Michael Baker - Thesis - Problems in Longterm Forecasting and Planning
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A5. Correspondence with the Central Statistical Office
This Appendix consists of two letters from CSO and a reply
from me.
The letter from Fred Johnson and my reply were both accompanied
by tables of estimates of the output of, and inputs to, road
haulage.
These were my first and second sets of estimates.
For comparison I have also included the final set of estimates
which appeared in Baker (1979a).
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C A B I N E T O F F I C E
Central Statistical Office
Great George Street, London SWIP 3AQ Telephone 01-233
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Our ref: D2/22 |
 March 1979
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Dear Mike
ROAD HAULAGE 1974
There has been some discussion between the CSO and the Department of the
Environment about the appropriate weight to be given to the road haulage industry
(excluding own account) in the index of GDP(0). The weight is based on the gross
value added in the industry in 1975 and the main problem is over the size of the
profits component of value added.
The national accounts derive their estimates of value added from inland
revenue returns and these show considerably lower profits than those implied from
other sources - including the estimates of input and output of road haulage which
you prepared for the 1974 input/output tables. Table 5 of your first report (copy
attached) shows total output of £2436m and total inputs (including labour costs)
of £1693m thus giving a residual profit figure of £743m. This is about twice as
large as the revenue estimate.
What I would like to ask is whether you have any views on the reliability of
your estimates. I realise that they are based largely on the Commercial Motor
tables of operating costs and to that extent simply mirror the soundness of those
tables. But do you know of any other sources which might provide an alternative
estimate of profitability in road haulage?
I am sorry to drag you into what is essentially an internal problem but now
that you are a world expert on UK transport statistics could we ask for some free
advice? I am copying this to Keith Childs in the GDP(0) section here and Mike
Haslam at DoE.
Yours sincerely
[Signed Fred Johnson]
F J JOHNSON
Mr M Baker
Energy Research Group
Open University
Walton Hall
Milton Keynes
Bedfordshire
Enc
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Table A5.1 shows my 1st round
estimates on road haulage and was enclosed with Fred Johnson's
letter of 11 March 1979 (see above).
Table A5.1 Road Haulage 1974 (1st estimates)
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| I.O. No.(s) |
Commodity |
Total |
| 94(703) |
Road Haulage |
2 435.7 |
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| I.O. No.(s) |
Commodity |
Total |
| 94(703) |
Road Haulage (million tonnes)
(million tonne km) |
731.4
49.210 |
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| I.O. No.(s) |
Commodity |
Total |
5,6,7,11,59
85,95,102
11
59
?
89
99
100,0
102
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Overheads
Fuel
Lubricants
Spare partsOther materials for vehicles
Tyres
Vehicle insurance
Other Insurance
Rent and rates
Amounts paid out for
maintenance and repairs |
114.4
261.0
11.6
88.9
13.0
76.5
94.0
20.5
39.9
66.2 |
0
0 |
Salaries, wages, N.I. and
grad. pension
Licences |
848.7
58.5 |
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Total |
1 693.2 |
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| I.O. No.(s) |
Commodity |
Total |
| 11 |
Fuel ('000 gallons) |
561.100 |
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THE OPEN UNIVERSITY |
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Energy Research Group
The Open University
Walton Hall
Milton Keynes MK7 6AA
England
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Telephone:
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Milton Keynes 74066 |
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Direct Line:
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Milton Keynes 6 3338
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Our Ref:
Your Ref:
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MB/PC
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F. J. Johnson
Central Statistical Office
Great George Street
London SW19 3AQ
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27 March 1979
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Dear Fred,
Thank you for your letter of 22 March and for conferring
World Status, frankly I feel woefully ill informed.
I am enclosing my (hopefully) final results for Road
Haulage. These are based on the work I cam to discuss
with you about a month ago.
I am assuming that all public haulage in Order XXII
is performed by Road Haulage, MLH 703. It is probably
not but I suspect the difference is within the level
of accuracy of the estimates. You will see that the
Gross Profit is now £449m (considerably less than
the previous £743m).
I have made certain changes to my methods which you
will be able to see when I have finished writing up the
road trasport work. Basically, I hgave reduced the
Rent and Rates and Interest unit costs to 0.2 of the
Commercial Motor Table values and Insurance to 0.6 of
the CM values. This is to keep the figures more in
line with the results quoted in Edward + Bayliss,
Operating Costs in Road Freight Transport. I have also
altered the method of calculating Overheads and Profit
which CM take as 20% of all other costs, for both. I
am now taking 7.87% and 0% respectively for own account
operation and 18.08% and 23.16% for public haulage which
are again in line with Edward + Bayliss. If the revenue
estimate is similar to my own this would be a great
comfort as the Edward and Baylis figures are for 1965!
I hope this may be of some help.
Yours sincerely,
Mike Baker
Encs:
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Table A5.2 shows my 2nd
round estimates on road haulage and was enclosed with my
letter of 27 March 1979 (see above).
Table A5.2 Road Haulage 1974 (2nd estimates)
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| I.O. No.(s) |
Commodity |
Total |
| 94(703) |
Road Haulage |
2 435.7 1614.8 |
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| I.O. No.(s) |
Commodity |
Total |
| 94(703) |
Road Haulage (million tonnes)
(million tonne km) |
731.4
49.210 |
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| I.O. No.(s) |
Commodity |
Total |
5,6,7,11,59
85,95,102
11
59
?
89
99
100,0
102
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Overheads
Fuel
Lubricants
Spare partsOther materials for vehicles
Tyres
Vehicle insurance
Other Insurance
Rent and rates Hiring Vehicles
Amounts paid out for
maintenance and repairs |
114.4 73.5
261.0 277.0
11.6
88.9 96.5
13.0 5.6
76.5 74.0
94.0 60.7
20.5
39.9 25.1
66.2 28.9 |
0
0
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Salaries, wages, N.I. and
grad. pension
Licences Taxes
Gross profit |
848.7 470.0
58.5 55.0
448.6 |
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Total |
1 693.2 1614.8 |
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| Value added is 60.3% |
| Physical Input |
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| I.O. No.(s) |
Commodity |
Total |
| 11 |
Fuel ('000 gallons) |
561.100 |
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Table A5.3 shows my final estimates
on road haulage which appeared in Baker (1979a).
Table A5.3 Road Haulage 1974 (final estimates)
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| I.O. No.(s) |
Commodity |
Total |
| 94(703) |
Road Haulage |
1537.7 |
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| I.O. No.(s) |
Commodity |
Total |
| 94(703) |
Road Haulage (million tonnes)
(million tonne km) |
673.3
52246 |
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| I.O. No.(s) |
Commodity |
Total |
5,6,7,11,59
85,95,102
11
59
?
89
94(703)
99
102
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Overheads
Fuel and Lubricants
Spare partsOther materials for vehicles
Tyres
Hiring vehicles
Insurance
Amounts paid out for
maintenance and repairs |
70.0
285.7
94.7
5.5
74.0
22.2
54.7
28.3 |
0
0
0 |
Salaries, wages, N.I. and
grad. pension
Taxes
Gross profit |
419.2
48.7
434.8 |
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Total |
1537.7 |
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| I.O. No.(s) |
Commodity |
Total |
| 11 |
Fuel ('000 tonnes) |
2280 |
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C A B I N E T O F F I C E
Central Statistical Office
Great George Street, London SWIP 3AQ Telephone 01-233 7350
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Our Ref: D2/22/H01514
2 May 1979
Dear Mr Baker
TRANSPORT SECTOR INPUT-OUTPUT 1974
I have just seen, in manuscript, your final input-output reports for the transport industries for 1974.
Various parts of your report, in its earlier stages, have already been incorporated in our tables on a provisional basis. I have no doubt that in a work of this size there will be a number of points needing clarification and further discussion, and we may of course need to modify your results in some respects when we have completed our look at the input-output results as a whole. It is perhaps too early yet to make a final assessment of the value of your work.
But on the basis of what has been looked into so far, it is clear that it does represent a major improvement in the methods of arriving at reliable estimates of the transactions of the transport industries and in the quality of the results obtained.
I must congratulate you on the thoroughness and care that have obviously been taken to arrive at these very comprehensive results. I am sure your report and methods used will be a model for preparing similar estimates for the transport sector for future years.
I am sending copies of this letter to Dr G Alexander, Head of the Energy Research Group and to Mr T R Walsh of the Transport and Road Research Laboratory.
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T M Baker Esq
Energy Research Group
The Open University
Milton Keynes
MK7 6AA
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Yours sincerely
[Signed M J G Lockyer]
M J G LOCKYER
Chief Statistician
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Copyright © Michael Baker 1981,2005. All Rights Reserved.