By Any. Other Name
Page 77
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LAST week I remarked upon the curious way in which, at the Road Haulage Association's Bournemouth conference, the word " constitution " triggered off a chain reaction that made inevitable the defeat of a mild resolution that, under almost any other name, most of the members present would probably have liked to see put into effect. The framers of White Papers are more subtle in their approach. Those responsible for the recent publication on the subject of the British Transport Commission know that the one word they must avoid pronouncing with approving noises is "subsidy." So skilful is • their evasive action that Sir. Brian Robertson, chairman of the Commission, whilst gracefully accepting what most people assume to be a subsidy, is able to say how glad he is not to have one.
Sheltered from the cold %,Vinds that blow from Carey Street. the CornmissiOn expect for the next year or two to get further and further into the red. The; expectation, or hope, is that the modernization plan, the elimination of uneconomic services,, increased productivity and greater freedom to compete, will all begin to show results so that by 1961 or 1962 revenue Will just about balance outgoings. After that it will be roses, roses all the way, until 1970, the farthest ahead that the Commission care to look, when they forecast a.surplus of £50m. ,
In the meantime, the Commission Will have incurred substantial debts or deficits. By the end of 1956 the accuinulated-de.ficit will be of the order of E I 20m. The Governmentpropose that, to meet subsequent deficits (presumably up to 1961 or 1962) payments which may he as mush as £250m. will be made out of the consolidated fund. There will also be special advances to cover the interest on these payments. Finally, the 'Government propose to allow the Commission to borrow sufficient money to pay thefirst three years' interest on the money required to finance the railway modernization scheme.
Wipe the Slate Clean. _
When the Commission are in funds again, they may have as much as £500m. to work off in repayments. Even with an annual surplus of 1:50m.,.this will take 10 years. _Whether the amount will ever be liquidated may depend upon circumstances. For example, if inflation is still with us, the public will become exasperated at the spectacle of a railway system that is supposed to be vastly improved, but diverts the resulting economies away from the direction of cheaper fares and rates. There will be a mounting demand for the Government.to wipe the slate clean. If this is done, then the Commission will have had their subsidy. under whatever name it may be disguised.
Perhaps to heighten the contrast with the gloomy present, the Commission make the picture of their future extremely, even unbelievably, bright. Precise estimates are made of the gains under each item Where improvements are expected. The early successes under the modernization scheme are expected to repeat themselves many times over. As a result, an improvement of £30m. a year is confidently predicted'on passenger traffic, and a minimum of £55m. a year on freight transport.
The elimination of uneconomic branch lines is expected to make a permanent saving of £3m. a year by the end of the next six years. Increased productivity. apart from what will be provided by the modernization scheme, will help to the extent of £5m. a year by 1961, and flOm. by 1970. Relief from statutory obligations, say the Commission, will make possible a "less -restricted, more selective and more aggressive selling policy," and this, ooupled with "such alterations in fares and charges (net) as may be feasible within the ambit of charging policy," would give a total improvement of £20m. a year by 1961 or 1962, and £25m, by the year 1970.
By that time, the Commission plan to be £123m. better off each year than they' are at preterit with an annual rate of deficit of £40m. The payment of interest on modernization borrowings would reduce the profit to about £50m.
The graph of future railway prosperity provided by the Commission shows no shadow of disturbance. It assumes, and obviously must asstune, that other things are equal. There is no guarantee that this will be so. Some of the financial improvements in the Commission's plan Will be achieved by internal economies; others depend upon an increase in the number of passengers and the tonnage of goods carried. if the extra business is to be obtained at the expense of road transport operators. they will not submit easily to the loss of their customers, but will make every effort to improve their own services.
Period of Austerity
In order to win sympathy for the railways, the White Paper makes a good deal of their difficulties over the *past 30 years. The depression of the early 1930s was followed by the challenge of road transport. Then came the war and the post-war period of austerity. There is no evidence, however, that while this gloomy succession of 'events was unfolding, hauliers and passenger
'operators were living in luxury. They also suffered from the depression, the war and the austerity. As Mr. R. Morton Mitchell, chief executive officer of the R.H.A., pointed out in his recent paper before the 'Scottish Section of the Institute. of Transport, every kind of restriction has been placed upon hauliersto safeguard other interests, but nobody thinks of restricting other interests to safeguard the haulier.
It is not possible to tell how much traffic the Commission have lost as a result of disposal and the return of freedom to the hauliet. The road haulage industry as a whole has still not settled down. Co-operation or co-ordination remains sketchy, or disjointed. It .need not be supposed that this state of affairs will last until 1970. Recent events have shown. plainly that operators wish to work more closely together, and will not be contented until they have found satisfactory machinery, which will make them more powerful competitors than ever to the Commission, however much improved that body may become.
Other possible, even likely, developments may upset the Commission's calculations. Technical improvements will mean more efficient and more economical road vehicles. The growth in the number of private cars, and the development of air transport. will attract traffic from the railways. Road operators should not minimize the threat in the White Paper, but they will regard it as a spur to more effort rather than as a signal inviting them to give up.