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Political Commentary By JANUS
Page 87
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No Peace for Transport
JUST when a period of tranquillity seemed to be in store for the transport industry, the Minister of Transport has chosen to take a bold decision that may within a few months plunge the industry into another turmoil. Not enough attention has been paid by road operators to a remarkable debate in the House of Commons the day before Parliament broke up for Whitsun, when the Minister explained his decision, not greatly to the satisfaction of the Socialists who began the discussion.
They attacked him for not giving the British Transport Commission and the Transport Tribunal their head to increase rates and fares. Burdened with a deficit estimated to reach £125m. by the end of the year, the Commission applied some time ago for permission to increase fares, for a 10-per-cent. advance in rates, and certain other increases, including 7-1 per cent. in respect of docks and canals. These changes were estimated to produce an extra £37m. in a full year, as compared with a deficit of £55m. in the current year.
After consultation with, and perhaps a little persuasion from, the Minister, the Commission agreed to defer the increases in fares. The application on freight rates was referred to the Transport Tribunal, but the Minister made plain that he would not accept an increase of more than 5 per cent. instead of the 10 per cent. that was sought. As a result, the Commission's revenue would increase only by £20m. in a year, and the accumulated deficit by the end of 1956 would probably exceed £110m.
The subsequent events were, as one would imagine, a Greek tragedy rewritten by W. S. Gilbert. Fully aware from the outset that they were engaged on a highly abstract exercise, rather like the tailors making new clothes for Hans Andersen's emperor, the Tribunal solemnly examined the case put before them, and submitted a long memorandum ending with the recommendation "that regulations be made authorizing the increases proposed by the Commission."
Advice Ignored Mr. Harold Watkinson, as he had said he would, ignored the advice and introduced regulations, which took effect from April 23, to increase railway freight, dock and canal charges by 5 per cent. generally, by 7,1 per cent." for merchandise by goods train in consignments of under a ton and for merchandise by passenger train, and by 12+ per cent, for returned empties by rail.
The Minister has defended his action mainly along two lines. He has endeavoured to link it with the Government's policy as a whole, and he has suggested that the curb on higher rates and fares is in the interests of the Commission. The present economic policy requires that all nationalized industries shall make charges that fully reflect their costs, but the Government feel justified in asking the Commission to make an exception of themselves.
The Government's confidence, said the Minister on March 19, was supported by signs that "renewed and strenuous efforts will improve the financial outlook on the railways through more efficient working arising from better relations in the industry." The Minister thought that six months would be sufficient time in which to judge whether the Commission's efforts were bearing fruit. At the end of that period the position would be " re-assessed."
On May 17, when the latest debate took place, the Minister was more inclined to stress the importance to the Commission of the Government's policy. At the same time, he seemed less confident that six months would be sufficient time in which to produce results. "If something cannot be done in the next year or so," he said, "to gain improvements in operating efficiency, the Commission may well find itself crushed between the upper and lower millstones of an increased deficit and an inability to recoup the deficit by -increased charges, because the economic limit of increasing charges has been reached."
He evidently regarded the situation as serious and admitted that the Government were taking a calculated risk. "If we get it wrong, as hon. members rightly pointed out, we are merely faced with a deficit which cannot be overtaken, and, as the Government firmly reject any element of subsidy, and I do so again tonight, we can see therimpossible position in which the railways would be placed."
Helping the Railways Road operators cannot be anything but uneasy at the implications arising from this statement. Every major piece of transport legislation so far has had the main or subsidiary object of helping the railways. The Transport Act, 1953, promised freedom to the railways as well as to hauliers, many of whom were perturbed at the prospect of much keener competition from the Commission.
The railways are being given ample opportunities to renew and modernize their equipment, so that they will be better able to recapture traffic and passengers from the roads. Nevertheless, apparently the whole future of the railways lies in jeopardy. The Minister thinks it could become "impossible," but does not suggest what should then be done, apart from a statement, commendable as far as it goes, that there can be no question of a subsidy.
Suggestions will not be lacking from other sources, and they will almost inevitably entail further restrictions on road transport and its users. Heavier taxation, mileage limitations, curtailment of long-distance passenger services, proof of need for C licences—there is no end to the handicaps that have been proposed in the past and are likely to be proposed again at the least opportunity.
Hauliers are in particular danger. There are many people still prepared to maintain, in defiance of statistics, that the financial troubles of the Commission began with the loss through disposal of the greater part of the " profitable " road-haulage section. The campaign for renationalization lacks only a plausible excuse.
Road operators can find little comfort in the present situation. If the railways prosper to the extent required for their solvency, they must do so at the expense of their competitors. If they fail to come up to the Government's expectations, road transport will flourish always in the shadow of a rail decline that the Government must now do everything in their power to reverse. This is no time for road transport to imagine it can