Motion made, and Question proposed,
That a sum, not exceeding £848,642, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1921, for the Salaries and Expenses of the Ministry of Transport, including sundry Charges in connection with Transportation Schemes, &c., under the Ministry of Transport Act, 1919, and certain Repayable Advances under The Electricity (Supply) Act, 1919." [Note.—£500,000 has been voted on account.]
§ Mr. WILSON-FOX
On the last occasion when this Vote was before the Committee, I moved an Amendment to the effect that the Vote should be reduced by the sum of £750,000. Is not that Amendment now before the Committee?
No. In Committee of Supply a Motion to reduce always lapses at the end of the day, and therefore a new Motion would have to be made on the present occasion.
§ Sir W. JOYNSON-HICKS
Would it not be better to allow my hon. Friend, proforma, to move the reduction now?
§ The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal)
I hope I shall be studying the general convenience of the Committee by interposing at this stage of the Debate. It will be in the recollection of the Committee that my right hon. Friend the Minister, in opening the discussion a week ago, intimated that he had asked me to deal with questions which arose in the Estimates and also to make some broad statements with reference to the traffic 710 conditions in the country. I propose also, if I may, to deal briefly, and not in the spirit of controversy any more than is absolutely necessary, with the criticisms which were raised against the Ministry a week ago. A question was put by one of the first speakers in the Debate, my hon. Friend the Member for East Edinburgh (Mr. Hogge), as to the necessity of the Ministry. I propose shortly to remind the Committee of the grounds upon which this Ministry was created so recently as August of last year. There was before the War, not only in this country but in others, an almost universal feeling that the subject of transport, and particularly of railway transport, was ripe for action. A number of Committees sat, and the last of them was appointed in August, 1918, and reported in November, 1918, and it was presided over by my hon. Friend the Member for Tamworth (Mr. Wilson-Fox), and also there was, I think, upon that Committee my hon. and gallant Friend the Member for Burton (Colonel Gretton), who presided over the Committee on National Expenditure which recently examined the affairs of this Ministry. They arrived at a conclusion which I think was unanimous not only so far as they were concerned, but so far as public opinion outside was concerned, namely, that there would have to be more careful and close consideration of the transport problem and that there never could be a return to the old state of things.
That was realised by the Prime Minister and the Leader of the House at the General Election, and amongst the promises which were made, and which, I think, received no criticism from anybody—I think possibly it was the one case where there was no criticism—was the statement that there would have to be some better transport facilities offered to the country. Under these circumstances, very early in the existence of the new Parliament, the Transport Bill was introduced by my right hon. Friend the Home Secretary, who made a short speech on the First Reading; the Second Reading was moved by my right hon. Friend the Minister of Transport, and I do not propose—I have not the time—to do more than to indicate in the briefest outline the reasons which were given for the introduction of that Bill. They may be summarised, I think, in two ways: first, that it was desirable to collect under the ægis of one Department 711 many administrative duties which were scattered over many other Departments and which, as we had occasion to discover a short time ago, numbered over 150; secondly, it was pointed out how inseparably interwoven with the commerce of this country and the health and wealth of the people was this question of transport. It was on those lines that this Bill was introduced. My right hon. Friend used one phrase which I venture to quote. He said:They ask, 'What is your Colonial policy; what is your foreign policy?' I have never seen it really asked, 'What is your transportation policy?' What is our transportation policy, and who is responsible for that policy?"—[OFFICIAL REPORT, 17th March, 1919; col. 1763; Vol. 113.]Under those circumstances, the Bill met with a great deal of criticism upon its Second Reading. May I indicate in a word or two the nature of the criticism? It was not going to the root of the Bill, but it was criticism perfectly properly addressed to those interests which were affected or threatened by the Bill itself, but if anyone wants to know the exact reason of the Transport Act it is in the first Section of the Act itself:For the purpose of improving the means of, and facilities for, locomotion and transport, it shall be lawful for His Majesty to appoint a Minister of Transport.At that time the railways of the country were under a form of control which I do not think was convenient, and I do not think anyone ever thought it was convenient. They had been taken possession of by varying Sections of an Act of 1871, which was intended only for purely temporary purposes. They had had their control existence enlarged by weekly warrants during the five years which had elapsed from the taking possession of these railways. Let me say once and for all that it is in no spirit of censorious criticism that I refer, in the least, to the incidents of the past, because I hope I shall have the consensus of the Committee here. During the War it was wrong to expect that there could have been precisely the same commercial outlook upon all these matters as in ordinary normal times, but there had sprung up a series of financial obligations. They were not subject to any formal agreement; they were scattered about in various Departments; they had not been collated. Looked at 712 in the light of to-day, I hope I may not be thought to be hostile to those responsible when I say that they were not the agreements that would have been made in ordinary normal times, but the effect was that the State had become involved in very large expenditure in respect of the railways of this country.
§ Mr. THOMAS
It is very important if the Committee is to understand the facts that those of us who were involved in these agreements. I am personally of opinion that no other Department than the Railway Department of the Board of Trade made any agreement. If there are other Departments we should know about it.
§ Mr. NEAL
I can answer my right hon. Friend at once by saying that if he will be good enough to refer to the Addenda of the White Paper, published with our Estimates, he will be able to get there the whole of the information I have at my disposal, and it will verify my statement. This Bill was introduced and went to a Second Reading without a Division being challenged by anyone. It was subjected to the closest scrutiny and criticism in Committee for some nineteen days. It received detailed consideration in this House on Report stage. There was discussion on the Third Reading, and there was the extraordinary spectacle witnessed, on the Third Reading, of a Division called and Tellers appointed, and then having no one to tell against the Bill. I mention this to show that this Act was the deliberate creation of the House after the fullest consideration of the vast problem of trying to co-ordinate the transport agencies of this country and to bring them under 713 proper control. One of the first things my right hon. Friend the Minister did, as he informed me on taking office, was to try to get together these various documents which were in existence, and ultimately we got, partly with the aid of the railway companies, a large number of documents which we have presented to the House and which, pieced together, are the indication of the State obligations and liabilities. Having got this, what did he find? He found what he had certainly not known before, that there were outstanding very large questions of great importance from every point of view, important from the point of view of doing justice to the transport agencies who had served the country well during the War, and not less important from the point of view of doing justice to the taxpayers of this country and to the travelling public, and he found it necessary to enlarge his vision of the duties of his Ministry under that part of the work which he had taken over from the Board of Trade. If the Estimates which we present to-day are examined in detail it will be found, I think—and here, I think, I have the support of the Select Committee on National Expenditure—that about one-half of the present staff is involved in the obligation of safeguarding the public purse, not because there is some attempt to take something that is not due from the public purse, but on ordinary commercial and business lines, realising the old maxim, that no man can serve two masters, and realising what I think is obvious to every Member of the Committee, that it is the imperative duty of the servants of the State to safeguard the financial interests of the country. Under these circumstances there was an investigation into the obligations of the State under these agreements. There was another duty placed upon the Minister in the terms of the Act itself. Tinder Section 3, Sub-section (1), it is provided:With a view to affording time for the consideration and formulation of the policy to be pursued as to the future position of undertakings, to which this Section applies, the following provisions shall have effect.Summarising those provisions, the position which has been held for five years was regularised and stabilised for a further period of two years. That period was arrived at with reference to a letter which had been given by a past President of the Board of Trade. If I mention his 714 name it is with no disrespect and no sense of criticism for his having done so. I mean Mr. Walter Runciman. Mr. Runciman had extended the financial obligations of the State with the railway companies for a period of two years after control. I make that statement without reference, polemical or personal.
§ Mr. NEAL
I accept that, and I am not criticising. I am simply pointing out that there was an outstanding period of two years' financial obligation during which the interests of the State must be safeguarded and during which the condition was to be continued under this Statute, and during which the State had unique opportunity of investigating the problem of future management and policy with reference to railways. Those are the great purposes which called this Act into being. Those purposes remain intact. Those purposes were approved in this House by direct speech by the right hon. Member for Peebles (Sir D. Maclean) then leading a branch of the Liberal Party in the absence at the moment of the right hon. Gentleman (Mr. Asquith). Those were approved in principle by my right hon. Friend. They were not challenged by any vote on the Second Reading or Third Reading, and in answer to the hon. Member for East Edinburgh, I say that it was the deliberate Act of Parliament discharging its duty to the State which called the Ministry of Transport into existence.
That being so, I may call attention to some other criticism. It has been said that the Ministry set up its staff on too large a scale. I would ask the Committee to consider these figures. In the month of December the Minister was asked to submit estimates. The Ministry had only been in existence for a short time when the future could not be foreseen. There was a desire on the part of the Chancellor, as there always is, to avoid Supplementary Estimates. I am not quite sure that there is not a danger in that that you may get your Estimates too swollen, which is also a danger to the State. But the Estimate as presented for salaries was £416,892. The actual cost—the Minister had so curtailed his appointments—of salaries on the basis of the Estimate as it stood on the 30th April last was £266,074 showing that he 715 had, unless the staff were enlarged beyond that figure, effected economies to the extent of £155,518 and those who criticise the Ministry on the grounds of extravagance in salaries should know that they are criticising us for our economy and not for our expenditure. My hon. and gallant Friend (Captain W. Benn) who sees some humour in this, should apply his mind to the fact that there was a margin of £155,518 which was not spent.
A little later the Minister of Transport, speaking on the Consolidation Bill, particularly requested that there might be a detailed investigation of his accounts at the instance of the Committee on National Expenditure, and the request was accepted, and the Minister has already paid tribute, and so far as it is right for me to do it I would like to pay my humble tribute, to that Committee, not only for the work which they did, but for the spirit in which they did it. They laboured under the difficulty, as has been pointed out, of distinguishing where policy ends and expediency begins. What have they said about this £150,000 and our swollen staff? They indicated that we need not appoint staff to the extent of £68,000 out of the surplus, which they put at a round sum of £70,000, but they say that in their deliberate judgment it would be right to make appointments exceeding those which were in existence on the 30th April last to the extent of £81,618. What becomes of the suggestion that this was an extravagant staff?
Another criticism is that there was an undue proportion of highly-paid servants in the Ministry. There are several reasons why I need not occupy the time of the Committee with it. First this was discussed at great length when I introduced the Supplementary Estimates in March, and was subject to the very searching and very friendly cross-examination by the hon. Member for East Edinburgh, and no one can complain that I was guilty of undue brevity in the part that I took on that occasion. Second, the whole ground was covered in a White Paper which we issued. Third, my right hon. Friend himself dealt with the speech on the Consolidation Bill. Fourth, the Committee on National Expenditure have examined every part, have gone through the whole of it bit by 716 bit, and do not in any single case condemn the Ministry in reference to anything that was spent, or suggest any reduction in the scale, but suggest an increase to the extent which I have indicated.
In these circumstances may I as briefly as possible point out what this investigation of accounts under these agreements means? Members of the Committee have at their disposal in the White Paper the whole of the documents which the Minister has at his disposal. I will endeavour in a few sentences to summarise. The first is the outstanding agreement which arose immediately on the taking of possession of the railways by the State under the provisions of the Statute which was only very temporary and limited. Where the railway or any property was commandeered by the State, the State became liable to pay full compensation. I do not criticise His Majesty's Ministers for realising that it would be a cumbrous and difficult procedure. Every available man who could have kept accounts was wanted for His Majesty's Forces for the supreme purpose of winning the War, but this agreement, which was made in the shape of letters, was that the railway companies should have guaranteed to them by the State an income on what is called over-the-line expenditure, taking the phrase from the Accountancy Act of 1911, and that it should not be less than the over-the-line expenditure in the year 1913. It was not quite in that form that it was first made. It took that form ultimately.
What you have got in these accounts, which have involved payments to or by the State already of £158,000,000, was examined by the accountants of the various railway companies plus a committee of railway accountants plus two very distinguished accountants who were called in. There are very many questions which have been left over, and the Committee on National Expenditure has said that there are a great number of complicated questions outstanding. I may be allowed to put alongside the statement of my right hon. Friend (Mr. Asquith) that these were easy and simple questions that had already been solved, the statement that dealing with these questions of Revenue under the first agreement the Committee have found that there are great complicated questions. It is obvious 717 to any business man that when you talk about Revenue the very first thing you have got to distinguish is, what is Revenue and what is capital. This is of vital importance to the State. At the moment the State is liable to make good the whole of the money that is spent on Revenue within the limits of its guarantees. It is only liable to pay 5 per cent. on the approved expenditure on capital.
I pass to the second point. The railway companies realised that they could not carry on their full work of keeping up maintenance and repair of rolling stock and permanent ways, and therefore put to the Government what seems to have been a reasonable proposition that if there was delay owing to the situation which existed they must run the risk of doing these repairs and renewals on a rising market and with higher prices, and the estimate was made by the two distinguished accountants of whom I have spoken that there were outstanding at the end of the financial year £40,000,000 payments of that description. It is not a question primarily of skilled accountancy. It also necessitates mechanical and civil engineering and an expert examination of these matters which are the subject of renewal. It also involves a mixed question of law and fact, not at all easy to deal with. That is, where does maintenance stop and where does renewal begin, and where does betterment begin? These matters that we are discussing lightly to-day involve millions of pounds of the State's money, and it is essential that they should receive careful and critical examination. Similarly there was a question to what was stock, what was the value of the stock, what was the condition of the stock in 1914. Are they to be replaced in kind, out of public funds, and replaced when markets are at the highest, or when favourable opportunity offers? Are the railway companies to be able to say exactly when they are to be replaced, or is the interest of the State to be watched?
Then there was what was called the abnormal wear and tear, and the agreement to-day involves the consideration between the State and the Transport Ministry as to what is normal and what is abnormal wear and tear, and whether the wear and tear is the result of Government traffic and Government control, or of the ordinary use of the railway Another factor is interest on capital. The 718 State is involved to pay interest to the railway companies on capital which is non-productive. In the first place, this falls into two categories. We have already expended £4,000,000 interest on capital which had not fructified up to the commencement of control. There are no fewer than 700 cases being closely investigated by the Ministry, not only as accountancy matters, but also from the technical side, the mechanical and the civil side—700 applications by the railway companies since August last, that they may be allowed to spend capital. It has to be decided whether that is a wise expenditure or not. When it is sanctioned, and if it is sanctioned, that involves 5 per cent. interest on capital, which in the first instance cannot be productive of benefit to the State, though ultimately it may be productive of benefit to the railway companies. Those 700 claims, which have to be closely examined, involve an expenditure of £13,000,000.
§ Sir F. BANBURY
This is a very important point. Do I understand the hon. Gentleman to say that the Ministry has to investigate whether or not the condition of the undertaking has been injured either by Government traffic or by ordinary traffic? Is it not a fact that the Government are bound, unless they come to an agreement with the companies, to restore their property to them as it was when it was taken over in August, 1914?
§ 5.0 P.M.
§ Mr. NEAL
I am very much obliged to the right hon. Baronet for asking that question. That certainly is a view which is arguable on the part of the railway companies. [HON. MEMBERS: "No, No!] I cannot—it would not be right to do so —pledge the State and the Exchequer in the course of a Debate upon the construction and effect of some technical agreement. This year, in this very Vote, there is included a sum of —22,000,000 for the purpose of making some provision towards those payments, which it is anticipated may become chargeable to the public Exchequer in the current financial year. If there had been less scrutiny, less care taken over the affairs of the State that has been taken by my right hon. Friend and by the expert staff he has gathered around him, we should not have been able to face the public with a clear conscience and to hope for an acquittal on our statement that we have done our public duty. There is another 719 matter of not less importance, and that is that, although by the operation of the increase of charges, the sums which the State is becoming liable for are great—I have already mentioned £158,000,000—although those were becoming greater, it was not possible during the War to deal with them. I think it is a matter that calls for examination. It is quite true that passenger fares, which could be moved up 50 per cent. quite easily by a stroke of the pen, had been adjusted, but there had been no time to bring the railway companies, subsidised by the State, into a position of paying their own way; and one of the very first things my right hon. Friend did was to call upon the Railway Advisory Rates Committee to advise him as quickly as they might, how by some temporary increase of percentage, or otherwise, of existing charges, he could get to some position that would enable him to relieve the taxpayer of subsidies on transport undertakings.
The Ministry came into existence only on 15th August last. By 15th January the machine had worked and the new charges were put into operation; and although it is by no means certain, because there have been other increased costs since, that those charges will prove quite adequate to their purpose, yet there is set up the means whereby there may be a scientific investigation, at present proceeding, into the old system of rates and charges, and a method of keeping the railways in a reasonably prosperous and fair position. Passenger fares have been increased 50 per cent. Freight rates have gone up 50 per cent. on the average. My right hon. Friend the Minister of Transport reminds me that the average increase of freight rates might be a little higher that that. He thinks 60 per cent. a little nearer the mark. In Germany similar charges have been increased by 490 per cent.; in Austria they have been increased by 390 per cent.; in Sweden by 200 per cent.; in Switzerland by 180 per cent.; and in France by 140 per cent. Therefore, although the charges have increased in England, the increase is a very long way below that of other countries, and compared with our neighbours we may say that we are satisfactorily placed.
In regard to the work of his Department, my right hon. Friend has adopted 720 two cardinal principles. There was first the principle that some of these matters might be purely temporary. For instance, the examination of all these accounts and figures, which are dealt with in some detail, must come to an end. Having that in view, my right hon. Friend has done this: Whereever there is a likelihood that the work of the Department is temporary he has staffed it with non-pensionable, non-established, non-bonus-receiving staff, with gentlemen who, it is believed, could with the least difficulty be re-absorbed into civil occupations with considerable profit to themselves when the time comes. Where the officials are concerned with the examination of the accounts of railway companies and others, he has taken the view that they ought to be put on the establishment, that they are permanent Civil servants, so that they may not be open to the suspicion of favouring some company or other, in the hope that there will be an open door for them if they leave the Civil Service. Has this Department justified its existence? would quote the report of the Select Committee on National Expenditure. Dealing with the Finance Department, that Committee says, "It is entirely justifiable and the cost is not great." The Committee call attention to the fact that this year the Finance Department has to deal with matters involving £77,750,000 direct, with revenue and expenditure accoutns of £486,000,000, and other large sums; and they also add this, "There are many cases of doubt to be investigated." They record that in one transaction, in regard to railway wagons, the Finance Department has saved £30,000.
I pass now to the Traffic Department. It is not controlling railways. The hon. Member for Macclesfield (Mr. Remer) informed us that someone had told him they were always getting orders from the Ministry of Transport and they could not get on with their shunting. No such orders have been issued. Only 12 orders have been issued and they do not affect the working of the railways at all. The Traffic Department has been doing a great work in the co-ordination of traffic and in dealing with individual problems as they have arisen. I do not know that it would be said properly to be a function of the Ministry, but we have inquired into over 2,500 specific complaints made 721 by traders with reference to delays. I think there are many hon. Members in this House who, if they cared to speak, would say at least that when they have brought complaints to the Ministry they have been dealt with as quickly as the circumstances permitted. We have not got control in the sense of management. If we had we should want a staff multiplying many times the staff we have. If we had we should become the bureaucrats of Whitehall and should be detested in the country, and rightly so, because there is no one who loves bureaucracy less than my right hon. Friend the Minister of Transport. In dealing with traffic let me give one or two facts. I would say, first, that the way in which the railways have shown their resilience in coping with post-War problems is a credit to the commercial enterprise of this country. I say that in the most public manner I can. Dealing with the matter as ton-mileage, I would mention that the ton-mileage is vastly greater than that dealt with during the War. If you take passenger traffic, they are dealing with 30 per cent. more passengers than they dealt with in the, year 1913. If you take freightage, the figures are probably 20 per cent. up on a ton-mileage basis. The North-Eastern Railway Company, the only company which kept the figures in that way, shows a ton-mileage increase of 30 per cent.
There are two districts that have been the cause of considerable anxiety. There is the South Wales district, where a local committee has been set up and where great improvements have been affected, but where there can be no permanent improvement until you get rid of the bottle-neck conditions over the Severn. Then there is the North-East coast, the subject of many questions and answers in this House, where there is a state of things which one would, if possible, very gladly get rid of immediately. It is very bad. The fact is that, so far as the North-East coast is concerned, there is a greater volume of traffic being dealt with under difficulties than there ever was before. I cannot give precise figures, but the steelmakers' return for the country shows an increased output of 34 per cent. in comparing March, 1920 with March, 1913. Everything that can be done will be done to improve the conditions in that respect. Recently we have been holding consultations with repre- 722 sentatives of the fish traffic. The facts are that 50 per cent. more fish is being landed, that the foreign market for fish has disappeared, that the fish has been carried by rail instead of being carried by coastwise vessels, and that there are many other explanations. An hon. Member has said that the docks were not in a healthy condition. So far as the railways are concerned, all the principal docks show a condition with which I think we have reason to be gratified. Bristol is dealing with 3.77 more traffic, Hull with 27 per cent. more, Liverpool with 17 per cent. more, and London with 10 per cent. more. The Road Department received considerable praise from the Committee, and I will not pursue that subject. The Development Department is a department which is essential if the Ministry is to attempt to redeem the promises made on behalf of the Government before the election. In these stimates there is a sum of £1,000,000, as there is a provision in Section 9 of the Act whereby it is necessary to come to this House, and also to another place, if the total work exceeds £500,000. In Section 17 there is power to make grants by way of subsidies, loans or otherwise to districts which are suitable for the development of further facilities. No less than 200 applications have been investigated by the Department. Fifty of them have received considerable investigation, and a number of them are ripe for decision. The work of this Department is by no means criticised by the Committee. I fear I have trespassed much too long on the time of the Committee, but it is desirable that this question should not be looked at from the narrow point of view of any personal dispute, whatever the merits may be of that dispute. The business community of this country surely will ask the Committee of the House of Commons, when it is considering the Estimates of a Department so supremely needed for the purpose of securing the best transport facilities of all kinds, to consider them as business men and with the broadest and largest outlook.
§ Mr. ASQUITH
I congratulate my hon. Friend the Parliamentary Secretary on the zeal and energy with which he has represented to the Committee the Estimate which was submitted to us a week ago by the head of the Department. 723 He devoted a considerable part of the earlier portion of his speech to a vindication of the policy of the Transport Act, a matter which is hardly appropriate to the consideration of Estimates in Committee of Supply. As to the remainder, I listened to it very carefully and very respectfully, and it appeared to me to be nothing more, if I may say so without offence, than an amplification, and in some respects a dilution, of the arguments and allegations which were presented by the Minister of Transport last week. I took occasion then to make some observations on the character of this Estimate and to point out that, in my judgment, and I gave reasons for that judgment, there was no justification for the creation of this gigantic Department, and that by a proper and necessary addition to the most efficient Railway Department of the Board of Trade—[HON. MEMBERS: "No, no!"]—most efficient, as I think all who utilised it, both employers and workmen, will agree in days gone by, everything that the Ministry of Transport has done might have been done at a measurably less cost to the public exchequer and the taxpayers. I am not going to repeat what I said then, and I should not have intervened in this Debate at all but for some attempt which was made by the Minister of Transport last week, and which has not been repeated by the Parliamentary Secretary to-day, to justify its existence on the ground that it was an instrument of saving and a safeguard for economy. My right hon. Friend the Minister of Transport gave, I think, only one concrete tangible and test able illustration, and that was that he had got rid of an improvident agreement made in the year 1915 by my right hon. Friend (Mr. Runciman) with the Metropolitan District Railway, which from first to last had cost the ratepayers, he said, something like 1½ million sterling. The Parliamentary Secretary in his peroration just now told us that we ought not, in a matter of this kind, to deal in personal recriminations and reflections. It is rather a pity that the only justification by way of illustration which the Minister gave for his claim that he was not only an apostle but a practitioner of economy, involved the gravest disparagement of the efficiency of a Department of the Board of Trade and cast a strong reflection on the business capacity of Mr. Runciman.
724 I want to ask the attention of the Committee to this illustration and its real value. First of all, how did the Minister of Transport discover the existence of this agreement? We have been told just now that one of the first duties which he took upon himself when he assumed office was the collation of agreements, which were represented by the Parliamentary Secretary, and it was news to me, as scattered over a large variety of Departments. I know of no Department except the Railway Department of the Board of Trade, I speak subject to correction, which was the custodian of or a party to such agreements. But here is a Ministry with its large staff of ten or eleven directors-general devoting itself to the task of collating agreements, and it is a little singular with all their industry and business flair that they had not discovered this particular agreement until the month of December, 1919. Their collation does not seem to have been very thorough or exhaustive. The Ministry came into existence in August. This discovery was made, as we know, in the month of December, and it was not made as the result of the collation. The Minister of Transport made the discovery, to quote his own words, in this way:I heard this story by chance.After all these months spent in this task of compilation, collation and classification, the peccant agreement on which he based his claim for this Department as a practical model in saving was discovered by chance. He came upon it almost casually, according to his own language, through the evidence given by the Chairman of the District Railway at the Committee on London Traffic, which was presided over by my hon. Friend the Member for Hornsey (Mr. Kennedy Jones). That was in December, 1919, and according to his own account he discovered it by a piece of sheer good luck. To that extent the Minister may be congratulated upon a fortune which rarely falls to Government Departments. Let us see what happened, when by good luck he discovered the existence of this agreement—again I quote the words of the Minister of Transport—It was mentioned in evidence by the Chairman of the company.The Chairman of the company was Lord Ashfield, who previously had been Pre- 725 sident of the Board of Trade. He continued:That was how I heard of it. I did not know before that the agreement existed. I saw the Chairman immediately afterwards, and I said to him, 'Look here, that sort of agreement is no good, and it is not the sort of thing to which I can assent.' He replied (that is Lord Ashfield), 'I quite agree.' I continued, 'Look here—'—the colloquial style of the new official, not steeped in the outworn traditions of the Civil Service, but coming from the business world, with breezy outlook and that vocabulary which that world conveys to those who are unaccustomed to move in it—Look here, you will have to get that agreement cancelled. He agreed to have it cancelled, and had it cancelled."—[OFFICIAL REPORT, 24th June, 1920; col. 2432; Vol. 130.]And is it cancelled to-day? It is not. The business methods are not quite so simple as they are here described.
That is how my right hon. Friend came to learn of the existence of this agreement, this improvident agreement of Mr. Runciman. I come now to the second point, though this is very illuminating as throwing some kind of sidelight on the methods of the Minister. There is the stroke of good luck leading to the discovery, and those breezy phrases between the ex-President of the Board of Trade and the Minister, and at the end the cancellation, or a sort of intimation that it might have to be cancelled. What was the agreement? It has never been disclosed to this House. I never heard of it, because it is not the kind of agreement which would be submitted to the head of the Government or the Cabinet. Like my right hon. Friend, it came to me as a revelation. It is an agreement, I gather, between the Board of Trade and the Metropolitan District Railway, and it is described by my right hon. Friend as an agreement, the basis of which was a pool. I think I know something, if not of the agreement itself, of the circumstances which may have led to it, and it is well that they should be in the recollection of the Committee, as the history of this matter is very important. When the War began the Government, under the powers of the Act which my right hon. Friend recited, took over all the great railways of the country, the heavy lines, and, roughly speaking, upon the terms that we should guaran- 726 tee to them their previous net receipts, and, on the other hand, that we should have the free use of them for the transport of men and munitions and stores and all warlike material. That is the substance of the agreement. Whether the District Railway was originally one of those taken over, or whether it was taken over later, as I rather imagine, is immaterial for the purposes of my argument, because the same terms and guarantee, and the free right of the Government to use it for the carriage of military stores and men, would apply. I believe it was a little later. I see Mr. Runciman says so in the letter he publishes to-day. A few months later—I think in the spring or early summer of 1915; certainly after the first Coalition Government was formed—trouble arose in the Metropolitan area—my right hon. Friend (Mr. Thomas) knows the history of it much more intimately than I do—in regard to increased wages, war bonus, and so on. The difficulty with which the Government were confronted was this. We had taken over the Metropolitan District Railway; it was under our control. We had not taken over the allied railways, including the London General Omnibus Company, which formed part at that time of what is vulgarly called a combine, and in which the men employed were really regarded, not as being so much the employés of the particular company, as of the companies as a whole.
§ Mr. ASQUITH
We could have dealt quite easily with the question of a controlled company, but this was a case in which men were jointly employed by that company and other companies in the combine, and the men could not be segregated according as they did or did not belong to the District Railway. There was a choice of course. One was to take over the Tubes. That was objected to by Lord Kitchener—and my right hon. Friend will, I am sure, bear that out—on the ground that there was no military necessity for it. He did not want the Tubes for military purposes. Another possible course would have been to raise fares and rates, but that, naturally, we wished to avoid if we could avoid it. The conclusion come to was that the best course was to allow this combine to enter into a pool, and 727 Parliament passed an Act, not, indeed, sanctioning the agreement which was ultimately entered into, but passed an Act, I think in June or July, 1915, sanctioning a pooling arrangement between these companies, and the agreement now in question was entered into under the authority given by the Act between the District Railway Company and the Board of Trade. Without the authority of an Act, no such agreement could have been entered into. That is the history of the origin of the agreement. What its precise terms are we do not know. Many questions have been put in the course of this Session to my right hon. Friend as to the character and terms of this agreement. He referred to it in a speech, I see, on the Second Reading of the London Fares Bill, which is still upstairs, and, in referring to it, he did not allege that the country had suffered loss. He was asked later by the hon. Member for Dulwich, on the 3rd May and 14th June. He has been asked questions since, but nobody yet has elicited what are the precise terms of the agreement, and, until we know those terms, we cannot form a judgment as to whether the Minister is right in saying that two important provisions, which ought to occur in every pooling agreement, have been omitted from it, namely, that you should provide for the adequate performance of the service, and against what is called over-carrying by any one of the parties. Until we see the agreement we cannot tell how far that charge is justified; still less can we tell how much of the added burden, which the right hon. Gentleman alleges has been imposed upon the taxpayer, during the period that agreement has lasted, is due to omissions of that kind. It is all important, before this House or the country can form a judgment on that point, we should have the agreement produced, and we should be able to see it for ourselves.
In the meantime, I will venture to read to the House an opinion I only received this morning from a very high authority in these matters in the shape of a letter which Mr. Runciman has passed on to me from Sir Robert Perks. Sir Robert Perks is not only a great pundit of the railway world, but has special knowledge of the conditions of our metropolitan railway system. He was solicitor for many years 728 of the Metropolitan Railway, and Chairman for some years of the District Railway, and he knows as much as anybody could know about the conditions of London railway traffic. I think it is only right that I should give Sir Robert Perks' opinion. It is very explicit and very short—My own personal conviction—and, as you know, I was the lawyer of the Metropolitan Railway for fifteen years, and Chairman of the District Railway for five years—my own personal conviction is that the agreement which you (that is, Mr. Runciman) made on behalf of the Government with the Railway Company was a very excellent agreement for the Government, and, so far as my experience goes, there were no Clauses omitted from that agreement which the Board of Trade ought to have inserted, or, indeed, which the District Railway Company could have been expected to accept.That is a very serious pronouncement on the part of an admitted authority, and I venture to set it against the condemnation which the right hon. Gentleman—upon materials which we are not able to scrutinise, because they have not been presented to us—has pronounced ex cathedra from that Bench. There is a final question in relation to this subject which has still to be answered. What has the right hon. Gentleman done? I read the conversation which was alleged to have taken place as far back as last December between him and Lord Ashfield, in which he said, "Look here, you will have to get that cancelled," and he agreed to have it cancelled, and it was cancelled. We know now that is not the fact. It is an inaccurate statement. What has he done, and what is he going to do in relation to this agreement from which he alleges the public has suffered so much? There is a Bill before the House to enable these London companies to increase their fares and charges. The right hon. Gentleman's Department made a report upon that, and the Select Commitee had special instructions from the House on that matter. The Committee found, at a late stage in its proceedings, after it had adjourned its proceedings in consequence of the right hon. Gentleman, that the railway company which said that beggars could not be choosers under the pressure of the Department, agreed that it should be left, in substance, to the Ministry of Transport, within certain limits, to deter- 729 mine fares for the future. If Lord Ashfield has now consented, as one rather gathers from the intimation given by the Council of the Company, to cancel the agreement, what is his quid pro quo? What does he get in return? He is getting, it is quite obvious, something in the nature of an assurance or undertaking on the part of the Ministry of Transport that fares and charges will be raised, and raised, as I gather, from what I have been told of the provisions in that Bill in the form it has now assumed, potentially, if not actually, for a period of something like five years.
§ Mr. ASQUITH
I am told that is so. I shall be corrected, of course, if I am wrong. So that that is really the bargain which has been come to, or is about to be come to, by the Ministry on behalf of the public, and I confess, unless some further explanation can be given of the facts which I have very briefly narrated to the House, and which I believe are the correct ones, the case against Mr. Runciman and against Lord Ashfield—because he is quite as much involved in the charge—falls to the ground. The Minister of Transport says that this agreement omitted provisions which any clerk—I am not quoting his exact words, but the substance of them—in any general manager's office in the country would have known to be necessary for the protection of the Department. It was submitted by Lord Ashfield, then Sir A. Stanley, one of the greatest railway experts in the country, and submitted to the Railway Department of the Board of Trade, which consisted also, from another point of view, of some of our most competent experts. It was assented to by Mr. Runciman, whom nobody would accuse of being anything but an acute man of business, and it is now stated, on the authority of Sir Robert Perks, to be an agreement in the interest rather of the Government, from which certainly nothing was omitted which could have been inserted to safeguard the public interest. Therefore, I think, as far as the evidence now before the House and the country is concerned, the case completely breaks down. But I am not concerned—because, as I say, I do not know what the agreement is—in defending this agreement, although I know my Friend Mr. Runciman was a most cautious and 730 prudent man, but what I am concerned with is the point which is really relevant to this fact. What is the part the Minister of Transport has played?
§ Mr. ASQUITH
I know; I have stated the facts. I have shown that this elaborate process of collation and so forth, which my hon. Friend, who has just sat down praised as a new discovery, broke down at this point. This agreement was discovered by haphazard, a happy - go - lucky affair, and since then, so far from having been cancelled, it has lingered on in a precarious, intermittent kind of nebulous existence, and is now, apparently, coming to an end at the cost of the passengers and traders on the Metropolitan Railway. Let me go on. This is not an isolated case. I pass on only two pages in the speech of my right hon. Friend. I will read his own language:The War stopped. I found—for I had no knowledge of it before—that the President of the Board of Trade (Mr. Runciman) had agreed with the railways that the guarantee of net receipts should continue for two years after the War."—[OFFICIAL REPORT, 24th June, 1920; col. 2434; Vol. 130.]No knowledge of it before! That was an agreement come to not by Mr. Runciman. It was come to by the Cabinet. I was Prime Minister. The right hon. Gentleman opposite (Mr. Bonar Law), and I think the right hon. and learned Gentleman (Sir E. Carson), were Members of that Cabinet. It was told to every railway company in the Kingdom. There is a suggestion here in this speech that it was only discovered by the casual reading of a letter written to the North-Eastern Railway Company. [An HON. MEMBER:" The North-Western Railway Company."] But it was told by my right hon. Friend to every railway company in the country and to the leaders of the trade unions. It was public property. Although I have not consulted the OFFICIAL REPORT. I am perfectly sure it must have been referred to more than once in this House. Yet the Minister of Transport has suggested that his new Department was created to import business like habits into the dealings of the State with the railway companies of the country. He tells us, when he came 731 into office—he had no knowledge of it before—he found Mr. Runciman had made an agreement of this kind.
Well, Sir, is the Committee satisfied with that? Is it worth while employing a Minister and ten Directors-General to discover, after months—four or five months at any rate—what all the world knew two or even three years before? I come back to what I said the other day. This Ministry is really not for the purpose of action, but for a totally different purpose. The philosophers of ancient Greece, Mr. Whitley, as you know well—and Aristotle in this matter agrees with Plato although he did not always do so—were of opinion that the highest life, and the best exercise of the energies of man, was the life of contemplation. They thought it greatly superior to the life of action and practice, immersed, as they said, in matter. How they, in those ideal communities which they were fond of creating, would have rejoiced at the erection of the Ministry of Transport! [An HON. MEMBER: "Who voted against it?"] A State-supported dreamer in the person of my right hon. Friend with his 10 or 11 Directors-General, all engaged in furiously thinking! But this is a serious matter. Here are involved tens and hundreds of thousands of pounds of the taxpayers' money. I state my opinion, as I stated it last week, that I can find no justification whatever, in the financial and economic condition in which the country is placed, for this extravagant expenditure.
§ The MINISTER of TRANSPORT (Sir Eric Geddes)
I felt certain that when the right hon. Gentleman spoke in reply to this matter, he would bring his large skill and experience into play, and I should probably be given a trouncing. No doubt the agreement, which is mentioned in the paragraph of my speech to which reference has been made, was made before I came upon the scene, but when I was speaking I was trying, imperfectly perhaps, to carry the House with me through the sequence of events that followed this agreement which was come to with all this great formality. It went before the Cabinet. It was dealt with in a very formal and deliberate way; but this agreement did not exist at the Board of Trade. I had to make inquiries in a preliminary way before I could get any idea of its existence, so that when the matter came before the Ministry of 732 Transport for informational purposes, we had to go to the railway companies to get a copy of this very momentous document. I might have got it by going to the trade unions, or possibly, to Lord Ashfield, but I preferred the railway companies.
I should like to ask the Committee to go back with me to what started this controversial, shall I say, rather more controversial part of the Debate on the Estimates. It was commenced by my right hon. Friend's two speeches at Plymouth and in the Isle of Wight. He denounced in no measured terms the Ministry of Transport, and he ascribed to us the contemplative functions which he has again ascribed to us to-day, and upon which, I feel sure, he is undoubtedly an expert authority. He said that the Ministry of Transport was not doing the work as economically, cheaply, and efficiently as the Board of Trade. That was a direct comparison between the time when a Minister in his own Government was doing the work and myself, who never had the honour of serving under him. It was in reply to that accusation that I had to make a reply, and the only possible reply I could make was to do what I did, and compare the work of the two Departments. The last wish I have is to attack any Minister of the right hon. Gentleman, or the right hon. Gentleman whose name has come into the discussion. If I had had the wish to attack him I should have done so long ago. It did not require the present or recent occasions to make me do that. It was only because I had to answer the right hon. Gentleman's speech that this came up at all. I should like to refer very briefly to Mr. Runciman's letter in to-day's papers. I regret very much that he is not able to be here, as I could have wished, and we could have had this matter out on the Floor of the House.
Mr. Runciman's letter to the papers is written in error, an error into which the right hon. Gentleman opposite (Mr. Asquith) did not fall. The agreement to which I refer was not the agreement under which the Metropolitan Disctrict Railway was taken over. It was taken over at the same time as the others. It was an agreement come to in circumstances which I will explain to the Committee. I believe inquiries have been made by Mr. Runciman and his friends for information not only at the Ministry of Transport, but at the Board of Trade, 733 and, for all I know, other Departments. So far as I am concerned no obstacle has been thrown in the way, and no refusal given to any request made for information, and I shall be very glad to give any further information in my power. The history of the agreement is as follows: The Metropolitan District Railway was taken over with the other railways in 1914. In 1915 the Tubes, as the right hon. Gentleman has said, applied to be taken over and guaranteed. That was refused, largely, I believe, for military reasons. The next step was this: The Tubes and the London General Omnibus Combine said, "We cannot go on owing to the difficulties caused by the War, unless we are able to help each other."
Therefore, they came to Parliament with a request that an agreement that they should combine and pool their resources should be sanctioned. Parliament sanctioned that. At that stage it was necessary to consider—I do not say it was not mentioned before—the consequences. At that stage it was necessary to consider what the Government's share—as the pro tem. owner, of a portion of the pool—should be out of the pool. It was eventually agreed upon on the basis of the 1913 receipts. They were standardised on that. No arrangement at all was provided for the working expenses or for a revision of the additional working expenses being paid for additional traffic or a revision on a basis if the earnings were great. There was no agreement at all, no Clause which provided for the maintenance of an adequate service. The result of that—of the arrangements and pool—was that passengers are actually 58 per cent. more on the District Railway than before. Certain minor alterations, which still extend to the whole of the working expenses, were not fixed. They are borne by the Government. The Government has not got additional revenue nor additional working expenses. The right hon. Gentleman has said, "Why is not this agreement produced?" These agreements, these which are called agreements, were arranged and scattered through the country. The agreements which were collated were general agreements. There are large numbers, I do not know how many. The fact remains that the expenses rise and rates rise; and they have risen in the other comparative ser- 734 vices, and the traffic rises enormously to the extent of 58 per cent., but the receipts do not rise. What I put forward last week was not an attack upon Mr. Runciman or any Minister, but was brought forward to illustrate to the Committee that the machine which was then working was a minus machine, because the Board of Trade, a Department which before the War had a staff of 35, at the time these momentous matters were referred to them, were working with a staff of 25, and had to attend to other matters as well. They had this vast responsibility of railway matters. My object was to show that the machine, which the right hon. Gentleman said was so efficient, did not exist, and could not have been in existence. May I remind the Committee that when Lord Ashfield went to the Board of Trade as President in 1916, by the unwritten law of this House, when he took a ministerial post he severed his connection with the private companies with which he was then connected. The first year's accounts under this agreement showed a balance against the Government of £28,000, not a very big sum. That was the 1915 account. The 1916 account came to the Board of Trade in February, 1918. That was the way in which the machine worked. It came from the railway companies' auditors, who had been carrying out the cross check, and these auditors reported to the Board of Trade that the agreement was working unfavourably to the Government. What did Lord Ashfield thereupon do? The Board of Trade did what I think was the only proper thing: they sent a report at once to the consulting auditor for the Government, appointed to deal with this group of railways, and asked him to go into the matter and see if anything could be done. That was the only action open to them. The accounting auditor replied that, in his opinion, certain adjustments, detailed and technical, with which I will not trouble the Committee, should be made. This was submitted to the company in the ordinary way, not to Lord Ashfield, who was President of the Board of Trade at the time, and was accepted by them. They accepted, in fact, the recommendation of the Government consulting auditor. See how the machine works—this machine which we are told is so efficient that there is no need to improve it. From that day to this no agreement has been reached on the point. There are still outstanding the 1917 735 accounts, which have not yet reached the Board of Trade. That is the way in which the machine has worked.
§ Sir E. GEDDES
The right hon. Gentleman complains, I assume, that we have not improved the machine. We are trying to improve it now. But from 1916 so quickly and so efficiently has this machine worked that the 1916 accounts were not received until 1918, and since then no further accounts have been received. So here we are in 1920, and have not got the accounts yet for the year 1917! The figures which I gave last week are the best figures available, and they have been arrived at after the minor adjustments, within the terms of the agreement which were recommended by the consulting auditor have been made as far as possible. Lord Ashfield gave evidence before the Committee on London Traffic, and took that opportunity, and I can quite understand his doing so, of publicly drawing attention to this agreement. That is exactly what I should have expected from a man of his high character.
Mr. KENNEDY JONES
Has not my right hon. Friend's attention been drawn to the fact that this agreement was before the Select Committee of the House of Commons on London Traffic nine months earlier?
§ Sir E. GEDDES
I was not aware of the fact that the agreement was before the Committee presided over by my hon. Friend. At any rate, up till the time I have mentioned the machinery had produced nothing but the 1916 accounts. With the fullest assistance of Lord Ashfield we sent down some of the investigating accountants and auditors of the Ministry of Transport, who spent some weeks in the offices of the companies, and it was from their books that we were able to arrive at an accurate appreciation of the position. It was at that stage that the interview which my right hon. Friend the Member for Paisley has described so humorously took place with Lord Ashfield. I was perhaps in error in my endeavour to lay the purport of that conversation before the House, for I fell into the trap of repeating the conversation in a colloquial form. However, before the 736 Debate was closed I made perfectly clear the arrangement under which it was decided that this agreement should be determined. Let us look for a moment at what was the position of the companies at the time of that conversation. They had come to Parliament in 1915 and made an agreement with the Government which it was admitted worked out in a way not expected at the time. In the meantime, during the War, on the strength of that arrangement—an agreement which it is not open to either side to tear up—they had paid certain wages and incurred certain costs. It is not as if they were a prosperous concern, putting a lot of gain into their pockets as a result of a hard-driven bargain. They came to Lord Ashfield and said, "We must in some way or other be able to meet the increased expenses which we have incurred, and we must be put in a position to pay the increased wages which have been forced upon us by the railway settlement to which we were not parties. We must he put in a position to pay the high costs incurred." Lord Ashfield said to me, "You have now got power to take over this undertaking under the Ministry of Transport Act. Will you take it over or will you enable us to do what other railways have done, and put up our rates so that we can pay these increased wages to our employés?" My reply was that, in my opinion, the Ministry of Transport Act did not give us power to authorise them to do that, and their best way would be to come to this House to seek such powers. Lord Ashfield concurred that that was the best way, and accordingly the companies came to Parliament with a Bill giving them additional charging powers.
The House gave that Bill a Second Reading and it was sent upstairs. I reported on the Bill. The right hon. Gentleman has referred to that fact. I reported that this arrangement, which had been come to perfectly honourably, was working against the Government, and it was therefore desirable that it should be determined, if the Bill which the Government was promoting went through. What did the Committee do? I would like to point out that the question of a quid pro quo can be easily settled, not on my evidence, but on the evidence of the Committee itself. The Committee had instructions from the House to consider a reasonable return on 737 capital, and to give advances which would produce that. It was not a case of giving so much meal in return for so much malt. If it had been, the Committee surely would have entered into some investigation of the terms of the agreement. The Committee, after hearing Lord Ashfield's evidence, took no account of the agreement at all. They did not seek to treat these companies not as the 'bus companies which had authority to pool were treated, or to put them on the same footing as the tramways, docks and other companies which had come to the House. If it had been a case of a quid pro quo they would certainly have called for evidence as to the agreement. They would certainly have made that a condition of their report to this House. It is not accurate to say that the agreement was cancelled as a condition that they should have power to make certain specific increased charges. They reported to the House on an independent investigation that had not taken into account the value of the agreement. The right hon. Gentleman opposite pointed out that I had made a report to the Private Bill Committee which left the fixing of these fares to some extent in the hands of the Ministry of Transport. I would ask the Committee to observe exactly what that means, because there has been some misunderstanding about it, and I earnestly hope if any Members of the Committee are here to-day they will speak on this point. The House sent that Bill upstairs with an instruction that the fares should be revised on scales which would give a reasonable return of capital. Clearly there was some confusion in the actual wording of the instruction, because both the words "maximum" and "actual" were used. The Committee, in conformity with the instructions of the House, fixed the maximum, but in the present changing state of affairs I recommended them to consider whether it would not be wiser to fix maxima which on the present-day charges would give a reasonable return to the companies on their capital. I could hardly do more than that, and I could hardly do less. This agreement, about which we have heard so much, was one which operated undoubtedly to the advan6.0 P.M. tage of the Company and not to the benefit of the Government. It was come to as a perfectly 738 honest and straightforward bargain, and not a single aspersion rests on anybody's name in connection with it. It was brought to our notice by those who had benefitted, and they agreed when they were asked to accept modifications for the benefit of the Government. They had undertaken obligations which the years of the War had forced upon them, and they were not in a position to continue unless they were treated as other undertakings, and were enabled to increase their charges. The Committee upstairs has reported what the increase shall be, and if the House passes the Bill, those who have had the benefit of this assistance and this subsidy which was given by the terms of this agreement will agree to cancel that agreement if they are put in the position of earning a reasonable return on their capital.
Consequently, that subsidy which was paid under the operation of this agreement will be determined. No doubt, if I put down £1,000,000 for this subsidy, I should be told that I was spending the money, and when I reduce a subsidy shown on the Estimates, then I claim that I have saved the money. In this case, if the House gives this Company fair and reasonable treatment, and I believe it will, as the Committee has recommended it, that subsidy will cease, and therefore I am entitled to claim that the action of the Ministry in this matter has effected a saving which will realise very shortly a sum estimated at £1,000,000 in the coming financial year and that saving will be realised.
§ Sir JAMES REMNANT
I beg to move "That the Vote be reduced by £100,000."
This is the second day of the Debate on this subject, and we have not very much longer to debate this question, as I understand that another Bill is to be taken at 8.15. [HON. MEMBERS: "No!"] Then, so much the better. One naturally is inclined and wishes to curtail one's remarks so as to allow other Members to speak on this subject. I shall speak as little as possible in support of my Amendment. What is the conclusion, so far, at which the House has arrived? Surely I should be right in saying that, so far, we have heard nothing from the Minister and his colleagues which would lead us to any other conclusion than that this new Ministry was not wanted, and 739 that the work done by it could have been done just as well with far less expense by a Department of the Board of Trade. The Minister has made a great deal of the tremendous amount of work that he and his Department have had to do. Naturally, they would have had to do a great amount of work to meet the after-war effects on the traffic of this country, but surely the Board of Trade Department dealing with railways could have done it just as well, and if it was necessary to have a Ministry appointed to deal exclusively with transport matters, surely they could have followed the example set by the President of the Board of Trade when he asked the House to appoint a new Minister to the Ministry of Mines.
The right hon. Gentleman the Member for Paisley (Mr. Asquith) showed conclusively that a Transport Ministry was not required. The right hon. Gentleman called attention to the fact that there were 10 or 11 new Directors-General, and he might have gone a little further and said that the total number of assistant Directors-General was something like 32 or 34, and they required to carry out their work no less than 97 other officers. The right hon. Gentleman made a great point that when the Bill was introduced into this House it was received practically with open arms by everybody, that there was no division against it, and that everbody was unanimously in favour of it. The Minister responsible for the introduction of that Bill, as was pointed out the other night—a statement which influenced I have no hesitation in saying, a great number of hon. Members of this House—said:I shall be surprised if there are many officials. It cannot be a big Department of new people apart from those already being paid by the taxpayers.I would ask hon. Members, and even those with a short experience of the House and the Ministry, whether they consider if that Bill was to be submitted to the House today there would or would not be very serious opposition to it. A great point has been made of economy. The hon. Member who represents the Ministry said that it was the urgent and necessary duty of the Minister to safeguard the taxpayers of the country, and I quite accept that statement. The point I was going to put to the Minister was this: When he was defending the salaries paid to the officials 740 of his Department he said that, compared with the salaries given to the high officials of the railways of this country, they compared very favourably, and in other words that he was giving less to his own officials than they would otherwise have got in the railway world.
The right hon. Gentleman did not tell us how he arrived at that decision or for what year he estimated those salaries. Did the right hon. Gentleman take it for the year 1918 when he himself was allotted—given I know not what for—the sum of £50,000 on leaving the North-Eastern Railway Company for the patriotic object of trying to help the country, a sad case of profiteering. Many hundreds and thousands of people in this country gave up their civil work at great personal sacrifice in order to do their little bit for their country. I want to know whether that £50,000 allotted to the right hon. Gentleman by the North-Eastern Railway Company is included amongst the salaries of railway officials when he says that the railway officials were getting far bigger pay than the new Ministry is paying. Was that £50,000 debited to traffic expenses which would be paid for by the Government, and if so how will that £50,000 be refunded to the taxpayers of this country? Will it be paid either by himself or the shareholders of the North-Eastern Railway? If they are so keen on economy that would be one of the points which I should think he would direct his attention to in order to safeguard what looks to me to-day as likely to be a severe tax upon the already over-burdened taxpayers of this country. The Report of the Select Committee has been referred to more than once by the right hon. Gentleman as practically justifying the existence of his Ministry; in fact, he said that they even recommended an increased expenditure. I have not been able to find that statement in their Report. I know they say that the Estimates should be reduced by £70,000, that the whole scheme was a grandiose scheme, and that it was difficult for them to pass an opinion upon it. I should have concluded from reading the Report that their opinion was that the whole of the Ministry of Transport was an unnecessary Department.
It is rather difficult to confine one's remarks in a small space, but I must refer to one subject to show the way in which this Ministry is seeking to econo- 741 mise public money. They have swollen their Estimates to start with at the special request of the Chancellor of the Exchequer, and now they claim credit because they are able to reduce their Estimate by a considerable sum, which to me is a new method of finance. I should like to point out to the Committee the way in which it is sought to economise the finances of this Ministry. Last year the Royal Commission on Canals and Inland Waterways, of which I was a Member, was appointed by the present Prime Minister. We sat for something like two years, and we investigated thoroughly this subject from the engineering and every other point of view. We inspected really all the canals and waterways of this country, and we visited Scotland, Ireland, Holland, Germany, and France at enormous expense to the country. Now, forsooth, the right hon. Gentleman, by way of showing how energetic he is in safeguarding the transport facilities of this country, appoints another Committee to do practically, I imagine, the same work over again, because the only difference can be the altered financial and economic questions which are to-day affecting this country, and which I should have thought might have been easily settled by the despised Board of Trade Department. I have moved this reduction because I believe that the country is clamouring for economy, and will not stand much longer this extraordinary outburst of spending Departments. I ask the Committee to support this Amendment, and thereby show that they consider that here there is a good chance of economising, at all events, for the next few years. The Parliamentary Secretary is a good backer of his chief, but it was a somewhat extraordinary athletic feat that he performed recently. He led the opposition to the Government in Committee upstairs, when the right hon. Gentleman was trying to claim all the electricity supplies throughout the country. He beat the Government. In a short time he comes down, after rubbing noses with the right hon. Gentleman, and goes directly contrary to what he did upstairs, and, within a day or two, we find him sitting on the Treasury Bench. This Ministry have not got much of a case of their own, and they are anxious to make a show of grabbing every industry they can lay their hands on. They admit 742 that they are going to do nothing for the docks. They cannot touch electricity for the time being; they cannot even handle the railways—and, after all, if the right hon. Gentleman is not an expert on railways, heaven knows what he is. I do think that they should confine their energies and be less of an expense to the country.
§ Mr. THOMAS
The first observation that I would make on this afternoon's Debate is that, at least, the House and the country generally will alter their opinion about the wickedness of the railwaymen during the past four years: If, as we have discovered during this Debate, and that of last week, all the Government Departments and the responsible Minister were not able to check and deal with the wicked railway companies, I think they will at least extend their sympathy to the leaders who like myself, had to deal with that very same state of things. Incidentally, I would remind the Committee that one of the difficulties throughout the whole of the War was that, whenever there was a wage agitation, whenever there was a struggle and a threat of a strike, before any negotiations of any sort or kind could take place, all manner of other negotiations had to take place, and by the time we met the other side there was a great deal of irritation and ill-feeling amongst the men themselves. That will have been gathered very clearly from some of the statements made during this Debate and that which took place last week. I have negotiated with every President of the Board of Trade since the outbreak of war, and I am bound to say that, after the statements made last week, hon. Members of the House, and certainly the people in the country who read the reports of the Debate, could come to no other conclusion than that, firstly, Mr. Runciman had made a bad bargain, and, secondly, that Lord Ashfield, as a party to the bargain, at least had not played cricket by remaining quiet whilst he was President of the Board of Trade. It is no use mincing matters; that was the only conclusion that the man in the street—the British public—has drawn from the Debate last week. It is the duty of all of us to deal clearly with that aspect of the question for the moment.
I want to join issue with the statements that have been made, both to-day 743 and previously, with regard to the original agreement. I have no hesitation in saying, not only that this was a good agreement for the Government, but that the War would have been lost if some such agreement had not been made. When war broke out, and it was necessary to transfer the Expeditionary Force, there were only two ways of doing it. One would have involved the checking by the railway companies of every passenger, every wagon, every gun and every horse, and the payment of some sum for each individual and for all the traffic carried. That would have required double the staff that they had. It would have prevented the release of railwaymen to the tune of 127,000 to go to the War, and the delay and confusion can be imagined that would have arisen if that method had had to be followed. The House and the country do not fully understand that, for they are invariably told that there was some wicked agreement and that a bad bargain was made. We may as well face that. That was the position with which the Government were faced, and they had to find some means of getting over that difficulty, of dealing with the troops expeditiously with the minimum of labour, and, at the same time, at least remunerating the railway companies on some fair basis. The result was that they decided, as has already been explained, that, instead of all that checking, waste labour, delay, and, what was more important than all, the bringing of troops to London and then unloading them for another company to take them on because it was a different line, they adopted the simple system which is now well known, and guaranteed the net receipts. We have been told this afternoon that the State has contributed £158,000,000—
§ Mr. THOMAS
That is exactly what I am going to deal with, and it is all-important. What is the good of talking about the State contributing £158,000,000, if probably £100,000,000 can be set off against it? For the first two years of the War, not only did the Government not contribute anything, but, in the 744 main, their traffic was carried free. If you are going to draw a correct balance sheet, the only way to do it is to show, not only what the State is now paying, but what the railway companies owe to the State, and what would be a fair margin for the work performed by the railway companies during that period.
§ Mr. THOMAS
And outstanding liabilities. I have no hesitation in saying that, whatever else may be said about the arrangements made by the Government during the War, the arrangement which they made with the railway companies was certainly not a bad bargain for the State. I want to emphasise the fact that it was the only possible arrangement in the circumstances. That having been made clear, I come at once to the agreement that was mentioned, and it is significant to observe here what has not been said, either to-day or last week, namely, that, when this pooling arrangement was made, the omnibuses in London were the part of the combine that was making the most profit. The omnibuses at that time were making very heavy profits, and the railways were run at a loss. We had 50 per cent. of our men under the control of Parliament and 50 per cent. uncontrolled. What would have happened if, when the men received an advance in wages, 50 per cent. got it and the other 50 per cent. were told that they were not under the Government scheme? The Committee knows perfectly well that the men would not have accepted any such suggestion for a moment. In the interview with Lord Kitchener I myself put that point. His answer was a simple one. He said, "So far as taking over the railways is concerned, we are not affected by finance in the least. All we have to show is some military reason." On those grounds he turned it down. There was then a danger of a strike, and Lord Ashfield, who was then Sir Albert Stanley, said, "I do not want to be responsible for causing a dispute. I believe my men ought to be treated as the other railwaymen are treated," and he said that the only way was to get some authority so that the whole of the receipts could be pooled, and the money from the omnibus company put into the pool to help to pay the railways. 745 The idea that this agreement was a secret one amazed me. It was not only no secret to every railway manager, but it was no secret to the Board of Trade, to my personal knowledge, and it was known perfectly well to the railwaymen's union and was mentioned at public meetings. When I read the Debate, what astounded me above all was the suggestion that this was some secret bargain for which only Mr. Runciman was responsible, and about which no one knew anything. All I can say is that it is due from me to Mr. Runciman to say quite frankly and honestly that, whilst he was at the Board of Trade, he was perfectly straight and perfectly honest, and that in all his dealings with the men we never found him guilty of double dealing of any sort or kind. It is due to Mr. Runciman to say that, and, incidentally, it is also due to Lord Ashfield to say the same of him. Although, when he was President of the Board of Trade, we had to negotiate with the combine of which he was the late chairman, never once did we find that he allowed his previous connection with the company to influence him in any way or in any of his dealings with us. My right hon. Friend must not forget that a reflection has been cast by what took place last week, and I am glad to know that it has been somewhat cleared away to-day.
I want to join issue with the right hon. Gentleman about the Bill upstairs, because, I suggest to him, that his construction of his letter is not strictly in accordance with the facts. The Bill was dropped in this House for a period of seven weeks during which negotiations were taking place with the Ministry and with certain London Members. Mr. Whitley was frequently in consultation as to when the Bill was to get a Second Reading, and ultimately it was put down for 8.15, the whole House knowing perfectly well that there was going to be a long Debate on it and the House, to put it no higher, divided in opinion. The right hon. Gentleman spoke, and said distinctly that the new arrangement that was made formed part of the consideration and gave the Bill a blessing on the Second Reading, a blessing, let it be observed, with the instruction that had been moved and accepted by the London Members. We were entitled to assume that that was the policy of the Ministry of Transport on that Bill. We were 746 entitled to assume that they had considered the whole matter, because if that was not their policy it ought to have been stated on the Second Reading here. But to the amazement of everyone, when the Committee met the first thing it was faced with was not the Instruction of the House of Commons, but the letter of the right hon. Gentleman, which was an entirely different position from that stated by him on the Second Reading. The Committee had to choose between throwing over the Instruction of the House of Commons or throwing over the Ministry. I said in the Committee-room what I want to say here, that I do not understand the attitude. I do not think it was fair either to the Committee upstairs or to this House, because under circumstances such as I have mentioned, I think the Act has not only prejudiced the Bill unfairly, but has prejudiced public opinion, and may do an incalculable amount of harm to trade and commerce by the feeling it has engendered amongst the men. Therefore, on the personal side of this dispute I only want to say that the agreements were not secret; they were made with the best intentions, and under the circumstances, I believe, can be justified, and I think it is a monstrous injustice to have reflected either on Mr. Runciman or on Lord Ashfield as to their part or connection with it. The hon. Gentleman, in defending the Ministry today, made a somewhat remarkable statement. He said the Ministry of Trans port was justified to-day on the ground of giving effect to Minister's election pledges.
§ Mr. THOMAS
The hon. Gentleman said various Ministers. If he had limited himself to the Prime Minister, I should not have said what I am going to say, but he made it clear that various Ministers in different part of the country had dealt with this question during the election, and at least it was redeeming their pledges.
§ Mr. THOMAS
The hon. Gentleman also mentioned others. At all events, I want to draw his attention to the fact that another Ministerial statement was made during the General Election, and the 747 Secretary of State for War, speaking at Dundee just before the election, had made it perfectly clear that the Government was committed to the nationalisation of the railways. That statement was publicly commented upon, and no denial of any sort or kind was made on behalf of the Government by any other Minister. If we are to assume that no Minister of the Crown would make a statement of that kind without consultation and agreement with his colleagues, the people of this country were entitled to assume that that was the considered policy of the Government. Another statement made by the Prime Minister at Wolverhampton did not definitely say railway nationalisation, but, read in connection with the War Secretary's speech, indicated that it was at least in his mind. Therefore, when the Ministry of Transport Bill was brought into the House and justified in the country, we were entitled to assume that one of its functions was to give effect to the declaration of the Secretary of State for War that it was essential in order that railway nationalisation should take place. The White Paper rather shows that the Secretary of State for War was not speaking for the Government, or that the Government does not intend to give effect to that policy. But I do not agree with those who suggest that there ought not to be a co-ordinating authority on transport. I have no hesitation in saying that there ought to be co-ordination. I do not think for a moment that you could ignore the effect of agriculture on transport. I do not think you can ignore the development of road traffic. In fact, I believe the question of transport is not only dependent upon but is essential to the future development of the country, and I certainly believe that for that reason there ought to be some coordinating authority. I am not going to say a word as to whether the staff at present required is justified, but I say quite clearly and definitely that you cannot even to-day draw any accurate conclusion with regard to the railway position until you get considerably more data than you have at present. No comparison could be made of the railway system in this country with foreign countries because there are not sufficient data kept, and there is no return made which would enable you to do it. It would be impossible for you to find out the ton miles to-day. For that 748 reason I hope we shall not allow the personal side of this dispute or personal recriminations to blind us to the essential necessity of the transport of the country in relation to the development of the country. It is because I hope that side of it will be kept in mind that I felt it was my duty at least to give my version of the personal side of it, being perfectly clear that we consider the Ministry of Transport as essential to the well-being of the community.
§ Sir F. BANBURY
I should not have intervened had it not been for the statement of the hon. Member (Mr. Myers) during the Debate last Thursday. He is reported as saying:There is no need for 51 railway companies. There is no need for several hundred railway directors at £5,000 a year."[OFFICIAL REPORT, 24th June, 1920; col. 2492; Vol. 130.]I do not think there is, but the facts of the matter are that the average fees paid to railway directors are about £300 or £400 a year, and not £5,000. As this statement appears in the OFFICIAL REPORT, and as it was commented on in the Press—I saw some remark on it in at least one newspaper—I wrote to the hon. Member and told him I intended to raise this subject at the first opportunity, and I have had a letter in which he says he was rather misled by the hon. Baronet (Sir F. Flannery), though I cannot find anything in his speech which would have misled him, and that the remarks were incorrect, and that he has taken steps to correct them.
§ Sir F. FLANNERY
I did not refer at all to directors' remuneration. I referred to the remuneration of officials of the railway company as being greater than the remuneration of corresponding officials in the Transport Ministry.
§ Sir F. BANBURY
I read my hon. Friend's speech, and I agree that there was nothing in it which would in any way justify the statement which was made in error by the hon. Member (Mr. Myers). But I think it advisable, especially as we are talking about economy, that we should really know what the remuneration of railway directors is. I cannot speak for all companies, but the Great Northern Railway has thirteen directors, and the remuneration divided between them is £6,000 a year. It is 749 true they have some other extra fees for managing joint lines, and this is the actual position given me by an accountant this morning. In 1913 the salaries and wages paid on the Great Northern Railway and its proportion of the joint lines were £2,900,000 a year. The other expenses were £1,808,000. The profit available for shareholders was £2,241,500, and the remuneration of the directors £7,500, and the gross receipts were £6,949,500. In 1919 the salaries and wages had grown to £6,400,000, the other expenses had grown to £3,146,000, and the gross receipts had grown to £8,992,600. But instead of there being a profit of £2,241,500 there was a loss of £554,000. For 1920 the Estimate is based upon the assumption that there would be no further increase in salaries and wages, but the figure in this respect has gone up from £2,900,000 in 1913 to £8,000,000; other expenses £4,000,000. The receipts, which in 1913 were £6,149,500, are now £12,500,000, and the shareholders' profit is £500,000, as against a profit of £2,241,500 in 1913. The directors' remuneration remains the same. For the management of a company whose gross receipts are £12,500,000, I venture to say £7,500 divided among thirteen men compares favourably with the salaries paid by the Ministry of Transport.
§ 7.0 P.M
§ Mr. G. ROBERTS
I am glad that personal matters have been very largely disposed of. But for that fact I should have felt it incumbent upon me to make a few observations respecting them, because during the greater part of the occupancy of the position of the President of the Board of Trade by Lord Ashfield, then Sir Albert Stanley, I happened to be Parliamentary Secretary. Therefore, matters connected with this agreement came under my notice. I well remember the fact that Lord Ashfield was very careful to deal as little as possible with railway matters, because it might be felt in the country and this House that he was a prejudiced person. Consequently, as far as practicable, he handed over the dealing in these matters to myself. It is true that when the National Union of Railwaymen desired negotiations they insisted upon being met by the head of the Ministry. I can say with positive truth that Lord Ashfield, while he was at the Board of Trade, was, like Mr. Runciman before him, animated with one 750 desire, and that was to do his best to promote the efficiency of the Department and to serve the country. I deeply regret that personal matters should be introduced into these Debates, because it is impossible while these Debates are running to deal with them adequately, and we know full well that if a misstatement gets a start it requires a marconigram to overtake it.
The whole existence of the Ministry of Transport is being challenged. That question has been determined by Parliament. Rightly or wrongly this House decided to set up a Ministry of Transport. I confess that I am not enamoured of new Ministries, and I had some doubt, being a Member of the Government at the time, as to whether it was proper to set up an entirely new Ministry, and whether it would not have been preferable to have created a Department of the Board of Trade as is now proposed to be done in the case of mines. Nevertheless, I strongly contest the view that the Board of Trade, as previously constituted, was quite capable of dealing with this vast subject. My experience of the Board of Trade was that it was becoming over-weighted; it had too many Departments. All these matters have to come before the Minister, because however many Departments you have, and however many officials you may appoint, the Minister must be responsible to this House and he must be able to reply to criticisms which are made upon the work of any one of the Departments. I came to the conclusion whilst I was at the Board of Trade that it had already sufficient work to do, and, therefore, when it was decided to entrust some Department with the task of co-ordinating the various transport services of this country, I was clear in my mind that the Board of Trade could not undertake that great new task. The House of Commons itself is responsible for the creation of the Ministry.
It may be, of course, a matter of argument as to whether the Ministry is overstaffed. At any rate, my experience of the men who have been selected to work in the Ministry convinces me that the State has secured the services of very accomplished gentlemen. If you want the services of business men—and there is a demand in this House and throughout the country that the Government should employ increasingly men with the knowledge 751 and the service of these expert business men—you will have to pay them salaries which will attract them from private enterprise. You have no right to expect men in the service of the State to accept salaries lower than they would receive in private enterprise. That would prove fatal to the development of public ownership and control. If the State will not pay for the best brains in the country the State will never be able to get the highest skill and the greatest experience in these matters. There are sections of this House who ought to realise that, when we are putting forward proposals for the extension of public activities, new departments will have to be set up, and great expense must be embarked upon, and there is always an uncertainty as to whether it is possible to justify these creations and these expenditures.
My mind is carried back to a Departmental Committee on which I sat in the years 1909–11. The question referred to that Committee was that of railway agreements and amalgamations, what alterations of the law should be adopted, and what provisions should be incorporated in order to safeguard the various interests concerned. The whole drift of the Report of that Committee was that amalgamations and co-operation amongst railway companies and the general transport system should be encouraged. We believed and we found out that a good deal of waste was occurring and that efficiency might be promoted if we encouraged the policy of railway amalgamation and cooperation. On the other hand, many dangers will accompany such a system, and reference to the Report of that Committee would prove that we clearly indicated the necessity for some such Department as the Ministry now under consideration in these Estimates. I remember at the time being a comparatively new Member, having only been in the House three years, and, being stimulated by my youthful enthusiasm, I ventured to add a note to that excellent Report, the concluding paragraph of which expressed the opinion that the question of transport, and particularly of railway nationalisation, had now reached a stage when it should be lifted out of the arena of academic discussion into that of practical politics, and that we should consider whether the State should assume owner- 752 ship of the railways and the various transport services. I have travelled a good way since those times, but I am in agreement with my right hon. Friend the Member for Derby (Mr. Thomas) that we had been led to believe by a high Member of the Ministry that nationalisation of the railways was to be part of the Government policy. I had never understood that to be so, but if that right hon. Gentleman is, as he is represented to be, strongly in favour of that policy, and if he had the sanction of his colleagues to give expression to that view as representing the Government policy, there is no reason to complain of the fact that there are sections of the community dissatisfied with the present proposals. I see in this White Paper a step in the right direction. I believe that the Ministry of Transport's work will tend to the co-ordination of the transport services of the country and will effect great economies and promote more efficient transport. The mistake we are making at this juncture is to judge simply the expenditure which has been incurred, without recognising that the work of the Transport Ministry cannot and has not reached the stage whereby they can provide us with the proposals and the measures which will effect that proper organisation of transport and those economies which will eventually result. We expect too much at this juncture. Of course, those who are opposed to the Ministry are quite right in insisting upon their criticisms, but I submit that it is rather belated, because the time for adopting that attitude was when the measure for the establishment of the Ministry was before the House. I was in doubt as to whether a full Ministry was justifiable, but I was satisfied that a Ministry at least of the status of that proposed to be established in the case of mines was quite necessary to deal with this great question of transport.
I should like to know from the Minister of Transport or from the Parliamentary Secretary whether we are going to make any allusion to the question of coastwise traffic. In these matters we are very prone to place the transport problem out of its proper perspective and to regard it as merely one of railway traffic. There is a tendency to aggrandise the railways. That has been the policy of the railway companies in the past. It is quite natural for them. They have been concerned to destroy com- 753 petitive systems. The canals have not been fully utilised, and, undoubtedly, they have not given great encouragement to the coastal traffic. During the War, and particularly while I was at the Ministry of Food, we felt the positive necessity of the coastal service. That was not destroyed by the railways, but destroyed owing to the War. We had to give special facilities in order to recreate that service, and the Government had to give a subsidy. I ascertain from the White Paper that it is now proposed to stop that subsidy. I believe it stopped at the end of last month. Will the right hon. Gentleman tell me what will be the effect of that stoppage? I am not going to argue in favour of the continuance of the subsidy, because I have always recognised that subsidies are vicious and indefensible, and that it is desirable we should get back to normal business conditions as early as possible. I want to know whether my right hon. Friend is satisfied that the conditions have assumed a normal. character and that coastwise traffic can now be conducted on economic terms, because I am certain if it happens that the coastal steamers have now to be held up because of the fact that they cannot pay their way, it would be disastrous to the transport system of the country and inimical to the business and even to the individual interests of the great mass of the people. I think I have succeeded in making it clear that whilst we are entitled to criticise the Ministry, whilst I confess to some doubt as to whether all the appointments are justifiable or of the best possible character, I am personally not in a position properly to judge of that. I read the Report of the Select Committee very carefully, and I thought, apart from the concluding paragraph, that the Ministry of Transport had won a great tribute. That was the impression made on my mind, because I had felt the Ministry might well have laid itself open to some very keen criticism. When you have to employ business men, you have to pay them salaries something commensurate with what they would get in private enterprise outside, but I fear that those who have indulged in criticising the Ministry are expecting too much at this juncture. The Ministry has been entrusted with a prodigious task, the full results of which could not possibly be 754 expected within a few months, and when they are presented to us we shall be better able to judge whether or not the Ministry has justified itself.
§ Mr. MARSHALL STEVENS
I feel sure the Committee will agree with me that there is no party more concerned in this Vote than the great body of traders, yet the system which obtains in this House makes it exceedingly difficult even for a body of that character to make its views known here. In this particular Vote, the whole of last week's Debate, with the exception of the speeches of the Chairman of the late Select Committee, the hon. Member for Tamworth (Mr. Wilson-Fox), the hon. and gallant Member for Burton (Colonel Gretton), who represented the Sub-Committee which has done so much work with regard to this Vote, and the statement of the Minister, the whole thing has been a party squabble, and little chance has been given for the main considerations arising out of the Vote. I do not pretend to represent the traders of the country, but what I am in a position to say here is that the views which I express generally are those of the traffic experts of the great body of the traders of the country. I say at once that there is an absolute necessity for a Ministry of Transport, for the protection of the public, for the economical working of transport, and to safeguard the national interests. I say also that the whole of that can be done at a much less cost than the Estimates which we are now considering. I join issue at once with the right hon. Member for Paisley (Mr. Asquith) that the Board of Trade could have carried on this important matter. They were entirely incompetent for doing the main work which we expect from this Ministry. It is quite true that their departmental work of looking after the safety of the public and so on was well done, but as to the protection of the traders, and as to their knowledge of railway matters, it was the complaint of the traders for years, given in evidence before Royal Commissions and cther bodies, that the Railway Department of the Board of Trade absolutely knew nothing of importance about the matter. I only need state one fact, and that is that this country, due to the inefficiency of the Board of Trade, was the only large country in the world where the 755 statistics were not available which we are now beginning to obtain from the new Ministry. Our complaint was that that Department was absolutely dominated by the railway companies. Transport, which used to be considered a subsidiary matter, is now assuming its correct degree of importance. It is a ridiculous assumption that huge estimates are requisite to maintain the Ministry of Transport in the high position it must occupy, and we desire the assurance of the Government that Estimates of this character will not be put forward after the Minister has completed the initiation of his scheme. We have heard from the Minister and from the Parliamentary Secretary of the great work which the Ministry is carrying out, but the whole of the work they have referred to is only the temporary work due to the control of the railways and the reconstruction policy which is so necessary as a result of the War.
What I desire to know is whether these Estimates are to be considered as temporary or as permanent. The country to-day is committed to the great bulk of the Vote, whether this House confirms it or not. Consequently, let us have the full advantage of this temporary expenditure, as I anticipate it will be, and fully utilise the highly qualified staff which the Minister has brought together. Traders want everything that the Minister is doing and, so far as I know, is contemplating; they want the whole of it; they want it now, for permanent use subsequently. A great many of the statistics which are being prepared may become redundant almost immediately after they have been obtained, but still they will serve their purpose in the initiation of the new system. We must have statistics which will enable us to judge by comparison what our traders pay as compared with their competitors in other countries. An illustration used by the Parliamentary Secretary this afternoon shows how little even the Department itself knows of the subject. The Parliamentary Secretary referred to the fact that in France general merchandise rates had been increased 140 per cent., whilst in this country they had increased them from 50 per cent. to 60 per cent. Those are statistics which are absolutely fallacious. They are got 756 out, not by the Ministry of Transport, but, if you please, by a new Department of Transport of the Board of Trade which has come into operation. They are fallacious in this way—and it has been shown by evidence before the Advisory Committee which is now sitting—that 140 per cent. over many of the old French rates does not bring the rates up to the old English rates. See the fallacy of talking about an increase of 140 per cent. there, as compared with our increase of 50 per cent., over rates which were already in the mean about 50 per cent. higher than the French rates. These are things which have already been brought to light by the Director-General of the Statistical Department of the Ministry, Sir George Beharrell. He is too good as a permanent official, and I have no doubt it is in the mind of the Minister that expenditure like £5,000 on this account is only to last for a couple of years. If so, I am in perfect agreement that men of that character, with certain assistance, should at first be available for the Ministry. I have noticed, however, that that one Department is costing £30,000 a year, and it is not obtaining statistics. They are being obtained from the Railway Clearing House, and the obtaining of these statistics is not included in the Estimate at all.
What were the intentions of the Government in regard to transport? In 1917 the Minister of Reconstruction authorised a public announcement that a Transport Committee should be formed, of representatives of all the traders' interests in the country, together with transport interests, and the one one thing he did not provide for on that Committee was the permanent officials, and I believe it was on that account, and on that account only, that that Committee did not come into operation. That was December, 1917, but sufficient was done amongst the traders for them to co-operate and to form themselves into such a committee as had been indicated by the Minister of Reconstruction, who is the present Minister of Health. That Committee has worked ever since and is working now, without any Government help, and it has formulated a Bill for the amendment of the Railway and Canal Traffic Act, which I have had the honour of introducing, and which is backed by my 757 hon. Friend the Member for Coventry (Mr. Manville), the Chairman of the Associated Chambers of Commerce, by my hon. Friend the Member for Ladywell (Mr. N. Chamberlain), and by other hon. Members representing somewhat similar interests. That Bill contains the policy of the traders, leading up to the establishment of a new tribunal, which is being foreshadowed now at the rates inquiry of the Advisory Committee of the Ministry of Transport, following on the Canadian Inter-States Commerce Act. It is quite certain if the traders are to have their way—and I think the railways are of a similar opinion—at any rate that that would be the trend of the next legislation, that we shall have to provide four or five tribunals, apart from the Ministry of Transport, concerned in questions of rates and facilities and other matters. Connected with that Bill—to give an indication of the interests concerned—is the Federation of British Industries, with over 200 associations and 18,000 firms, in co-operation with the Associated Chambers of Commerce, with over 100 Chambers and 45,000 members. They are working without any charge at all.
Then we come to the Select Committee of the House of Commons on Transport, of which my hon. Friend the Member for Tamworth (Mr. Wilson-Fox) was Chairman. When Parliament dissolved, it had commenced to obtain knowledge, and I am sure that if it had continued in office, there would be no Estimate of £400,000 before us to-day to consider. The Ministry of Transport Bill was introduced on the 26th of February, 1919, and the Home Secretary in his speech said:The Government propose to set up a Ministry to maintain for the two years dur-which the receipts are guaranteed the whole of the control which they had during the course of the War and at the same time to give them powers during those two years to consider the whole question and to consider it with the assistance of the Committee of this House, which is still in existence. [HON. MEMBERS: "No, not in the new Parliament!"] Well, you can set it up again, and at the same time to make such changes as and when they may think desirable, as are desirable.Why is that Committee not sitting? Several efforts have been made outside this House to obtain the performance of that promise of the Government, that more than anything else has served to satisfy the great body of traders of this 758 country in regard to the continuance of this Ministry.
Then it was announced that the right hon. Gentleman (Sir E. Geddes) had been appointed by the Prime Minister as a Minister without Portfolio, with a view to his taking up the appointment which he now holds. I stated then, I have stated in this House since, and I state again now, that the best available man was selected for the job. The fear that the traders had that he might have only railway vision, and that he might be steeped in the English railway system, is fast disappearing. Then the Bill went upstairs, and the traders' representatives on the Committee were strong enough to deal with the Government's representatives if it had not been for our Friends on the Labour Benches The hon. Member for St. Helens (Mr. Sexton) on one occasion was an exception, and it is due to that that we have to-day this Advisory Committee on rates, but the Labour Members went upstairs imbued with the idea that they had been promised nationalisation, as stated by the right hon. Gentleman for Derby (Mr. Thomas) and because of that they went almost absolutely on every Amendment for the Government. The result was that we were not able upstairs to obtain the reforms which we were so anxious to obtain. Some we obtained. The greatest of all was the Rates Advisory Committee which, after taking the greatest objection to it, the Minister himself was good enough to propose. Then we had a panel of experts, to all of which the Minister objected at first, and we have to a very large extent provided means for giving assistance to the Minister in the very great and arduous work which is before him.
The statistics are not supplied by the Minister. They are only ordered by him. As the result of that we shall have the advantage directly of considering the grouping into districts of railways and with the other transport matters that come along. I give one illustration to show how difficult the Advisory Committee on Rates find it now to act without statistics. Everyone at an inquiry—I speak for the traders and railway companies, and I am sure court itself—is most anxious that the railways should be handed back to the companies in such a condition, financially, of course, that they may be worked successfully as com- 759 mercial concerns. Look at the difficulty when you have to provide for the cost of working and profit on a railway like the Great Central that never paid anything to its ordinary shareholders, if the same rates are applied to a competitive line alongside it which is paying a reasonable dividend. Those are difficulties which can be righted only when we get completed the statistics which are now being obtained. The right hon. Gentleman last week in opening the Debate said that we had already got for the first time in this country the ton-mile cost of working traffic, and he added quite properly that the comparison was not a very sure one, because in this country we carry a very abnormal quantity of coal traffic.
It will be found, I feel sure, a little later on, when your general merchandise traffic is compared with that of other countries—I am talking of pre-war rates now: it is the basis all round—that we were at least 50 per cent. higher than any other country in the world. It has been found out by statistics how unprofitable the short-distance traffic is. I am speaking of short-distance traffic within 20 miles, which is carted at two ends. It is all being done so as to keep a particular traffic upon the railway instead of its passing on to the roads where it belongs. It is the traffic that has been usually carried before by railway with the knowledge now that the company itself does not bear any of the loss, but that the whole loss is borne by the Government. Take the short-distance traffic of the Lancashire and Yorkshire Railway, carried within 20 miles, carted at both ends. On the average the whole of the convenance, the station terminals, station accommodation, and the two cartages is all being done at less than what it cost the railway companies to do the two cartages. That to a very great extent is where the waste is great and the loss is great, and we traders do not intend blindfolded to agree to increases of rates unless these things are discussed, because the old conveyance rate in this country—high as it is compared with other countries—is, I believe, almost large enough, if not large enough, to cover even existing conditions.
We are incurring great waste in the cost of administration, but the administration is requisite. Let us take full advantage of the Department. I would 760 ask my hon. Friend (Mr. Neal) to convey to the Leader of the House that I would like to press for a declaration from the Government that this vote is an abnormal one due to important initiatory work and the reconstruction of transport, and that, before the House is asked to vote Estimates for the Ministry of Transport in its permanent form, the whole question of its continuation would be reconsidered in the light of the definite permanent work required, which the House has not yet had an opportunity of considering. In fact, it comes up for the first time in the White Paper issued yesterday. Another question to which I wish a definite reply is, whether the Government will not carry out the unasked-for pledge to reappoint the Select Committee which they themselves intended to assist to make such changes in transport as are desirable. My criticism may have been severe, but, at any rate, it is sincere. The Minister can obtain assistance from traders who are no longer so suspicious that he is thinking of railway interests. It is not railway questions alone with which we are to deal here. It is the transport system to which the railways contribute their full share with other systems.
§ Sir W. RAEBURN
The critics of this Vote have all disappeared and, consequently, one gets no chance of answering them. It seems to me that criticism has been two-fold, first, that the Ministry should never have been set up and, second, that it has taken on an extravagant form and produced no result. One would imagine listening to the speeches, particularly the speech of the right hon. Gentleman (Mr. Asquith), that this Bill had been put through by a strong, determined Government against the most severe criticism and opposition. What are the facts? I was one of a very small band who took exception to the Bill at the beginning and fought for 19 days against some of its provisions. From the other side there was a universal chorus of approval. I would like to read one or two of the speeches made. The right hon. Member for Paisley (Mr. Asquith) said this was not the opportunity for discussing the setting up of the Ministry, but he straight away added that the Ministry ought never to have been set up. I noticed that when the Minister of Transport was reading an extract from the 761 speech of the right hon. Member for Paisley, in which the latter talked about the reckless setting up of this unnecessary Ministry and bureaucracy, to my intense surprise the Benches re-echoed with "Hear hear." I did not hear any of that when the Bill was passing its Second Reading or on Report or Third Reading. No, if any of us on this side had any doubts as to the necessity for this Bill, we were told that of course it was only a few persons connected with docks and roads that had any objection to the measure. Let me read a few extracts to show what was the opinion originally held of the Bill. The right hon. Member for Peebles (Sir D. Maclean) said:It is proposed to give the Minister all the powers and duties in relation to a whole list of things, including unification, tramways, canals, harbours, docks, piers, and the supply of electricity. I am quite certain that the immense amount of unnecessary competition which my right hon. Friend so admirably described will be done away with.That was one important reason for setting up the Ministry. The right hon. Gentleman went on:I wish at once to say that, as far as I am concerned, I am in favour of the principle of the Bill.Yet his leader comes to the House, evidently not having been instructed as to what took place last year, and makes the astonishing statement that this is a monstrous setting up of an extravagant Ministry. The right hon. Member for Derby (Mr. Thomas) said:We give a blessing to the Bill. We reserve our right in Committee to move certain Amendments, but we congratulate the right hon. Gentleman on the admirable way in which he has stated the case, on the magnitude of the Bill, and, above all, I hope he may be as pushing in the remaining stages of the Bill and after he has got it as he has been in presenting it here to-day.Other Members spoke in the same way. The hon. Member for Wednesbury (Mr. A. Short), who is a very level-headed member of the Labour party, said:This Bill is of a most practical character. We are compelled to come to the conclusion that it is not only desirable but essential that some drastic steps should be taken to secure a finer and more efficient transport system. He has proved that it would be possible, as a result of Government control and action, to secure greater efficiency and a more effectitve service, which would be not only to the advantage of the country but also probably to the advantage of those who to-day control these great transport 762 services. The Labour party regard this Bill as a step in the right direction.The right hon. and learned Member for Duncairn (Sir E. Carson), not wanting to leave the House in any doubt as to what the Bill meant, gave this solemn warning to the House:No one can picture what powers you are giving to the Minister. Without doubt the expenditure will be enormous. We have not even had an estimate of what may be the cost. I venture to say that it will be by far the most expensive Department ever set up. You will have to deal with every local board throughout the United Kingdom, every road, railway, and electric undertaking, and you cannot do that without a mass of officials, if it is to be done properly and really controlled from headquarters. I cannot imagine what the limit of the staff will be. You will have by far the largest and most extravagant Department that could possibly be set up. The Committee is now asked to let all this go through without any limit whatsoever. I do not mind whether it is £200,000 or £2,000,000 which is fixed as the limit, but let us have some limit put in so that after all the Minister will have to come and face the House in some way or other before he is allowed to launch forth any great scheme. I am not saying the schemes may not be good. The Minister to be appointed has had a career of unqualified extravagance, and I do not say that he was not quite right during the War. We are all well aware of the railways which, under his direction, were so successfully laid down in France, and we are all aware of the work he did at the Admiralty; but all that is a bad bringing up. Nobody who has watched the growing expenditure—I do not mean merely the War expenditure, but anybody who looks ahead to see what is likely to happen in the immediate future as to the concession that has been made and as to all the problems of reconstruction—can have anything but the gravest possible anxiety as to the future of this country.The great argument for this Bill last year was that we had no proper transport system, and that a system was required and at once. If Members on the other side of the House thought the Bill required very minute inspection in Committee upstairs, I can only remind them that the attendance of free Liberals was very limited, and that the work was left almost entirely to Labour Members When we sought in Committee to curtail some of the powers of the Ministry, we met with strenuous opposition all through. After many struggles we managed to get an Advisory Committee agreed to, and some check put upon the Ministry. But in that we had no assistance whatever from Members opposite, who now say that the Act is a monstrous Act and altogether unnecessary. All I can say is 763 that I have never seen any change in regard to the necessity involved. If it was necessary to have this Bill, then I cannot see that it is unnecessary to have it now. A great many of the old conditions still exist. I am bound to say to the credit of the Department that it has, to a very considerable extent, eased the position. I do not believe that the Board of Trade, or any Board then in existence, could have brought about the same change as the Ministry of Transport has brought about. What did Members of this House expect when they set up the Ministry? They realised, I am sure, that they were setting up a very large Department, and one which was charged with enormous powers. Which one of us in business would expect that in nine or ten short months you were going to have all the fruits of all the expense and all the exertions you had made? It has been hitherto the spade-work stage of the Bill. Anyone who knows, as I know to some extent, what the work is cannot be surprised that the Minister has not been able to come down and show a perfect state of transport throughout the country in so short a time. The House is far too impatient, not only in this matter, but in others. It takes considerable time to evolve order out of chaos, and the railways were in a chaotic state. There is more traffic carried on the railways to-day than there was before the War, and there have been great disadvantages in carrying it—want of wagons. want of engine power, deterioration of material, and so forth. Yet, with it all, an enormous traffic has been conducted.
The state of the ports in this country at present is very different from what it was when we had this Bill before us. There sore I say, "Give it time; do not be unreasonable; do not attempt to break this Minister, of whom you had nothing but good to say last year." I disagree entirely with the statement that the Board of Trade would have been competent to carry out the great changes that were wanted. Upstairs some of us wanted to keep the docks under the Board. We said that the Board had served the dock people very well and that we had no complaint to make. What support did we get? We were told that the Board was overweighted and that it was impossible for them to deal with such a big subject. We were overwhelmed to the extent of some- 764 thing like 25 to six. The Committee came to the conclusion that the Board were not competent to deal with the question of the docks. As to the question of salaries, I consider that the able and competent men who are at the head of these Departments of the Ministry are not getting salaries equal to what they could get if they liked to apply to commercial and industrial concerns. If you are going to have brains you have got to pay for them. I have as great a regard as any Member for the ability and enterprise of the Civil Service, but when it comes to a question of the conduct of business, I do not think they are to be compared with those engaged in trade and commerce, and Civil servants would, I think, be the first themselves to admit it. There is the subject of the coasting trade. The subsidy agreement has terminated, and those engaged in the coasting trade are in the very uncomfortable position that they have now to compete with low railway rates. That is an alarming position, but I understand there will be very soon an all-round advance of railway rates. That is not very good news to some people, but it is to those engaged in the coastal traffic. It would be a terrible evil and loss to this country if the coastal trade were blotted out. What the coastal people say is, that they do not want a general rise of rates, but that they want the rates, which were cut down before the War for the particular purpose of attracting this trade, put right and brought to a proper level. Before the War those rates were 25 or 30, or in some cases 50 per cent. below the ordinary level. One very useful function which the Ministry of Transport can discharge is to see that those rates are brought up to a fair level. While I am the last man in this House to advocate bureaucracy or any increase in it, and while I want to see less Government interference, yet having established this Ministry and given it large powers, I think we should give it fair play and not grudge decent salaries to those who carry out important work.
§ 8.0 P.M.
Mr. TREVELYAN THOMSON
In the course of this Debate reference has been made to the discussions and the speeches when the Ministry of Transport Bill was before the House. I think if you contrast the speeches made then by the Minister in charge of the Bill with the speech made to-day it would be hard to find a case where there was a greater difference between promise and 765 performance. It was then heralded as a scheme which was going to remodel our transport system, and as the first step in the programme of reconstruction which this Government had in hand. It was not merely to co-ordinate the existing systems of railway transport, but it was to electrify and improve the condition of things, and produce order and harmony where chaos and confusion ruled. There were to be additional railway facilities in connection with housing and in the development of agriculture, and, in fact, the Ministry was to herald the dawn of a new era. To what extent have those promises been realised? To what extent has reference been made by the Minister last week and by the Parliamentary Secretary to-day to those things? Apart from a passing reference last week and a very few words this afternoon the main three speeches we have heard from the Minister and his Parliamentary Secretary, occupying more than three hours of the time of the Committee, have dealt very largely with questions of accountancy, which is, no doubt, important and interesting, but is a very different matter. What the country is really anxious to know, whether this House is anxious or not, is what is the improvement in our transport system, and what is the Government doing to redeem its promises and pledges in order to restore order out of chaos. Instead of hearing of measures for reforming the transport system by rail or road or steamer or dock, we have had interesting disquisitions as to capital or revenue or annual charges, and we have been told of a blizzard and a snowstorm which blew down the telegraph poles, and of a landslide near Dover, and as to what ought to be the cost of champagne in the railway company's hotels. Those things may be very important, but what the country and the traders of the country want to know is what improvement the Ministry is achieving in the transport system of the country. We can only speak each of us from the knowledge we have of our own particular district. I submit, so far as the northeast area is concerned, that the position to-day, judged by the accumulation of stocks and by the reserves which have been accumulating through congestion of traffic, is three times worse than it was a year ago at this time. I do not suggest that the 766 whole position is three times worse. But when the Parliamentary Secretary tells us that there has been great improvement in the traffic conditions of the country, I submit that that is not borne out by the facts and figures dealing with the North-Eastern area. It may be that we are exceptionally badly placed. I have figures from that area which I will give the House in order to substantiate my claim that in the area which extends from the Tweed to the Humber, with large factories on the Tyne, Wear, and Tees—shipbuilding, blast furnaces, rolling mills, steel and iron products—the position to-day is worse than it was a year ago. During the Armistice and the time which followed we expected there would be confusion and chaos in the transition period, but in March, 1919, it was my lot to approach the Board of Trade with a deputation from the North-East Coast, complaining that the stocks of accumulated rolled steel had amounted to 64,000 tons. When I made reference to this on the last occasion, the Minister of Transport said it was very easy to take an isolated case and point here and there to mistakes, but what one had to do was to take a broad, general view of the situation. I say that when you are dealing with an area of that size it is a fairly large area. When I say accumulated stocks of 64,000 tons, I do not mean crude products of the district, but rails, plates, and all things needed for the whole of the iron and steel industries in this country, and when I refer to stocks I do not mean material which is rolled on the chance of an order coming on, but every ton of which is rolled against a specified order. There are ships waiting for it; there are engines requiring plates, and they cannot get delivery because of the congestion and inefficiency of our railways. The Board of Trade—let me give credit where credit is due—through the influence they brought on the railways, reduced it by the end of June last year to 32,000 tons. I do not say the rise since has been due to any change, but it happens to be a somewhat curious coincidence. In September it increased to 53,000 tons, in December to 70,000 tons, in March this year to 90,000 tons, and now to-day a telegram I have received states that the stocks in that area are over 92,000 tons of rolled steel which cannot be taken out on account of the lack of facilities.
The output of the area is an important item I admit, because if your output is going up all the time there might be some justification for your stocks going up. But I have figures for last year up to the end of December and up to March this year, but not since. The output of the district last year was 33 per cent. below what it was in February, 1919. Compared with the pre-War output, I am informed that there has been no increase whatsoever. I know what my hon. Friend (Mr. Neal) is referring to when he shakes his head. I am coming to the figures, and I hope I shall be able to convince the Committee, if I do not the hon. Gentleman, that there is some substance in the complaint which traders of that district make with regard to the inefficiency of the traffic arrangements. The Parliamentary Secretary in his speech to-day said that the traffic conditions had very greatly improved, and he went on to say that this was borne out because the estimated freightage was 20 per cent. up over the whole of the railways. He went on to say that they had no figures for any railway except the North Eastern, and on that the ton mileage was 30 per cent., so that I take it the 20 per cent. for the country is simply an estimate based on the figures of the North Eastern Railway. He tells us that on the North Eastern the ton mileage is 20 per cent. up and the output from the steel works was 34 per cent. up. I presume he means finished steel?
That does not necessarily mean that the increased output has been carried by the railways. To begin with, the stocks are ever so much more. That accounts for a great deal. It does not account for the whole 34 per cent. Another thing is that the export trade of the country is infinitely greater this year than it was before, and those connected with the iron and steel industries know, with regard to rails, plates and 768 many other things, that this material is shipped direct from the firms' wharves, where it is manufactured, and therefore you might perfectly well have your output of steel up by 34 per cent., and yet the amount carried on your railways might not be increased by one per cent. The stocks are three times what they were a year ago in one district alone, and the export trade of the country, particularly in iron and steel products, is infinitely greater to-day than it was a year ago, and the great proportion of the output never comes on to the railways at all. My hon. Friend (Mr. Neal) shakes his head, but I know what I am talking about, and other Members connected with the iron and steel trade will bear me out. For instance, firms like Bolckow, Vaughan and Co., Ltd., and Dorman, Long and Co., Ltd., ship at their own wharves. They ship thousands of tons of billets abroad which never go on to the railways. What applies to the Tees, applies to the Tyne and the Wear, and the whole of the iron districts of the country. I know it does not apply to the Sheffield districts, because they have not the advantage of sea-borne traffic, but a large part of the export trade of the country is shipped direct without going over the railways at all.
Therefore, merely to say that the output of steel has gone up 34 per cent. all over the country does not prove at all that the railways are getting it. Then the hon. Gentleman said that the ton mileage had gone up 20 per cent. I do not dispute that for a moment, but it is not at all at variance with the statement I made, that the facilities for traders are not equal to what they were before the War. In the first place, you have a much bigger haulage than you had before, and if you are bringing coal, as you did the greater part of last year and during this year, by rail instead of by water, you get a very much larger ton mileage, with no additional advantage to the country at all. In the same way with regard to many districts, the Government, rightly or wrongly, have been diverting and interfering with the natural channels of trade, and putting a much bigger strain on the railways than there was before the War. The consequence is you may have a very much bigger ton mileage without the same facilities to the trader which existed before. There is another point in regard to that. The rise in the coastal 769 freights have reduced the amount of traffic which these steamers have got on account of the lower rates on the railway. In my own district that accounts for a great deal of the extra burden on the railways. We used to send into Scotland pig-iron by water. None of that now goes by water but by rail. My hon. Friend opposite (Mr. Neal) agrees. I am not, however, trying to put the blame upon anyone. What I am trying to show is that the facilities to traders in the matter of transport are less now than before the War.
That is why I want one—to put the thing right! Before the War a large quantity of this material went into Scotland, South Wales, or to London by water. Now it goes by rail. Although you may show a ton-mileage bigger than before the War, your facilities to traders are less than before the War because of the rates of coastal traffic, on account of the larger haulage, and also on account of the huge stocks carried. There are various ways to remedy it, I agree; but I am anxious that the Ministry of Transport should realise the condition of things, and I speak on behalf of that part of the country of which, at any rate, I can speak with some little knowledge. The condition of things there is bad, and going from bad to worse. The hon. Gentleman (Mr. Neal) shakes his head; but if you have stocks increasing each quarter so that you have instead of the normal condition of stocks and of raw material—this does not refer to pig-iron, but to rolled steel and iron—if you have stocks of 10,000 tons normally, and now have stocks of 80,000 tons standing in the works, you have not only that, but you have capital of about £2,000,000 lying idle, and you have under-production. I think hon. Members will agree that if you can turn out 4,000 or 5,000 tons per week, and run for a month, and so turn out 20,000 tons, and the railway facilities are only to the extent of 16,000 tons, leaving a balance of 4,000 tons, that that sort of thing cannot go on accumulating. There is no room in the yards for stocking purposes, nor capital available to finance this big stock; so once in every four or five weeks the works have to stand idle, and the men miss a week's work. 770 The men, being human, naturally say to themselves: "Why should we exert ourselves in the way we are asked to do if we have to stand idle one week in every five or six? We will reduce the output so that it will be more in keeping with the railway carrying capacity." There follows a deplorable reduction in output, with its influence on our foreign trade, at a time, too, when the world is clamouring for our goods, and we should be encouraging output—that is, if the Government wishes exportation to continue and increase. You have blast furnaces which are producing pig-iron working at half-blast, and many closed down because the management cannot get the coal, the limestone, or the ore necessary to produce the iron. You have works managers refusing to take orders. I had a letter the other day from a big firm saying they were turning away orders, and likely to stand still, because they could not get the necessary pig-iron to carry on their works. I do appeal to the hon. Gentlemen opposite and to the Ministry of Transport to use every possible means to improve the facilities. Doubtless they are anxious to do this, and I ask them again to do their very best in the matter. If they have not got the powers let them seek for the extra powers. The present system is really a hybrid, mongrel sort of system which has the disadvantages of both and the advantages of neither system; neither of nationalisation or private enterprise. The Minister of Transport last week referred to the freightage rate per ton of the traffic on the Continent. He gave figures which showed an average of 1.49d. for this country, compared with 66 for France, and 68 for Prussia. Surely the point that we are so high—
§ It being a Quarter past Eight of the Clock, and there being Private Business set down by direction of the Chairman of Ways and Means under Standing Order No. 8, further Proceeding was postponed without Question put.