" Abandon Licensing," Says Economist

6th May 1960, Page 108

6th May 1960

Page 108

Page 108, 6th May 1960 — " Abandon Licensing," Says Economist

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ABANDONMENT of the licensing system for goods vehicles was advocated by Mr. D. L. Munby, reader in the economics and organiza

tion of transport, Oxford University, when he addressed the Royal Society of Arts on Wednesday in London. He was speaking on " Future Developments of the Internal System of Transport."

After pointing out the difficulties involved in trying to forecast the future, because of technical advances and unpredictable changes in Government policy, Mr. Munby said that a fundamental question which had to be answered was whether transport was to be run on commercial lines, and .pay its way, or whether it should be offered as a public service.

Logical Criterion

It was, however, difficult to lay down a logical criterion for a standard of public service. How much transport ought people to expect? Should the bus service from the village to the market be once a week or several times a day?

In practice, decisions on the publicservice principle were made by politicians. If the West Highlands could mount a sufficiently large lobby, they would be provided with a subsidized transport service. "if this is to be the background for transport." commented Mr. Munby, then it is difficult to see how a mere economist can say anything very much about the future."

On the other hand. "quite a revolution" would be involved if transport were run on commercial lines, and strangely enough, this would not be so great on the railways as elsewhere. The railways now had rates freedom, but serious restrictions remained in the field of road services.

Out of Tune

"A logical following out of the commercial principle would mean the abolition of restrictive monopolistic licensing in road haulage and road passenger transport," said Mr. Munby. This had survived from the 'thirties and was out of tune with the anti-monopoly legislation of the post-war world of full employment.

• There was no question of the benefits to be gained by control of vehicles and . hours of work, and the provision of scheduled passenger services, but a • licensing System which ensured these benefits need not be so restrictive as at present. The existing licensing system was necessary only if a large measure of cross-subsidization were considered essential, and if the desirability of monopoly privileges for road operators were aclepted.

A serious question concerned the proper charging for the use of the roads. "Our present methods of charging are F14 likely to lead to considerable overcharging for the use of certain underutilized roads, while at the same time the road user who creates traffic congestion does not in any sense pay the full costs for which he is responsible," Mr. Munby maintained.

Arguments about the total amounts collected from road users in relation to the total amount spent on the road system were largely irrelevant. The real problem was whether particular road users paid enough for the services they demanded.

Mr. Munby attempted to judge the extent of the growth in demand for transport on the basis of a doubling in the gross national product in 25 years. Experience in many countries suggested, he stated, that the national product expanded more rapidly than the need for transport. As standards of living increased, a high proportion of final consumption was of industrial goods, the value of which was high in relation to their weight.

Unless a Government deliberately forced traffic back to the railways from the road, one could not see the railways as the predominant goods carriers of the future. What mattered was how far they were able to sell their services to the public at the right price, and to convince the public that the services they offered were of a good quality.

Bigger Lorries

Two trends loomed large in road haulage: one was the increase in the number of ancillary vehicles, and the other was towards the use of larg&. vehicles, It seemed highly likely that lorries would become bigger. "Indeed technical progress in lorries may be faster than the more dramatic forms of technical progress to be seen in the modernization plan of British Railways," Mr. Munby remarked.

This might be one good reason for being sceptical about too bright a future for )3.R.," he added.

It was important to note how much of the growth in C-Licensed vehicles was because of the expansion of the distributive industries. It was natural that shopkeepers should buy more vans as a higher proportion of the national product took the form bf services. It was equally natural that manufacturers concerned with advertising their brands should put their own vehicles on the roads.

These trends were an inevitable accompaniment of a rising standard of living, and had nothing to do with the competition between the public carrier and the private concern's own vehicles, or with the competition between road and rail.

But the future of this kind of service was not assured, Mr. Munby warned. "Ii may Well be that, with the abolition of resale price maintenance, shops will not have the same incentive to provide delivery services whether customers are ready to pay for them or not.

Radical Methods "Similarly the advertising value of a delivery van, in which a manufacturer delivers his goods direct to shops, may well be seriously affected by more radical methods of dealing with traffic congestion in cities," he explained.

Mr. Munby had in mind the establishment of clearing houses on the outskirts of city centres. Goods would be delivered to them from the factories and onwards in aggregated loads, to the shops. It did not seem sensible that dozens of different manufacturers should deliver in turn to particular shops in congested streets.

Some of the growth in C-licence vehicles was because of the monopoly restrictions on the other licences and the upheavals undergone by the road transport industry in the past few years. "But something like it would have occurred in any case," Mr. Munby observed.

If all the sections of the haulage industry Were allowedto compete on economic terms, manufacturers would be in a position to decide whether they wanted to bear the costs of a private system of transport, taking account of the convenience this might offer for them.

Proper Costs

Common sense would suggest that there would then be a place for all forms of transport. A fully commercial system of road haulage would involve the operators in paying the proper costs of the roads they used. It might be that they would be called upon to pay less in the country but probably much greater sums in the towns.

It would involve the removal of licensing restrictions of practically every kind. For example, there would be no limitation on C-licensees carrying goods for hire or reward if they wanted. The logic of this policy might well lead to the development of public clearing houses where traffic demands could be .sorted out

"A proper commercial system of transport does not preclude transport developments being linked with the whole pattern of industrial development," Mr. Munby concluded. "We, have suffered too much in the past from transport investment taking place in a piecemeal fashion, unrelated to what is being done in other fields. For the future we must do better."