§ Order for Second Reading read.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal)
I beg to move, "That the Bill be now read a second time."
In the year 1918 an Act was passed entitled the Statutory Undertakings (Temporary Increase of Charges) Act, which enabled an increase of charges to be made by a number of statutory undertakings. In the case of tramways and light railways running upon public roads an extension of the powers of that Act has been found now to be necessary. By reason of matters which I will briefly explain, the financial position of the undertakings was such as to call for some relief. There are, I am informed, 263 of these undertakings in the country. Sixty-six of them, I think, are municipal undertakings. The rest are statutory companies. All of them are limited in charging powers, but in varying ways according to the special statutes under which they were constituted. The municipal undertakings show an estimated surplus of £73,650, without making any provision whatever for renewals, and the cost of renewals now is, at the lowest, three times what it was before the War. In addition to that there are certain arrears of renewals to be made good. Some of these tramway undertakings are already serious burdens upon the rates. There 1444 are some 20 which, in the last financial year, have had rate subsidies. The most conspicuous of these have been the two boroughs of West Ham and East Ham. With, in the former case, a charge upon the rates of 9.85d. and in the latter 5.41d.
Private companies are no better. There is something like £15,500,000 capital invested in these companies, and the balance to meet all priority charges, such as debenture interest and preference stock and to provide for renewals, is estimated at £455,000. I ought to say that every one of those undertakings, municipal and company undertakings, are uncontrolled and in no way fettered by the Government. Quite recently there has been an agitation by the tramway workers for increased remuneration. That matter became a subject of discussion before the Industrial Council, which is commonly known as the Whitley Council, and they arrived at a unanimous conclusion that it was necessary that there should be an increase in the rate of pay given to the employés in those undertakings. But they were equally clear that it was impossible for that recommendation of the Council to become effective unless some power was given to increase the charging rights of these undertakings beyond those which are permitted by the Act of 1918. In those circumstances they approached my right hon. Friend the Minister of Transport (Sir E. Geddes) and asked whether he would give his Parliamentary assistance to secure some extension of these charging powers, and that promise my right hon. Friend, after full inquiry, thought it wise to give, and it is that promise, which was ratified by the Cabinet, which we are here to ask the House to confirm.
There are certain methods by which these increases of charges could be brought into operation. The usual method is by means of private Bills. I do not think that anybody would say that in the case of 263 undertakings, many of which require this relief, it would be anything but a gross scandal and a waste of public time and money if each of them were required to promote a private Bill, even if they could get the necessary sanction to do it, as in the present Session of Parliament there would have to be special facilities given for that purpose. Another method would be by a general Act authorising all such undertakings to increase their maximum charges by certain percentages. 1445 But a measure of that character is not called for. There are some undertakings, both municipal and companies, which will not be able on the figures, so far as we have them before us, to justify an increase above the maximum rates and charges. As to companies there was still a third method open. That was that the Minister of Transport should exercise the power vested in him by the Transport Act, and take possession of the companies, and then give them an award directing them to increase their actual charges.
There are three objections, both in principle and practice, to that method. In the first place it is not conceived to be desirable to extend controls more than is necessary and may wisely be done. In the second place, there is very great difficulty in arriving at what is the correct actual charge to make in the case of tramways, as distinguished from the maximum charge that may be made, by reason of the fact that you have point to point charges all over tramways, and an investigation of the correct fares between two given points over all the tramways in the country would be one of very great difficulty and perplexity. In addition that method would not apply to municipal tramways, which by the Transport Act are excluded from the purview of the Ministry of Transport. In these circumstances a very short Bill is before the House, and I propose in a few sentences to indicate the method which is to be adopted. By Clause 1 of the Bill the limitations to be found in the Act of 1918 are abrogated, so far as they may be referable to Orders made by the Minister under this Statute. By the 1918 Act undertakers who are a local authority were authorised to increase the maximum charge by not more than 50 per cent., provided that that was not more than sufficient to enable them to carry on their undertaking without loss. In other words, they could have no increase under that Statute—nor is it proposed that they should have under this Bill—which would do more than carry on the undertaking in a way which permits its solvency without contributing anything in relief of rates. As to companies, they were limited in their increase of charges to three-fourths of the pre-War rate of dividend or the standard which was the maximum rate of dividend. By this Bill those limitations are abolished, 1446 and other methods are substituted which I hope will be satisfactory.
It is proposed that powers should be vested in the Ministry to relieve undertakings temporarily from onerous and un-remunerative provisions which hamper the working of these undertakings. There are in certain private Acts establishing these undertakings such provisions as those requiring that there shall be a certain frequency of service which in the events which have happened have turned out to be quite unnecessary. The Minister may make Orders authorising the necessary increase of charges by the municipalities, again with the same limitation that they shall not make a profit in relief of rates, and by companies such as may be; necessary to enable them to pay a reasonable return upon their capital, and for this purpose we have taken, I think, the exact words from the Resolution which was passed by the House in dealing with the London Underground railways as to a reasonable return upon capital. The Minister proposes by this Bill that he shall act upon the advice of advisory committees to be set up, which shall consist of the Light Railway Commissioners plus Members to be selected for the purpose from the advisory panel which is established under Section 23 of the Ministry of Transport Act. But inasmuch as the matter is quite urgent and some of these companies are in the greatest possible difficulty in meeting both their current obligations for renewals and the further liabilities coming upon them by reason of the recommendations of the Whitley Council, namely, that the men should be paid an immediate advance of 5s. a week to be followed by, I think, a further one shilling in June, it is desirable that the Minister should have power to act promptly
A considerable mass of statistics has already been obtained to enable him to do so. Therefore, the Bill proposes that he may make Interim Orders, which will not have validity for a period of more than six months, and that he shall forthwith, on the making of an Interim Order, refer the matter to the Advisory Committee for its consideration and report so that a more permanent Order may take its place. Then there is a provision for review, either at the instance of the Minister or at the request of the local authority or company concerned, or in 1447 the case of municipal undertakings by twenty ratepayers. A further provision is that the cost of these inquiries which, it is hoped, will be quite light, by reason of the avoidance of quite large expenditure in the matter of professional witnesses and counsel and the like, shall be borne by the undertakings themselves. The reason for that is that they are relieved from the much more onerous burden of the cost of promoting a Private Bill in Parliament. Another provision is to limit the duration of the Bill to exactly the same period as that to which the House has limited the powers of the Minister with reference to railway authorities, namely, during the two years of control which is sanctioned by the statute, the Ministry of Transport Act, plus eighteen months. Therefore, there is a time limit to the Bill of 15th February, 1923. In the meantime the companies and the municipalities will have gained experience and they will be able to say whether it is necessary for them to make any further application to Parliament, either privately or by public Bill.
§ Sir H. NIELD
Does the hon. Member distinguish at all between municipal tramways and private tramways under the Tramway Acts and light railways constructed under the Light Railways Act?
§ Mr. NEAL
No; under the Act of 1918 light railways which have the character of tramways, that is to say which run along the public roads, are included. It is intended that they shall be included in this Act also. Unless some such measure as this receives the approval of the House there would be a very serious position created for the tramway undertakings of the country, both municipal and company owned. They would not be able in many cases to meet what has been ascertained to be the just demand of the workers for greater remuneration; they would not be able to deal with the obvious necessity of keeping their tracks in such a condition as is consistent with public safety and convenience or of maintaining their undertaking in the way that is essential if the public are to have that service of transport which is increasingly necessary as people are being asked to live further and further from the place where they work.
Colonel - WEDGWOOD
I beg to move to leave out the word "now" and at the 1448 end of the Question to add the words, "upon this day six months."
I will put the case against the Bill. Under the Bill tramway fares will be increased by every private company throughout Great Britain. The Bill does not affect municipal tramways. Under the 1918 Bill a concession made to municipal tramways was very nearly identical with the concessions made in this Bill, except so far as regards East Ham and West Ham. The Independent Labour Party, for whom I speak, would regard it as an impertinence if the Government of the country interfered in any way with the charges made by the municipalities for the use of their own tramways. They think that that is a matter to be decided by the locality, and not by a central power. It is the 180 or more private tramway companies which stand to benefit under this Bill. In every one of those companies the fares will be raised. The reason given by the hon. Gentleman for the necessity of increasing fares is that unless the fares are raised the private statutory companies will not be able to carry on their businesses. Let us first make up our minds what is our position relative to these statutory companies from the point of view of justice. Each of these statutory companies made a bargain with the State. Under the terms of that bargain they were entitled to a certain franchise—the right to make tramways. Owing to the War, the bargain has turned out to be unsatisfactory to the private companies. Suppose that the bargain had gone the other way, that it had turned out more satisfactory to the private companies than to the public. Should we then have had a Bill introduced to give the public more advantageous terms than those which the original bargain secured to them? We should have been told that it was monstrously unjust to alter the terms of a bargain made between the Government and a private company, that the country had entered into a bargain, and that whether the public gained or lost by it, they would have to stick to it. Now we have the reverse side of the shield. Immediately, as in 1918, the Government, which looks with almost tender care after the interests of these statutory companies, and, indeed, after all vested interests, come forward with proposals to break the bargain made, inasmuch as it has proved disadvantageous for private enterprise.
1449 That seems to me to be a wrong way of dealing with these things. Whenever private enterprise gets into a corner it comes to the Coalition Government and says, "We are being hard pressed, alter the bargain." But, says the hon. Member, "We must remember that wages are going up, and if you do not allow the companies to increase the wages the companies will go bankrupt and be unable to pay their way." That leaves me cold. Many people have entered into bargains with public authorities, for instance, to do certain work, and they have found that the contract did not pay them, but they stuck to those contracts. Let these people stick to their contract too. They would be sold up. They would be bought up by the municipalities and the county councils at a fair market price. The Government and Members of this House ask that when the municipalities or the county councils buy up these tramway concerns they shall pay, not the fair price at which the bargain was originally made, but one enormously increased by the passage of this Bill. An immediate result of the Second Beading of this Bill would be that the shares of all the companies concerned would rise. If this Bill was defeated to-day those shares would drop to-morrow. When the Bill is passed by a triumphant majority all the shares will rise. We saw that happen in 1918 in the case of the water companies and the gas companies. The very introduction of the 1918 Bill by the Government immediately sent up prices on the Stock Exchange. I remember Mr. John Burns calling special attention to the matter and quoting the figures. We are deliberately, by an Act of Parliament, giving to certain franchises in this country a value they did not possess, and would not possess if this Bill were not passed. The whole of politics, as far as I can see, and I have been in the House fifteen years, is one long struggle between the public interest and the vested interests. The vested interests can employ people in the Lobby here and can circularise every Member in the House. The public interest is no one's interest. There is no one to circularise them or to put them on the qui vive. We must try to divest our minds of any desire to benefit vested interests. The public interest is that the bargain entered into by these companies should be carried out to the letter.
§ 7.0 P.M.
§ Sir H. NIELD
The speech to which we have just listened is self-condemned as most unreasonable, having regard to recognised facts which have been forced upon the whole world by reason of a cataclysm which has never been known before. I should like my hon. and gallant Friend to tell me what he would have happen in a case I will put. It is a case where a county council, realising its opportunities under the Light Railways Act, not being a tramway authority under the Act of 1870, proceeds to promote Orders and to get Orders from the Light Railway Commissioners, to establish a very large network of tramways throughout its area, makes a track, keeping complete control over the substance or disturbance of the road, doing the widening and everything necessary for the purpose, and then under advantageous terms leases to a company to provide the equipment and the rolling stock, taking therefor a preferential rate of interest on the county council's outgoings and then sharing the profits after giving an interest of 6 per cent., to include sinking fund, in respect of the expenditure of the company and in respect of wasting assets, such as rolling stock and equipment. Apparently, from the observations of the hon. and gallant Member, that very reasonable deed whereby the losses to the county ratepayer are minimised, whereby the county has the right to prevent an alteration of fares without the county's assent and to see that the cars are properly run, kept clean, and so forth, is not to be regarded as an ideal bargain. What would be the result if the hon. Member had his way? An enormous number of employés have their wages raised. How in the world are the companies or the municipalities to meet those obligations unless it is by increasing the fares? I do not know what my hon. Friend means by talking about these companies becoming insolvent and then that the municipalities will be able to buy them on advantageous terms. What more advantageous terms can they get than those already given to them by the Tramways Act of 1870, whereby they can buy the whole thing at the price of old metal? That is a provision which I am perfectly sure was never contemplated as giving a public authority the right to buy 1451 a going concern at a break-up price. But the municipalities get that power under the present law, and what more does the hon. Gentleman want? It seems to me that my hon. Friend's passing over from his old party allegiance to that of the Independent Labour party is not likely to inspire either one section of the community or the other. One would want to have a more definite idea and a more workable idea, and a somewhat less purely revolutionary idea, of the treatment of contracts than that which he offers. As one who is very interested in this question of transport in relation to tramways, I venture to think that this Bill is an absolute necessity. I can hardly believe that the hon. Member is serious when he suggests that these tramway concerns should be brought to an end, for that is what it would mean. The result would be that in many districts the tramways would cease, and the public would be unable to get from point to point, and theirs would be the grievance. The debenture holders in the case of a private company would come in and get a receiver appointed, and unless there was an Act passed for the purpose, there would be no power to compel the receiver to run the trams at a loss. I am speaking of the large number of private concerns run in the provinces.
The hon. Gentleman who introduced the Bill referred to one object, namely, getting rid of onerous conditions. I should like to see that part of the Bill in operation. I can give an instance where an onerous condition should be got rid of but cannot be got rid of under this Bill. The hon. Member who looks after the interests of the London County Council is not present at the moment, but I cannot refrain from utilising the opportunity to ask the Minister in charge to consider whether a condition which imposes an exorbitant and outrageous rent by the London County Council upon the Middlesex County Council for half a mile of tramway connection between the Archway Tavern and country boundary is one of those oppressive conditions which ought to be got rid of. If the right hon. Gentleman thinks so I shall hail the Bill. A more iniquitous thing than to impose a rent of that sort upon a helpless county council which must make this connection to get into the London system is difficult to 1452 imagine. On the whole, it seems to me that the Government have no alternative in order to do justice to the workmen and at the same time to those who have provided these trams, but to introduce this Bill. Those people who have provided the trams have done so, I venture to say, at a very low rate of interest. I have not a single share or any interest in tramway companies. I am interested in county tramways. I would like to ask any hon. Member who has the material to investigate the dividends paid by tramway companies upon their shares for the last twenty-five years, and on inquiry I think it will be agreed that the remuneration received by the shareholders is neither outrageous nor excessive. When we remember the extra charge of five shillings per week to be paid at once and another shilling in June it is impossible to suppose that these concerns can do so without the provisions of this Bill. I think it is a bare act of justice, notwithstanding the extravagance of hon. Gentlemen who have just departed from this House to go into my own Division to make an Independent Labour party speech there, though I am quite sure the hon. Member who makes it will get no change in doing so in that Division.
§ Mr. GRIFFITHS
The hon. Gentleman who has just spoken has, I think, misinterpreted everything said by the hon. Member for Newcastle - under - Lyme (Colonel Wedgwood) who pointed out that this Bill was introduced to bolster up private enterprise. He drew a distincton between the municipal tramways and those owned by private enterprise, because in the case of the municipal tramways you get the cost back in the rates, and what you lose on the roundabouts you get back on the swings. So far as private enterprise is concerned, if you are going to allow increased fares for the purpose of paying extra wages or extra burdens imposed on them I do not believe a single Member on this side will oppose. But the hon. Member for Newcastle-under-Lyme pointed out that what he was afraid of was that you were going to allow these private enterprises to pay extra dividends, and as a result when the shares were put on the gambling exchange they would go up. Thus, if I purchased a £1 share in a private company and put it on the market and it increased to £2, and if I was getting 5 per cent. on £1 it would mean that I would be getting 10 per cent. 1453 There is no one on this side going to oppose this Bill in so far as it proposes to meet increased charges for the workmen. That is occurring in every industry in the country and these men have to get the same privilege as the workmen employed in other industries. If the Minister of Transport will give an undertaking that this is only to meet increased charges of this kind or increased prices of rolling stock or anything of that nature we will not oppose it, but if it is going to mean extra dividends for private enterprises, then we shall go into the Lobby against it.
§ Mr. W. GRAHAM
I regret very much I am not able to agree with all that fell from my hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), but I think we are entitled to resist the Bill until we have some more information. There is at least one principle about the Bill which many of us in existing circumstances would support. I think the general provision for an increased charge is satisfactory when compared with the private Bill or Provisional Order for increased charges. Here we have a general Statute which gives what is apparently a general power, and to that extent I think it marks a very real advance on the individual effort to secure a concession of the kind, which is true of other lines of public activity. The point to which I wish specially to direct attention is with regard to paragraphs (a) and (b) of Sub-section (1) Clause 1. That Sub-section deals with the position of the local authority and covers, as I understand, all municipal tramway undertakings. Under the 1918 Act it was provided as regards municipal enterprise in trams that there might be a 50 per cent. increase in the charges. This Sub-section is to the effect that such increased charges should be imposed by them as will enable the undertaking to be carried on without loss, and that, according to the speech of the hon. Gentleman, excludes anything which might be paid to the relief of rates. I do not quarrel with that in the least. No controversy was more productive of heat in the past, and my own view was that we should always supply the service at the lowest possible charge rather than try and earn money to subsidise the rate of the locality. That is now excluded, but I notice in the Clause which applies to municipal authorities there is no reference 1454 to prospective development, whereas there is a definite reference to prospective development where the companies are concerned. I am hopeful we may have some explanation that there is something in the finance of these tramway undertakings which meets this point. At the moment, many of the municipal authorities are embarking on great extensions. In Edinburgh, for instance, they are about to embark on an entirely new system. What is the position as to this First Sub-section to cover developments where municipal authorities are concerned? The second paragraph deals with the provision in the case of private enterprises, of interest on loan capital and a reasonable return on share capital, regard being had to prospective development. An attack on this Bill would I think be much better directed to some limitation of the returns to those private undertakings on the capital invested in them.
Here we are dealing with what is in every area substantially a monopoly. These companies have got powers, and so far they are removed from competition, and I think it is not unreasonable to ask that we should substitute for what may be regarded as a reasonable return on capital something which would be in effect a limited return on capital, without being in any way unfair. A good deal of the objection to this Bill on the part of the working classes will undoubtedly turn on what seems to be a very vague and far-reaching power given to the Minister of Transport. I gather that the power with which he is entrusted to increase the charges up to 100 per cent. is an interim power. It would seem to indicate that if that is an interim restriction up to 100 per cent., it is possible that a reasonable return on share capital may land us in charges which will be very much greater than the charges in force now. I think we should have some explanation from the Minister of Transport as to how these Advisory Committees are to proceed in fixing this so-called reasonable return. I know that in most of these things we have the return which is given to capital invested in similar or kindred enterprises throughout the country, but, very largely because of war conditions, the return is artificially greater to-day and probably will be for some years than it was in pre-war times, or even during 1455 the course of the War itself, and I venture to suggest that the people of the country, having granted a monopoly to these companies in these areas, are entitled to be protected against that inflated charge in a Bill of this kind.
I think it is clear that the general principle of the Bill is going to be met with little or no opposition. There must be increases in fares to cover the increases in costs. But we are really entering upon a very important situation in dealing with this Bill, because it raises a very much larger question than is covered by the actual scope of the Bill itself. We are dealing here with tramway undertakings merely, but this Bill itself is based upon a precedent set up by the financial Resolutions under which the London Railway Bill was brought in. That was the first move in the direction of legalising increases in the charges for transport facilities. We have the term," a reasonable return on share capital," which arose in connection with that Resolution, and the action which the House takes on this Bill will be the precedent upon which it will be asked to act later on in other cases. It is therefore a matter of considerable importance. I agree with the principle of the Bill that charges must be increased, but I want to ask the Minister of Transport one or two questions of general interest. In the memorandum to the Bill there is, I think, a clerical error. It says, in Section (b), that in the case of companies the charges cannot be increased by more than the amount sufficient to enable them to pay dividends on ordinary capital at a rate exceeding three-quarters of the pre-war rate of dividend. I think the word "not" has been left out.
§ Mr. NEAL indicated dissent.
What will govern the charges, amongst other things, will be the consideration of what is a reasonable return on share capital, regard being had to the pre-war financial condition of the company and its prospective development. That opens up the whole question of the value of the company. What figure, in deciding what is a reasonable return on share capital, is the share capital to be taken at? Is it to be taken at its face value or at the value at which it was quoted on the Stock Exchange prior to 1456 the War, say, on the 3rd August, 1914, or is the share capital to be taken on a present-day valuation of the undertaking? It is obvious that every undertaking which is worth anything at all is worth more to-day than it was before the War. That is really the vital question on this Bill, though perhaps it is a Committee point; but I think it would be helpful if the Minister could give us some information as to whether the share capital of an undertaking is to be based on pre-War or post-War value. In regard to the term "reasonable return," it seems to some of us that it would be better if a fixed return was substituted. The Minister of Transport is getting considerable powers under this Bill, and as experience has already shown him that he is not likely to get those powers without a good deal of scrutiny in Committee, I think if he would give the House at this point some information on this exceedingly important question of the capital valuation, it would lighten his task considerably.
§ The MINISTER of TRANSPORT (Sir E. Geddes)
I must thank the House for the way in which this necessary, but rather unpleasant, request for power has been received. I would like to refer to what the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) said. He said in effect that this was a Bill to enable private companies to be placed in a much more healthy condition financially, that it was a Bill brought forward after pressure from vested interests, and that it was to increase the value of the properties so that the proprietors might benefit thereby. There is no foundation whatever for that. This Bill was brought forward after one meeting only with the Ministry of Transport. The meeting was a Whitley Council, which consisted of employés' representatives, of company representatives, and of municipal representatives, and unanimously they came and said that after full investigation they had come to the conclusion that the men working on these lines must have higher wages and that, generally speaking, none of the undertakings, municipal or company-owned, could stand the additional burden. There was no question of the vested interests lobbying or making representations, as the hon. and gallant Gentleman suggested. Further, the request comes from the representatives of 169 public authority-owned undertakings and 94 1457 companies. It is mainly public authorities who have asked for this, and not companies. Further, any question of permanently increasing the charging powers of these undertakings is, I think, negatived by the fact that whatever powers the House chooses to give to any authority lapse at the end of eighteen months from August next—I think it is in February, 1923. It is a temporary provision, and simply in order to fix a date we take the same time that the similar provision lapses for railway charges. That was fixed at a time in order to enable the railways to promote, if they wished, private Bills to increase their charging powers, and then is the time for this House, in dealing with these private Bills, to exercise the control which it ought to exercise, and to revise the bargain in a fair way.
With a great deal of what the hon. and gallant Member said in regard to bargains I agree. I admit that the State gave certain powers in return for certain obligations, and that bargains should be revised both ways, and when these temporary bargains come to an end, it is then that we ought to deal with the relationships and the bargains which these undertakings may make to the State. One hon. Gentleman said why not let the things go on as they are. Obviously, they cannot. If they cannot get the money to pay the wages, they will come to a standstill; the workers will go on strike, because they cannot get the standard which has been agreed by the Whitley Council as necessary, and that is the reason why this emergency arrangement has to be come to. As my hon. Friend, the Parliamentary Secretary, explained, the matter is one of some urgency, and therefore immediate and temporary powers have been sought, for six months only, to increase temporarily the charging powers of these undertakings up to a figure not exceeding 100 per cent. of their existing powers. That power is exercised by the Minister of Transport on their application in every case, and he has to refer the thing at once to the Advisory Committee. Apart from that, it is only upon the application of the authority—and no one will interfere with them if they do not apply—that this matter comes up at all. As to the points which were raised by the hon. Member for Central Edinburgh and the 1458 hon. Member for Newcastle as to what a reasonable return was, and whether it was on the nominal capital or on what share capital, I should very much regret if I had at this stage to interpret that. We took the wording which, for better or for worse—I think it was inevitable—the House adopted in dealing with the Bill put forward by the London Combine, that a reasonable return on capital was a reasonable provision. We have added to that something, which I thought was a safeguard, that regard should be had to the pre-war return upon the capital. I put that in because I did not wish to let it go from this House—if the House gives the powers—that the reasonable return should be taken on general lines, regardless of the pre-War return on capital and regardless of the pre-War financial position of the company.
§ Mr. GRIFFITHS
Have you any method of ascertaining whether the value of the shares has gone up since 1918?
§ Sir E. GEDDES
Certainly. I could ascertain what the value of the shares would be in a great many cases, but that would be a matter for the Advisory Committee to go into. For that purpose the Advisory Committee is put in, and we will give, as we have already given, the best accountancy advice we can possibly get. It is intended to have a very exhaustive inquiry—and we are on it already—into each case.
The point I want to get at is this: A tramway undertaking might make a revaluation of its concern and issue bonus shares and double its capital. Would that doubled capital be capital upon which a reasonable return would be made, or would it be its value before the war?
§ Sir E. GEDDES
I cannot imagine that any Advisory Committee would be so foolish, and so lacking in judgment, as to adopt that sort of valuation, but if these matters offer any real difficulty, when we come to consider them upstairs in Committee the Government is most anxious to meet those points. There is not the least intention of putting these undertakings into any better position until they come forward with private Bills. I attach the greatest importance to one of the points which the hon. Member for Newcastle brought forward, and that is 1459 the bargain with the State. I am glad he mentioned that. There is a bargain with the State, and if the undertakers come forward—be they railways or tramways—and say, "We want one side of the bargain altered," I want the other side altered also. It is not that the Ministry of Transport want these increased powers, but we have got to do something. The points which my hon. Friends raised we will endeavour to meet in Committee.
§ Amendment negatived.
§ Original Question put, and agreed to.
§ Bill read a second time, and committed to a Standing Committee.