HC Deb 31 May 1956 vol 553 cc466-74

  1. (1) There shall be included among the grounds on which an A licence or a B licence may be suspended or revoked under subsection (1) of section thirteen of the Road and Rail Traffic Act, 1933 (which provides for the revocation or suspension of carriers' licences in certain circumstances) or a direction may be given under subsection (3) of that section, the following additional ground, that is to say, that the holder of the licence has been persistently charging, for services which consist of or include the carriage of goods by road in any of the authorised vehicles, sums insufficient to meet the cost of rendering those services and has thereby placed other holders of licences at an undue or unfair disadvantage in competing with him as respects the carriage of goods by road.
  2. (2) The proviso to the said subsection (1) (which proviso imposes certain conditions on the powers of the licensing authority to revoke or suspend a licence) shall not apply to any revocation, suspension or direction made or given by virtue of this section, but, if the holder of the licence requests the licensing authority to hold a public inquiry, the licensing authority shall not make or give any such revocation, suspension or direction except after holding such an inquiry.
  3. (3) So long as the provisions of section twelve of the Road and Rail Traffic Act, 1933 (which relates to holding and subsidiary companies), have effect, paragraphs (a) to (c) of subsection (1) of that section shall apply in relation to 467 subsection (1) of this section as they apply in relation to Part I of that Act, and references in subsection (1) of this section to charges made by the holder of the licence and to competing with him shall be construed accordingly.—[Mr. Ernest Davies.]

Brought up, and read the First time.

Mr. Ernest Davies

I beg to move, That the Clause be read a Second time.

I do not think I have ever moved a Motion with less enthusiasm than that with which I move this, and the House will understand the reason when I explain the history which lies behind this new Clause. When the Standing Committee was discussing the Transport (Disposal of Road Haulage Property) Bill, the Government put down a new Clause very similar to that which now appears on the Order Paper, but in Committee we raised serious objections to it, mainly on the ground that if impositions were to apply to road hauliers when they engaged in what was interpreted—although we did not accept it—as unfair practices, those impositions ought to apply equally to the Transport Commission and to private road hauliers. In our view it was quite unfair that there should be discrimination against the Transport Commission.

We accordingly fought against the Clause in Committee, but at that stage the Minister defended it and refused to withdraw it. We placed Amendments on the Order Paper to the effect that the Clause should apply equally to all road hauliers, and the Minister stated that if they had been in order he would have accepted them. In the course of the proceedings he suggested that the difficulty could be overcome by an Amendment to this Bill covering both private and public operators. During the final stages of the Transport (Disposal of Road Haulage Property) Bill, the Minister accordingly withdrew his Clause, which confined the possibility of revocation or suspension of licences, in the case of unfair practices, to the Transport Commission, and agreed to accept this Clause.

The purpose of both this and the original new Clause is to prevent unfair competition. The Government considered that unfair competition arose where holders of licences placed other road hauliers at an unfair competitive disadvantage by undercutting them that is to say, if the licence holder operated services at a loss, the licensing authority would have the right to revoke or suspend the licence in accordance with Section 13 of the Road and Rail Traffic Act, 1933.

As I have said, we considered that unnecessary and undesirable. Moreover, the original Clause was unfair to the Commission and inoperable. We stated, however, that if it were applicable to all it might just be tolerated, and I submit this new Clause in that sense—that it can just be tolerated. In other words, the Minister insists on having something, and we say that we can tolerate this, although we do not consider it necessary. If we had not put down the new Clause, no doubt the Minister would have taken action.

5.0 p.m.

There is one change which I hope represents a slight improvement. During the Committee stage discussions on the other Bill we suggested that it was necessary to prove that the engaging in unfair practices was frequent; that it was not enough, every time a service was operated at a loss, for some other road haulier to suggest that the service being operated at a loss was a form of engaging in unfair competition. We suggested that there should be included in the Clause the word "persistently". In other words, were it proved that the Commission or other road hauliers, were making unreasonable charges persistently, and therefore were engaged in this so-called unfair competition, the licence could be suspended or revoked.

Strong arguments have been advanced that even though the Clause were accepted and applied to all road hauliers, the Commission would still be in a position to engage in unfair competition. The hon. Member for Kidderminster (Mr. Nabarro) suggested in previous debates that the Commission was in a more favourable position than private hauliers, because it was able to obtain its capital under Treasury guarantee. Compared with other road hauliers, the Commission is at some disadvantage, inasmuch as, being a nationalised sector of the transport industry, it engages in public service, and has therefore to provide, and does provide, a large number of unremunerative services.

It is well known that it is providing a nation-wide comprehensive trunk service for the carriage of goods by road which covers practically the whole of the United Kingdom. Inevitably, that means that there are considerable losses on some routes, whereas considerable profits may be made on others. The Commission considers it a duty to provide such a public service, but the private hauliers in many instances may be operating a few vehicles and working only on remunerative routes. They go in for what is frequently called "skimming the cream". They pick up the most profitable traffics and operate on the most profitable routes, so that they still have some advantage.

The Commission has been most unfairly treated recently, and the new Clause has been drafted because of the denationalisation of a sector of the Commission's undertaking. Not only has the Commission been unfairly treated by having the recommended number of vehicles which can hold licences reduced by 7½ per cent.—by 582 vehicles—but last Tuesday it was revealed in another place that in future the fixing of the total unladen weight of the vehicles for general haulage which it is allowed to retain will mean that it will be deprived of a further 100 vehicles. The Minister in another place gave the figure of vehicles which the Commission will be able to retain as 101 less than the 7,750 which were recommended to the Minister by Sir Malcolm Trustram Eve. Therefore, in my opinion, the Commission is being most unfairly treated.

The competition which arises in the industry, and which the Clause is meant to regulate, has arisen as part of the deliberate policy of the Government. They wanted to reintroduce a large measure of competition into the industry and have succeeeded in so doing. There is a substantial amount of cut-throat competition within the industry today. Rates are being cut, there have been prosecutions, and there is evidence of a deterioration of working conditions. Excessive hours have been worked and the law has been broken.

This excessive competition arising from Government policy is due to the efforts or operations of private hauliers and not the Commission. If there is to be any regulation of unfair competition and the prevention of excessive rate cutting which results in operational losses, the private operators should be affected equally with the Transport Commission, and that is what is attempted by the Clause.

When the original Clause was drafted, there was a mistaken impression that the Commission had an unfair advantage and engaged in certain monopoly practices. As has frequently been pointed out, both in this House and during Committee discussions, the Commission is not a monopoly operator. In the end, it may well have the largest operating fleet. That we do not deny. It will have the largest fleet, and the best; but, be that as it may, the competition, both from the private enterprise hauliers who can pick and choose their routes, and from the C licence holders, is considerable. Despite that competition, and without engaging in unfair practices, of which it has been indirectly accused by the introduction of the original Clause, the Commission continues to operate very profitably; and despite also the difficulties resulting from the disintegration of certain of its services.

As I said, I move this Motion with little enthusiasm. I would rather the Minister indicated that he has had second thoughts about it. The Clause is not in his name, and he could easily refuse to accept it. I promise the right hon. Gentleman that, should he do so, we shall not take him to a Division on the matter. We consider that the Clause is not really necessary, but it is a great improvement on the original Government proposal, because it applies equally to all road hauliers.

Mr. McLeavy

I beg to second the Motion.

I do not propose to reiterate the points made by my hon. Friend the Member for Enfield, East (Mr. Ernest Davies). I think it fair to say that the old Clause was one-sided and designed to affect the Transport Commission rather than private road hauliers. We on this side of the House made clear that this was unreasonable, and in fairness to the Minister one should say that our arguments were so strong that he accepted our point of view. I do not think there is anything wrong in paying a tribute to a Minister, from whatever side of the House he may come, who sees the wisdom of arguments advanced to him and introduces a new Clause which will affect both sections of the industry.

I agree with my hon. Friend the Member for Enfield, East that there are dangers in the Clause unless the licensing authority exercises a sensible balance. It is very easy to make representations to the effect that there is under-cutting, but today there are many services of a national character from the very nature of which it can be argued that one section, because it is serving an isolated part of the country, is giving a service at less than the normal cost. We have, however, argued many times that the duty of a nationalised industry is to provide a service on a national charge basis so far as possible so that isolated areas can get the service at as reasonable a price as the more fortunately situated thickly populated areas.

It is only a short time since we had a discussion on rural bus services. This is a case in point. Whoever provides a service in a rural area will have to provide it on the basis of loss. Whatever concern provides the service, whether it is a municipal, nationalised or private undertaking, it can be argued that it is providing a service to agricultural areas which is not in fair competition with some one else seeking to provide a similar service. Thus, the licensing authorities will have to hold a very fair balance. If the Clause is accepted, I hope they will strongly resist any attempt to make frivolous complaints and to cause difficulty for any section of the industry.

On the other hand, provided that the licensing authorities exercise the restraint and common sense which I believe they will, I do not entirely object to the principle of fair competition being insisted upon in the Bill. I have always argued that unless we have a measure of fair competition we shall have a system of cut-throat competition which will be bad not only for the industry and its service but for the personnel engaged in the industry. I will always support in this House a principle which is firmly based upon fair competition coupled with the application of fair wages and conditions of employment. The new Clause, apart from some of its disadvantages, will confer some blessings in that respect.

5.15 p.m.

We have spent a long time on the Bill in Standing Committee and in the House, and it is only fair to say that on many matters the Minister has been very reasonable and anxious to meet the points which have legitimately been made. Much of the success of the Bill is due to the very fair way in which he has approached the problem. During our debates, apart from one or two of the highly political aspects of the Bill, there has been no question of party division. Whatever may be the shortcomings of the Bill, the values which it has are due largely to the wisdom of the Standing Committee and the wisdom of the Minister and the fair way in which he has dealt with the various propositions put forward from both sides of the House.

Mr. Norman Cole (Bedfordshire, South)

I want to comment upon one or two points made by the hon. Member for Enfield, East (Mr. Ernest Davies). We have again heard the hoary old story about private enterprise getting the cream of the routes. The hon. Member for Enfield, East can never have heard about the licensing authorities. That old story is not true. I can also tell the hon. Member that private enterprise, and, indeed, the British Transport Commission as well, is not frightened of fair competition, as the hon. Member for Bradford, East (Mr. McLeavy) stated. Therefore, from the private enterprise point of view, there is no need to worry about competition arising from the Clause.

I want to reiterate a point I made in Standing Committee. The reason, I believe, why my right hon. Friend introduced his Clause in Standing Committee was that nothing can escape the fact that the largest transport organisation in the Kingdom, the Commission, has special advantages in regard to running certain routes at a loss. That was the feeling that some of us had in relation to the original Clause which is to be replaced by the present one. The Clause moved by the hon. Gentleman retains the safeguards. I have no objection to it, and I think my hon. Friends would support it, but nothing can alter the fact that, until my right hon. Friend dealt with the matter of free competition, there was always the danger that one large authority—in this case, the largest in the Kingdom, the B.T.C.—could, no doubt for legitimate reasons, afford to run certain routes at a non-competitive rate to the detriment of private enterprise, which we also want to have a fair crack of the whip and a fair share of the industry.

I am glad that the new Clause will apply equally to both sections of the industry. I do not think private enterprise will be worried about it. It is prepared to take on all the advantages and responsibilities arising from proper free competition between nationalised industry and private enterprise.

We are here controlling what can be done by a large organisation in comparison with a smaller transport unit which has not the same advantages. The hon. Member for Enfield, East said that a number of the ordinary hauliers owned just a few vehicles. That is, by and large, the pattern of the industry. It is very proper that where there is one giant in an industry in competition, as we envisage in the future, with a great number of much smaller organisations, something should be provided in law to ensure that free competition exists and that the whole business does not get out of balance. I believe that my right hon. Friend will accept the principle of the Clause. Speaking for myself, I am very glad to see the Clause.

Mr. Watkinson

Despite the slight lack of enthusiasm with which the hon. Member for Enfield, East (Mr. Ernest Davles) moved the new Clause, he stated the case very fairly, as did the hon. Member for Bradford, East (Mr. McLeavy). The Clause will be a useful addition to the Bill, which I believe is the opinion held on both sides.

We are moving, I hope, into an atmosphere in this great haulage industry where the arguments and divisions are largely settled and where British Road Services and other operators will settle down as ordinary employers and try to work together. I attach the utmost importance to that. British Road Services, the Road Haulage Association, and the other interests should now regard themselves as one, or as several parts of a very important industry, and should work together in that sense. The Clause is therefore a useful adjunct to that way of running the industry.

I do not think the Clause will be unduly difficult to operate. It gives a safeguard against any unfair use of it, but, of course, if the Clause were invoked we should have to place the facts before the licensing authority with all its experience. It would be only if the licensing authority considered that there was a prima facie case to answer—and even then we should have to put the case to the licensing authority—that the authority could hold a public inquiry.

It is a fair Clause, and I am grateful to the hon. and right hon. Gentlemen who have put it down. They have improved it by the word "persistently", which makes very clear the abuse which it exists to counteract. I have much pleasure in accepting it.

Question put and agreed to.

Clause read a Second Time, and added to the Bill.