IRISH RAILWAYS (CONFIRMATION OF AGREEMENT) BILL. (Hansard, 27 November 1919)

§ Sir E. GEDDES
I beg to move, "That the Bill be now read a second time."
1986 In asking the House to give a Second Reading to this Bill, Mr. Deputy-Speaker, I would like briefly to explain what it does, and why it is necessary. When the Irish railways were taken over under war conditions at the end of 1916 it became necessary to do for them what was done for the English railways under the Act of 71. By an agreement with the Irish railways the year 1913—a prewar year—was taken as the base year upon which their net receipts should be made good to them by the Government. In Ireland there are two complications, which have to be met—first of all, by agreement now by means which this Bill introduces for the consideration of the House. The two points are these: Owing to railways being required in certain backward districts in Ireland which would not pay by themselves, there have been a considerable number of guarantees of minimum return upon capital given by local authorities. Roughly speaking, the cash value of these guarantees is about £50,000 to £60,000 per year. The guarantees are based upon an accountant's scrutiny, partly by officials from the local authorities and partly by officials from the Board of Trade on the accounts; finding what the net receipts for any year may be, then from that making up the deficiency for the total guarantee.
Obviously, when the receipts were no longer divided and the railways were being guaranteed by the Government, on the 1913 receipts, it was impossible for them to afford the audited statement necessary before the guarantors would pay the deficit on the railways. This Bill provides that for that purpose, as for the purposes of guaranteeing the whole of the net receipts of the railway, that 1913 should be taken as a base year. It was not at all an unfavourable year; in fact, it was a favourable year for the guarantors. The other thing the Bill does is somewhat similar. It provides that 1913 shall also be taken when one railway is working a line belonging to another railway company on a percentage-of-receipts basis. Obviously that, under normal circumstances, would be the net actual receipts paid to the line in question for each year. As these have not been separately ascertained, and as the railways have been given all over the Kingdom, both in Ireland and Great Britain, the 1913 figure, they cannot, as in the case of the guarantors, give the actual receipts of 1913. What 1987 this Bill does is that it provides that for these two purposes, and in slight variants, the year 1913, net receipts, shall be taken as the year upon which a calculation shall be made during the period of Government control.

§ Sir F. FLANNERY
That is precisely the same as in Great Britain?

§ Sir E. GEDDES
The same principle. But the question of guarantee and of making up the net receipts has not risen in this country as in Ireland. In Ireland those conditions exist and it is necessary to make 1913, so to speak, the legal net receipts year for the two purposes.

§ Sir E. CARSON
May I ask the right hon. Gentleman, before he concludes, whether the guarantees apply to anything but light railways? Are they merely light railways?

§ Sir E. GEDDES
I am afraid I cannot answer my right hon. and learned Friend with great accuracy on that, but I think not; they are broad-gauge lines.

§ Mr. LINDSAY
Are we to take it that the guarantees paid by the State will not relieve the local authorities and the guarantors from their responsibility—that they will not be able to shift any of the guarantee on to the State?

§ Sir E. GEDDES
That is the intention. I cannot take any particular railway, but if you take the whole of Ireland, it is less than if they had not come under the Government control at all, because the receipts were falling. If the year 1913 had not been adopted, the guarantors would have had to pay more.

§ Mr. ROYCE
The right hon. Gentleman referred just now to light railways in Ireland. Is it not a fact that some of the light railways in Ireland are of 3 ft. 6 ins. Gauge?

§ Sir E. GEDDES
Yes.

§ Mr. WATERSON
The right hon. Gentleman referred to the fact that some of the railways have been held back by the State. I should like to ask him whether those backward parts of the railway system have been developed, and at whose expense, and will that be taken into consieration when they return to normal conditions?

§ Sir E. GEDDES
I am afraid I do not understand the hon. Member's question. This is not a question of building new railways in backward parts. Those are railways which were built before. It is purely a question of adjusting the financial guarantees for the years during which, owing to the Government control and the depletion of staff during the War, it has been impossible to arrive at what their actual receipts have been. What the Bill does is to make the year 1913, which was the year adopted for the Government guarantee, the base year for the other guarantees as well. That is all that is done. It is not starting any new railways; it is not giving new guarantees; it is simply a matter of adopting a statutory year which shall be taken as the year giving the net receipts for the period during which the Government control lasts.

§ Mr. WATERSON
I am sorry if I did not make myself clear. I want to ask whether, since they were taken over in 1916, there has been any development in the national interest, and, if that development has taken place, who is to bear the expense?