HL Deb 15 February 1939 vol 111 cc746-66

LORD MONKSWELL rose to call attention to the defects in the policy pursued by British railways in the past and to ask His Majesty's Government for an assurance that in granting, or contemplating the grant, of any new powers to the railways they are at the same time giving attention to the importance of ensuring that the mistakes of the past are not repeated; and to move for Papers.

The noble Lord said: My Lords, the finances of British railways are in such a serious condition that I think everybody agrees that something must be done about the matter. Exactly what ought to be done is not so clear. In these circumstances it is important to ensure that remedies are not applied that are worse than the disease. So few people have had the time or inclination to study railways that it may be useful to begin by very shortly summarising their history. The Liverpool and Manchester Railway was opened in 1829 and was at once brilliantly successful. For the next twenty years or so up to about 1850, in spite of a good deal of financial trouble, largely due to the losses of investors in the railway mania period in the middle 'forties, very great progress was made, and railway appliances and railway services improved out of all knowledge.

By this time the position of the railways was secure. It was everywhere obvious that for the purpose of inland transport they were so far superior to any possible rival that no competition need be considered except the competition of one railway with another. There had by this time grown up a large professional class of railway officials who very quickly perceived the strength of their position and saw that all they need do to secure for themselves a quiet and untroubled life for any time to which they could look forward was to agree with one another to do as nearly as possible nothing in the way of technical development or improved service. Although of course much new line had to be built, and complete inertia in technical development was not feasible, it is not unfair to say that such improvements as took place were usually made in spite of the bitter opposition of the railway officials. The adoption of block signals and continuous brakes are classic instances. These things were forced upon the unwilling railways by the Board of Trade. Speeds of 75 miles an hour had been attained in the 'forties. Maximum speeds were still about 75 miles an hour in the 'nineties.

One result of the inertia and lack of foresight of this period was that a system of working the goods and mineral traffic was allowed to grow up which has led to some of the worst troubles from which the railways are suffering to-day. British goods and mineral traffic has always been carried on in small lots at frequent intervals and at fairly high speeds. I do not suggest that this system is without valuable features, and it would take far too long to discuss it in detail to-day; but the system was allowed to get completely out of hand, and was carried to ridiculously wasteful extremes. Single parcels of awkward and cumbrous shape were regularly accepted on the one hand, and, on the other, no proper arrangements were made for carrying in an economical manner the heavy mineral traffic passing at regular intervals. The vehicles were not big enough, and the colliery sidings and terminals in industrial works were not adapted to dealing with big vehicles. The prime advantage of railways—that of being able to carry very large loads with a small amount of man-power—was not utilised as it should have been.

From about 1900 things became slightly better. Certain attempts were made to work on a larger scale, and a number of technical improvements were, very belatedly, put in hand. There was, however, no real change of spirit in the railway managements who, far from regarding themselves as partners with, and regarding themselves even less as servants of, the public, still made a quiet life for themselves their principal aim and object. Their point of view was exactly expressed by a well-known General Manager who remarked: The railways have the advantage of speed, and need not exercise themselves to enhance this advantage. The interests of the public did not occur to him as being worth a thought. So things went on till about ten years ago. Up to that time the railway officials never seriously thought of mending their ways. As late as 1927 the Chairman of the London and North-Eastern Company, when asked whether he would increase to 60 miles an hour the speed of the best trains between London and the principal centres served by that railway, replied "No." When asked if he would introduce third-class sleeping carriages, he replied "I hope not."

It is therefore with all the more pleasure that I offer the London and North-Eastern Railway my most sincere congratulations, in which I hope your Lordships will join, upon the really remarkable improvements that have been effected in the last ten years. It is no longer a case of 60 miles per hour to the principal towns. York and Darlington may be reached at 70 miles an hour: Leeds, Newcastle, and Edinburgh at over 65; and there is even hope for Norwich. Third-class sleeping carriages are found where required, and, though I believe no formal instructions on the making up of lost time—that is to say, punctuality—have been issued, the position in this respect also has much improved. Goods traffic methods have changed for the better by getting the trains more quickly over the line by means of improved signalling and more powerful and economical engines. The permanent way is better, more cheaply, and much less laboriously maintained by modern methods of packing. Goods are largely despatched in containers or expeditiously distributed by road motors from railhead. If improvements on the other three groups have not so far reached the high standard attained by the London and North-Eastern Company, similar developments on a smaller scale are perceptible on all of them. Indeed, from a technical and operating point of view, never since the very early days has there been such a burst of activity.

We must not, however, allow ourselves to be carried away by satisfaction at certain aspects of the railway problem. It would be folly to ignore the dark shadows. One very unsatisfactory feature of recent railway activity is that it has been accompanied by what can only be described as the "stunt" of electrification on surface railways. By "stunt" I mean a spectacular move that involves the spending of a great deal of money and is useless when completed. I have studied railway electrification as carefully as I can and, so far as I can make out, its usefulness is confined to underground lines. Owing to the adventitious fact that electricity does not exhaust or foul the air, its use on railways which are entirely or largely in tube is unavoidable. On surface lines its only technical advantages are slightly quicker starting and a small saving of space in terminal stations. It is enormously expensive to instal, and an electric motor costs roughly twice the price of a steam locomotive of equal power. Owing to difficulties of springing the heavy motors electric engines knock the road to pieces, and the vibration thus set up causes acute discomfort to passengers. I have recently exchanged experiences with some half-dozen friends and casual acquaintances of their impressions of journeys in the electric trains of the Southern Railway. All except one had felt serious discomfort, and the one exception was a retired naval officer who is, presumably, accustomed to rough seas.

Neither is there any reason to suppose that electrification pays. The Southern Railway have again and again been asked for particulars of the finance of electrification. They always flatly refuse to give them. They merely go on repeating that the traffic has largely increased on the electrified sections. Of course it has. The number of residents in the suburban districts served by the Southern Railway has largely increased and traffic must have grown whatever system of traction was used. The railway's claim is a mere subterfuge to conceal awkward facts. Again, the Chairman of the Great Western Railway has recently told us that the electrification of the whole of the main line west of Taunton is under consideration, and he has added that a firm of electrical engineers has been asked to report on the subject. It is, of course, a foregone conclusion that they will report strongly in favour of a large expenditure of money in their own trade. This is the kind of way things are done. It is quite certain there will be no advantage for the shareholders or for the public.

Who is it that benefits? That is a most interesting question, and one that might very properly engage the attention of the Government. It must be remembered that it was the Government who, in their intense anxiety to snatch at any colourable excuse for spending, agreed to lend the railways millions of the taxpayers' money below the economic rate of interest, and took no proper steps to ensure that the money should be usefully employed. It was putting temptation in the way of the electrical industry that has never been backward in making claims that cannot by any means always be substantiated. It was also inviting trade practices of which the less said the better. It can only be hoped that the virtue of the various parties subjected to these unnecessary temptations is sufficient to withstand them.

When the railways asked to be relieved from their present obligations the principal reason which they alleged for this request was the pressure of the competition of road vehicles. Road vehicles are said to skim off the cream of the traffic and leave the railways only the less paying kind. Now railways are specially suited for moving very large loads. They have, and are never likely to lose, three immense sources of traffic; firstly, heavy goods and mineral traffic; secondly, intensive passenger traffic into and round the big towns; and, thirdly, long distance passenger traffic. The traffic they have lost is that where their immense carrying power is least felt; that is to say, for which they are least suited. The trouble is that railway goods rates have never been fixed upon an economic basis. The railways have always charged, in their own words, "what the traffic will bear." Put in another way, this means that they have charged the more valuable consignments rates out of all proportion to the value of the services they have rendered, and have used the profits thus secured to subsidise the transport of cheaper and more bulky merchandise. In essentials the trouble is that the policy of favouring one kind of traffic against another has broken down. The subsidy has behaved as subsidies usually do behave, and has come home to roost.

It is noticeable that the railways are extremely reticent about what they propose to do if granted the new powers for which they ask. The Minister of Transport himself has failed to elicit any information. Unfortunately the whole history of officialdom on railways tends to show that it is only really stringent conditions such as have existed in the last ten years that can galvanise railway officials into life. If they are not constantly kept up to the mark they slacken effort, and it is difficult to avoid the fear that any considerable easing of their position would quickly lead to an abandonment of that activity for which we had to wait so long. The unpleasant fact also has to be faced that the immediate cause of all this trouble is that the wages of the railway servants have been forced up by political action to a point too high to allow the railway shareholders to receive a suitable return on their holdings This is obviously detrimental to the public interest, for the shareholders provide means for carrying on one of the vital public services. The capitalisation of the railways, moreover, cannot seriously be regarded as too high because it is much less than the sum that would be required to replace the railways.

This trouble, unfortunately, does not stand alone. It is merely one aspect of the present condition of national finance, which has landed this country where it now stands, in Queer Street. It is the inevitable result of subsidies, because subsidies, no matter of what kind, always tend to prevent proper provision from being made for the future. The railway servants are receiving not only that proportion of the railway receipts which they earn, but also a supplement which is earned by the thrift of the shareholders but taken from the shareholders and handed over to the railway servants. This is the morass in which we are now floundering, and, though it may be possible to make some arrangements for relieving the acute troubles of the railways, no temporary expedient can settle the fundamental trouble, which is that this country is living beyond its income. These are, I believe, the principal facts bearing on the case put very shortly; and a pretty kettle of fish they are.

I have asked that steps may be taken to prevent a repetition of the mistakes of the past, so I must say a few words on that subject. My own belief is that most of the trouble has come from the weakness of the boards of directors. The boards are supposed to be a committee of shareholders whose function is to ensure that the interests of the public, the shareholders and the railway servants all receive suitable consideration. In some ways the boards are almost ideal bodies. They are mostly composed of big industrialists, landowners and public men, all of the highest character and personal integrity. But that is not enough. They also have defects which destroy their usefulness. The directors know so little about railways and can spare so little time to learn, that in practice they are hardly more than a body for registering the decrees of their professional advisers. These advisers value, above all things, a quiet life for themselves and when it is a question on the one hand of fair treatment for the unorganised and impotent shareholders or, on the other hand, of saving trouble by giving way to some demand of the highly organised railway servants, there is never any doubt what they will do. The real remedy is to get the boards to take their duties seriously. One of their first duties is effectively to organise the shareholders for such action as may be necessary, and another is to ensure that the railway managers and officials should at least continue the activity which they have recently displayed. I beg to move for Papers.

EARL BEAUCHAMP

My Lords, in spite of nine years experience as a Member of Parliament in another place I feel very much in need of your Lordships' indulgence in making my maiden speech here to-day. I feel especially in need of that indulgence because I know that the noble Lord who has just spoken is an expert on the subject which he has raised and I most certainly am not. Whether one is in agreement with all that has just been said or not, I am sure your Lordships will be grateful that the subject has been raised to-day, because it is a particularly appropriate moment, when railway companies are making claims for most drastic revision of the law which, in many respects, has hindered them in the past. I can only look at this subject from the point of view of the man in the street, who has to use the railways for business and pleasure and also, on occasion, to despatch goods. I think it is quite clear, if one follows the history of the railways since they were inaugurated, that they have been fettered by a great many rules, regulations and restrictions which have now entirely outlived their usefulness. At the same time, I think it would be most dangerous to sweep all these rules away and give the railway companies an entirely free hand.

It is also true, as one can see from reading the history of railways in this country, that they are suffering from a great many difficulties which were put in their way when they were originally built. Most unfair prices had to be paid by the companies before they could build their lines, and it is not an exaggeration to say that they are still, more than one hundred years later, feeling the effects of that kind of obstruction. But at the same time I would not advocate sweeping away all forms of control over the companies, because that would be very dangerous and would lead to results which we cannot at present foresee at all. It will be very interesting to hear to-day what the views of His Majesty's Government are on this question. I very much hope that they will come to the conclusion that the railway companies do need some assistance, but also that that assistance should be tempered with discretion. I think that if this all-important question is handled with wisdom and foresight there will be a new and better era, not only for the railway companies, but for the whole country. If I may just sum up what I feel on this matter, I would say that I think the railway companies should be granted a very large measure of the freedom which they are now seeking, but that even then there should be some definite control of railways in regard to the conveyance of traffic, and a continuation of the general supervision which the Ministry of Transport now exercises with regard to safety and matters of that kind. I do not feel that the railway companies should be granted a blank cheque to charge what they like, because that would not be for the general good of the country.

LORD BALFOUR OF BURLEIGH

My Lords, I should like at the outset of my remarks to congratulate the noble Earl, who has just sat down, on a very able maiden speech. Your Lordships have often heard such congratulations offered but I venture to say never with more reason than to-day. If I may say so, taking the substance of the noble Earl's remarks about railways, I, as a railway director, have not the smallest fault to find with a single word that he said. The railway companies have no desire to exploit the community and no one is more alive to the need for proper charges and reasonable charges than are the railway companies.

Now, if I may, I will turn to one or two of the remarks which fell from the noble Lord who moved the Motion. To begin with, the noble Lord dealt rather with past history. I thought at first that he was going to deal almost wholly with the past. He told us about a good many things that ought to have happened long ago and I thought that he was going to reside entirely in a bygone age. Then, to my great pleasure if I may say so, the noble Lord came to life and he told us, in phrases which I envied, and which I could not myself dream of bettering, about some of the things which the London and North-Eastern Company have done in the past ten years. I am very much obliged to the noble Lord because what he said is perfectly true, and I am sincerely grateful to him for having followed what has been done and for being ready to give praise where praise is due. If I may, I would just venture to correct one figure which he gave. He said you could travel from London to York at 70 miles an hour. As a matter of fact, the exact rate is 71.9 miles per hour. It happens to be a journey of 188 miles and the train is the fastest in the British Empire.

Then the noble Lord, having been kind for a moment, pulled himself together and said it would never do to be carried away by satisfaction. He went on to condemn the railways, among other things, for their system of charges. He said the railway companies have adopted a system of charging the traffic the rates which the traffic will bear. That is the very thing we are trying to get rid of. The noble Lord did not tell your Lordships that that system is imposed on the railway companies by Act of Parliament. That is just one of the troubles we are dealing with at the present time. The noble Lord then went on to condemn any attempt to electrify railway systems and I should like, if I may, to say a word about that. I should have thought that it was absolutely res judicata that for dense suburban traffic electrification was the only possible system by which to get the maximum traffic which is necessary in the circumstances we have to face to-day. Before the noble Lord spoke, I wondered whether we were open to attack for not having done sufficient electrification or for having done too much. But the noble Lord condemned electrification root and branch, although I think he did say that electrification might be all right for the tube railways.

LORD MONKSWELL

It was surface electrification I condemned, not the electrification of tube railways. I said that was necessary.

LORD BALFOUR OF BURLEIGH

I gather that the noble Lord approves electrification of tube railways mainly because they run in tunnels and with electrification you do not get smoke. That seems to be the only redeeming feature in the noble Lord's view. The real point about electrification, of course, is that where there is dense traffic, you can only get the maximum number of trains by electrification. Once you have got your line electrified you can run a very much larger number of trains per hour than you can when steam is the motive power. The trains are made up of multiple units. There is no shunting. The trains run into a terminus at one end and they can start out the other way, and the saving both in time and in expense is very great. The Southern Railway, apart from the suburban traffic in and about London, is the railway which has gone in most intensively for electrification. I believe they have electrified something like between 650 and 700 route miles. That system is peculiarly suitable for the Southern Railway. I do not want to say anything which is rude to the railway with which my noble friend below me is connected, but the Southern Railway is really a glorified tramway, and that is why electrification is so suitable for that particular area. What I might call main line electrification is quite another thing. The Southern Railway represents 12 per cent. of the railway business of this country, and of that 12 per cent. only 1 per cent. is, I believe, merchandise. Therefore the Southern Railway is in an entirely different category to the other three main line railways.

Practically speaking, there has been no main line railway electrification carried out in this country yet. There is a certain amount on the Tyne, but that is perhaps rather special. The project which is now under construction is the electrification of the main line between Manchester and Sheffield on the London and North-Eastern Railway, and that is being undertaken because, for certain technical reasons, it would seem to offer a very favourable field. I can assure the noble Lord that the reports from electrical engineers were far from being the only matters under consideration when this expenditure was authorised, and I am sorry the noble Lord thinks that all railway directors are so very biddable and obedient to their experts. I am bound to say that I think he gave your Lordships a rather distorted picture of the proceedings which go on in the board room of a great railway. So much for electrification. If I may just add one word, it is that you get infinitely quicker acceleration and more rapid stopping.

LORD MONKSWELL

I really must protest against that. You do not get more rapid stopping. The stopping is done by the air brake which is exactly the same on a steam train as it is on an electric train.

LORD BALFOUR OF BURLEIGH

Two similar brakes no doubt give similar results, but nevertheless I am advised that you do get quicker stopping as well as more rapid acceleration with the electric train. Apart from electricity, the noble Lord told us that merchandise is carried in much too small quantities, goods and minerals in too small lots, and that the vehicles are not big enough. This is a very old story about the 20-ton wagon. The railways have always been in favour of larger wagons, but the railways do not have the last word. The proportion of the wagons which are owned by the railways is only a part of the wagons which are on the railroads, and our masters are the traders. I sup- pose the mineral traffic is best adapted for large wagons. I believe that the whole of the coal traffic that is shipped from the north-east ports is carried from the colliery to the coast in large mineral wagons. I believe it is a fact that the whole of the docks in South Wales are equipped to handle traffic in large wagons, but unfortunately that is not the case among the colliery companies generally.

I have an extract here which I think I will read to your Lordships from the Report of the Standing Committee on Mineral Transport issued in 1929. That Report says: Our investigations show that 56 per cent. of the collieries on a tonnage output basis and 64 per cent. of collieries on a numerical basis cannot handle 20-ton wagons. Also that 43 per cent. of private sidings serving works with a weekly consumption of 500 tons of coal cannot take the 20-ton wagons and the position at smaller works is likely to be even more unsatisfactory.… Another reason for the reluctance to adopt: the 20-ton wagon is that the small consignee prefers a small truck. In many cases his trade is of such a character that either lie would have to take a large wagon partially filled or he would hold up for a very long time a large wagon with a full load. That applies, of course, to merchandise.

The railways would much prefer to handle trains made up of large wagons, and the railways do all they can to encourage traders to send their goods in large quantities, but unfortunately the traders show a disposition to do exactly the opposite. The average load for general merchandise has decreased since 1929 from 2.94 tons to 2.88 tons in 1937, and that is in spite of all the efforts which the railways have made by quoting lower rates for large quantities and in other ways. There is a way in which the railways have been successful and it has been referred to by the noble Lord who gave us credit for having done what we could to encourage the use of what are called bulk containers. Those are containers in which goods can be bulked. Where there were only 1,500 of them in use in 1928 there are 15,000 of them now in daily use.

There is only one other figure I would like to give your Lordships and that is with regard to the complication of the privately-owned wagon. In 1929 there were 5,000 separate owners, and 35 per cent. only of the wagons were greater than 12-ton capacity. I do not think I need say anything with regard to speed. The noble Lord was good enough to give us credit for having increased the speed, and I can leave that alone. The noble Lord was not very polite about inertia and coma and all the rest of it, but I would like to mention that the British railways, as far as I know, are the only railways in Europe, possibly in the world, who have not got their fingers in the taxpayers' pockets. I do not know whether the noble Lord would wish me to say it, but it is perfectly true we have had the advantage of some State guaranteed money. That is true. It enabled us to get our money rather cheaper. It is, I believe, literally true that there is no other system of railways in Europe which is not having subsidies from the Government of the country. I may be wrong; I am not sure that Luxembourg does not have railways which pay their way. If so, it is an exception on which I think we can only congratulate Luxembourg without being seriously disturbed.

There is one test on efficiency which I think I can give your Lordships, and that is engine mileage. Engine mileage is a good criterion of work performed. Engine mileage in 1927 was practically the same as engine mileage in 1937, but the working expenses were down in that period by 15 per cent., and that, I think it is obvious, could not have been done without efficiency on the part of those who are responsible for that result. There is the question of wages. The noble Lord was inclined to blame us, I believe, for paying too high wages. Of course there again the wages are settled by conciliation machinery, derived from the Act of 1921. The Government conceded the eight-hour day to the railway unions without, I think, even consulting the railway companies, and the same conciliation machinery has worked from that time. Of course it is not only the eight-hour day which is expensive, but the conditions with which the eight-hour day is accompanied. In some ways the conditions cost even more than the wages.

I do not know whether I need seriously defend the railway directors from the charge of inefficiency. I was interested to observe in an evening newspaper that they had worked out the average age of railway boards. I do not know whether the noble Lord thinks that everyone is too old at sixty. The average age of my own board is 57½. I have always been taught to believe that the prime of life is ten years older than the age of the man you are talking to. It is not a bad rule, and by that rule I think the average age of 57½ ought to go down fairly well in your Lordships' House. We really are struggling for efficiency, and I think not without success. The road competition has the tremendous advantage of "door to door," and I must remind your Lordships that one of the great difficulties under which the railways labour is the fact that their stations are so often a mile or so from the village or town that they have to serve. I suppose that in the period 1840 to 1870 any railway that was built was tremendously petitioned against, and there again your Lordships' House has had a share in creating the circumstances which now do add difficulty to the attempts of the railways to secure efficiency. I am not mentioning that in any spirit of reproach, but merely as an historical fact.

When we are accused of inefficiency sometimes I think all that derives from the fact that people do get accustomed to such a wonderfully high level of service that they are inclined to be a little bit unreasonable if there is sometimes a falling away from that high level. I was travelling south from Scotland on a night when there was a considerable snow storm just before Christmas, and I happened to look out of the window of my sleeper on several occasions during the night. On every occasion, apparently, there was blinding snow, and one could see little or nothing. In the morning when we arrived I found that the space of half an inch or so between the glass and the wooden shutter of my sleeper was packed solid with snow, and I do not think there could be any doubt that the train had been running through a blinding snow storm all night. Yet it arrived at King's Cross exactly one hour late, and I could not help thinking that that was something in the nature of a miracle. I think we get so accustomed to the high level of service and punctuality of trains that when any failure occurs undue blame is attached. I can only say that I know from the inside that the aim of the railways is to serve the public, and I believe that the level of efficiency has never been so high as it is to-day. This is not the time to enter into a discussion of the so- called Square Deal. That is a matter which is sub judice, and I must not go too far in discussing that, but I would only like to add, in conclusion, that I do not think the noble Lord has made out a case that we are inefficient, and I believe that we are doing a job of work for the general public with efficiency and a real regard to the public interest.

THE EARL OE ERNE

My Lords, I should like to associate myself with my noble friend Lord Balfour of Burleigh in congratulating the noble Earl, Lord Beauchamp, on his excellent maiden speech. I hope we shall often see him here taking part in our debates. The noble Lord, Lord Monkswell, has raised a very interesting topic in initiating a debate on the subject of the British railways. He will not, I hope, expect me to deal in detail with many of the points of railway administration which he has mentioned. Lord Balfour of Burleigh, who is conversant with the day-to-day working of the railways, has intervened in this debate, and covered many of these points. I would remind your Lordships, however, that the railways are not a Government service, and that subject to statutory regulation in certain respects, notably safety and charges, railway policy is a matter for the railway directors, who are, in turn, responsible to their shareholders.

Now let me turn to the five main points in Lord Monkswell's speech. First of all, it is obvious that Lord Monks-well does not like electrification, but it has many advantages in suitable conditions. Rapid acceleration and ease pf reversing at terminals are very real advantages. As an example, the Southern Railway, giving evidence before the Railway Rates Tribunal in 1933, said: If it had not been for our policy of electrification our net revenue would have been very considerably less than it is to-day, even after making allowance for interest on the capital that has been spent. They also stated that the whole subject of an electric service is to give improved facilities; and for every two steam trains we have taken off, we have put on five electric trains. As regards the noble Lord's statement that the Government "agreed to lend the railways millions of the taxpayers' money below an economic rate of interest, and took no proper steps to ensure that the money should be usefully employed," I should like to deal a little more fully with this as it is a matter of Government policy. This statement is not strictly accurate. By an Agreement scheduled to the Railways (Agreement) Act, 1935, the railway companies were to borrow the capital necessary to finance certain works from a finance company which, in turn, raised money from the general public by the issue of securities. All that the Government did was to guarantee these securities as to principal and interest. By this means the companies were able to undertake works which they could not otherwise have done, and large numbers of men have obtained work in consequence. These works are all designed to improve facilities. They have been agreed with the Government, and include such things as the improvement of lines and the reconstruction and enlargement of stations. The point about the railway system of working goods and mineral traffic has been dealt with very fully by Lord Balfour, and I do not propose to deal further with this rather complicated railway matter.

As regards classification, this system was imposed on the railways by Parliament after expert inquiry. The present classification was settled by the Rates Advisory Committee in pursuance of the provisions of Section 29 of the Railways Act, 1921. The section provided that in determining the classification the Committee should, in addition to all other relevant circumstances, have regard to value, to the bulk in comparison to weight, to the risk of damage, to the cost of handling and to the saving of cost which might result when merchandise was forwarded in large quantities. The quoting of exceptional rates and agreed charges—particularly during recent years in reply to competition by other forms of transport—has to some extent cut across the existing classification table, but the general principle of a classification of merchandise primarily according to value and bulk is still the foundation on which the railway rates structure is built. This matter is one which is being very closely examined by the Transport Advisory Council, and I cannot very well say more about it at present.

With regard to wages, in common with the policy adopted in industry generally, the wages and working conditions of railway servants are in the first instance the subject of joint negotiation between representatives of the railway companies and the trade unions. If agreement cannot be reached in this way, the matter comes before a tribunal on which an independent element is represented. Since 1935 this final court of appeal has been a body known as the Railway Staff National Tribunal, upon which neither the railway companies nor the railway trade unions are represented; it consists of three members, none of whom is directly connected with the railways. I cannot myself see what better form of machinery for wages negotiations could be devised; or in what way the interests of the shareholders could be more adequately safeguarded.

As regards the future, the whole matter is closely bound up, as I said before, with the present claim of the railways for some relaxation of their conditions. The Transport Advisory Council will in due course report to the Minister, and the Government will have to decide what action, if any, to take. I can assure the noble Lord that in this matter His Majesty's Government will give very full consideration to the effect any change may have on all interests concerned. I would only, in conclusion, remind your Lordships that any relaxation of the present statutory control of railway charges will require legislation, and so will come before this House when there will be ample opportunities for further debate.

LORD STRABOLGI

My Lords, this subject is so important that I feel it necessary to say just a few words on behalf of the Party I represent in your Lordships' House. First of all, I also congratulate the noble Earl, Lord Beauchamp, on his most excellent speech. If he will allow me to say so, my only regret is that it was made from the Benches opposite, and I hope that now that he is in the more rarified atmosphere of your Lordships' House he will presently make the transition to this side. The noble Lord, Lord Balfour of Burleigh, reminded your Lordships that every railway in Europe in private hands is subsidised, with the exception, I think he said, of the Luxembourg railways. The Luxembourg railways, in other words, are the only ones to-day that are paying their way, and I think that in this country, with the exception of the Southern Railway, it cannot be said that the railways are paying. They are not able to pay, the conditions are against them, in particular the competition of road transport. The increasing number of people even who go by aeroplane has made a great difference to the traffic of all railways, and they are not a paying proposition to-day. In spite of that, I am bound to state from my own observations and information that the British railways are as efficient as any in the world, and are very well run. But they are not a paying proposition, and you will have this continual trouble as long as they remain in the hands of private companies.

It will not surprise your Lordships to hear that I have risen to make in a word the claim for nationalisation. The Party for which I have the honour to speak believes that the whole transport problem in this country, which becomes more and more acute all the time—transport by canal, road, railway, coastal traffic and so on—can only be solved by a great measure of national control.

LORD BALFOUR OF BURLEIGH

Might I interrupt the noble Lord? He would perhaps tell us whether he would mind, after taking over the railways, whether they paid or not.

LORD STRABOLGI

I would not mind a bit as long as they served the community. As a matter of fact, I was coming to a point on that which I shall make. Do the roads pay? Think of the millions we spend on roads. They are a necessity, but we do not make a profit on our roads. We used to. We used to have turnpike roads on which tolls were paid, and a few still exist. But the roads are public utilities. With regard to this point about railways paying, consider the case of the German railways before the War. Both the noble Lord who introduced this debate and the noble Lord, Lord Balfour of Burleigh, are experts, and they are aware that one of the main reasons for the great increase in German industry and export up to 1914 was a highly efficient railway system, nationally controlled and owned. The German railways showed a deficit, but they were run, organised and managed for the benefit of German industry, with tremendous results for the advantage of German industry. I believe that is not disputed and that it was one of the main reasons for the great increase in German commerce before the War. Of course the German railways showed a deficit, but it was advantageous to the whole German nation that that policy should be followed.

I would remind your Lordships also that during the late War our railways had to be taken over. I dare say if another great war comes upon us as the result of the Government's policy, which I quite anticipate, the railways will have to be taken over again. After the War the Coalition Government, of which the noble Lord, Lord Harmsworth, was a member, announced publicly, through Mr. Churchill, that the railways were going to be nationalised. Then some vested interests or prejudices intervened, and that policy was not carried through; but as the result of the experiment of those years the Coalition Government, which was a Government of the Right, not a Socialist Government at all, proposed to do that. Our policy, as I say—and we think it is the only one that can possibly solve these great problems—is to take over, co-ordinate, and manage in the interests of the community the whole of the transport of the country, including the railways, and when we do that in the near future I hope that the noble Lord, Lord Balfour, and the noble Lord who introduced this Motion will give us the benefit of their assistance.

LORD MONKSWELL

My Lords, I should like to begin my reply by adding my testimony to the interest with which we listened to the speech of the noble Earl, Lord Beauchamp. I felt there was a peculiar connection in this case. As many of your Lordships are aware, I have on various occasions ventured to bring the subject of railways before the House in the last twelve or fifteen years. I had never spoken in the House before until the noble Earl's father, who was then Leader of the Liberal Opposition, wrote to me and suggested that I should put a Motion on the Paper, which he himself would support. I did so, and we had a very good debate. That started me off in this direction to which, rightly or wrongly, I have adhered ever since. In the absence of the father, I have great pleasure in offering my thanks to the son.

I do not know that there is very much I need say on the various points raised by Lord Balfour and by the noble Earl, Lord Erne. I was a little disappointed with Lord Balfour's speech as I am one of those who regard him as one of the best speakers in this House. I must say he hardly seemed to live up to that. He seemed to lead us up to a certain point and then to sheer off, particularly with regard to electrification. He told us how splendid it was, and how everybody agreed with what the experts said, but he did not come to the question of finance. There was not a single word about that. What I want to know is what are the relative estimates of the cost of running an electric service and that of running a service by the most efficient of modern steam locomotives. I have no doubt whatever that the modern steam locomotive would have it every time and that it would save millions of money.

THE EARL OF RADNOR

I think I can answer that. You can run two electric locomotives, taking every financial factor into account, for the cost of one steam locomotive.

LORD MONKSWELL

That is the kind of statement I dislike. I want to know what the capital cost of the electric locomotive is and what the capital cost of the steam locomotive is. It really comes down to capital cost.

THE EARL OF RADNOR

I did say to the noble Lord "taking every financial factor into account," including capital cost.

LORD MONKSWELL

How much did the electrification to Hove cost?

THE EARL OF RADNOR

I think that is much more a matter for the shareholders of the Southern Railway than for your Lordships' House.

LORD MONKSWELL

I am entirely dissatisfied with what the noble Earl said, and I do not consider it carries us any further at all. If the noble Earl will give us the full figures I asked for, I should be glad to go into them and, if I am wrong, write to the papers and confess my error. I am perfectly certain he will not give us the figures. I have been at meetings of the Southern Railway myself when shareholders have been shrieking for them, and they have not been given. I am sorry to take up your Lordships' time, but I am not in the least impressed by what noble Lords have said. With regard to the noble Earl who spoke for the Government, I gathered from him that the Government proposed to do nothing. It is interesting to hear that that is so. That is the question I asked, so I must leave it at that. The noble Lord, Lord Strabolgi, made a very interesting speech about German railways, but I do not think he laid stress on the real point. Before the War the German railways were often a great help to German trade, but has he any information about the wages paid to German railwaymen, and would he ask British railwaymen to accept similar wages? I do not think he had better run that hare too hard. He suggested that British railways should be nationalised, but he did not say a word about buying up the shareholders or what sort of terms he would offer.

LORD STRABOLGI

I did not want to make a long speech, but it is quite well known that the policy of my Party is to compensate the shareholders.

LORD MONKSWELL

Out of taxes paid by themselves? But we can hardly discuss that now. I have kept your Lordships long enough, and I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.