LIGHT RAILWAYS BILL (Hansard, 11 June 1895)

* MR. GRANT LAWSON (York, N. R., Thirsk and Malton)

said, that on the last occasion when the Bill was under discussion he endeavoured to show—both by the testimony of experts and also by figures relating to a light railway actually in existence—that the difficulty of procuring sufficient capital before commencing the work, and not the expense of obtaining an Act of Parliament to authorise the work, was the main obstacle in the way of promoters of light railways. The object of the Amendment, which he supported, was to remove that principal initial difficulty by State aid. Let them consider how the President of the Board of Trade proposed to deal with it if this Amendment were not carried. Directly, his Bill did not touch that point at all. Indeed there was one peculiarity about the Bill which actually obstructed the raising of capital. It dealt with light railways, but did not define them. That definition was to be left locked up in the breast of the President of the Board of Trade for the time being. Anyone who desired to promote a railway was to be left in the dark as to whether his project was a light or an ordinary railway until he forced himself face to face with the Board of Trade. Before he got there the Bill required him to go through certain onerous and necessarily expensive preliminaries. He must find his future shareholders, shareholders in an enterprise of which the promoter himself did not know the conditions. He must get his county council order, he might even have to make a deposit to guarantee completion in a fixed time, and when he had done all this and worked and paid his way to the Board of Trade, that Board might declare, unfettered by any definition in the Bill, that his project was not a light railway at all, and that his time and money, so far as creation of a light railway was concerned, were all wasted. If 956 this scheme of the Bill did not deter promoters from undertaking these undefined enterprises, the promoters had in themselves even more enterprise than they had ever given them credit for. Though the Bill did not directly assist in raising capital, the right hon. Gentleman might claim that it did help indirectly by decreasing the cost of construction, and therefore reducing the amount of capital which it was necessary to raise. On the First Reading of the Bill he ventured to challenge the right hon. Gentleman's estimate of the probable amount of the reduction. He had now had time to look more closely into the right hon. Gentleman's words, and to test his figures and comparisons. These were his words:— The estimates he had been able to obtain pointed to a probable reduction in the cost of making the proposed lines of from an average of £10,000 per mile to £3,500, or, according to some authorities, to £3,000 per mile. There was nothing so deceitful as averages. Taken as it stood, this statement would make it appear that the Bill would cause a reduction of £6,500 or £7,000 per mile in the construction of these small lines. How was that average of £10,000 arrived at? By counting in all main trunk lines—even those parts of them constructed in cities. Surely the right hon. Gentleman did not mean to say that these small lines had cost £10,000 a mile. Yet the figure of £3,500 for the future applied only to small lines. It was not right to compare what small lines in future would cost with the average of what all lines had cost. A truer comparison of cost in past and future would have been arrived at if he had given the House the average cost at present of making a small line. With all the financial difficulties at the outset which he had detailed in the previous night's Debates, the Easingwold line only cost £6,200 per mile. Without those difficulties it should have cost £4,200 per mile. He did not see how a reduction of £6,500 per mile could be made by this or any other Bill in the construction of a line like the line to Easingwold. The Bill clearly did not deal directly with this question of capital, although it did so indirectly, and it did not even indirectly so largely assist future companies as they were led to suppose from the right hon. Gentleman's 957 speech on the occasion of the First Reading. Where did the President of the Board of Trade think the money was likely to come from? He had specified a number of sources. He had told them that he relied on the public spirit, and possibly—though he did not tell them so—he relied on the eye to profit which the landowners whose land would be benefited by the lines would have. He himself believed in the generosity and liberality of the landowners, and he did not think that, if they had a great deal of land which would be affected by the lines, it would be a great strain upon their generosity to come forward and help the right hon. Gentleman. This would be done by the larger landowners, but what about the small landowners? They had little to live upon, and little land which would be benefited by the lines, so that they were not likely to come forward to assist in advancing the capital. The small landowners had always been the difficulty in the matter of railway construction. In France, where the land was divided among such a large numbers of owners, this had been especially the case. He would point out that the policy of the present British Government was not in favour of large landowners. If they were going to rely on the generosity of the large landowners, he had to say that their policy did not, at any rate, favour that class of the community. The next source the right hon Gentleman mentioned was the existing railway companies, but for his own part he thought if they placed this matter of local lines in the hands of the existing railway compainies, they would simply increase and encourage a monoply by which many agricultural districts had already suffered a good deal. Another source the right hon. Gentleman mentioned were private and independent companies. It was that such companies might be started and carried on profitably that those who supported this Amendment asked for State aid. The President of the Board of Trade rejected State aid altogether, and at the Conference on Light Railways, he made it one of the preliminary conditions that it should be understood the State should give no aid. The right hon. Gentleman said it had never been the policy of this country to subsidise railways, and that 958 it would be a new departure, whilst he proceeded to give the impression that where this aid had been afforded in foreign countries it had been attended with bad results. If that were so, foreign countries had not found it out, because, not only were they continuing, but they were increasing, the aid given to light railways. Several foreign legislatures at the present moment had light railway bills before them, and the results achieved abroad should encourage them here to seek similar aid. What State aid had done abroad was shown by the figures. The railways in Germany between 1887 and 1891 had increased by 9 per cent.; in France and Belgium by 11 per cent.; in Italy and Switzerland by 12 per cent. and in Austria by 13 per cent., whilst in Great Britain, where there was no State aid, the increase was 3 per cent., or only one-third of that in the least progressive of continental countries. It was generally imagined that in this country they had the best and most complete system of any country in Europe. As a matter of fact, they had fallen back until the position they occupied was that of having a smaller number of miles of railway per each 100,000 of the population than many of the great countries of Europe. They tied with Belgium, but were behind Germany, Denmark, and France, and a long way behind Switzerland. Their falling back both relatively and substantially in this regard was a matter of comment on the Continent at the present moment. With reference to the contention of the right hon. Gentleman, that the policy of this country had always been against State aid to railways, he pointed to India, whose policy, if they did not actually shape, they controlled, and remarked that the Indian railways were constantly receiving grants. Not half-an-hour ago they heard from the hon. Member for Perth that an offer was quite recently made to grant a sum of money to a Scotch railway; and there was on the Paper at the present time a proposal which was in the nature of a guarantee in regard to another railway in Scotland. But what about Ireland? They had in that country the most extraordinary illustration of the fact that it was the policy of this kingdom to help railways so long as they were not in England. He found that our total liabilities for 959 Irish light railways was £1,326,000. What would that sum do for England if the country got it from the Treasury? England had six times the population of Ireland; but he would leave that argument aside for the moment. Supposing England only got what Ireland had got that at £3,000 a mile would create 430 miles of light railway in England. But they were not to suppose that English men would be content as Irishmen were content to cast all their cares on the public purse, or that English light railways would be as unsuccessful financially as lines managed in accordance with Irish ideas, so that a vast number of miles of railway would be added by private enterprise. If the financial aid from the Treasury were distributed in accordance with the principle of population—that was to say, that England should have six times the amount granted to Ireland—2,580 miles of light railway could be constructed in England; and if the grant in aid were in proportion to England's contribution to the Imperial Treasury, the face of the country could be covered with a network of light railways. But if the House would not agree to give direct subventions to those light railways, it ought at least to allow them such indirect advantages as were given to railways abroad, in addition to the direct State aid. For instance, in most foreign countries where there was a passenger duty, it was not levied on local lines. He believed the President of the Board of Trade would grant them that concession; but, so far, it was not in the Bill. The next advantage was, that if the postal authorities used such lines, they had to pay for what was carried over the lines as if it were conveyed by car. In Austria no Income Tax was raised on the income of those lines, and no stamp duty was charged on the transfer of stock; if the lines were rated they were rated as agricultural land; and in nearly all foreign countries there was a special Government department for giving instruction and assistance in the management of those lines. In Russia there was actually a light railway journal published by officials of the Government. He did not know that we wanted any more Government journals in this country; but he thought there ought to be a department of the Board of Trade 960 for giving assistance and advice to promoters and managers of light railways. Then there was another point. If the House would not give State aid to light railways in England, would they face the only possible alternative? Would they grant the directors of those railways power to charge rather higher rates than were charged by the great trunk lines which, with their big organised staffs, could naturally work much more cheaply than the small lines? He believed that abroad the rates were higher on the small lines than on the large lines. Of course, that was a power that would have to be carefully guarded. It might be guarded by enacting that the sanction of the local authority should be given to the schedule of rates before it was allowed. He was sure that if they could not get State aid for the light railways some localities would agree to a slightly higher scale of rates on those railways than on the trunk lines rather than do without them. Within the last two or three years the Commissioners who inquired into railway rates had a case before them in which people interested in the main article carried on a certain line particularly requested the rates should be put up. It was a line which carried granite; it was in the hands of a receiver, and was not in a very prosperous condition. The Commissioners proposed to put down the charge for granite from 3d. to 1½d., but the receiver said he would have to close the line if the charge were reduced. The people asked that the charge should be maintained at 3d., and the old rate was allowed. That showed that localities, if they could not keep their line in any other way, would consent to a slightly higher rate. There was one other point he desired to examine, and that was, whether there was anything in the Bill to tempt capital. If they could not get capital from the State, where were they to get it? The inducement to supply capital offered by the Bill was that there was to be a reduction in the amount of money that would have to be spent to get the authorisation of a line and a reduction in the cost of construction. In the first place, promoters were to go to to the County Council instead of to Parliament to get the authorisation. That was intended to save a certain amount of 961 money, but the hon. Member for Somerset (Mr. Strachey) showed very plainly it would be just as expensive to take experts to the country as to bring ordinary witnesses to London. He, therefore could not see there would be any very large saving in that direction. But they could not keep Parliament out of the thing. In all the most important cases the promoters would have to come to Parliament. The Bill provided that if a line ran into a town of 20,000 inhabitants, the county council and the council of the town were to agree as to the terms of the order. If they did not agree they would have to come to Parliament and get a Bill. Take another instance. Suppose a line were going to fulfil the very useful purpose of breaking down the monopoly of some particular trunk line. That line would come under the special head the right hon. Gentleman mentioned of a line which would have to be made by Act of Parliament. The unfortunate promoters would really never know whether they had to come Parliament or to go to the County Council. As to the reduction in the cost of construction, a certain amount of relief was to be given as to the requirements at present existing in railway law and management. But those relaxations only applied to existing statutory requirements. The county council could not deal with future Acts of Parliament, and could not interfere with the non-statutory powers of the Board of Trade. The President of the Board of Trade had many powers he exercised in his discretion. No order of the county council could control him in the exercise of his discretion. There was another danger which would threaten the shareholders in these lines. At any moment the House might pass another Act, like the Act of 1889, bringing up the standard of railways to a still higher degree of perfection. What would happen to the shareholders? £860 a mile was the cost, to the Cambrian Railway of complying with the requirements of the Act of 1889. Fancy a charge of that sort falling on one of these light lines. The attention of all agricultural clubs and societies had been drawn to this light railway question by a circular of which he received several copies. The Central 962 Chamber of Agriculture invited the societies to specify what would be thought the best improvements in the law on behalf of the agricultural community. Forty-four sent replies, but only three mentioned light railways at all. Why was that? Because they knew that one of the conditions of the Government was that there was to be no State aid. He hoped it was not too late to reconsider that point. If they could not have the whole loaf given to Ireland and Scotland let them have a crumb. It would be something if they could only get the crumb that the Board of Trade would provide the promotion expenses if a bonâ-fide case were made out. There were two main facts in the whole of his argument: one was, that all foreign countries gave this aid to their light railways, and by so doing increased the competition against our manufacturers and agriculturists; the other was, that this Government gave aid to every country under its control except England. On those two points he asked the House to agree with the Amendment, that this was not a satisfactory solution of the question.