HC Deb 05 July 1920 vol 131 cc1125-73

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the Third time."

Mr. GILBERT

I beg to move to leave out the words "now read the Third time," and to add instead thereof the word "re-committed."

I do this on behalf of the London Members who are acting together in this matter. Perhaps if I am allowed briefly to explain to Members of the House what this Bill means to London it may enable them to understand exactly what the position of London Members is in this matter. The original Bill was a private Bill introduced by the Underground Railway Company, which included the Tubes and the Metropolitan District Railway, and it proposed that the fares in the future should be 4d. per mile first class, and 2d. per mile for third class, with a Clause which would give a right to make the minimum fare 4d. In addition to that it proposed the entire abolition of workmen's fares and of the Clause in the old Acts of Parliament which gave workmen special fares on these particular railways. When this Bill was introduced, naturally the London Members of all shades of opinion and representing different parts of the Metropolis were very much alarmed at the proposed increase of fares, and, as a result of meetings which were held by the Unionist and Liberal parties in London, a series of conferences took place with the Chairman of the Underground combine, who was formerly President of the Board of Trade and a Member of this House. As a result of four long confer- ences with Lord Ashfield and the officers of the Underground combine, it was agreed that when the Bill came forward for Second Reading an instruction should be moved. The form of words of the instruction was agreed to by Lord Ashfield on behalf of the Underground Railway Companies and by the London Members, and when it came before the House it was agreed to by the Government and accepted by the House. The form of words of the instructions, which was moved when the Second Reading of the Bill took place on the 25th March by my right hon. Friend the Member for Hammersmith (Sir W. Bull) was as follows: That it be an Instruction to the Committee to which the Bill may be committed, after inquiry into the financial position of the various companies named in the Bill, to amend the Bill as follows:— (a) So as to provide that the maximum powers of charge in excess of the fares which the companies are now authorised to charge shall not be more than are required to provide from time to time for working expenses, efficiently maintaining and renewing the undertakings, and a reasonable return on capital; (b) That workmen's return fares between any two stations shall not exceed the single ordinary fare for a journey between those stations, with a minimum fare of threepence. When the Second Reading Debate took place in this House the Minister of Transport participated in it. The Minister of Transport, towards the end of his speech in the Second Reading Debate, said: The Report of the Committee on London Traffic gives the figures, and I would like to quote something from that Report. It is this: 'To what extent fares or any of them should be raised so as to become economic is a matter for close investigation and we are of opinion that the most suitable method of reaching a definite conclusion is through the medium of the Private Bill Committee of the House of Commons, which from the detailed statement furnished by the Minister of Transport, should be able to settle— (1) The present value of the share capital on which a reasonable rate of remuneration should be paid; (2) The rate of remuneration which can be considered reasonable; (3) The percentage of increase in fares necessary to place the undertaking on a sound working basis.' That expresses very clearly the attitude of the Government on this Bill. It appears to us absolutely beyond dispute that, if these undertakings are to go on serving the public at the present-day cost, they are entitled to an inquiry as to whether they can go on financially as a healthy concern. I have been asked why we did not deal with it under the Ministry of Transport Act. It would have been possible to have taken possesion of these railway undertakings and to have authorised an increase in the fares. I will tell the House quite frankly. It involves considering these questions which have been put down by the Committee on London Traffic: what is a reasonable return on capital? That is a very difficult thing to ask any one Minister to lay down in putting up the fares for the whole of London. What is the present share value of the capital? Frankly, I did not want to act in an arbitrary way in this matter. I wanted to get help and consideration, and where can I get better consideration than from a Committee of the House of Commons? That is why we did not act under the Ministry of Transport Act, and, I submit, with very good reason. That is the reason that I am asking the House to-night to grant a Second Reading to this Bill. I do not commit the Government to any single figure in the Bill; only to this, that the promoters of the Bill are entitled to consideration of their position, and I ask the House to give it."—[OFFICIAL REPORT, 25th March, 1920, Cols. 741 and 742,Vol.127.] Having heard that speech from the right hon. Genteman, and after the Division on the Second Reading, which was carried by 131 votes to 25, the Instruction which I I have already read was accepted by the Government; and those of us who had acted in good faith with the promoters of the Bill in drawing that Instruction thought, after the Minister's speech, that that Instruction was going to the Committee in order that the information might be obtained which the Minister mentioned, and which we London Members had so often discussed with Lord Ashfield, the Chairman of the Underground Railway Company. The Committee meet on 11th May, and Counsel for the promoters of the Bill immediately asked that the Committee should adjourn, for the reason that a Memorandum had been received from the Ministry of Transport suggesting certain proposals to the Committee for dealing with this matter, and practically telling them to ignore the Instruction which had been passed by this House. Evidently the Committee were amazed by this form of procedure. They adjourned from 11th May until 8th Tune, and, when they met again on 8th June, the promoters of the Bill produced a Clause which carried out the proposals of the Ministry of Transport, as set forth in the Memorandum which had been sent to the Committee. When the Committee had finished hearing the evidence, and the Chairman had decided that the Preamble of the Bill was proved, he said, on Thursday, 10th June: The Committee find the preamble proved as it now stands. We desire, however, to express some surprise at the action of the Minister in suggesting to us in a memorandum considerable alterations in the Bill as passed by the House of Commons on Second Reading, and apparently at that time accepted by him. It would have been, in the opinion of the Committee, more suitable if the Minister could have communicated to the House at the time of the Second Reading the views he ultimately put before us. In the printed Report which the Committee has circulated to the House, the Chairman states that the Bill does not authorise the construction of any new railway; that the principal objects of the Bill are to increase the statutory maximum fares for passengers carried on the respective railways of the London Electric, Metropolitan District, and Central London companies, the statutory workmen's fares in respect of workmen carried on such railways, and on the City and South London Railway, and the statutory rates and charges in respect of the conveyance of small parcels on the same railways in excess of fares, rates and charges usually authorised in previous years for like undertakings; that the Committee, in accordance with the Instruction of the House of the 25th of March last, have inquired into the financial position of the companies named in the Bill, and have amended the Bill so as to give effect to the Instruction. That particular Clause is the Clause where the London Members join issue with the Report of the Committee. In view of the many statements that have been made with regard to the finance of the Underground companies, and as to the way in which that finance is managed, we do not think, from the Report of the Committee to the House, that they have inquired at all into the financial position of these companies. One thing about which the London Members felt very keenly, and which I mentioned during the Second Reading Debate, was that we had very strong objections and criticisms to make as to the pooling of the profits of the railways in the Underground combine. We thought, in perfect good faith, that, when this Instruction was passed by this House and sent to a Committee upstairs, that Committee would inquire into the finance of those undertakings, and that we should have a Report from the Committee stating their opinion as to the way in which that finance was managed, the reason why the four statutory railway. companies were asking for increased fares for passengers, and the method by which, when they made those profits in conjunction with the Government subsidy, the money represented by that subsidy was used partly for the benefit of the railway companies and partly to subsidise a non-statutory company which was losing a

— First Class. Third Class
If such fraction does not exceed one-third of a mile. One penny. One halfpenny.
If such fraction exceeds one-third but does not exceed two-thirds of a mile. Twopence. One penny.
If such fraction exceeds two-thirds of a mile … Threepence. Three halfpence

If these revised fares are carried out on these lines, it is going to mean a very great increase in fares to the travelling public of London. Speaking on behalf of the London Members, may I say at once that none of us wish in any way to prevent the railwaymen, or any men working on the railways, from obtaining proper and legitimate wages for the work which they do. Secondly, we do not wish that the shareholders should not receive a fair remuneration for the money invested, provided that all the material facts are taken into consideration; but we think the railway passengers, of whom some millions are carried every year by these companies, should not be charged fares which will allow a profit to the railway companies which, owing to their pooling arrangements, can be handed over to another branch of traffic in order to make up their loss, and that is one of the strong reasons why, on behalf of London Members, I am moving for the re-committal of the Bill. We may be told that the Committee, although they did not carry out the Instructions of the House, have done the next best thing, or probably what they think is a better, because in Clause 6 they have put in the following Sub-section: Before any of the companies under the powers conferred by this Act increase the fares charged to passengers travelling on the railways of such company beyond the maximum amount which prior to the passing of this Act they were authorised by Statute to demand, such company shall submit to the great deal of money, namely, the omnibus company. The Bill now before the House is quite a different Bill from that which was dealt with on Second Reading. Instead of the fares which I have just mentioned, and which were in the original Bill, it is proposed that first-class passengers should pay 3d. per mile, with a minimum of 4d., and that third-class passengers should pay l½d. per mile, with a minimum of 2d. In addition to that, Clause 3 provides the following fares for fractions of miles: Minister of Transport a schedule of fares as intended to be increased, and no such increased fares shall be charged until the same have been approved by him. Before approving any such increased fares, the Minister of Transport shall refer the matters to the Rates Advisory Committee constituted under the Ministry of Transport Act, 1919, for their advice, and shall report thereon to him. If this Sub-section is to be carried out properly, and if the Select Committee wishes to carry out the Instructions of the House they should put in that Clause words similar to those in the Instruction. In addition to that, the Bill abolishes all workmen's fares in the existing Act. Certainly it carries out the Instruction of the House in this matter that they set up a double journey for a single fare for workmen. It does not state whether this is for all time or whether it is only a temporary Measure during the continuance of this Bill, because this in only a temporary Bill. It is proposed that it shall be in force for two years beyond the eighteen months of the Ministry of Transport. But we think if that is the case there is no need to rescind the Schedule or the Clauses dealing with workmen's fares in the existing Act of Parliament. If it is only a temporary Bill, a Clause should have been put in which would have suspended those Clauses instead of rescinding them altogether.

We think that, after an Instruction such as was passed by this House, we ought to have had a report from the Committee on the capital, the rate of interest to which they suggest their holders are entitled, and particularly on the question of the pooling of profits. I may be told the Committee did inquire into this matter. I have looked through the evidence which has been before the Committee, and I cannot find that any of the evidence before them was evidence such as after the Instruction they ought to have carried out. There were three witnesses heard y the Committee, two of them on behalf of the company, namely, the Chairman, Lord Ashfield, Sir William Plender, who is auditor to the company, and the right hon. Gentleman (Mr. J. H. Thomas), who gave evidence on behalf of the Bill. Certain tables were produced to the Committee. There were five kinds of tables —Table A, giving the rise in price standardised on the year 1906; Table B, giving passenger receipts and expenses and the capital; Table C, giving the fares charged and the rates per mile now charged by the company; Table D, being an estimate for future years and not less than five years from 1920. Then there was Table E, nominal capital and net amount received. It is true those tables were presented, but except for a few leading questions and for some cross-examination by some of the counsel opposing the Bill. I do not think anyone who has read the evidence will attempt to say there was anything like a financial inquiry into the finances of the company whose Bill they were considering. It may be said it was not easy for them to obtain such evidence, but there is the report of the Advisory Committee on London traffic, which is a very full report on the finances of the company. I propose to read one paragraph of that which says: The four railway companies in question are seeking Parliamentary sanction to an increase in their charging powers. They are parties, together with the London General Omnibus Company, to the London Electric Railway Companies' Facilities Act Agreement of 1915. This Act authorised, though it did not require, the institution of a common fund. The setting up of that fund makes it necessary to review the position of the companies as a group, as well as individually, and to include in the survey not only the railway companies, but also the omnibus company. The latter, however, is not statutory company, and is consequently not in need of Parliamentary sanction for any increase in its charging powers. Nor is it subject to any provisions of the Ministry of Transport Act, 1919, in this respect. It goes on to deal with a lot more figures, with which the hon. Member (Mr. K. Jones), who was Chairman of the Committee, will be much more competent than I am to deal with. There is an analysis of them by the Finance Director of the Advisory Committee on London Traffic which goes very fully into them, and if this Committee were keen on carrying out the Instruction they could quite easily have called for that paper and had it before them and examined witnesses upon it, or the Ministry of Transport, knowing the Instruction, and knowing that the Report was in existence, should have placed the figures before the Committee.

We in London feel very keenly on this traffic problem. We hold no brief for any tube railway or for buses or for trams, but the traffic problem in London to-day is a very critical one. Everyone who travels on the tube or on buses or trams knows the great extent of the overcrowding and the terrible difficulty of people getting to and from their work, and in view of the development of housing in London it will mean a far greater problem in a few years' time unless something is done. We have no grievance against the Underground combine. In many ways they have managed their traffic very well; but we do not think, and I think when the House knows all the facts it will agree, that the statutory companies should be allowed to charge their passengers a bigger rate of fares than will allow for a fair return on their capital, for fair working expenses and for proper labour charges, and then if there is any surplus it should be used for the improvement of the companies and should not be used for the purpose of paying the deficit on another transit which is outside the immediate railway. That is a point that we feel very strongly on. That is a matter upon which London Members have worked unitedly together. We did our best in the early days of this Session to come to an agreement with the underground companies. The promoters of this Bill met us most fairly and candidly and spent hours in consultation with us, and we really thought, having agreed on an Instruction such as was passed on the Second Reading, we had come to a very fair decision, and that this Bill would go to an absolutely independent Committee upstairs, who were not biassed by having London views and representing any part of London, and that we should get a fair and just decision. I think I am expressing the views of all London Members, that when the Amended Bill is produced, and we find that there is nothing whatever in it, or in the Report of the Committee, dealing with this complicated financial problem we certainly think we have a grievance, and at a meeting last week, attended by both Unionists and Liberal Members, we agreed to put down this Motion to recommit the Bill.

Mr. CLEMENT EDWARDS

I beg to second the Motion.

I should like to say that one of the grounds upon which I second the Motion is, in my opinion, sufficient to justify the House in rejecting this Bill altogether. If it had not been that I personally take the view that was expressed by the Minister of Transport in the Second Reading Debate, and the view that was expressed by the Report of the London Committee on the question of traffic, and the Advisory Committee which sat on the question of London traffic, over which my hon. Friend (Mr. Kennedy Jones) presided, namely, that the right machinery for inquiring into the finances of these companies was a Private Bill Committee, I should have moved the rejection of the Bill. As I am not doing so, I hope to secure its committal to a Committee as the proper machinery, if it does its duty and carries out its instructions from this House, to inquire into the question of finance. The three grounds on which I propose this Bill are, first of all, that the Committee to which this Bill was committed did not carry out the express mandatory instructions of this House to inquire into the finances of the various companies mentioned in the Bill. The second ground is that the Committee did not carry out the express mandatory instructions of this House to fix such a maximum fare as should only give a fair return on the capital of the companies. Neither of these instructions has been carried out. The third ground is that the Bill to which we are now asked to give a Third Reading is not the Bill which went from this House. This House has never given this Bill a First or a Second Reading. It is an entirely different Bill from the one which was committed to the Committee upstairs.

Take the first point as to inquiring into the financial position. As soon as this Bill went on the 11th May to the Committee, the Ministry of Transport, either inadvertently, because the right hon or hon. Gentlemen who are the heads of that Department have not had experience of the methods of procedure in this House, or for some other reason, went behind the back of the House, and turned topsy turvey from their own attitude as expressed in the Second Reading Debate, and in a Memorandum advised the Committee not to carry out the instructions of this House to inquire into the finances of the various companies. The reason they cited for this action in respect to a very vital matter affecting the supremacy of this honourable House is given in these words: The Committee will observe that while in terms the instruction relates to maximum fares and charges, the limitations appear to involve a consideration of the actual fares which the companies concerned are to charge in order to provide a revenue not more than sufficient to meet the prescribed conditions, including a reasonable return for capital. This consideration cannot be given without inquiry of a lengthy and most intricate character, and would raise questions of great complexity and difficulty, such, for instance, as the amount and composition of the capital, the right of return to be allowed on present and future capital, and whether or not any particular scale of charges would in practice produce more or less than the necessary revenue. That is precisely the thing that this Committee were instructed by this House to carry out. That is precisely the task which the right hon. Gentleman in his Second Reading speech, in the passage quoted by my hon. Friend (Mr. Gilbert) said could be more properly performed by a Committee upstairs, and from which task a single Minister would naturally shrink. This is how his Ministry, with or without his cognisance, advised the Committee upstairs. The suggestion is made that the Committee have gone into the question of finance, but that is not the view of anybody who was there, because immediately on this passage of the Report being read before the Committee upstairs, by Mr. Honoratious Lloyd, who appeared for the promoters, he said: Apparently the Minister is anxious to relieve you of the burden of going into these matters. For the benefit of those hon. and right hon. Members who have not had the opportunity of examining the evidence, I might explain the position. About a fortnight ago, I raised a point before Mr. Speaker in regard to the evidence. The result was that 1 was referred to the authorities of the House, and, in the end, they found that the view I had expressed, that this House was entitled to get the evidence if it was taken in the ordinary way by the promoters of the Bill, was right, it was put to me by the Chairman of Ways and Means, whether I thought the House ought to go to the expense of printing a copy for every Member or whether I would be satisfied if it could be arranged to get a certain limited number of copies of the evidence from the promoters. I was not anxious that this thing should be hung up, but that it should be thrashed out on its merits, and the London Members have had copies. On this question we shall be in conflict, in view of the Report from the Chairman of the Committee, that the Committee have carried out the instructions of the House in regard to finance. We have, therefore, to look rather closely at the matter, and it was for that purpose that I asked that the evidence should be produced. We must, therefore, look at the matter as one of substance, and ask whether this instruction of the House of Commons with regard to inquiry into finance has, according to the evidence, been carried out. There is no doubt whatever in the minds of those Members who have had an opportunity of studying the evidence upstairs that there was no semblance of an observance on the part of the Committee.

Reference has been made to a certain semblance of financial evidence that was put in. There were five small tables handed in by Lord Ashfield. The first is nothing more than an extract from the Labour Gazette showing the rise in prices as standardised in the year 1906. It has no more to do with the finance of these companies than with the wages bill of a Billingsgate porter or the financial position of a wholesale grocer. The next item is a statement, statement B, which is described as a statement in illustration of the position of the four railway companies in 1913 and in the three months to 31st March, 1920. What has that to do with the financial position of these four companies? The third is simply what is described as a short comparison of the margin which will obtain under the increased statutory charging powers as against the margin which the railway companies had in 1913 under the then statutory charging powers. It has nothing at all to do with the financial position of the companies. The next item is one which on the first glance looked the most promising. I looked and saw "gross railway receipts," "working expenses," and "net railway receipts." Then I looked at the heading and I could scarcely believe my eyes. All it is is an estimate for a future year not less than five years from 1920. The only other item that was handed in is a brief statement in eight lines, purporting to show the nominal capital and the net amount received in respect of each company. That is the sole documentary evidence that was submitted or taken before this Committee, relating to the finances of these companies.

My hon. Friend said there were three witnesses called, Lord Ashfield, Sir William Plender, the accountant, and the right hon. Gentleman the Member for Derby (Mr. Thomas). As to what Sir William Plender's view was with regard to this financial evidence, I will read the last question that was asked him on these figures and his reply. It is question 455: And really that summarises the financial position of the companies? Well it deals with it certainly. The broad facts of the subject-matter of the negotiations—lasting over four extensive conferences—between the London Members and the promoters of this Bill. have been indicated, and were indicated after many, many days of examination and cross-examination by the financial experts of this combine before the London Traffic Committee upstairs. We got a certain amount of information. We had to report that there was still a great deal behind that had not come out. Finally, upon that Report the Government set up an Advisory Committee on London Traffic, which most industriously went into this question of finance, and they got among other experts to assist them the Director-General of Finance of the Ministry of Transport. He reports, to begin with, on a figure of £2,900,000 submitted to him by Lord Ash-field on behalf of these companies, that this is really a mistake of £1,500,000 made up of six items. The Director-General of Finance of the Ministry goes on to say that there is need for investigation, and close investigation. Acting on this, the Committee, over which the hon. Member for Hornsey (Mr. Kennedy Jones) presided, said that you must, before you attempt to deal with fares in London, have an exhaustive inquiry into the finances of these concerns, and that in this Private Bill Committee there was appropriate machinery, and it was for that reason that the London Members accepted the compromise on the Second Reading of this measure. That has not been inquired into.

I come to the next point, and if hon. Members will look at the Bill as it comes before the House, they will see that there is no attempt to fix the fares as thy were instructed at such a figure as to be a fair return on the capital. Frankly, they accepted the advice of the Ministry of Transport that they should hand over to the Ministry the duty of fixing the fares. They have on the advice of the Ministry handed over to the Ministry the duty of investigating, and they have not attempted to fix those fares which they were instructed to fix which were to give a fair return and only a fair return when they had ascertained it. Why did the Ministry come to this House after Second Reading and recommend the House to pass this Bill at all? I challenged the right hon. Gentleman at that time. I took the view which I take to-day, that under Section 3, Sub-section (a) of the Ministry of Transport Act, he is fully authorised to raise whatever fares he likes, and under Sub-section (b) of the same Section he is authorised on giving a month's notice to take over any other railways and raise their fares. Why was that machinery not adopted here? Why should he help to get this Bill before a Committee and then get the matter referred back to the Ministry?

I will tell him frankly what my view is. First it is this, that if he had raised the fares of these companies the Metropolitan and District which he controls, if he had given notice and taken over the other companies which he has power to do and had raised their fares, what would have happened at the end of his control period?

9.0. P.M.

By the provisions of Section 8 of the Act of last year the whole of the increase in the revenue-earning capacity of these railways would have eventuated for the benefit of the State, that is, if it had been his sole act. But by making it the Act, and assisting to make it the Act of Parliament, independently of his act as a Minister, the whole of this increase in the revenue-earning capacity proposed by this measure will simply eventuate, according to the provisions of the Act of last year, for the benefit of the companies. That, I suggest, is one reason why this Bill was ever brought before the House, and why it received the blessing of the right hon. Gentleman. The second reason is much nearer home. The right hon. Gentleman has no power whatever, without the sanction of this House, thanks to the provisions of the Act of last year, to continue the subsidy which he denounced as having been given to the Metropolitan District Underground. What does he suggest? He actually suggests to the Committee upstairs, without a word to this House, that they are to increase fares as a quid pro quo for cancelling this very agreement, this very subsidy which he denounced. What is it in terms of finance? It is this: The right hon. Gentleman, brought here at the head of a great Ministry and supposed to have a wonderful grasp of finance, actually proposes seriously to Parliament that they shall compound for a debt of £1,000,000 from the Treasury by imposing on the poor travelling in London £4,500,000 in perpetuity. That is the proposal. I am perfectly certain that if the House will examine this for themselves they will get this Bill recommitted, and they will see that there is no attempt to buy off this £1,000,000 subsidy, which the right hon. Gentleman has denounced, by imposing a burden five times the size on the poor working girls from East London and the workers from other parts of London.

I come to the third point and the point upon which I say there is sufficient justification for me to move the rejection of this Bill, if it had not been for my view that we want inquiry into the finances of the company through the Private Bill Committee. It is that the Bill now before the House is, except for two formal Clauses, an entirely new Bill. Even the preamble has been amended by the Ministry of Transport. To show that there is no question about this, let me prove what was done. On 11th May the Committee adjourned on receiving the memorandum from the Minister of Transport During the five weeks of the Adjournment the Minister of Transport sent for the promoters. It was not a question of asking the Committee to consider new Clauses or of asking the promoters to draw up new Clauses. The Minister actually redrafted the whole thing. When the Committee reassembled there happened what has not happened before in the history of procedure in this House. The promoters handed to all the opponents there what they themselves called a substituted Bill. Mr. Honoratus Lloyd, as shown on page 8 of the Report, explained what had happened to the Bill. He said: In order to make it perhaps more intelligible it would be advisable if I first of all call attention to the manner in which the Bill should now be read, because, having regard to the various alterations, it is a little confusing. You have the manuscript Clauses in front and you have them numbered in an inconvenient way, and it is a little difficult, Without something in the nature of a catalogue, to follow it. Therefore, if you will allow me, in half a dozen words, I will try to put it in order. I need not trouble about the introductory Clauses, I think. The first is merely the short title, and the second is the interpretation, where you see the definition of 'railway' has been struck out, and that is merely because it is placed in another part. When 1 come to Clause 3 which, of course, was an important Clause concerning the rates and charges, that is struck out entirely, and instead of that you will find a new Clause 3, which is at the very front of the manuscript Clauses so-called, and marked 'Paper A.' That, I think, is the first material one. Then follows new Clause 4, which is 'Paper B,' following Paper A'; then comes new Clause 5, which is 'Paper C,' and refers to special trains. Then comes new Clause 6, which is a Clause embodying what I have just been telling you about the requirements of the Minister of Transport; then Clause 7 of the Bill as it stands provides for the repeal of the various provisions relating to workmen's fares; new Clause 8 is 'Paper E ' in the manuscript Clauses, and that makes the substituted provisions with reference to workmen's fares. Then we get back to Clause 9, which provides for variation of the Cheap Trains Act; and the rest are formal matters. So that you have every single operative Clause in the Bill, embodying the principle of which this House approved on Second Reading, thrown over and substituted by the new Bill from the Ministry of Transport. I know I shall be told by some of the authorities of the House who have not followed precisely what happened upstairs, that it is not an uncommon thing for a Private Bill Committee to consider new Clauses. That is perfectly true, but as far as I can gather there is no single precedent of which there is record in this House where an entirely new Bill, or practically a new Bill, has been considered by a Committee. The whole of the evidence went upon this substituted Bill. It was only after the evidence had been considered that they got to the question of Clauses. I submit that on that there is sufficient justification for this House even to reject the Bill. I have no kind of feeling or antagonism against the Combine; 1 have a great admiration for the very great skill they have shown in their work. I am prepared that they shall have not only a fair return on their actual capital, but even something by way of a small bonus on the enterprise they have shown. But if, after the investigation we had upstairs we found that there was a volume of watered capital, and found what that really was in fixing fares which would give a proportionate return, I think we should be doing wrong to the traditions of this House which have grown up during so many generations, and the great trust we owe to posterity, if we had allowed the Committee at the instance of a Ministry, or a Minister however big, to ignore the express mandate of this House.

Mr. J. A. GRANT

As Chairman of the Private Bill Committee which dealt with the Bill now before the House, I welcome the opportunity of making a statement as to what led to the findings that we came to. I am happy to say that I am speaking for the whole of the Committee. We were unanimous in our findings. We have had to-night hon. Members speaking for those others who desire to recommit the Bill. I cannot help thinking that among these hon. Members—and I am fortified in that belief by what has fallen just now from the hon. Member for East Ham—there exists considerable misapprehension as to what occurred in that Committee. It is my duty to endeavour to convince the House, and I hope to do so, that the recommittal of this Bill is unnecessary, and would be a contradiction of the action of the House on the Second Reading. I hope to be able to show that the Instruction of the House has been carried out fully and in detail, and, further, that the Amendments that have been put into the Bill carry out the evident desire and intentions of the House of Commons as expressed on the Second Reading. These Amendments introduced into the Bill are in no way favourable to the companies. On the con- trary, they put the companies into a worse position. If we take the result of these Amendments, we will find that the members of the travelling public whom the hon. Member has just referred to in such sympathetic terms will be in a greatly better position because of these Amendments than they would have been under the Bill as it left the House on its Second Reading. With regard to the terms of the statement I have to make, which, as I have said, is a unanimous one, I have consulted my colleagues on the Committee, and I have their assent in saying that we carried out the instructions of the House. As I shall have to follow that statement pretty closely, I shall have to refer to my manuscript.

In the first place, I shall deal with the first paragraph of the Instruction, whereby we were instructed that we were to inquire into the financial position of the various companies named in the Bill. At the outset of our proceedings the Committee did enquire into the financial positions of the four companies as required by the instruction. Lord Ashfield, who represented the Petitioners, submitted tables of audited figures showing the present-day gross earnings, working expenses and net earnings of the four railway companies. These figures wholly excluded the London General Omnibus Company, and were on a decontrolled basis for the District Railway; that is to say, the Government subsidy was entirely eliminated. The exact position of the four companies was therefore ascertained on a normal fair earning basis. These tables were criticised in detail by Counsel for the London County Council and other local authorities, but were in no way shaken. They showed that for the three months ending 31st March, 1920, the actual balance of the net revenue after payment of interest on the four companies' debenture rent charge, guaranteed and preference stock was only £7,439, which was the total sum available for dividends on ordinary capital amounting to £17,000,000. Lord Ashfield also proved, and his evidence was unshaken in cross-examination, that since 31st March last the working expenses of the four companies are increasing at the rate of £600,000 per annum.

Mr. C. PALMER

May I ask who was cross-examined—how many witnesses were examined on the question of the capital?

Mr. GRANT

On this question there were two witnesses. Hon. Members will recognise that a Private Bill Committee does not call witnesses. It is for the opponents to bring their evidence and their witnesses, and we had to deal with the evidence which was brought before us. As I have just said, it was proved that an increased charge at the rate of £600,000 per annum had been brought upon the companies since the 31st March. That was owing to the increase in the cost of coal, material, wages, and such like. It was further proved that the four companies were faced with, and in great part already committed to, an immediate capital expenditure of £6,203,000, for new rolling stock, widening of tunnels on the City and South London Railway, additions to the power station, carriage sheds, and other urgently needed improvements. The annual interest charge in respect of £6,203,000 on an 8 per cent. basis, a moderate estimate having regard to the money market to-day, is £496,000. Lord Ashfield proved to the satisfaction of the Committee that the companies were subject to further additional annual charges in respect of the renewal of rolling stock and making good deficiencies and depreciation and renewal funds amounting to £434,367 per annum, in all £1,430,642—

Mr. KENNEDY JONES

I am sorry to interrupt, but I should like to ask who proved this which we are told was proved?

Mr. GRANT

It was the evidence which was brought before us. It was also proved to the satisfaction of the Committee, and, consequently, we found that, estimating the position of the four companies for the year 1920 on the basis of the operating results of the first three months of 1920 and bringing into account the additional charges accruing since, there will be an actual deficit of £435,834 on the year's working. The position of the four companies, accordingly, is that they would default and pay nothing on their debenture rent charge guaranteed or preference stock, and, of course, nothing on their ordinary stock. The Committee, at the same time, prosecuted an inquiry into the terms on which the capital of the four companies has been issued, going as far back as 1869 in the case of the District Company. The Companies Clauses Act expressly authorises Parliamentary companies like railway companies to issue their capital at a discount; and the average rate of discount at which the capital of the four companies was issued was 16 per cent. In other words, out of the total nominal share and loan capital of the four companies of £39,000,000, they have actually invested £33,000,000 in solid sovereigns in their undertaking. After hearing expert evidence, the Committee was satisfied that, having regard to the speculative character of the enterprise, this was no more than a reasonable discount, without which the capital could not have been raised. Further, this question of discount on the capital of the four companies formed the subject of a lengthy and expert inquiry by the Royal Commission on London Traffic, which came to the same conclusion. The Committee therefore had no hesitation whatever in determining that the whole of the com-panics' nominal capital should rank for dividend to the full amount. In regard to the question of raising the new capital on an 8 per cent. basis and discount on the old capital, the Committee had the advantage of hearing the expert evidence of Sir William Plender. The House will agree with me that no man has had wider experience or is more competent to give evidence than Sir William Plender. The Committee had also the advantage of reading and having discussed before them the report as to the financial position of the four companies made by the Director-General of the Financial Departments of the Ministry of Transport.

Mr. CLEMENT EDWARDS

Can the hon. Gentleman kindly give me the reference to that report in the proceedings?

Mr. GRANT

It is in Question 215. With regard to the remarks made by the Mover as to the Minister's remarks in the House of Commons, that the Committee had not included in the Bill a Clause cancelling the Government subsidy to the District Railway Company—in the view of the Committee on evidence given it did not seem expedient to have done so. The four companies have no power to put into operation the increased charges except by the approval of the Minister of Transport. If when the Minister approves of the companies charging the whole or part of the fares fixed by the Committee he can, and pre- sumably will, deal with the question of the subsidy to the District Railway Company, in the same way as he will deal with subsidies paid to main line companies on those companies receiving power and directions to increase their rates and fares. The Committee felt that on such evidence as I have referred to, evidence given by men of such knowledge, ability, integrity and expert knowledge of such subjects as Lord Ashfield and Sir William Plender, and evidence unshaken by cross-examination of distinguished counsel on behalf of those who opposed the Bill, that it was sufficient to instruct us as to the financial position of those companies. I trust what I have said will satisfy the House that the Instruction to inquire into the financial position of the company was duly com-plied with by your Committee. I will now deal with the second point. The Instruction of the House was: To provide that the maximum powers of charge in excess of the fares which the companies are now authorised to charge shall not be more than are required to provide from time to time for working expenses, efficiently maintaining and renewing the undertakings, and a reasonable return on capital. It will be seen that under that Instruction the Committee were to fix such increased fares, so that the difference between them and the company's existing fares should not be more than what was required to provide from time to time for working expenses and efficiently maintaining and renewing the undertaking and for a reasonable return on capital. The Committee submit that those words "from time to time" made it incumbent upon us to look at the future as well as the present, and to give the companies such increased charging powers as would be sufficient, if not more than enough, to provide for the three items which I have just mentioned, not merely at present but for the future. The governing words are "from time to time." The Minister of Transport appears to have stated his view before the Railway Rates Advisory Committee in reference to main line companies that charging powers sufficiently high to meet the future needs under working expenses and maintenance and renewals and return on capital might be too high to meet the present needs, and that if the companies were left free to charge up to the full amount of the charging powers, that is, up to the maxi- mum, immediate injustice to the public might result. In the case of the main line companies he has taken the position that any increased rates to be introduced and any future increases should not be left wholly to the railway companies to determine, but should be subject from time to time to the decision of an appropriate tribunal. I venture to say that that is very wise in the interests of the public. Applying the same policy to the London Underground Railways, the Minister of Transport asked that before the companies proceed to charge any part of the increased charging powers which might be fixed by the Committee on the Bill he would be entitled to satisfy himself that that increase was not more than reasonably required for the items referred to in the Instruction. It was not part of the duty of the Committee under the Instruction, nor, indeed, a practical proposition for the Committee, to fix the actual fares, but we laid down a maximum, as we were instructed to do, and that the actual fares at any time necessary to make working expenses reasonable, maintenance and renewal expenses and return on capital should be fixed by the Ministry of Transport. I think the House will agree that it is his duty to do so. A Clause is therefore inserted into the Bill to restrict the company from charging fares which, under the Instruction they would have been entitled to charge, that is, the maximum. The question we had to decide was, what increased charging power was sufficient, but not more than necessary, to enable the four companies to provide from time to time, in the words of the Instruction, for working expenses and maintenance and renewal of the undertaking and a reasonable return on the capital. The Committee was satisfied beyond question that the increased charging powers in the Bill were not more than were required for that purpose.

Major BARNES

Did the Committee decide what was a reasonable return on existing capital? The hon. Gentleman has told us that 8 per cent. on new capital was decided on.

Mr. GRANT

The Committee laid down no figure as a reasonable return. The view the Committee took, and had to take, was that the companies should not get what they considered unreasonable. I think it is beyond the ability of the most competent of my hon. Friends to lay down at present what may be called a reasonable return or to fix any figure. I think the Committee was more justified in protecting the public against the companies receiving an unreasonable return, and that is the principle we acted upon. The fares for passengers of 1½d. per mile third or ordinary class, and 3d. first class are the actual fares being charged by main lines and suburban companies, fares which it is proposed by the Minister of Transport almost immediately to increase. Those are the maximum fares which were laid down for these London companies. It was also proved to our satisfaction that it would be impracticable to increase long distance fares to the same amount as short distance fares, and I think the London County Council agreed that it would be inexpedient to do so. Lord Ashfield satisfied us that at the outside no greater average increase than 40 per cent. on existing fares could be put into operation. Lord Ashfield submitted to the Committee a Table which the Committee, I claim, were fully justified in accepting. It showed the results to the four companies of the increase of fares for a future year not earlier than 1925—a normal year in the future when arrears had not to be made up. This Table assumed no increase of working expenses between 1920 and 1925 and showed that on this improbable assumption the result in 1925 of such an increase in long distance and short distance fares as would be represented by an over-all average increase of 40 per cent. would produce a net revenue, under the most hopeful conditions, which would not be more than sufficient after meeting working expenses and reasonable maintenance and renewal expenses, to pay a dividend at the rate of 4.9 per cent. on ordinary capital. Any increase of wages or other item of working expenses between 1920 and 1925 would, of course, more or less seriously reduce this narrow margin. The House will, I trust, consider that on such evidence we as a Committee did well in accepting these Amendments, and that instead of violating the instructions of the House we even more fully carried out what the House desired. The distinguished counsel engaged to oppose the Bill did not in their cross-examination shake the evidence, and if a case was to be made, the time to make that case was upstairs in Committee.

Mr. EDWARDS

Is it not a fact that all the counsel acted on the suggestion that as the Minister would fix the fares, it would be a waste of time to go into the question of fares there?

Mr. GRANT

There was no restriction on the Committee to limit any evidence brought before them, and I think my hon. Friend does an injustice to the eminent counsel engaged in suggesting that they were intimidated by any action by even the Minister of Transport.

Mr. EDWARDS

I do not suggest that, but I suggest that the Chairman, by allowing the promoters to proceed with reading the new preamble drafted by the Minister of Transport, put everybody in the position of considering the new Bill on the basis that the Minister was to fix fares and that the Committee should not fix them.

Mr. GRANT

The Committee had to carry out what they considered to be the desire of the House, and I submit that they did so. There was one more Instruction from the House, and that had to do with workmen's fares. If hon. Members will read Sub-section (1) of Clause 8 of the Bill, I think they will see that the instruction of the House was literally carried out with regard to workmen's fares. Thus, 1 think, the House should be satisfied that the Committee complied with the whole of the Instructions of the House and that on the evidence supplied the Committee were well advised in amending the Bill. I must express some astonishment at the action of my hon. Friends who desire to re-commit the Bill. and I again say that I do not think they can have fully appreciated the exact position. I think I may say quite frankly that all the Amendments, so far as they stand at the present moment, are in the interests of the travelling public, and that is surely what the House desires. We delegated to the Ministry powers to control from time to time actual fares, and it is suggested that in that way the House has lost its hold in regard to fares. In the first place, we were not instructed to lay down actual fares, but only maxima, which we did; and secondly, the Minister, who will control the actual fares, is in a sense a servant of the House. His actions can be questioned and controlled, and in that way the House holds a more stringent control over fares than it did when the Bill was in Committee.

We have laid down our maxima fares, and we still have a representative who can control actual fares, and so I say the Bill is stronger in the sense the House desired it to be than it was on Second Reading.

There is another point on which I desire to say a word or two, namely, the intervention of my right hon. Friend the Minister of Transport. His suggestions were of such a substantial character as to be unusual, if not unprecedented, in such circumstances and at such a stage of the Bill, and the Committee, as representing this House, rightly or wrongly, felt it their duty to comment on this action of the Minister, but their comment was on the matter of procedure, and not on the substance of the Minister's proposals. We were satisfied that his proposals did not violate the instructions of the House, or the desire of the House in regard to the Bill. On the contrary, we did not question that he acted so far as he could to assist the Committee, and that he acted wholly in the interests of the travelling public. We merely stated our opinion that the Minister should have put his concrete proposals before the House on Second Reading, rather than in Committee; it was purely a matter of procedure. A great deal of notice has been taken of this incident. I hold no brief for my right hon. Friend, but I must say that I think he has in this matter been somewhat unfairly dealt with. My right hon. Friend has recently been an object of criticism, and the House well knows that when a man is under criticism, a mere mole-hill of alleged indiscretion may very often be turned into a mountain of iniquity. I repeat that the action of the right hon. Gentleman has been made too much of, and I think it would be a grave injustice if this incident should in any way prejudice the just claim of these public utility companies, who are carrying on their shoulders this vast burden of passenger traffic in our metropolis. The House has before it two alternatives. At present we are subsidising these companies, and we have a Bill to do away with these subsidies by increasing the fares. I think that as soon as we can, we ought to do away with subsidies, and I hope in the first place that the Amendment will not be pressed to a Division, but, if it is, I hope the House will see to it that this Bill goes through its Third Reading. By so doing, they will not only benefit the travelling public, but carry out the wishes of the House expressed on Second Reading.

The CHAIRMAN of WAYS and MEANS (Mr. Whitley)

As the House will probably expect me to say a few words in connection with this Bill, what I have to say will be entirely confined to the question of Procedure, and will not deal with the merits of the Bill. The House is entitled to review the decisions of its Committees on matters of this kind, but I heard as Chairman of Ways and Means, some little time ago, that questions had been raised as to the correctness of the procedure in the Committee upstairs. I think it is, therefore, incumbent upon me to say that, having followed the proceedings of the Committee while they were going on, and again examined the Report of their proceedings, I am clearly of opinion that the Committee and its Chairman acted in every way in accordance with our proper Procedure. I do not think any suggestion of favour on their part can be maintained. The only other point on which I shall say a few sentences is with regard to the action of the Ministry in presenting a Report to the Committee at so late a time, I think on the day—was it not?— when the Committee met to consider the Bill. That may have been unfortunate, but it clearly was the duty of the Minister to present at any stage a Report which conveyed his representations to the Committee. But let it be always understood that this Committee and all other Committees of our House have an independent duty. It is their duty, it is true, to consider—and consider carefully—any recommendation made by a Minister from his Department, but it is their duty to use their independent judgment on that recommendation, and to accept it if they think it is the right one, and, if they fail to accept it, to make a proper Report to the House of their reasons why they have not done so. In both those respects I think the procedure in this matter has not been one of which complaint may be made. As to the merits of the Bill, as amended, I do not express an opinion.

Sir HERBERT NIELD

We have just listened to some weighty words from the Chairman of Ways and Means, but, although I think he may be accurate in the way in which he has described the functions of a Committee upstairs in relation to the Ministries who have to present their reports on Private Bill legislation, he has not done justice to the particular circumstances of this case, because this House, by a most determined Instruction, accepted by the Minister at the time, did undertake that these specific matters should be dealt with by the Committee. It is an extraordinary thing that not only was this Instruction imposed upon this Bill, but it was moved by myself, and accepted by the Minister, in relation to the London United Tramways Bill and the Metropolitan Electric Tramways Bill. Now both those Bills have disappeared, and for the reason that the Ministry, exercising the powers given under the Temporary Powers Act to increase fares, have sufficiently satisfied those companies, that their Bill has been withdrawn. And yet we are told—and we find it upon the Notes—that when the Committee met for the first time, the Promoters were aghast at the Report which was presented by the Ministry, and were at a loss to know what to do, and asked for an adjournment for a considerable time in order to consider their position. When the Bill was opened, the leading counsel for the promoters was bound to admit that the proposals which were then before them, which he read in detail, were totally new proposals, which I gather from the evidence, he said he was bound to accept. Then you come to deal with the explanation which was given by the right hon. Member for Derby, whose name on the back of these Bills certainly arouses a feeling of curiosity, which he amply dispelled, when he said frankly that he regarded the consumer as being the proper person to pay his share in the raising of the railway-men's wages, and we find the right hon. Gentleman is asked in cross-examination, May I ask you, when you say you are supporting the Bill, whether you mean the Bill in its present form or the original Bill? And the answer was: On that, I think it is only fair for me to state that I do not quite follow the action of the Ministry of Transport in this matter. I read carefully the Bill prior to Second Reading, and I knew of the negotiations which were taking place with the London Members, and ultimately agreed with a Clause which was put in with a view to protecting workmen's fares. I also knew what happened on the Second Reading and the statement of the Minister, and I can- not quite understand the reversed policy of the Ministry of Transport. So that we get the right hon. Gentleman for Derby and the other two Gentlemen, one being Lord Ashfield, not only the representative but the mainspring for the promoters, and we have, of course, Sir Wm. Plender supporting his evidence. When you come to the third witness, he expressed amazement that the Bill had been turned inside out by the action of the Minister. Representing as I do a large London constituency, which may not be affected by the Bill, because they are what is termed the long-distance traffic, but representing a London constituency of a very considerable magnitude, I do think it is a most unsatisfactory thing to have happened that at this particular moment of all others, when the Government is being constantly held up as being disposed to support capital against labour, and all sorts of misrepresentations are now being uttered outside, the bulk of which are without foundation, with regard to the attitude of the Government as to these matters. I venture to think that it was the duty of the Chairman of the Committee to refuse to proceed with that Bill without taking the instructions of the House first upon it. Undoubtedly the action of the Ministry has turned the Bill inside out. I am not saying for a moment there is any suggestion as to collusion between the promoters and the Minister. It is perfectly plain upon the evidence that the promoters were taken by surprise when the Committee met for the first time, and were very seriously concerned about the fortunes of their Bill if the Report of the Ministry was to have full effect given to it. I think that there is one way to try to cure this unfortunate condition of things. It is necessary to recommit the Bill for the purpose of inserting in the New Clause 6, second paragraph, the same direction which was included in the instruction, so that before the Ministry of Transport approves of and makes any Order increasing the amount of fares up to the maximum which are authorised, the Rates Advisory Committee, to which the matter has been referred, shall be compelled to take into consideration those special matters which are dealt with in the Instruction of this House. That is the only way to try to put right what I regard as a most unfortunate blunder which has left the House open, in connection with the Committee, to the suggestion that the Committee had been overawed by the Minister.

These are days where we are suffering very keenly from bureaucracy. The House is, I believe, in a temper to resist any further inroads on its privileges by the Minister. I do not say the Ministry have done this intentionally. It is a new broom. Probably it has over-estimated its powers. Probably it does not realise that in dealing with this House it must have regard to the constitutional usages of this House, seeing that this House is the guardian of the liberties of the people. I venture to hope that the Minister will see his way to allow the Bill to be re-committed for the purpose of including those words: that the scale of fares be fixed so as to provide for working expenses, efficient maintenance, and reasonable return on capital." I am not prepared to say whether the 8 per cent. on the new capital or the 4.9 per cent. on the old capital is right or wrong. As I understand the hon. Member for East Ham makes a definite statement, which he has made before in this House on the Second reading, that the capital is not really live capital, but capital upon which dividend ought not to be paid, because it has long since ceased to exist, and the circumstances make it improper that the undertaking should be burdened with that, which, in point of view, is not living capital. That is the allegation which is made, I understand, and I think we owe it to the constituents we represent to take care that matters of this sort—whatever the thing is—are looked into. For they are carefully scrutinised by the public outside. I assure the House that the public are already very bitterly complaining, and there is the rumble of thunder in the distance about the increase of the family fares. Tram undertakings which have been able to raise their fares are already beginning to feel that the fares have gone to breaking point, and so are producing a reduction in the passengers carried. In the end the concern is little better off, if better off at all. This House ought carefully, and I trust with the goodwill of the Minister, to do everything we can to remove the impression that is abroad that there is any attempt or desire to take from the public more than is absolutely necessary owing to the exigencies of the moment. Unless something of this sort is done in the re-commital of the Bill for the purpose of effectively carrying out what we think is desirable in this matter, I am afraid the situation, bad as it is, will rapidly become worse.

Mr. KENNEDY JONES

I agree with my hon. and learned Friend, the Member for Ealing (Sir H. Nield), despite the statement of the Chairman of Ways and Means, and despite the very elaborate apology of the Chairman of the Committee. I agree that they have not carried out the Instruction which this House gave, based on a recommendation contained in the Report of the Advisory Committee over which I presided. By the way, it must interest the House to know that there were two prominent members of the Ministry of Transport members of that Committee. We discussed these questions: What was the capital of the companies promoting this Bill? What rate of remuneration should be considered as reasonable? What was the percentage of fares necessary to place these undertakings on a sound working basis? In discussing the question as to where these very important points were to be settled, we came unanimously to the conclusion that the best authority, and the most impartial, to decide these points would be a Private Bill Committee of this House. We did that for this reason: The Transport Ministry said, We may be prejudiced, and we may be fighting like cat and dog, the owners of these properties; we had better, therefore, have impartial people who will hear both sides, and impartial people to whom we can lend the whole of our Accountancy Department to inquire into the figures of the concern; we will then be able to arrive at what we agree is a very necessary decision, and arrive at it, possibly, in complete harmony. That was why this instruction to the Private Bill Committee came to be drawn up on the Second Reading of the Bill.

I venture to say that there would have been no Second Reading of this—not this Bill, but the other Bill—if it had not been that there was unanimously an agreement between the promoters and the London Members that these matters would be gone into by a Committee, and that that Committee would answer such questions as: How much watered capital is there in these undertakings? What is the actual market value of all stocks and shares as against the face value? What is a reasonable return on the capital? And so on. I have read the whole of the evidence given before the Committee. There were only three witnesses called. There was Lord Ashfield, and Sir Wm. Plender, who both represented the same interests, and the right hon. Gentleman the Member for Derby who merely came to say that he was surprised at the change of front on the part of the Minister of Transport. This was the searching inquiry in which Lord Ashfield and his accountant were witnesses! The Committee has failed the House, in my judgment, on all these points. Let the Committee remember that Lord Ashfield and the members of what is colloquially called the Combine, have always maintained that they are entitled to a reasonable return on the whole of their investments at their face value which, they say, represents the most favourable terms on which the capital could have been raised. At one time during the proceedings of the Advisory Committee that view was not held by the Ministry of Transport, because this opinion was given by the head of the Finance Department to my right hon. Friend, and it is set forth in his report, which is attached to the Advisory Committee's Report on London Traffic. He says this: "The nominal value of the stocks include large amounts not represented by money payments to the companies, but if stock is issued at a discount for stock or exchanged for work done on a basis of the then market value, it may be questioned whether such stocks are entitled to rank to the same extent as stocks issued at par for cash."

10.0 P.M.

I wonder whether my right hon. Friend thinks so now, and, if so, why he supports this Bill. I am going to inform the House what Lord Ashfield and his friends get under this Bill. At the present moment in connection with those promoting this Bill the rate of fares per mile is .74d., and under the arrangement of the Bill the company propose to add 40 per cent. They have permission to do that, and this brings it up to 1.04d. against .55d. in 1913. Under this arrangement, by this Bill they have, as against the 1913 fares, which were a halfpenny per mile, the right to raise the fares to 1.04d. per mile. The result of the 40 per cent. increase fares and 20 per cent. increase on the traffic, which Lord Ashfield admits is likely this year to yield £6,629,000 in connection with these railways. It is esti- mated that when you have deducted all, the increased costs and allowances you will leave a net balance of £2,639,000, which, after deducting charges for rentals, reserves, and renewals, will leave £840,000 for the ordinary stocks and shares for dividends, or 4.9 per cent. on the ordinary stocks at their face value.

I looked up to-day the price on the market of the Metropolitan District Railway Ordinary stock, and I found that you could buy it between 14¼ and 15. if you are going to create a revenue under this Bill, which is going to provide nearly 5 per cent. on a £100 stock for which you pay about 14½, you are going to create a very nice speculative condition of affairs on the Stock Exchange. Sir William Plender said that he did not care what amount the value was, as he only took the face value of stock. In the present condition of railway finance, this will create a most grave precedent, because if you are going to pay at a rate of 5 per cent. on the face value of all the Ordinary stocks of these railway companies, how can you refuse it in the case of the smaller non-paying railways which, under the scheme of my right hon. Friend the Minister of Transport, are going to be amalgamated with the other main lines?

There is one other point in connection with this matter, and it is that this Bill, which is supposed to be promoted by four companies, really represents a combine which embraces 17 companies. When you come to the companies promoting this Bill you find that the London Electric Railway Company include the Metropolitan District Railway, and you find that includes 10 other companies which have all been amalgamated between 1910 and 1912, and by an Act of Parliament passed in 1915 the London Electric Railway Companies' Facilities Act provides for a common pool. So that you are really considering a measure which is a combine Bill, and the increase of fares under this Bill is going into a fund which is distributed in such proportions as the directors of the controlling company direct, because there is in all these great financial amalgamations a holding company, and that in this case is the Underground Electric Railway Company. It can distribute the pool in such proportions as the directors agree, and agreement as between the operating and controlling companies is very easy, because the directors of the controlling company are in nearly every case directors of the operating company. There are four of these gentlemen: Lord Ashfield himself is not only a director of the controlling company, but he is a director of six other companies. A gentleman named Mr. W. A. Burton is a director of nine companies, Mr. W. M. Acworth is a director of five companies, and Mr. H. A. Vernet, the Paper Controller during the War, is also a director of five companies. This pool is under the control of the holding company, which is associated by reason of the 1915 Act with the omnibus companies, and when you get the fares under this Bill, which will give a return of 5 per cent. upon ordinary stock, some of which to-day is not even quoted on the market, you will find that these men in the controlling company, who pull the strings, will sympathetically raise the omnibus and tram-ways fares and will gather in extra profits for the Pool. I have gone into this question on two successive Committees. A Select Committee of this House, after hearing extensive evidence on the matter of the finances of the Combine, a Committee composed of Unionist, Liberal, and Labour Members, unanimously agreed that, before this Combine was allowed to fasten its tentacles on London, there would have to be the strictest and closest investigation into its finances. That was repeated by the Advisory Committee appointed by my right hon. Friend, a Committee over which I presided, and on that Committee were two of his prominent directors. They agreed that this House, through a Private Bill Committee, should closely investigate the whole question of capital, should decide upon its value and upon what was a reasonable return upon it, and should also decide upon the fares. I associate myself with those who wish to see this Bill re-committed, because I claim that the Committee to which it was sent has failed in its duty to this House.

Sir WILLIAM BULL

It will be within the recollection of the House that it was I who moved the Instruction in this matter, and Lord Ashfield called upon me yesterday, and asked me whether I would put before the House his view of the case. He explained to me that, of course, the Combine had no representative in this House, and their side of the story had not been told. He therefore appealed to me, as the Mover of this Instruction, to say a few words on his behalf, and I consented to do so, in the interest of fair play; and I thought, of course, that the House would like to hear his side of the story.

Mr. A. SHORT

On a point of Order. Is it competent for a Member of this House to speak on behalf of one individual, rather than on behalf of his constituency?

Mr. DEPUTY-SPEAKER (Sir E. Cornwall)

The right hon. Gentleman is quite in Order.

Sir W. BULL

Lord Ashfield is very anxious to put himself right with the London Members, of whom I happen to be one of the secretaries, and therefore he asked me to make a short statement in regard to him, and I, in my discretion, thought that I was justified in doing so. At the interviews between Lord Ashfield and the London Members he agreed to accept the instruction which was afterwards adopted by the House of Commons, and also intimated his intention of reducing the proposed powers of charge to per mile on third or ordinary class, and 3d. per mile on first-class. When the Bill was submitted to the Select Committee, presided over by the hon. Member for Whitehaven (Mr. Grant), the proposed charging powers were reduced as promised by Lord Ash-field. Workmen's fares were also reduced, in accordance with the Instruction, to the amount for the single ordinary fare for the return journey, with a minimum of 3d. I may tell the House that four meetings of the London Members were held prior to the meeting of the Committee. Lord Ashfield also wishes me to make it clear that the Report of the Minister of Transport was, of course, made by the Minister without any prior consultation with the four companies, and, coming, as it did, only a day or two before the date announced for the meeting of the Committee, the leading counsel for the promoters was instructed to ask for an adjournment, in order that they might see whether giving effect to the Report involved any departure from the agreement come to with the London Members and the undertaking given by Lord Ashfield, so that, in that event, Lord Ashfield might have an opportunity of meeting the London Members, if he were so advised. He did not want to consent to anything sprung upon him by the Minister of Transport without first consulting the London Members, if he thought fit.

The adjourned hearing commenced on the 8th June. Shortly before that date the Minister of Transport made another report, and annexed to it Clauses which he asked should be inserted in the Bill. to give effect to the general terms of his former report. The four companies accordingly amended their Bill by introducing into it the Clauses of the Minister, and in that form it was resubmitted to the Committee. Lord Ashfield would like it to be made clear that the Bill in its amended form made all increases of fares subject to the limitations contained in the Instruction of the House of Commons, namely, that the excess of the new charging powers over the existing charging powers should not be more than was required to meet the working expenses, reasonable expenses of maintenance and renewals, and a reasonable return on capital. The effect of the Minister's Clauses was to ensure that the companies did not benefit from the increased charging powers beyond what the Instruction of the House of Commons provided. If by any chance the companies' expenses should be less than is now expected, the Minister will be authorised to interfere and demand that the fares shall be reduced, if the revenue of the companies is in excess of what the Instruction requires. As the Bill, when amended by the insertion of the Minister's Clauses, in no way exceeded the limitations contained in the Instruction agreed to between Lord Ash-field and the London Members, Lord Ashfield did not think it necessary again to consult the London Members. He recognises the great interest which the London Members attach to this important matter, and intends to adhere to his undertaking to consult the London Members when the increased fares are put into operation. He promised that in the Committee room, and he now repeats it here, so that they may be apprised of the exact result of any increase in fares. They will thus be kept in close touch with the situation as it develops, and this will again ensure that excessive fares are not being charged. It is important to emphasise the fact that the four companies have maintained as a standard to apply to any increased fares, that which was fixed by the London members and Lord Ashfield, namely, that the revenue to be derived therefrom should not be more than sufficient to pay working expenses, reasonable expenses of maintenance and renewals, and a reasonable return on capital. This standard has been definitely inserted in the Bill as the governing condition, and is in no way whatever affected or enlarged by the Clauses inserted at the instance of the Minister of Transport. In anticipation of obtaining the increased charging powers provided for in the Bill, the four companies have already increased the wages of their railwaymen, in accordance with the national settlements, for the purpose of avoiding serious railway trouble throughout the country, and partly as a result of so doing, they are not now earning their actual expenses.

That is practically the statement of Lord Ashfield in explanation of his part in the matter. What he was very anxious to have made clear is that he has not broken faith with the London Members in any way and has strictly kept to the terms of the agreement. Our private Bill legislation has grown up, of course, through many centuries, and it would be very serious indeed if it was thought by any section of the House that that legislation had been interfered with in any way. When you think that 150 or 200 Bills practically go through the House every year and the House itself has very little to do with them from start to finish because they have such great faith and trust in these Committees, it would be a serious interference and would also break down the rules and regulations if by any chance we thought these Committees had been interfered with. I think they thought the Minister of Transport —I am speaking frankly in his presence—had acted unwarrantably and unfairly in going to the Committee and in a jackbooted manner insisted on certain Clauses being inserted in the Bill. We London Members—and I think I speak on behalf of the majority of them—felt it very keenly. We felt that he, a somewhat new Member, had interfered with an age-long legislation, had cut across our usual Procedure and made a serious inroad with the rights and privileges of Committees. That is the reason why the London Members took it up so strongly. You heard the explanation of the Chairman of the Committee and also one or two Members who have spoken, and, of course, it is for the House to judge as to whether the Minister of Transport did or did not exceed his duty in the way he put the case before the Committee. I cannot help thinking the hon. Member (Mr. Grant) in his report did not quite make clear the point. Having heard the Debate and having listened impartially to the statements on one side and the other, I think the Committee honestly and fairly did its best to carry out the instructions which the House passed. The Minutes of Evidence, a thick book, shows that they went very closely into the matter. It was not for the Chairman to call evidence. Evidence was to be called either on one side or on the other. The only evidence was that called by the very active and pertinacious railway combine, and they called their Chairman, their accountant, and the right hon. Gentleman representing Labour; but to my surprise no one tendered evidence from the other side or came forward to support evidence given by those three.

That is the whole story of the case. The House will have to judge whether they are satisfied with the Report of the Chairman of the Committee or not. I thought it only fair and right that I should read the statement of Lord Ash-field showing that, at any rate, he had not broken faith with the London Members, and I am sure the House will appreciate that. It was the action of the Minister of Transport in charging into the Committee upstairs that has caused all the trouble. But for that the whole thing would have gone through Committee, and the House would have accepted their Report without any question. It was the suspicion that the Minister of Transport had rather tried to bully the Committee that has caused the trouble. We have had a statement which I think would satisfy the House that the Committee did its duty. I should be sorry to think that our Private Bill Procedure, which is the admiration of the other legislatures of the world, should be thought for one moment to be susceptible to domination or terrorism even by so formidable a Minister as the Minister of Transport.

Lieut.-Colonel Sir F. HALL

I am in rather a peculiar position, because I am not accustomed to make personal explanations; but it is incumbent on me as one of those responsible for sending out whips to the London Members. The London Members meet regularly to con- sider matters applicable to London, and we thought that the Bill as it was sent to the Committee had been dealt with in a rather extraordinary manner. I feel greatly indebted to my hon. Friend (Mr. Gilbert) for bringing this matter forward, but, after having heard the explanations that have been given, and particularly the statement of the Chairman of Ways and Means, that the whole procedure had been carried out in accordance with the usage and practice of this House, it is hardly advisable for us to continue further opposition. At any rate, so far as I am concerned, I shall vote for the Bill. I have the pluck to come to this House and say I was under a misapprehension. It is only fair that I should do so. We London Members had Lord Ashfield down to see us on several occasions, and we discussed the matter very fully and very freely, and we were unanimously of opinion that the investors should be paid a reasonable return on their money, otherwise it would be impossible to get money to carry out these gigantic undertakings, and if the money is not forthcoming the people of London will suffer.

The MINISTER of TRANSPORT (Sir E. Geddes)

I have intervened at this stage because a good deal has been said—I do not quite understand the reason for some of it—about the action of the Ministry of Transport. I will avoid, as far as possible, covering the ground dealt with by the hon. Member for Cumberland (Mr. Grant) and the hon. Member for Hammersmith (Sir W. Bull), but I will ask the House to bear with me while I explain the action of the Minister of Transport in this matter. The report that was put in in accordance with the usual practice, I am told, was rather less formal and more detailed than is usual, and that as Members of the Committee have told me was better appreciated. Throughout its terms it bears upon it the fact that the Instructions of the House to the Committee were present to the minds of the draughtsmen, and over and over again the words are repeated, if certain fares could be effected consistently with securing the limitation imposed by the Instruction or if the Committee consider that an actual increase in conformity with the Instruction or to enable an actual increase to be laid down in accordance with the Instructions". Throughout the whole report that one principle is outstanding. The words of the report are merely suggestions, but it is repeated over and over again that they are suggestions for the Committee to carry out in accordance with the Instructions received from the House.

The hon. Member for Whitehaven (Mr. Grant) referred to the difficulty which confronted the Committee and the Ministry of Transport when after the Second Reading of the Bill they had an opportunity of considering the instruction. It has been said that the Ministry of Transport should have raised these points on the Second Reading. The instruction which the House passed was agreed with out in any way the intervention of or consultation with the Ministry of Transport between, I believe, the London Members and the promoters on the day before the Second Reading, and neither the Minister of Transport nor the officials of the Ministry ever saw that Report until the day of the Second Reading. That was hardly the time to have come to a decision on a carefully prepared Report. It would have been unreasonable to expect it. What we found when we came to consider carefully the instruction which the House gave was that it was almost impossible to carry it out. The instruction is so as to provide that the maximum powers of charging in excess of fares which the Companies are now authorised to charge shall not be more than are required to provide from time to time for working expenses. That implies the use of maximum powers as an actuality.

I ask the House to consider what the Ministry of Transport did report. In no case did the Ministry of Transport recommend the Committee to do anything out of keeping with the instructions of the House. What it did was this. It said, There are two points. The first is that the future policy of railways is under consideration. Therefore it would be, in the opinion of the Ministry, and it is suggested to the Committee for their consideration, inadvisable, having regard to the position of all the other railways in the combine, to fix permanent maxima. Therefore it was recommended that there should be temporary maxima. The House will agree that it would be imprudent at present to set a standard, with prices as high as they are, of maxima which might have been put on, and would have been put on, for the whole country, if passed. The suggestion to the Committee was for one purpose, and that was to safeguard the travelling public and prevent a high standard being set. The second point was this: We put it to the Committee that there was this difficulty about fixing maxima when you had the word "from time to time" attached to the instructions. As has been pointed out, first by the Chairman of the Committee, and, secondly, by the Chairman of Ways and Means in his observation to the House on points of order raised, the Committee is master in its own house.

If any hon. Member desires it, I should be glad to supply him with a file of my Report. He will see that throughout, the two principles, the two points of view I have mentioned, are adhered to, and that they were by no means domineering instructions. The other point was that everything they did must be in conformity with the Instructions of the House. What I said to the Committee was this: To fix maxima from time to time is a task which you cannot really undertake. Fix maxima in accordance with the instructions given by the House, and if those maxima are higher than at the present time, give me an opportunity, with the Rates Advisory Committee—that again is an independent body created by Statute, with a King's Counsel of very great eminence sitting in the Chair and with independent members appointed, not by me, but from outside—give the Committee the right, within the maxima which you fix in conformity with the Instructions of the House, to consider any fares, any schedules which the management of these undertakings desire, and then these maxima shall be fixed upon the recommendation of the Committee. Again, it was purely with the object of safeguarding the users of the railway, not in order to get any higher rates, but to ensure that when the maxima were fixed, which it was believed would bring the return desired by the House, there should be the additional safeguard, that in the changed conditions during the five years when they have these temporary powers—made temporary on my suggestion—even then it had to go to the Advisory Committee to say whether from time to time, in conformity with the Instructions of the House, those fares were sufficiently high or not. Those were the two points I put before the Private Bill Committee. Upon those points they acted, and I submit to the House that my action was safeguarding those who used the undertaking and was in conformity with the best practice and with the wishes of the House. When my report went to the Committee who objected? The promoters. They said: "This is a very serious thing. Give us time to think it over." There was an adjournment. They said, quite rightly, that they would have to consult the London Members with whom they had negotiated before, and when they realised what the Report was, that the recommendations were in each case taking something from them and not giving them anything, they came back to the Committee, and Counsel for them said: "Beggars cannot be choosers. This is more than we thought, but we have to take it." What did the Opposition do? I have gone through the evidence. There is not one single case in which they objected to what was recommended. Indeed, they went further.

Sir H. NIELD

The representative of the London County Council did more than once object to the thing being, as he termed it, "turned inside out."

Sir E. GEDDES

My hon. and learned Friend says that is so. I say there was no objection taken to the recommendations I made. He may have objected to the way it was done or to the time when it was done, but in no case did the opponents say, "We object to this because it is giving too much to the promoters."

Mr. C. EDWARDS

The Committee had already accepted the preamble you had dictated to the promoters, and, therefore, the Committee were dealing, not with the Bill sent from here, upon which objection might have been raised, but with an entirely new Bill.

Sir E. GEDDES

I was not present at the proceedings of the Committee and the Chairman must be left to speak for himself. I believe that I am right in saying that in no single case was there any objection taken to the recommendations that I made and were in favour and in protection of the users of the railways. Therefore, I think that the Ministry was justified in the action which it took. In no case did it try to force conditions on the Committee, and the suggestions put forward were in conformity with the wishes of this House and in both cases were against the promoters and in favour of the users of the railways.

Sir ERNEST WILD

I am one of the few who voted against the Second Reading of this Bill, and, if necessary, I shall vote against the Third Reading or in favour of the re-committal. I do want, however, to be fair to the Minister of Transport, and, having read with some care most of the proceedings before the Committee and having read the Bill which is now down for Third Reading, I do think that the Minister of Transport has succeeded in getting the Committee upstairs to pass a better Bill than the entirely different Bill that was given the Second Reading in this House. Clause 6, which subjects the new fares other than the workmen's fares which are dealt with in accordance with the instruction of the House, is a distinct improvement on any of the Clauses that occurred in the Bill as it left the House on the Second Reading. Quite clearly, as my right hon. Friend has said, the promoters of the Bill were entirely dissatisfied with the Report of the Minister of Transport, because Mr. Honoratus Lloyd, when the Bill was before the Committee on 11th May for the first time, said that the Report left him absolutely astounded, and that he did not know where he was. I know my learned Friend pretty well, and I know that a Report which left him absolutely astounded and not knowing where he was, must have been of a very potent character. The consequence was, that there was a considerable period of time from 11th May to 8th June for the promoters to make up their minds what they would do. They then came before the Committee presided over by my hon. Friend the Member for Whitehaven (Mr. Grant). I do not think anybody in the course of this Debate has sought to cast the slightest aspersion upon the way in which he and his colleagues conducted the affairs of the Committee, nor has anyone sought to do so upon Lord Ashfield, for whom my right hon. Friend the Member for Hammersmith (Sir W. Bull) has acted as spokesman in this House. When the promoters came before the Committee on the second occasion, they read this Report from the Minister of Transport. There is one phrase which is really at the root of this proposition. The Minister said: The Committee will observe that, while in terms the Instruction relates to maximum fares and charges, the limitations appear to involve a consideration of the actual fares which the companies concerned may charge in order to provide a revenue not more than sufficient to meet the prescribed conditions, including a reasonable return upon capital. The Report then goes on to say: That would involve a lengthy and most intricate inquiry, which would raise questions such as the amount of composition of the capital, the rate of return to be allowed on present and future capital, and so on. My recollection, which has been fortified by reading the OFFICIAL REPORT of the Debate upon the Second Reading, is that that was the very thing that this House decided should be gone into by the Committee. I am not at all certain that the Minister of Transport is not much more competent to do this from time to time than the Committee, but if you read the Report of the Second Reading Debate it is perfectly clear that that was the proposition that the Committee should consider the allegation that there was some sort of watered capital, or, to use an unparliamentary expression, some sort of hanky panky, behind the whole thing. I do not believe those allegations. I think even if there was a certain element of reality in them that they are grossly exaggerated.

Sir E. GEDDES

The paragraph which my hon. and learned Friend has quoted from the Report of the Minister in no single word suggests that that inquiry, which on the Second Reading of the Bill I said I desired, should not take place. That paragraph was understood by those who read it as merely intended to point out, possibly superfluously, to the Committee that the matters involved were of great difficulty, but it was not suggested that the Committee should not go into them.

Sir E. WILD

I cannot agree, because the right hon. Gentleman said: The Committee will observe that, while in terms the Instruction relates to maximum fares and charges, the limitations appear to involve the consideration of actual fares which the companies are to charge. The Report then proceeds to argue the question, and says that that consideration could not be given without an inquiry of a lengthy and most intricate character, which would raise questions of great complexity. That is, that the consideration which the House instructed the Committee to give was one of difficulty and involved questions of great complexty, "such as, for instance, the amount and composition of the capital." Really, it is difficult to understand how that could raise any very great question of difficulty. Then there is the return to be allowed on capital, which is also elementary. And there was also the question: "Whether or not any particular scale of charges would, in practice, produce more or less than the necessary revenue."

Mr. GRANT

Does the hon. and learned Gentleman suggest that the Committee did not inquire?

Sir E. WILD

I suggest that the inquiry was not the inquiry which would have taken place had it not been for the intervention of the Minister of Transport. Nobody can read this Report without seeing that the whole trend of the inquiry was deflected by the intervention of the Minister. May I remind the House that this has been a mutual admiration society, even joined in by the hon. Member for Dulwich (Sir F. Hall), who came to curse and remained to bless. May I remind the Chairman of the Committee of his own words? The House imagined that this exhaustive inquiry would take days, and perhaps weeks, but the whole thing was over in three or four days, and the exhaustive inquiry consisted of the not unprejudiced evidence of Lord Ashfield, the Chairman of the promoters, of a very admirable expert on behalf of the promoters, and of their temporary ally, the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas). If the House had imagined that that would constitute the exhaustive inquiry, the Bill would never have got a Second Reading. When the hon. Member for Whitehaven announced the decision of the Committee with regard to the preamble, he said: The Committee find the preamble proved as it now stands. We desire, however, to express some surprise at the action of the Minister in suggesting to us in a memorandum considerable alterations in the Bill as passed by the House of Commons on Second Reading and apparently at the time accepted by him. It would have been, in the opinion of the Committee, more suitable if the Minister could have indicated to the House at the time of the Second Reading the views he ultimately put before us. To my, perhaps untutored, mind that weighs a great deal more than any technical decision about Procedure, that the Minister, by the admission of the Chairman of the Committee, had put forward in this Memorandum alterations in the Bill as passed by the House of Commons. Those were the words of my hon. Friend—and very proper words too—spoken on the 10th June, and they were different words, because it was suggested in the course of the Debate on the Second Reading that the Minister of Transport might look into this matter himself, and this is what he said: Frankly, I did not want to act in an arbitrary way in this matter. I wanted to get help and consideration, and where can I get better consideration than from a Committee of the House of Commons."—[OFFICIAL REPORT, 25th March, 1920, Col. 742, Vol. 127.] Then, having got that consideration, he, possibly rightly—that is not the point before the House—came to the conclusion that it was much more appropriate that this matter should be considered by the Ministry from time to time. I think he is right, but I think he did the right thing in the wrong way, and the question is, Is this House going to be treated like this? I have tried to state that if I were making a mere advocate's speech I should not admit that I think that in all probability my right hon. Friend would be able to decide this matter better than a Committee, but surely there is a very grave question of constitutional practice involved in the action of the Ministry in the matter. It does not matter whether technically the Bill is properly before us or not; we did decide that these matters were to be exhaustively considered by the Committee, and they have not been. The Committee had before them the attitude of the Minister of Transport, they had his Report; the promoters had that Report put at their heads, and they went away and sat upon it for a month, and then the promoters came and ate the leek. They said, "Beggars must not be choosers, and in these circumstances we will accept, because we cannot help ourselves." I think my right hon. Friend has really rendered a service to the country if this Bill is to be passed, but I contend that he has done it altogether in the wrong way. That is the whole position. I do not mean to argue the general question tonight, but there is no doubt that there is a very strong feeling in London with regard to this matter. Nobody wants to deny to this undertaking, or to any other undertaking, a proper return on capital. No one wants to say the shareholders are not entitled to reasonable dividends, and I do not think whether it very much matters whether they get their capital at a 16 per cent. discount; but we do want the whole matter seriously considered. We do want to convince the public that there is nothing behind this matter, and I do respectfully suggest that perhaps my right hon. Friend, whose ability nobody doubts, is a little bit too much accustomed to dealing with shareholders, and it is a matter of importance, after the House has given a Second Reading on one condition, and that is not complied with in spirit, although it may have been in letter, that this House should refuse a Third Reading until the Bill has been re-committed. This is a matter for which London Members are responsible to their constituents, and I think it is most incredible that the Government should put on Whips in regard to a matter which is entirely one of Private Bill legislation. Whether the Government put on Whips or not, I feel that the Minister of Transport has done the right thing in the wrong way, and I think it is time that he and every other bureaucratic Minister should be taught that the House of Commons is master of its own house. Therefore, if there is a Division, Whips or no Whips, I shall vote against the Third Reading.

Mr. KILEY

I must confess to a little regret that the name of Lord Ashfield has been drawn into the discussion at all. There has been no breach of faith so far as Lord Ashfield is concerned. He has met the London Members and fully and frankly explained his position. The trouble, as I understand, has arisen through the Committee not carrying out the Instruction to ascertain what increase of fares was necessary in order to enable the underground companies to carry on their business consistently with giving a return to the shareholders. Has that been done or not? is the question at issue, and that, I confess, I still find myself in considerable doubt about. I am not satisfied that has been done, although, no doubt, the intervention of the Minister of Transport has been done in perfect good faith and with the object of protecting the railway passenger. But it is to be regretted that the Committee did not carry out Instructions which were given them, and therefore if this matter goes to a Division, I feel bound to express my regret in a practical way that the Committee did not adhere to their Instruction. Had they done so, we should have been spared this Debate to-night.

Mr. PALMER

The Debate we have had should convince the right hon. Gentleman the Minister of Transport that, after all, the House of Commons is a place that even a superman must respect. The Instruction was sent from this House to the Committee upstairs, and the right hon. Gentleman tried to ride roughshod over it. I find a complacent Committee, with a very complacent Chairman who has come here to-night with the sole object of defending himself and the Ministry of Transport. The hon. Gentleman the Member for Hammersmith made a great deal of the amount of evidence that was taken. I have some knowledge of Committees and more perfunctory sittings I cannot imagine than are shown in the Report which I have before me. Two of the witnesses were associated with the company, and the third, the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas) actually came before that Committee not caring two pence about the poor of London—[Hon. MEMBERS: "No, No!"]—and those unfortunate people the middle classes, who have to pay these extra rates, so long as he could get money for the railway workers—

Mr. DEPUTY - SPEAKER (Mr. Whitley)

The hon. Gentleman must not impute motives to an hon. Member of this House.

Mr. PALMER

I beg your pardon if I have transgressed the rules. The Bill has not been properly considered. The Instruction of the House was wholly ignored by the late Committee, and if the House allows that sort of thing to happen we will never know whether or not an Instruction of the House will be carried out. [HON. MEMBERS: "Divide, divide!"] I have come down here tonight to speak at the invitation of the hon. Gentlemen who are now shouting "Divide!" I propose to say what I came to say. I would like to support the suggestion of the hon. and learned Member for Ealing, that is that this Instruction, which has been ignored by the one

Committee, should be sent before the Standing Committee on Rates. I think that would meet very largely the view of the House.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 184; Noes, 92.

Division No. 182.] AYES. [11.0 p.m.
Adair, Rear-Admiral Thomas B. S. Flannery, Sir James Fortescue Ormsby-Gore, Captain Hon. W.
Addison, Rt. Hon. Dr. C. Forrest, Walter Palmer, Brigadier-General G. L.
Agg-Gardner, Sir James Tynte Foxcroft, Captain Charles Talbot Parker, James
Astor, Viscountess Fraser, Major Sir Keith Pownall, Lieut.-Colonel Assheton
Atkey, A. R. Fremantle, Lieut.-Colonel Francis E. Pratt, John William
Baird, John Lawrence Ganzoni, Captain Francis John C. Pretyman, Rt. Hon. Ernest G.
Baldwin, Rt. Hon. Stanley Gardiner, James Pulley, Charles Thornton
Balfour, George (Hampstead) Geddes, Rt. Hon. Sir E. (Camb'dge) Rae, H. Norman
Banbury, Rt. Hon. Sir Frederick G. Gibbs, Colonel George Abraham Randles, Sir John S.
Banner, Sir John S. Harmood- Gilmour, Lieut.-Colonel John Raw, Lieutenant-Colonel N.
Barnston, Major Harry Glyn, Major Ralph Roberts, Sir S. (Sheffield, Ecclesall)
Bellairs, Commander Carlyon W. Gould, James C. Robinson, Sir T. (Lancs., Stretford)
Benn, Sir A. S. (Plymouth, Drake) Grant, James A. Roundell, Colonel R. F.
Benn, Capt. Sir I. H., Bart. (Gr'nw'h) Greenwood, William (Stockport) Royden, Sir Thomas
Bennett, Thomas Jewell Greig, Colonel James William Royds, Lieut.-Colonel Edmund
Betterton, Henry B. Hacking, Captain Douglas H. Sanders, Colonel Sir Robert A.
Bird, Sir A. (Wolverhampton, West) Hall, Lieut.-Col. Sir F. (Dulwich) Scott, A. M. (Glasgow, Bridgeton)
Blades, Capt. Sir George Rowland Haslam, Lewis Shaw, William T. (Forfar)
Blake, Sir Francis Douglas Hennessy, Major J. R. G. Shortt, Rt. Hon. E. (N'castle-on-T.)
Blane, T. A. Henry, Denis S. (Londonderry, S.) Simm, M. T.
Boles, Lieut.-Colonel D. F. Herbert, Hon. A. (Somerset, Yeovil) Smith, Sir Allan M. (Croydon, South)
Bowles, Colonel H. F. Hinds, John Smith, Harold (Warrington)
Bowyer, Captain G. E. W. Hohler, Gerald Fitzroy Sprot, Colonel Sir Alexander
Bridgeman, William Clive Holbrook, Sir Arthur Richard Stanley, Major H. G. (Preston)
Briggs, Harold Hope, Sir H.(Stirling & Cl'ckm'nn'n,W.) Starkey, Captain John R.
Brown, Captain D. C. Hope, James F. (Sheffield, Central) Steel, Major S. Strang
Bruton, Sir James Hopkinson, A. (Lancaster, Mossley) Stevens, Marshall
Buchanan, Lieut.-Colonel A. L. H. Horne, Sir R. S. (Glasgow, Hillhead) Stewart, Gershom
Buckley, Lieut.-Colonel A. Hotchkin, Captain Stafford Vere Sturrock, J. Leng
Bull, Rt. Hon. Sir William James Hunter, General Sir A. (Lancaster) Sutherland, Sir William
Burdon, Colonel Rowland James, Lieut.-Colonel Hon. Cuthbert Talbot, G. A. (Hemel Hempstead)
Burn, Col. C. R. (Devon, Torquay) Jephcott, A. R. Terrell, Captain R. (Oxford, Henley)
Butcher, Sir John George Jodrell, Neville Paul Townley, Maximilian G.
Campion, Lieut.-Colonel W. R. Johnson, Sir Stanley Turton, E. R.
Carter, R. A. D. Man., Withington) Jones, Sir Edgar R. (Merthyr Tydvil) Vickers, Douglas
Casey, T. W. Jones, Sir Evan (Pembroke) Waddington, R.
Chamberlain, N. (Birm., Ladywood) Jones, J. T. (Carmarthen, Llanelly) Wallace, J.
Clay, Lieut.-Colonel H. H. Spender Joynson-Hicks, Sir William Walters, Sir John Tudor
Clough, Robert Kinloch-Cooke, Sir Clement Ward-Jackson, Major C. L.
Coates, Major Sir Edward F. Lambert, Rt. Hon. George Ward, Col. L. (Kingston-upon-Hull)
Coats, Sir Stuart Lane-Fox, G. R. Warren, Lieut.-Col. Sir Alfred H.
Cobb, Sir Cyril Law, Alfred J. (Rochdale) Wheler, Lieut.-Colonel C. H.
Colvin, Lieut.-Colonel Richard Beale Law, Rt. Hon. A. B. (Glasgow, C.) White, Lieut.-Col. G. D. (Southport)
Coote, Colin Reith (Isle of Ely) Lewis, Rt. Hon. J. H. (Univ., Wales) Whitla, Sir William
Courthope, Major George L. Lewis, T. A. (Glam., Pontypridd) Williams, Lt.-Com. C. (Tavistock)
Craig, Colonel Sir J. (Down, Mid) Lister, Sir R. Ashton Williams, Col. Sir R. (Dorset, W.)
Dalziel, Sir D. (Lambeth, Brixton) McLaren, Hon. H. D. (Leicester) Wills, Lieut.-Colonel Sir Gilbert
Davies, Alfred Thomas (Lincoln) M'Lean, Lieut.-Col. Charles W. W. Wilson, Daniel M. (Down, West)
Davies, Sir Joseph (Chester, Crewe) Mallalieu, F. W. Wilson, Colonel Leslie O. (Reading)
Davison, Sir W. H. (Kensington, S.) Malone, Major P. B. (Tottenham, S.) Wilson, Lieut.-Col. M. J. (Richmond)
Doyle, N. Grattan Marriott, John Arthur Ransome Wilson-Fox, Henry
Du Pre, Colonel William Baring Middlebrook, Sir William Winterton, Major Earl
Edgar, Clifford B. Mildmay, Colonel Rt. Hon. F. B. Wood, Hon. Edward F. L. (Ripon)
Edge, Captain William Montagu, Rt. Hon. E. S. Wood, Sir H. K. (Woolwich, West)
Edwards, Major J. (Aberavon) Moore-Brabazon, Lieut.-Col. J. T. C. Wood, Major S. Hill- (High Peak)
Elliot, Capt. Walter E. (Lanark) Moreing, Captain Algernon H. Worsfold, Dr. T. Cato
Elveden, Viscount Morrison, Hugh Young, Sir Frederick W. (Swindon)
Eyres-Monsell, Commander B. M. Morrison-Bell, Major A. C. Younger, Sir George
Falcon, Captain Michael Mount, William Arthur
Farquharson, Major A. C. Murray, C. D. (Edinburgh) TELLERS FOR THE AYES.—
Fell, Sir Arthur Neal, Arthur Lord E. Talbot and Mr. Dudley Ward.
Finney, Samuel Newman, Sir R. H. S. D. L. (Exeter)
FitzRoy, Captain Hon. E. A. Nicholson, William G. (Petersfield)
NOES.
Acland, Rt. Hon. F. D. Borwick, Major G. O. Cooper, Sir Richard Ashmole
Barnes, Major H. (Newcastle, E.) Breese, Major Charles E. Curzon, Commander Viscount
Bell, Lieut.-Col. W. C. H. (Devizes) Brittain, Sir Harry Davies, A. (Lancaster, Clitheroe)
Benn, Captain Wedgwood (Leith) Bromfield, William Dawes, Commander
Bethell, Sir John Henry Brown, James (Ayr and Bute) Dewhurst, Lieut.-Commander Harry
Entwistle, Major C. F. Locker-Lampson, G. (Wood Green) Raper, A. Baldwin
Foreman, Henry Lorden, John William Remer, J. B.
Galbraith, Samuel Lunn, William Remnant, Sir James
Green, Joseph F. (Leicester, W.) Lyle, C. E. Leonard Richardson, R. (Houghton-le-Spring)
Gretton, Colonel John Lyle-Samuel, Alexander Robertson, John
Griffiths, T. (Monmouth, Pontypool) Mallaby-Deeley, Harry Samuel, Samuel (W'dsworth, Putney)
Gritten, W. G. Howard Malone, C. L. (Leyton, E.) Sexton, James
Grundy, T. W. Mitchell, William Lane Short, Alfred (Wednesbury)
Guest, J. (York, W. R., Hemsworth) Moore, Major-General Sir Newton J. Sitch, Charles H.
Gwynne, Rupert S. Morris, Richard Smith, W. R. (Wellingborough)
Hall, F. (York, W. R., Normanton) Mosley, Oswald Strauss, Edward Anthony
Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by) Murchison, C. K. Sugden, W. H.
Harris, Sir Henry Percy Murray, Dr. D. (Inverness & Ross) Swan, J. E.
Hirst, G. H. Murray, Major William (Dumfries) Thomas, Brig.-Gen. Sir O. (Anglesey)
Hogge, James Myles Myers, Thomas Thomson, T. (Middlesbrough, West)
Holmes, J. Stanley Newman, Colonel J. R. P. (Finchley) Thorne, G. R. (Wolverhampton, E.)
Hood, Joseph Nield, Sir Herbert Tillett, Benjamin
Hopkins, John W. W. Norris, Colonel Sir Henry G. Waterson, A. E.
Irving, Dan O'Grady, Captain James Wedgwood, Colonel J. C.
Jones, G. W. H. (Stoke Newington) Palmer, Charles Frederick (Wrekin) While, Charles F. (Derby, Western)
Jones, Henry Haydn (Merioneth) Peel, Col. Hn. S. (Uxbridge, Mddx.) Wild, Sir Ernest Edward
Jones, William Kennedy (Hornsey) Perring, William George Young, Lieut.-Com. E. H. (Norwich)
Kenworthy, Lieut.-Commander J. M. Preston, W. R. Young, Robert (Lancaster, Newton)
Kiley, James D. Prescott, Major W. H.
Knights, Capt. H. N. (C'berwell, N.) Purchase, H. G. TELLERS FOR THE NOES.—
Lawson, John J. Raffan, Peter Wilson Mr. Gilbert and Mr. Clement Edwards.
Lloyd-Greame, Major Sir P. Rankin, Captain James S.

Bill read the Third time, and passed.

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