DEVALUATION
Page 85
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By JANUS
L
IKE the sorcerer's apprentice, the Transport Tribunal seem to have started something with the Merchandise Transport appeal that they cannot easily stop, although a complete assessment of the consequences must wait upon a careful study of the Tribunal's reasons for their decisions, and upon the number of vehicles that the Metropolitan Licensing Authority will allow to operate under A licences. Whatever happens, the trend has become plain towards allowing the trader more freedom to set the pace at which the total number of road haulage vehicles can increase.
From the point of view of any action that hauliers may take, it is perhaps a good thing that the decision has been given first without comment. Even for the most surprising conclusions, the Tribunal are so adept at giving ingenious and well-thought-out reasons that it becomes difficult thereafter to look at the subject with an unprejudiced eye. So much learning, one feels, must produce the right answer. As it is, one can look at the decision with no intervening verbiage, and on that basis it looks as if the Tribunal have given just the verdict that an intelligent layman would reach on the facts.
He would see no reason why a vehicle that has to go a long distance with a load should be compelled to return empty when there is traffic available. It would appear to make no difference whether the vehicle were operated by a genuine haulier, by a trader who owns the outward traffic, or by a transport company of which he happens to be the owner. Because he needs the vehicle in any case to carry his own goods, he is likely to charge very little for the back load, and is therefore conferring a considerable benefit upon his transport customers.
All in all, the breach in the licensing system that the Merchandise Transport decision represents to hauliers may seem to other people to be letting in some long-needed light and air. Since 1953 the Licensing Authorities are supposed to have had regard to the interests primarily of persons requiring facilities for transport, and only secondarily those of persons providing the facilities. How could the interests of the first and favoured category be better served than by allowing them either to carry for other traders, or to make use at cheap rates of other people's vehicles?
It is to questions of this kind from the man in the street and even the man in Parliament that the haulier must find the answer. He is bound to see the problem first of all in financial terms. For him, the Tribunal's decision is equivalent to devaluation of his assets. It is not only going to reduce the price at which he could sell his business if he wished to do so. It will also lead inevitably to a fall in rates and a consequent drop in his revenue. He is justified in his concern but must reconcile himself to the fact that the general public see nothing wrong in cheap transport.
Devaluation must be taken a stage further if it is to provide a useful argument for the haulier. If he can wring little sympathy from the public for himself, the reaction might be different when the stimulus comes from British Road Services and especially the railways. The recent White Paper makes it plain that the taxpayer will never see again at least 11,200m. that he has lent the railways, and that he will have to pay more according to the extent of railway losses over the next few years. Direct encourage
ment to traders to buy more vehicles and to carry more traffic, per vehicle than before will have its effect on the revenues of the railways as well as of hauliers. The taxpayer will be faced with paying a bigger subsidy, and it is as well that he should be made aware of the fact.
The proper attitude towards transport rates may not be so easy to inculcate in the public. Naturally enough, they cling to the idea that surplus capacity, whether on a bus, a coach, a lorry, a train or an aeroplane, can be filled at little or no cost once the decision has been taken to make a journey; on this principle there seems no reason why there should not be marginal rates for marginal traffic, so that the trader who brings back a load cheaply for somebody else is performing a valuable public service.
This kind of argument recalls the fallacy of the. chain letter that promises the recipient a shower of shillings if he follows a few simple instructions. The proper share of costs that is evaded by means of a cut rate must be paid by somebody, usually indirectly, and in due course the situation levels itself out. In the meantime the road and rail services that were formerly available at a reasonable price tend to disappear.
In Britain, control over transport rates, in contrast to fares, has gradually diminished. The elaborate railway classifications are a thing of the past. In the Transport Act, 1947, the Socialists embedded machinery for creating a grandiose charges system, but the plans never, seemed likely to achieve worth-while results and were abandoned when the Conservatives took office. The White Paper now proposes to free the railways completely from statutory control over their rates. So far as road haulage is concerned, the market has always been the only factor in fixing rates, and probably always will be.
This is not to say that the Government should never concern themselves with the subject. In other countries it has been found necessary to interfere from time to time, which is at least an indication that the matter is considered to be important. Long-distance road transport rates in France will be subject to price control by the Government from July 1. As with the French State railways there will be upper and lower limits within which variations will be permitted. An official study group in the U.S.A., in a report to the Senate Interstate Commerce Committee, came out against the policy of reducing rates in order to force competitors out of businesi, and declared that "a soundly conceived policy for controlling minimum rates is consistent with the long-run interests of users."
Freedom from rates control in Britain may be a tribute to the present transport structure, with, on the one side the railways, unrestricted but gradually diminishing in importance, and on the other the licensing system. This may be as good a reason as any for giving careful thought before allowing arty development that may upset the licensing balance. The Merchandise Transport decision could have this effect in that it obscures the distinction between the haulier who carries goods for other people and the trader who carries his own goods and in some cases (under B licence) a closely determined selection of other traffic. The distinction is also clearly made in almost every other country.