HC Deb 24 March 1868 vol 191 cc139-45

Order for Consideration of Standing Order 131 (Competition to be a ground of locus standi) (by Order), read.


said, that having gone into this subject very fully not long ago, it was not his intention to trouble the House at any length on the present occasion. His object was to elicit as far as he could arguments from hon. Gentlemen with regard to the difficult question of the allowance of opposition to Private Bills on the ground of competition. The Standing Order 131 was capable of two different constructions. It might be taken to mean that the proprietors of existing works might be admitted before Committees to argue that the proposed new works were not required for the public advantage; or, without denying that the works were for the public advantage, that they might be allowed to oppose the construction of the new works on the ground that those works would interfere with their private interests. The Report of Mr. Cardwell's Committee on Railway and Canal Bills in 1853, upon which the Order was based, merely recommended that in contested cases careful arrangements should be made by which established railway companies and municipal or other public bodies might raise the question of public advantage, and, in order to secure fairness in raising the issue, provision should be made for payment of costs in the case of illusory, vexatious, or unwarranted opposition. Companies, however, had affixed to the Standing Order the interpretation that they should be allowed to object to proposed new works, on the ground that their private interests would be interfered with, and having gained admission to be heard on that ground they naturally claimed that Parliament recognized in them a vested right, more or less absolute, to the monopoly of the district in which their works were situated. He did not believe that Parliament ever had recognized such a right, and as under the present state of things, investors were led to indulge in hopes of protection which were constantly disappointed, he thought an Order which was liable to this misconstruction ought not to be maintained. The effect of its repeal would be that companies sanctioned by special Act of Parliament would return to the position in which they stood before 1853, and would be in the same position as companies incorporated under the Joint-Stock Acts, which were not allowed to oppose each other on the ground of competition. To this day, docks, although specially sanctioned by Parliament, were not heard in opposition to each other, and why should railways, or any other works? It might be said that companies incorporated by special Acts of Parliament were subjected to special conditions, but then it was in return for special privileges granted. It might be a fair question to consider, whether the conditions imposed were not in some cases too onerous in proportion to the privileges? He thought himself that the restrictions on the financial operations of companies, sanctioned by special Acts, especially of railway companies, were unnecessarily onerous, and were often injurious to the companies, without being attended with benefit to the public. Most of these attempted restrictions, perhaps all of them, like the old usury laws, broke down when put to the test; for it was impossible for Parliament to control the money market and the exigencies of lenders and borrowers. He believed it would be best to revert to the old law of Parliament, and not to allow one company to oppose another except in case of interference with its works. He was not contemplating, however, by his present proposition to withdraw from companies sanctioned by special Acts the concession intended for them in 1853; therefore, in proposing the repeal of the ambiguous Standing Order 131, he would substitute for it a new Standing Order, rendering it competent to the Referees on Private Bills, if they thought fit, to admit the proprietors of existing works to be heard upon their petition against any Private Bill relating to similar works within a town or district served by them, on the ground of the absence of public advantage. It might be said that the words "public advantage" were rather vague; but he thought that his proposition would have an incalculable advantage over the present more indefinite Standing Order, inasmuch as it would plainly declare that the public advantage would be the paramount consideration. In order to form a judgment as to how far the permission to be heard on the ground of their private interests being interfered with was of value to existing companies, he would refer the House to the evidence of Mr. Blenkinsop, solicitor to the London and North Western Railway Company, who stated before a Committee that the Standing Order 131 had not been productive of fruitful results, and that generally speaking the feeling of Committees was to sanction competing schemes. According to the best Returns, the companies established under the present system had, within the last fifteen year, expended £10,000,000 or £12,000,000 in legal and Parliamentary proceedings. Captain Huish, manager of the London and North Western Railway Company, and other witnesses also gave evidence as to the delusive character of the present Standing Order. He thought the House ought not to retain a Standing Order, the terms of which led people to suppose that Parliament was likely to reject a proposed work of public utility simply because it might appear to interfere with private interests.

Motion made, and Question proposed, "That Standing Order 131 be repealed."—(Mr. Dodson.)


, from his experience of Private Bill legislation, was opposed to the alteration of the Standing Order in the manner now proposed. During the existence of the Standing Order in question, hundreds of millions of pounds sterling had been invested in public works in this country. The hon. Gentleman himself had admitted that fully one-half of the opposition in Committee-rooms was based on this Order, which he now sought to repeal. If this were so, he would leave the House to draw their own inference as to the views which existing companies held with regard to that Order. In 1862, 1863, and 1864, when Railway Bills were more than ordinary rampant, and when no less than 852 Bills were deposited, only 478 actually passed. The railway companies then had succeeded to a very large extent in their opposition, and entirely on the ground of this particular Standing Order now sought to be repealed. But this was not all. In 1865, 1866, and 1867, when Private Bill legislation, owing to the financial condition of the country, was not carried to the same extent, the same relative results followed as in the previous period to which he had referred. The hon. Gentleman told them, on the last occasion when this subject was before the House, that railway directors were conscious of the want of success which had attended their efforts when seeking to avail themselves of this Standing Order. He must say that his own experience as a railway director for twenty years was wholly opposed to such a statement. Many millions of needless outlay had been prevented by railway companies by virtue of this very Order. The hon. Gentleman knew that during the last fortnight a deputation had waited on the Minister, representing the whole railway interest from the English Channel to the Tweed, and more than one-half of the capital of the existing railways — representing £250,000,000 of capital; and what was he told by that deputation? Why, that they looked on the repeal of this Standing Order with the greatest possible anxiety and alarm. He now repeated that statement as a railway director, and he knew he spoke the feelings of thousands whose capital was invested in railways. The hon. Gentleman said that the Bills thrown out during the period to which he had referred were not thrown out on the ground of competition; yet he admitted that fully one-half of the opposition to new schemes was based on this Standing Order, and the railway companies had no other right to be heard against them. Was it too much to ask that the large interests which Parliament had itself sanctioned and encouraged—he did not say protected, for the object of the railway companies was not protection — should be permitted to set up their own case, if the Referees or the tribunal to which a particular Bill might be submitted should think fit? But the hon. Member asked, why railway companies should be alarmed when the Order he proposed to substitute would equally, entitle them to be heard against new works? Because the words proposed to be substituted for "as the Referees shall think fit," were these, "on the ground of absence of public advantage"—words which the hon. Gentleman himself admitted he should not and could not define. The hon. Member had told them that the great object of the change he proposed was to save expense in Private Bill legislation; but the most direct method of reducing the costs of parties promoting Private Bills in Parliament would be to substitute one tribunal for the five different tribunals before which such Bills had now to be taken. If this plan were adopted it would be far more effectual than the mere repeal of a Standing Order.


said, he was certainly not one of those who thought that a railway company should be able to prevent the formation of another railway, merely on the ground of interference with profits. Parliament gave compulsory powers over land in return for restrictions imposed; but it did not guarantee monopoly, as the hon. Member for York appeared to suppose, and therefore such a provision as that in the Railways Construction Facilities Act, which enabled an existing company absolutely to stop in limine a competing line, would be most injurious to public interests, if extended to proceedings before Committees of that House. At the same time he was not sure that he went as far as the Chairman of Committees, and would exclude a railway company from tendering evidence on the ground of competition. Indeed, he doubted very much whether such evidence might not, in every case, be presented in the guise of absence of public advantage—whether prudently or not, he would leave it to Mr. Blenkinsop to decide—and would this not be reasonable? It was easy to say that Parliament would not interfere with the establishment of two banks or two hotels where there was only room for one; but there was a difference in the nature of things between the two cases. The weakest bank or hotel would succumb, the proprietors would be injured; but the premises might easily be turned to some more useful purpose, and the public would suffer to a very small extent. The same might be said, though with some qualification with respect to docks. In the case of two railways, on the contrary, being constructed in a district which could only maintain one, a vast capital would be wasted in permanently spoiling a large tract of land; and the public would be exposed to the hazard and inconvenience of being carried by companies who were obliged, in order to make both ends meet, to stretch economy beyond what was consistent with public safety. Moreover, there had always been this merit allowed to Committees of that House—namely, that they shut out no evidence, but that, whatever might be the value of their decisions, they gave all parties a patient hearing. He was afraid a departure from this rule might have the appearance of injustice and hostility to existing companies, and might also lead to the evil of frequent appeals to the House to suspend the Standing Order in such cases. It was also manifest that in most instances opposition might be carried on through landowners. He thought, therefore, looking at the period of the Session, that his hon. Friend (Mr. Douson) had done the best thing by bringing about, as he had done—though his own Motion was not carried—in the course of economy and justice, the discontinuance of the double trial and the strengthening of the Committee which would have to decide between reasonable and unreasonable opposition on the ground of competition, and in this he would be materially assisted by the late Act with reference to costs. But he did not think that for the future competition would be heard very much of before Committees. The main lines were for the most part made, and new lines would chiefly be feeders of existing lines, and he believed that Parliament would have to take care that fair arrangements were made for working these small weak lines, so that they might not be oppressed by powerful companies. Competition was, doubtless, the safeguard of the public. Under it they secured convenience and economy. In many instances the maximum rates of fares had been fixed with the intention that they should be moderated by competition. But just now competition was likely to be reduced below what was wholesome and safe by the process of amalgamation and working arrangements. It was an old saying that competition ended in combination, and this had received a remarkable illustration, as the House knew, in the case of the gas companies. The House should have its attention directed to what seemed to him to be a great danger to the public. From 1860 to 1867 344 Bills had been passed for amalgamation and working arrangements affecting no less than 465 railway companies. He proposed to lay this list with a map on the table of the House. This year the number of Bills was only fifteen, but among them was a gigantic scheme affecting a large district in the South of England. Now, he was not opposed on principle to amalgamation. There could be no doubt that it produced the advantage to the public of greater economy and more harmonious correspondence of trains; at the same time it deprived them of this safeguard of competition. He wished that in an earlier year this subject had been referred to a strong Committee, in order that efficient Standing Orders might have been framed, instead of the useless 162nd Order, requiring the Board of Trade to do what in many notorious cases it certainly could not do—namely, satisfy itself of the amounts of capital actually paid and expended, and that provisions had been insisted on not only for present regulation, but for periodical future revision. He had thought it right to say so much on this occasion, in order that the House, while admitting the value of competition by discussing this comparatively small question of locus standi in the few cases likely to arise in future, might not suffer to pass unheeded vast schemes for the substitution of monopoly in the place of competition throughout every district of the kingdom.


said, that the proposal made by the Chairman of Ways and Means had received due consideration at the hands of the Committee on Standing Orders. It was thought that it would meet with opposition from a great many Members who had made up their minds on the subject, while many others would not agree to it without further inquiry. The Committee accordingly recommended that the proposal should not be entertained for the present; and not only did he concur in this opinion, but, though he had heard ten times as much on the subject as he had ever expected to hear, he had seen no reason to alter his opinion. He hoped that the hon. Gentleman would be satisfied with the discussion which had taken place, and would at all events postpone the matter.


concurred in the suggestion of the noble Lord.

Motion, by leave, withdrawn.