HC Deb 19 March 1896 vol 38 cc1413-29

Considered in Committee.

[Mr. J. W. LOWTHER in the Chair.]

(In the Committee.)

Motion made, and Question again proposed:— That it is expedient to authorise the Treasury to make advances not exceeding £1,000,000 at any one time, under any Act of the present Session, to facilitate the construction of light railways in Great Britain, and for that purpose to borrow from the National Debt Commissioners the sums that may be required, such sums to be repaid out of moneys to be provided by Parliament, and, if those moneys are insufficient, out of the Consolidated Fund; and also to authorise the payment, out of moneys to be provided by Parliament, of the salary, remuneration, and expenses of the Light Railway Commissioners, and the expenses of the Board of Trade under the said Act."—(President of the Board of Trade.)

MR. J. CALDWELL (Lanark, Mid)

said, he thought the Committee was quite entitled to ask what the purposes were for which this money was to be expended. They were told it was for "light railways." What were "light railways?" [Laughter.] Where was the definition of light railways to be found? How did they know light from heavy railways? [Laughter.]


said, they were not now discussing the Bill. The proposal now before the Committee was the grant that should be made from the Exchequer for the purpose stated in the Resolution which he had read to the Committee.


said, he should confine himself to what was in the Resolution. If there was to be no Bill, he asked to what purpose this money was to be applied. The money was to be expended, nobody knew why or for what purpose, excepting light railways. That reduced the thing to an absurdity. They were asked to grant this money, and yet they were not told for what purpose it was to be granted. How did they know that a million would be sufficient? It might be too much or too little. A million would not go far in the construction of light railways. There were 667 constituencies in the United Kingdom, and if every one were interested in the matter the million of money would not go very far. It was stated that the authorities were to be paid out of the moneys to be provided by Parliament, and if this was insufficient they were to be paid out of the Consolidated Fund. He objected to this money being paid out of the Consolidated Fund. The principle in that House had always been that whenever grants for public money were to be given under the supervision of Parliament, the money was to be paid by Parliament, and the Government must have the consent of Parliament. In the case of the Irish Light Railways Bill the consent of Parliament had to be obtained to every grant, and every grant was upon the Estimates., The Government were now introducing a principle for the first time, namely, that they should, when, they wished to make certain railways, have power to take the money out of the Consolidated Fund. They must recollect that probably there would be another change of Government, and they would have to face the fact that the powers they were now taking might be exercised in future by a Liberal Government when in office. By the Resolution they were not told what this money was for. Under ordinary circumstances a notice of this kind was, he admitted, a formality, but it was not so in this case. Many hon. Members had not been allowed to speak at all upon the Second Reading of the Bill, and many of them were not upon the Standing Committee appointed to deal with the Bill. The right hon. Gentleman argued that upon Report and Third Reading they would have ample opportunities to be heard, but every one knew that after the Committee stage the Government would decline to discuss the matter further. They were entitled, at any rate, to see that if their constituents did not get a share of this money they should at least have Home, voice in regard to the districts which did get the money, he would later on move an Amendment and take a Division on the subject.


said the hon. Member had already had an opportunity of pressing his objections to this proposal at as much length as he chose, and he was astonished that, having had that opportunity, the hon. Member should get into such a state of evident excitement.


Not at all.


said he thought it was not a matter which lent itself to such excitement as the hon. Member had displayed. The matter really was a very simple one; the hon. Member seemed to think that the House of Commons would be placing a million of money at the disposal of the Treasury. This was a purely formal Vote, which must be passed in order to enable the Committee to whom the Bill was sent to go on with the Measure, the Second Reading of which the House had already passed without a division. Unless this Resolution were passed the Committee to whom the Bill was sent could not obey the Instruction of the House to deal with the Measure. He could assure the hon. Member that there was no attempt in this case to take the matter out of the hands of the House, because the whole Question of the application of this money would have to be discussed and decided first in Committee, and then by the House itself upon the Report stage and upon the Third Reading of the Bill. If the House were not content with the manner in which the Committee dealt with the Measure it would be open to them to alter, and if necessary to reject, the Bill altogether. Therefore, to say in these circumstances that there was an attempt to take the matter out of the hands of the House was a most exaggerated statement. The House had already decided that the Light Railways Bill was to be proceeded with, and therefore it was necessary that the Resolution should be passed in order to enable the Committee to deal with the financial clauses of the Measure.

MR. CALDWELL rose to order. He wished to learn whether the right hon. Gentleman was in order in saying that the Light Railways Bill involved financial questions?


The fact that the Measure involves financial questions is apparent from the terms of the Resolution itself. I have already stated that the details of the Light Railways Bill are not open to discussion on this Resolution. The only Question that can be discussed is whether the Treasury shall be empowered to make the grants in question.


said that he was merely pointing out that if the House desired that the Light Railways Bill should be proceeded with, it was essential that this Resolution should be passed. The House had already decided that the Treasury should be empowered to give pecuniary assistance towards the construction of Light Railways, and this Resolution had been brought forward in pursuance of that decision to enable the Treasury to carry out the intention of the House.


again rose to order. Was the right hon. Gentleman in order in making that statement?


The hon. Gentleman is not entitled to interrupt the right hon. Gentleman. I have already laid down a very clear ruling upon the point, and the right hon. Gentleman is not out of order.


said that he did not intend to detain the Committee for any long time in explaining this matter. If the Committee agreed with the House that pecuniary assistance should be given by the Treasury towards the construction of light railways, it was essential that they should pass this Resolution, so as to enable the Committee before whom the Bill was sent to deal with it, and to allocate certain portions of the money authorised to be granted for the construction of certain light railways.

MR. J. BRYCE (Aberdeen, S.)

said, that he believed the decision of the right hon. Gentleman in the Chair to be that it was open to the Committee to discuss the general principle and desirability of giving pecuniary aid towards the construction of light railways by the Treasury. It appeared to him that this was the proper opportunity for discussing that question. He intended to make but a very few observations upon the subject, and should confine himself to arguing the question whether light railways required pecuniary aid for their construction or not. What was a light railway? It was essentially a cheaper railway than the existing normal railways. The average cost of construction of a normal railway was £10,000 per mile, whilst the cost of a light railway would be from £3,000 to £3,500 per mile. The light railway traffic would also cost much less in working, there being no stations, no interlocking points, and no tickets required. A strong primâ facie case had been made out that there were a large number of railways which it would not pay to make at £10,000 a mile, but which it would pay to make at £3,000 a mile. In the same way numbers of railways which could not be worked to pay at the large cost which the working of railways at present entailed, would be made if they could be worked at something less than half the present cost. There was, in fact, every reason to believe that a large number of these railways would be made by voluntary action, especially by the existing railway companies. It therefore followed that where so great a reduction in the cost of construction and working could be looked forward to, there was every reason to believe that construction would go on without any aid from the National Exchequer. He thought, therefore, that it was an entire mistake at this stage to consider whether Treasury aid would be wanted ultimately or not, and that the reasonable course was, having cheapened construction and working, to wait for two or three years to see whether or no the existing companies would make these lines, and whether in that way, without any expenditure of public money, a large number of cheap branch lines would not be constructed. He believed that would be the result, and from communications he had had with the railway companies he had great reason to believe that if construction and working were cheapened they would make these lines. It might be that the opinion he had formed might be disappointed, but at any rate a few years' trial ought to be allowed. He put this forward as the opinion of experienced railway men whom he had consulted, and he thought a short time ought to be allowed to see whether their predictions were verified. If they were not it would then be possible for the Board of Trade to come and ask the House for a grant of public money, and in that case there would be practical unanimity in the House. At present he submitted that no case had been made out for pecuniary aid. Railway enterprise in this country and the Lowlands of Scotland had hitherto been entirely voluntary. Under that system it had prospered. There was an excellent railway service, which very efficiently connected the great centres of population. Parliament ought certainly to let voluntary enterprise see what it could do in providing the additional communications that were required, and before they deserted the voluntary system, they ought to be convinced that it was necessary to call in the aid of the public purse and to incur the risk of competition, of jealousy, and of pressure between different localities. He desired to state his objection on principle in the fewest words, and he hoped the House would consider that it had done nothing more than try an experiment, and would not extend the experiment unless the strongest case was made out for it.

MR. E. J. C. MORTON (Devonport)

said, the main motive for making this advance was to benefit the agricultural districts. The House had had experience in the past of the policy of light railways, but all their experience hitherto had been in the agricultural districts of Ireland. The experience gained in the case of Ireland led him to oppose a policy such as now was proposed. There were two similar principles upon which the advances had been made in Ireland, and one of the two was bound to be adopted in this country. There was the principle of free gift and the principle of charging interest upon the money advanced. If they adopted for England the first of these principles the House would practically be taxing the dwellers in the towns for the benefit of the dwellers in agricultural districts. That was admittedly an uneconomic and bad principle. If the second principle were adopted the interest on the money lent must be guaranteed by the localities where it was spent, and if that interest was not a true economic interest then the objection to the policy of free gifts would apply to this case also. If on the other hand, it was intended that a fair rate of interest should lie charged, then the experience of Ireland ought to make them pause. He undertook to say, that there was not a single light railway in Ireland which had been built with money advanced from the Imperial Treasury, on which the profit was equal to the amount of the interest which had had to be paid on the original grant. What they had done, therefore, in the case of Ireland, excepting the districts where free gifts had been made, was to erect a machinery which had had no other effect than that of draining the resources of Ireland. Were they going in the same way to erect the machinery in England by which they would drain the resources of any agricultural districts which they said they desired to benefit? The benefit would go to the Imperial Exchequer. The proposal of the Government was uneconomic and pernicious, and he should oppose it.

MR. ARTHUR JEFFREYS (Hants,) Basingstoke

said the Bill, as he understood it, only proposed that a million of money might be authorised to be spent on light railways. He did not himself believe that the whole sum would be spent, because the great railway companies, should they want to construct light railways, could borrow money for the purpose at a lower rate of interest than would be charged on advances from the Exchequer. But in some counties where there was great depression and poverty part of this money might be used very beneficially. Thus, the knowledge that the money could be obtained might stimulate companies to construct light railways in districts where distress prevailed. Surely the House would not grudge money which might effect so much good. The right hon. Member on the Front Opposition Bench said that this was a new principle and that the House was not in the habit of granting money for any railways in the Kingdom. But, only last week, the Secretary to the Treasury had told the House, in reply to a Question, that the capitalised amounts granted for the Irish railways in the last 16 years were represented by very considerable figures.


I did not say the United Kingdom. I said England and Scotland, which is an entirely different thing.


said, the right hon. Gentleman grudged to give a sixpence to England while willing to give millions to Ireland. He asked to have the same experiment tried in Great Britain. If the light railway system had answered well in many districts of Ireland, and the Irish people were grateful for it, surely it was not asking too much to extend that principle to Great Britain, that a certain grant should be made, not only to England, but to Scotland, because depressed districts in those countries could not make light railways without the aid of such money. All they asked now was to authorise this million, in case it should be needed. It was a most reasonable proposition, considering that the principle had been set of granting money to Ireland. When the money was required in some of the depressed portions of Great Britain they should have an equal share of that money which had already been granted to Ireland.


said, the issue before the Committee was whether it was expedient that light railways should be made by the Treasury and the deficiency caused thereby taken out of the Consolidated Fund. There was no case made out for taking this loan out of that fund. It was nothing more than an aggravation of the vicious system of increasing Imperial grants to local taxation and its relief. As a fact, they knew that the greater proportion of the Consolidated Fund, and of local taxation certainly, was raised from the taxpayers in the towns, and not out of the population spread over sparse districts of the country. What was the result? Returns showed that the towns were rated on their rateable value very high—from 34 per cent. down to 20 per cent.—whereas, in the country districts the taxation was from 17 per cent. down to 9 per cent. On the other side of the account they had a system of Imperial grants in relief of local taxation. In the country it was as high as 32 per cent., running down to 17 per cent., while in the towns the Imperial grant did not exceed 18 per cent. He had not heard the proposition made that the landlords in towns were to contribute to the relief of the burdens in the towns, yet the funds which were produced chiefly by the towns, were to be taken to aid in the relief and development of lands in the country belonging to owners who were the least taxed. It appeared to him, therefore, that there was no justification for taking this particular taxation, or relief fund, out of the Consolidated Fund. If the landowners desired to make light railways—and he was in favour of them—in order to carry their produce to the railway junctions, he maintained that this was a system for developing their lands. Let the owners, therefore, who were going to benefit by the light railway system, make the outlay and rate themselves for the purpose; let the funds be raised locally; let the advance be taken out of the local taxation fund, and not out of the Imperial fund contributed by the general taxpayer. In his judgment, therefore, it was inexpedient that the Consolidated Fund should be resorted to for the purpose of making light railways.


said, he wished to suggest to the right hon. Gentleman (Mr. Ritchie) that, whatever happened, he must make some alteration in the form of this Resolution. What was the meaning of the power of the Treasury "to make advances not exceed-£1,000,000 at any one time." They had to deal with the natural English meaning of the Resolutions they passed in that House, and he submitted that the natural meaning of those words was that the Treasury was to have power to make any number of advances. It would not do to say that it was explained by the Bill which had passed its Second Reading and was now in Committee, because, first of all, it was not in order to refer to Clause 6 of that Bill, and secondly, this Resolution applied not to that Bill, but to any Bill. It must be made perfectly clear in the Resolution that the advances the Treasury was empowered to make were not in all to exceed £1,000,000. The words as they now stood were at least susceptible of that meaning, and he submitted the natural meaning was that no advance was to exceed £1,000,000. He submitted that at all events there was an ambiguity in the wording of the Resolution, and no Government had a right to propose an ambiguous Resolution to the House. He did not speak against the principle of advancing money to light railways, but he did call upon the right hon. Gentleman, out of regard to the forms of public business in the House, to make it perfectly clear to the House and to the Committee upstairs, what the limit to the advances was that they gave them?


said, he was advised on very good authority that the hon. Gentleman was entirely mistaken in his interpretation of the words of the Resolution. There no was ambiguity whatever. This Resolution was drawn up at the Treasury by the most experienced men, who have drafted similar Resolutions which had over and over again been proposed in Committee of the House. The meaning of the Resolution was that a million of money might always be in process of employment. That was to say that, supposing the whole £1,000,000 were advanced in one year, either by way of loan or gift, and the loan became paid off, the amount so paid off would be again lent out if necessary. He would undertake to say that there was no financial authority in the House who would gainsay that the interpretation which he put upon the Resolution was the correct one, namely, that whatever Committee might have to deal with this question would be limited to £1,000,000—never to advance more than £1,000,000, but when portions were paid off, then those portions might be again advanced. That was the plain interpretation of the Resolution, and he would point out to the hon. Gentleman that, if there was anything in any Bill granting to the Treasury power to advance money such as that laid down in this Resolution, then it would be for the House to see that the interpretation he had put on the Resolution was carried out in that particular Bill. He did not in the least complain of the remarks of the hon. Member for Aberdeen. The right hon. Gentleman had repeated the observations on the question of principle which he made when the Light Railways Bill was before the House. He quite agreed with the right hon. Gentleman that there might be, and he believed would be, a large number of railways made under the Light Railways Bill by existing companies or others without any assistance from the Treasury at all. But there might be districts where, perhaps, light railways were most needed, and where they could not be made without some kind of assistance. That assistance might be given in two different ways. The first consisted of simply advancing the money by way of loan. The right hon. Gentleman said these light railways would be made so cheaply that they would pay their way. If that were so the loan made by the Treasury would not result in any loss to the taxpayers of the country. On the other hand, there might be districts where a mere advance of money from the Treasury on interest would not secure the making of the line, but where it might be necessary to make a free grant as had been done with success in Ireland, and all that they asked the Committee to do by this Resolution was to give power to the Treasury to consider the circumstances of the various districts in which light railways might be made. If they could be made without assistance, they would be. If they could only be made by an advance of money on interest, the Treasury would have the power of so advancing it on such terms as they thought fit to lay down. In those cases where a free grant would be necessary the Resolution asked the Committee to empower the Treasury to assist in the provision of a railway which might be of enormous advantage to the districts concerned. These were the circumstances under which the Government proposed the Resolution. The hon. Member for Devonport, condemned all the advances that had been made in Ireland. The advances in that country had been, made in two different ways, one by means of a guarantee of dividends, and the other by way of a free gift. He quite acknowledged that, so far as the guarantee of interest was concerned, the system had not resulted in any good. But the system of the free gifts of money, so far as they had been able to see, had been productive of very considerable good, the free grants only being given where the railway companies made and worked the lines. This arrangement had been attended with very great advantage to the community and the district.


Not with great advantage to the lender of the money, and in this case the lenders of the money will be the inhabitants of the town.


maintained that if it was for the advantage of a district, and developed the industries of the district, then it was for the advantage of the community at large. He was satisfied that, although there might be some remote and contingent obligation placed upon the dwellers in the towns, such obligations as this Resolution would place upon them would be amply repaid by the benefits the towns would derive from the agricultural districts being converted into a condition of prosperity from one of depression. He did not himself divide or separate the two interests. He maintained that the interests of the town and country were identical. He might point out that the proposals of the Resolution were not confined to any particular district, and it might well be that the towns would derive benefit from their operation. He wished, however, to particularly emphasise what he had to say in reply to the hon. Member for Devonport—namely, that where guarantees had been given they had resulted in loss, but where money had been granted the results had been, beneficial. The reference in the Bill to the Consolidated Fund, he was afraid, was hardly understood. That fund was only mentioned to guarantee to anyone from whom money would be borrowed that they would receive the interest. It was clear that if money was borrowed, and the interest was only payable by a Vote in Parliament, the lender was not put in the position of security he ought to be placed in, and while, under this Resolution, the interest on the money borrowed for the purpose of assisting localities in the construction of light railways would be voted annually by Parliament, there would only be a contingent liability upon the Consolidated Fund. It was only to give additional security to the lender that the Consolidated Fund was mentioned in the Bill.

MR. GEORGE LAMBERT (Devon, South Molton)

said, he was no lover of public grants to local taxation, but if Imperial grants were to be given for local purposes they could not be better applied than by assisting in the development of light railways, and he altogether demurred to the proposal of his hon. Friend that the Consolidated Fund or moneys given by the Treasury was entirely produced by the dwellers in the towns. In the agricultural districts they contributed more than their fair share. (An HoN. MEMBER: "Nonsense!") His hon. Friend said "Nonsense." That was all very well, but then matters had to be proved, and when they had the figures of a distinguished public official like Sir Alfred Milner (the Chairman of the Inland Revenue Board), whose evidence before the Royal Commission on Agriculture clearly showed that agricultural land bore more than its fair share of Imperial taxation, he imagined such evidence was entitled to credence and not to be called "Nonsense." In his own constituency, if light railways were constructed they would be an enormous advantage to the small boroughs and the whole county of Devon. He was perfectly convinced that no greater benefit could be conferred upon small boroughs, depending as they did on the prosperity of the agricultural districts, than by giving them grants that produce might be easily and cheaply brought from the country districts into the small towns. But he thought the money mentioned in the Resolution, instead of being devoted to the Light Railway Commissioners and the expenses of the Board of Trade under the Bill, would be much better employed in the construction of light railways themselves. He did not believe in officials at all. The fewer officials they had, the better for the development of light railways. He was sure the multiplication of officials would only mean more red tapeism and making the working of railways more difficult. He cordially supported the Resolution, believing that no more wise method of developing the rural districts could be initiated than by assisting in the construction of light railways.

MR. C. T. MURDOCH (Reading)

said, the great railway companies would not require to take advantage of the proposed advance by the Government The free grant would be taken advantage of in out-of-the-way districts. The grant was merely in addition to funds which would be raised by the local authorities. That was to say, in out-of the-way districts, where railway companies would not think of undertaking the making of the line, assistance would be necessary from the Treasury if the railways were to be carried out; and he could not help thinking that, when the Light Railways Bill was read a second time, the unanimity in the House was partly on account of the facilities given to the making of light railways in those districts which the great railway companies did not touch. There was one other point. The right hon. Member for Aberdeen stated that he believed these light railways could be made for an average price of £3,000 a mile, and that they would be remunerative. He himself believed that, if these light railways were made as an addition to our present railway system, they would be made by the great railway companies, not in the belief that the money would bring in any return so far as interest was concerned, but that they might bring traffic on their lines which otherwise they would not have. Light railways would hardly pay in themselves, but they would pay as feeders; and the assistance the Government proposed to give to outlying districts would be an inducement to the railway companies to facilitate the construction and working of auxiliary lines.


proposed to omit, after "£1,000,000," the words, "at any one time," and to make the Resolution read, "not exceeding in all £1,000,000."


said he was prepared to accept the words, "so that the sum total of free grants and outstanding loans shall not at one time exceed £1,000,000."

Amendment agreed to.


regretted very much that the right hon. Gentleman had not met the important point that was raised when the question was last before the House—the needs of mineral districts like Flintshire.


said that question could not be raised on this Resolution.


said the Resolution was not in the same terms as the Resolution for the Irish Light Railways Bill. In that case, the grants were to be made out of moneys to be provided by Parliament; but, under this Resolution, the advances were to come out of the Consolidated Fund, thereby evading discussion in Parliament. He therefore moved to omit the words, "if those moneys are insufficient, out of the Consolidated Fund," and to substitute the exact terms of the Irish Resolution, so that advances made by the Treasury should be subject to full discussion in the House of Commons.


said some reason should be given why it was proposed to depart from the precedent in the case of the Irish Light Railways and pay this money out of the Consolidated Fund.


said the two cases were different. In this case the Government desired not only to grant money, but to lend money, which was not so in the Irish case. The Government must borrow the money they desired to lend from the National Debt Commissioners, and they must pay interest on it to the Commissioners. The interest would appear on the Estimates every year, and hon. Gentleman would have the opportunity of discussing the Light Railways Schemes.


said, as he understood the Resolution, it placed not only the loans, but the grants as well, on the Consolidated Fund, a course which would prevent Members from discussing the schemes.

The Committee divided:—Ayes, 206; Noes, 37; 169.—(Division List, No. 62.)

Main Question, as amended, put, and agreed to.

Resolved:— That it is expedient to authorise the Treasury to make advances not exceeding £1,000,000, so that the sum total of free grants and outstanding loans shall not at any one time exceed £1,000,000, under any Act of the present Session, to facilitate the construction of Light Railways in Great Britain, and for that purpose to borrow from the National Debt Commissioners the sums that may be required, such sums to be repaid out of moneys to be provided by Parliament, and, if those moneys are insufficient, out of the Consolidated Fund; and also to authorise the payment, out of moneys to be provided by Parliament, of the salary, remuneration, and expenses of the Light Railway Commissioners, and the expenses of the Board of Trade under the said Act."—(President of the Board of Trade.) And, it being after Midnight, the Chairman left the Chair to make his Report to the House.

Resolution to be reported To-morrow.