Nothing for Goodwill
Page 69
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MUCH as the majority of people dislikes the idea of nationalization, they do not seriously question the right of a political party to put the idea into effect. Without clearly naming—or perhaps even clearly seeing—the targets, the Labour party threaten to take over, any businesses or industries that do not stand up to
certain unspecified tests. The threats have at least the appearance of legality in that the Socialists have in mind buying out their victims and paying compensation.
The public are reasonably sure that the formula on which payment is to be made will be more or less acceptable to both sides, although there is not likely to be unanimity about the value of the terms in the formula. The industries nationalized in the years following the war were given a fair deal in principle, even though the argument is still going on about what happened in practice. It is assumed that no worse treatment will be given to industries taken over in the future.
The exceptions seem to be the industries that the Labour party propose to renationalize. In the case of long-distance road haulage, it is the present intention that one of the terms in the formula shall no longer have any value. In the first flush of indignation the extremists wanted to go even further. They urged that the road haulage vehicles and other assets sold back to free enterprise should be confiscated on the return of a Socialist government. Wiser counsels modified the threat to a declaration that payment would be made only for the physical assets and not for goodwill.
Labour policy apparently remains at this stage, but nobody should deceive himself into thinking it a satisfactory compromise. When. the Socialists next decide to make a statement on road haulage renationalization, they might well re-examine their .minds and their consciences on the subject of compensation. If they look at it carefully. they may come to a fresh conclusion.
Showing a Loss To every business there is attached a goodwill, and this has a value wherever the business is not showing a loss. Neither the 1947 nor the 1953 Transport Acts referred directly to goodwill, but both Acts made sure in different ways that most of the assets taken over by the British Transport Commission or returned to free enterprise were sold at something a good deal more than they would fetch as chattels. The 1947 Act provided for a separate payment based on recent profits. The 1953 Act did not separate the items, but it is certain that the Disposal Board allowed nothing to be sold until the right price was offered. Each time an element, that may as well be called goodwill as anything else, was included in the purchase price.
If it is to be excluded at the next swing of the pendulum, the consequences may be more far-reaching than even the Labour party suppose. In case they return to power and ever reach the point of introducing a renationalization Act, it is important for public opinion to be made aware, well in advance, that the new legislation will not merely recapitulate but will introduce an entirely new principle—that of confiscation.
Past experience shows that once a principle is established it is applied to an increasingly wide range of cases. Most people regard, with a repugnance only partly due to experience, the thought of any further extension of State ownership. They should be thoroughly alarmed at the hint that not even a pretence is to be made of a proper commercial transaction. Once the Labour party are allowed to get away with buying merely the assets of road haulage undertakings, they may well decide that this is an excellent basis for other nationalization schemes. They will be encouraged to embark that much: moreboldly upon experiments that seem to cost so little.
Perhaps genuinely, the Socialists are relying upon false arguments. They assume without justification that nationalization and renationalization are somehow different in kind. They say that they are not prepared to pay twice for the same thing, although they will apparently pay twice for the vehicles. They believe that the value of goodwill is like the value of the bargain in the January sales, and cannot be repeated. If the Labour party can really uphold a principle so much the reverse of common sense, the country's future under their government would indeed be gloomy.
Almost Subversive Another point from the Socialist side is that they have given ample warning of their intentions. This, if valid, would excuse any crime. Operators who bought transport units from the B.T.C. were acting in accordance with the law. They expected appropriate noises from the Opposition, but it is almost subversive to suggest that threats against people who carry out the wishes of Parliament should be taken as any more than political flourishes.
Even more ingenuous is the argument that hauliers who bought transport units acquired merely a five-year special A licence and cannot expect their rights to continue after its expiry. It would never have been proposed or accepted that the licence be conferred in perpetuity, but the operator who has used it wisely has built up goodwill for which he may confidently expect an ordinary A licence when the time co.ftles for renewal.
The Labour party's transport experts suggest that they will not so much take over businesses as allow the B.T.C. to absorb them. There will be restrictions imposed on the operations of independent hauliers, who will either have to conform or offer their undertakings for sale to the B.T.C. at a knockdown price. This may conceivably bring the holders of special A licences into the net on the terms envisaged by the Labour party, but will also trap a large number of hauliers who remained in business following the 1947 Act, and may have been granted original permits.
Under that Act, an operator who was not granted a permit to enable him to continue his long-distance work was entitled to hand over some of his vehicles and to receive reasonable compensation. The Labour party may feel bound in equity to make similar provision next time; they can hardly blame the ordinary Aor B-licence holder from taking advantage of the raising of the 25-mile radial restriction. They would therefore find themselves in the position of having to compensate such an operator, who had paid nothing for his right, and not Compensate the only operator who in fact had made a specific payment.
Although the idea of not paying for the confiscation of the special A licence may seem just and reasonable to the Socialists, it becomes absurd as soon as the consequences are considered. It comes like the misleading
visions that trouble the hermits. It has the form and lineaments of the Socialists' own ideals, for it apparently smooths the path towards integration and public ownership. To the outsider the vision has a less prepossessing shape. It looks more like a not very plausible excuse for revenge.