;DOCUMENT IS T H E P R O P E R T Y OF H E R B R I T A N N I C M A J E S T Y S G O V E R N M E N T )
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C(67) 127
C O P Y NO. £4
10th July, 1967
CABINET
ROAD HAULAGE
POLICY
M e m o r a n d u m by the P r e s i d e n t of the B o a r d of T r a d e
In C ( 6 7 ) 122 the M i n i s t e r of T r a n s p o r t p r e s e n t s her p r o p o s a l s
for a new s y s t e m of l i c e n s i n g heavy l o r r i e s , including those of "own
account" operators,
I f e e l bo\ind to state b r i e f l y why I a m convinced
on the e v i d e n c e s o f a r p r e s e n t e d that these proposals would be
injurious to productive industry and to the national i n t e r e s t ,
2.
T h e r e i s , of c o u r s e , no dispute about the M i n i s t e r s objective
of using the new f a c i l i t i e s of B r i t i s h R a i l w a y s t o the b e s t advantage.
On the other hand it is a l s o c o m m o n ground that B r i t i s h industry needs
to place a new e m p h a s i s on e v e r y a s p e c t of distribution and m a r k e t i n g .
It c a m e out c l e a r l y at the P r i m e M i n i s t e r s Conference in June that
speed and f l e x i b i l i t y in d e l i v e r y and distribution w e r e c r u c i a l in this
respect, particularly for exports.
Another v i t a l public i n t e r e s t is
the a t t r a c t i o n of new industry to Scotland, W a l e s and other d e v e l o p m e n t
a r e a s , and. this is v e r y dependent on m a n a g e m e n t s being convinced that
different parts of p r o d u c t i v e p r o c e s s e s which a r e g e o g r a p h i c a l l y
separated can be g e a r e d together conveniently and f l e x i b l y .
I have
frequently found the d e s i r e to have its own internal t r a n s p o r t under its
own c o n t r o l is c r u c i a l in a f i r m s d e c i s i o n whether or not to set up in a
Development A r e a .
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3.
The e s s e n c e of the M i n i s t e r s p r o p o s a l s f o r "quantity l i c e n s i n g "
is that, o v e r and above the f r e i g h t t r a f f i c that the r a i l w a y s w i l l
attract by t h e i r sheer c o m p e t i t i v e advantage, an additional v o l u m e of
t r a f f i c should be d i v e r t e d to t h e m by refusing l i c e n c e s t o r o a d h a u l i e r s .
W h e r e the r a i l w a y s object to l i c e n c e a p p l i c a t i o n s , the onus w i l l be on
the h a u l i e r s to convince the l i c e n s i n g authorities that considerations of
speed, r e l i a b i l i t y and cost justify the use of road transport.
4.
It has b e e n calculated that the t r a f f i c d i v e r t e d t o the r a i l w a y s
in this way may r e d u c e the r a i l w a y s ' d e f i c i t by £ 6 m i l l i o n o r , say
4 per cent.
T h i s saving would b e worth having.
But, in m y judgment,
the issue is whether the inevitable i m p e r f e c t i o n s of any l i c e n s i n g
p r o c e s s w i l l not r e s u l t in costs t o B r i t i s h industry outweighing this
advantage.
I a m strongly in favour of the r a i l w a y s whining back a l l
possible traffic? but it should be done, not by r e s t r i c t i v e c o m p u l s i o n ,
but by the r a i l w a y s attracting custom by efficiency and r e l i a b i l i t y ,
as we would e x p e c t any other public or p r i v a t e e n t e r p r i s e t o do.
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5.
It a l s o s e e m s to m e that the l i c e n s i n g authorities w i l l face a
task of g r e a t c o m p l e x i t y .
In two long d i s c u s s i o n s in the M i n i s t e r i a l
C o m m i t t e e on E c o n o m i c P o l i c y ( E N ) and subsequent m e e t i n g s b e t w e e n
o f f i c i a l s , the d e p a r t m e n t s c o n c e r n e d with industrial e f f i c i e n c y have
sought to elucidate how the authorities would d e a l with important
difficulties.
Some of the m a i n ones w e r e set out in E N ( 6 7 ) 48.
For
e x a m p l e , how would the authorities quantify the value to be attached
t o the ability of r o a d v e h i c l e s t o m e e t the demand f o r j o u r n e y s , at
i r r e g u l a r t i m e s and at short n o t i c e , or to plan round t r i p s with
deviations f r o m the m a i n f r e i g h t l i n e r routes with p r o v i s i o n f o r d e l i v e r y
of p a r t - l o a d s and Maackloadmg' ? M o r e g e n e r a l l y , w i l l it be p o s s i b l e
f o r t h e m t o attribute a p r e c i s e cost/benefit to f a c t o r s such as the
f l e x i b i l i t y and t i m i n g which c o n t r o l of his own f l e e t g i v e s an "own
a c c o u n t " o p e r a t o r , or t o a l l o c a t e o v e r h e a d costs of h a u l i e r s t o
p a r t i c u l a r operations in a way that w i l l p r o v i d e a true c o s t c o m p a r i s o n
between road and r a i l ?
6.
T h e s e judgments w i l l often i n v o l v e a s s e s s i n g not only the
e c o n o m i c s of the r o a d h a u l i e r s ' business but the e c o n o m i c s of t h e i r
c u s t o m e r s business as w e l l .
W h i l e it m a y be true at p r e s e n t that
some r o a d h a u l i e r s and t h e i r c u s t o m e r s a r e insufficiently a w a r e of the
advantages that the r a i l w a y s offer f o r s o m e types of t r a f f i c , it is a b i g
jump t o say that the l i c e n s i n g authorities w i l l in g e n e r a l be competent
t o m a k e sounder judgments than the businessman about the costs and
e f f i c i e n c y of an important aspect of his b u s i n e s s .
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7.
In answer t o these points the M i n i s t r y of T r a n s p o r t have in
effect said no m o r e than that the f e a r s e x p r e s s e d a r e e x a g g e r a t e d and
that the l i c e n s i n g authorities can be r e l i e d upon t o d e a l with these
m a t t e r s with w i s d o m and d i s c r e t i o n .
P a r a g r a p h 6 of A n n e x D to the
M i n i s t e r s p a p e r , h o w e v e r , shows c l e a r l y that, after d e t a i l e d
e x a m i n a t i o n , the m a i n doubts of the other D e p a r t m e n t s concerned
have not been r e s o l v e d .
F o r this r e a s o n I cannot accept that the r i s k s
of going ahead on the lines p r o p o s e d a r e justified by the advantage t o
the r a i l w a y s , nor that the r a i l w a y s could not be helped t o m a r k e t t h e i r
product in some l e s s c o s t l y and c u m b e r s o m e way.
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8.
In addition, industry, and e x p o r t i n g industry in p a r t i c u l a r ,
a r e not simply concerned with cost c o m p a r i s o n .
T n e y a r e equally
c o n c e r n e d in many c a s e s with r e l i a b i l i t y , r e g u l a r i t y of t r a n s p o r t and
the maintenance of d e l i v e r y d a t e s .
T h e r e has b e e n too much genuine
e x p e r i e n c e of delays on the r a i l w a y s f o r many f i r m s to be w i l l i n g to
a l l o w t h e i r t r a n s p o r t a r r a n g e m e n t s to be outside t h e i r own c o n t r o l :
and the M i n i s t e r of T r a n s p o r t s p r o p o s a l s a r e t h e r e f o r e l i k e l y to
p r o v o k e a loud and s i n c e r e outcry f r o m a wide section of industry,
i. e, they w i l l b e r e p r e s e n t e d with s o m e r e a s o n as running counter t o
much of the G o v e r n m e n t ^ a d v i c e to industry on e f f i c i e n c y , the
m o v e m e n t of e x p o r t s , d e l i v e r y dates e t c .
9.
It would be far w i s e r , in m y v i e w , t o help the r a i l w a y s to win
back t r a f f i c by showing that their own p e r f o r m a n c e justifies i t , and
thereby to winning their c u s t o m e r s confidence.
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D. P. T . J.
Board of T r a d e , S. W . 1.
10th July, 1967