a year.
Poor Consolation Mr. Pritt said that such a man now worked hard for £1,000 per annum and would then get £200 per annum for doing nothing, and could spend all his time earning another 1800.
Mr. Thorneycroft said: "I should think that his chances of getting other employment are very slender indeed." Under the Bill, the maximum of hardship would be caused.
The effect of the first amendment would be to increase by a modest amount the number of years' purchase on the net profit. Mr. Thorneycroft did not think even the carrying of the amendment would remove a large part of the injustice, but it would be a step towards it.
Mr. David Renton said that there was no offer whatsoever contained in the Bill that the people who were to have their businesses taken away would obtain employment. Railway stockholders were receiving about 24 years' purchase and the electricity companies about 20 years' purchase, yet it was suggested that there should be two to five in this case.
Two-Five Years' Purchase Mr. Ernest Davies said that the haulier would obtain two to five years' purchase, plus the value of his assets, which was a very different thing.
Mr. Renton then said that the R.H.A. had worked on 263 specimen examples of the effect on operators of compulsory transfer. It was found that the total capital compensation payable, including the maximum of five times the average annual profit, was £71,730,000. That was what the Government was to pay in British Transport Stock.
He said, "The Government are going to do extremely well out of it, because they will get in exchange a net earning capacity of more than £8,000,000."
The Parliamentary Secretary, Mr. G. R. Strauss, said that if the Government was erring in any way, it was in the generosity of the provision being made to hauliers whose businesses would be taken over. The industry was exceedingly unstable, and there was a great deal of competition.
It was suggested that the goodwill payment should be on a five to 7+ years' basis, instead of two to five. The latter, however, was not only the Government's estimate, but that of the industry, too. The normal period paid in respect of goodwill was three years.
Following an undertaking to examine any case of hardship submitted by the R.H.A., the Ministry had considered evidence put before it, but the more that was submitted, the more just and 'generous the Government's own proposals appeared to be.
Mr. Strauss said that it was impossible that a man whose business was taken away should receive as much as when he was running it. When a man received his compensation he could invest it in some industry as "uncertain and speculative as the road haulage industry." If he wanted to invest in a more attractive and remunerative industry, there was no need for him to leave his money in British Transport stock.
Regarding the second amendment, he said that the industry was not stable enough for the Government to be able to put in a multiplier of the type suggested and pay a man 15 times his net annual profit.
Mr. Assheton asked, "Do hon members realize . . that this is really an industry of small men?"
It was the duty of the House of Commons, when proposing to take away the livelihood of people by law, to be very careful to see that proper arrangements were made so that there was no injustice. One could not compensate people fairly by reference to their assets. "I do not know," he said, "whether the Solicitor-General would think he was being fairly compensated if he was offered the full value of his wig and gown, and books, which are the physical assets of his business."
Employment Uncertain Mr. Oliver Poole said that no one could pretend that with a total absence of guarantee of employment, the compensation was adequate.
Supporting him, Sir David Maxwell Fyfe said: "From the human aspect, this is one of the crucial points of the Bill." He did not like to indulge in anything emotional, but he did saybeca use it was his honest belief—that it was the human material on which this industry was built up which had made it grow from strength to strength.
When he talked of the small men who built up the industry, coming out of the first world war and using their gratuities to build up family business, they would know that he was not indulging in heroics.
He suggested that the Bill did not in any way indicate the method by which the co-ordination or integration of the road-transport industry was going to be achieved. The Opposition had asked for that information for 4+ months, but had never received it Fight to Continue From the views that had been expressed and from the cynical carelessness of the Government with regard to the position of road hauliers, it was quite clear that the Government did not care about the road haulage industry. It was for that reason that the Opposition would protest on this occasion and on every occasion given to them in the future against the shocking way in which the industry had been treated.
The amendments were defeated.
Subsequent proceedings in the House of Commons wilt be reviewed analytically by our legal adviser next week.