Profit Without Honour -vv HEN Mr. Callaghan and his henchinen really
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get down to a long Parliamentary discussion on the subject of assignment, I suspect they will work the ,word to death. It serpentines smoothly off the tongue between clenched teeth.' It has overtones of the cloak and dagger and of the shady love affair. It sounds exactly like the sort of 'thing Conservatives would put into a Bill—and not honestly into one Of the main clauses, mark you, but surreptitiously into a schedule—and bundle past the guileless Socialists with the aid of the guillotine.
Criticism of the provisions for assignment might have been difficult while the Bill was passing through Parliament. The buyer of a transport unit must have the right to dispose of .it; or of part of it. He cannot be condemned to carry it around with' him for ever, like the Ancient Mariner with the albatross. He must also have power to pass on the rights, including the special A licence, that go with the unit.
Permission to assign has been used more frequently than most people expected. Owing to a legal technicality the operator who borrows the purchase price from a finance house cannot buy his unit direct from British Road Services. The finance house must themselves complete the transaction and then assign the unit to their customer. Apart from this manoeuvre, it was thought that most .operators would have little difficulty in finding the units that suited them. The main danger was expected from the wealthy buyer with several nominees willing to tender ostensibly as individuals but, in fact, so as to enable him to build up a large organization in spite of the safeguards for the small man.
Dispersal Not Concentration
As the Minister of Transport said recently, most of the assignments so far have had the effect of splitting units still further rather than concentrating them into fewer hands. One possible line of criticism has thus been blocked for the Socialists. They have not abandoned the attack, but must find themselves short of good reasons to justify it.
No violation of the Transport Act, in which the provisions for assignment are plainly stated, has taken place, nor is it easy to blame the Commission or the Disposal Board. It may be alleged that the transport units they formed were unsuitable, or that when inviting tenders they failed to establish contact with the assignee who pops up miraculously with a better price the day after the unit is sold. For the Socialists to admit this would be to admit at the same time that a more expert formation 'of units and a more vigorous sales policy would give quicker and better results than at present.
Some attempt has been made by Mr. Callaghan to deplore the fact that the buyer who assigns all or part of his purchase often does so at a profit. This is presumably an intelligent guess, for only the Board and the Commission know the original price and only the parties to the transaction know the cost of assignment. The exploitation of the profit theme is an old trick that seldom fails to come off. The man who sells a unit for more than he paid for it, the argument runs, must be acting contrary 'to the Public welfare. He is putting
the price up, and that must mean an increase in rates. His profit would have helped to reduce the transport levy. The assignee must be a mug, and that is bad for the. efficiency of road haulage.
. Profit can at times be respectable. B.R.S. lay claim, or the claim is made on their behalf, to a profit in 1953, and this is considered one of the strongest planks in the anti-denationalization platform. Good business has apparently been done by B.R.S. at sales of surplus vehicles. Most of these vehicles must have been acquired through the 1947 Act, and in the recent sales they may have fetched prices a good deal higher than convertsation paid to ex-owners. Nobody, least of all Mr. Callaghan, thinks any the worse of B.R.S. for this.
Mr. Callaghan's final accusation, when all else fails, is that the assignor who makes a profit had no real intention of entering the road haulage industry. The attribution of motives tends to weaken an argument. By industrious listening at street corners, Mr. Callaghan, or his informers, may conceivably have discovered what prices were paid. But how can they read the purchaser's mind, or believe what he says, even if he is willing to answer their questions?
Labour Influence?
He may have any number of reasons for making the assignment. He may, rather late in the day, have come across the Labour Party's threat of renationalization. Examination of the Party's policy on transport may have convinced him of his wickedness in buying a unit. Assignment is his only way out, and he must be puzzled to learn now that he is a villain for buying a unit and a villain for selling it. Alternatively, his original intention may have been to operate the unit, and he changed his mind only because of the offer he received.
These are possible, even if improbable, reasons. In most cases Mr. Callaghan may be right in assuming that assignment was planned from the beginning. He ought not to be surprised. The prospective purchasers have not had an easy task: They have had no guidance on acceptable prices. The units have not necessarily been exactly as required. To give himself a better chance of getting something, a bidder has often put in for more units than he wants, with the intention of re-selling the surplus should too large a fleet come home.
Assignment might justify Mr. Callaghan's description of a " racket " under certain conditions. If the Disposal Board accepted a bid that was not the highest, the buyer would find a ready market in his unsuccessful rival, and assignment in such a case might be deplored. Criticism would be justified of the acceptance of a low bid for a large unit which was subsequently split up and sold for a higher aggregate price. This cannot have happened often, for most of the units disposed of have been small and the prices high.
The division and re-sale of a large unit is not necessarily wrong, provided the unit fetched a satisfactory -price in the first instance. Above a certain size of unit, .disposal seems to be progressively difficult. The Board and the Commission may be pleased to have a large unit taken off their hands at the. price they want. They would not worry too much about what happens to it afterwards.