Motion made, and Question proposed,
That a sum, not exceeding £848,642, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1921, for the Salaries and Expenses of the Ministry of Transport, including sundry Charges in connection with Transportation Schemes, &c., under the Ministry of Transport Act, 1919, and certain Repayable Advances under The Electricity (Supply) Act, 1919." [Note.—£500,000 has been voted on account.]
§ The MINISTER of TRANSPORT (Sir Eric Geddes)
I shall have to trespass for some time on the indulgence of the Committee this afternoon, as I have two sections of my subject to which I must necessarily devote considerable attention. The third I will endeavour to reach if time permit. I propose to divide what I have to say to the Committee into three parts. First, the consideration of the Estimates; secondly, the condition of transportation of the country; and, If time should not permit, I think it would be for the convenience of the Committee that I should miss that, and leave the Parliamentary Secretary to deal with it in the Debate afterwards, in which I should be glad to give any further information that is required; and, thirdly, to outline generally the railway policy of the Government, together with the policy of the Government in regard to other means of transportation.
These are the first Estimates for a full year presented by the Ministry of Transport. The Supplementary Estimates for the close of last year were discussed In this House on the 9th and 10th March in Committee. The whole work of the Ministry was then reviewed, and the 2426 principal salaries were sanctioned by the Committee. I made a long statement on the Vote for the Consolidated Fund. I issued a voluminous White Paper, No.654, explaining the work of the Department, and giving further relevant information, to which I shall have to refer at considerable length this afternoon. In these circumstances, I think it will be for the convenience of the Committee if I do not enter into very great detail at this stage of the Estimates.
In my speech on the Consolidated Fund Vote on the 24th March, I invited investigation of the work and the Estimates of the Department by the Select Committee on National Expenditure. In response to that invitation, the Vote was postponed, and the investigation was made. I would like here to express my thanks to the Sub-Committee which carried out the investigation for the care and thoroughness with which they did it. I welcomed the inquiry asked for, and the Committee devoted much time and great care to considering the subject which they were charged to investigate. In order to estimate the work of the Department, they examined not only myself, but all the principal officials, including the nine heads of Departments. They went through the actual expenditure, and the forecast of the estimated expenditure of the Department in great detail. Of the actual expenditure, they did not condemn one penny that had been spent. Of the salaries paid or the posts filled, they did not recommend any reduction. Indeed, on the contrary, in every single department they left a margin, and therefore they recommended this Committee to leave a margin, for the necessary expansion of the work of the Ministry of Transport. Therefore, on one point, at any rate, as far as the Select Committee's investigations go, this Committee and the taxpayer may be reassured that where money has been spent, in the opinion of that Committee, it was not deserving of condemnation. Even in recommending, as they did, a reduction of the Estimates, they limited themselves to saying that they did not think the expenditure was necessary in the current year. They did not say it was not necessary at all, but that it was not necessary in the current year.
In view of what I might almost call the campaign of misrepresentation which has been carried on about the expenditure 2427 of the Ministry of Transport, I think I am entitled to ask, as far as I can ask, that these facts which I have given should receive equal prominence. I have been accused of squandering the country's money. The Committee has not said that I have squandered a penny of it. They have endorsed everything that was spent, and recommended further expenditure. These attacks are now becoming a common form on all Ministers, but at any rate I think we have a right to expect fair representation from our critics. I ask the Committee to bear with me while briefly I make a reply to some of the accusations which, in the Press and on the platform, have been levelled against us.
First, I will deal with the newspapers. It is quite easy to get a bad Press. If one takes a report compiled by a Committee composed of all classes of critics, such a report must necessarily be a compromise between contending opinions. If you take a blue pencil, and go through that Report, underline every word which is detrimental to the Department, and leave out the context, you can easily make out a case. That is what was done in this instance. The headlines came out, "Misleading Estimates." What were the "misleading estimates?" They were these: The Ministry of Transport, the Committee said, had submitted its Estimates with the salaries in one column and the War bonus elsewhere, which was in accordance with the Treasury practice. Yet the papers started out with, "Misleading Estimates of the Ministry of Transport." I ask, is that fair?
The Sub-Committee next said that the Ministry of Transport Act—I have not got the exact words, but I know what it meant—was "grandiose." That Act was the creation of the House of Commons. The Second Reading passed without a Division. The Report stage passed without a Division; the Third Reading passed by 245 Votes and none against, and thirteen Members of the Select Committee voted in favour of it. Yet the mere fact that the word "grandiose" is used makes a point against the Ministry for supposed squandering of national money. If it were grandiose, why did the thirteen Members of the Select Committee vote for it? "Grandiose" carries with it a certain imputation of 2428 bombast. Why did they vote for it, if it were wrong? The Ministry of Transport was formed because the House of Commons considered it necessary. The Ministry does not manage the railways. It has never professed to manage the railways.
We hear and read of the great swollen establishment of the Ministry of Transport! The same people ask: Do we not manage the railways in every detail? Ought we not to know when a flitch of bacon is stolen or a tobacco pouch is missing? We do not. Our actual expenditure is £252,000. One big railway headquarter's establishment costs £550,000. I do not say that the Ministry of Transport does the work of the headquarters of a big railway. If we were expected to manage the railways—as some people expect—we should require a far larger establishment than anything that has ever yet been dreamed of. As to high salaries, the Select Committee said in their Report that the salaries in our Department were higher than in other Government Departments. They commented upon that, or rather they recorded the fact that many of the holders of these big posts had made great personal financial sacrifices in order to take them. They commented on the fact that in these particular posts you have to compete in the market for men. Let us see what the salaries are.
Of our salaries above £1,000,the average salary is £;1,444. You have got to compare that with the same stamp of man employed in the industry of transport outside. I have taken the average of three principal railway companies. Of the salaries paid by them above £1,000 the average is £2,000. Therefore you have the Ministry of Transport with an average salary of £1,444, and the railways with an average of £2,000. On that comparison, I claim that the salaries in our Department are not exorbitant. Another point was that there was a larger proportion of highly-paid staff in our Department. That was said in the Report of the Select Committee. They explained how that came about. They said that they had excluded typists, and this Ministry employed a larger number of typists, instead of doing its work in longhand. Those with £350 and above are as one to two below £350. That is above the average, because we use more typists. That is cheaper than the 2429 larger and more expensive staff which uses longhand. If you add typists, the percentage, instead of being one to two, is about one to three. The figure of the Treasury, who are doing work comparable with the work which we are doing, is one to one of those above £350, compared with our figure, of one to three.
These are the main points in the newspaper misrepresentation of the Report of the Select Committee. I hope I have made them clear, or if not, that I shall do so before I sit down. With their main conclusion I have no quarrel. There was another misstatement which was much more serious because of the highly respected source from which it came, and which carries great weight on account of the speaker's authority in the country. I refer to the right hon. Gentleman, the Member for Paisley (Mr. Asquith). I have here the report of his speech at Portsmouth on the 18th June. He said—The Ministry of Transport was a new creation, and it had done nothing but lie on its back, contemplate the skies, ruminate over problems, and consider whether or not something might hereafter be done to improve the transport system of this country. This process, carried on by experts, costs us between £400,000 and £500,000 a year. It was a gross, profligate, inexcusable waste of the taxpayers' money.On the next day the right hon. Gentleman had apparently read the report, or someone had warned him that he had gone too far. Speaking in the Isle of Wight, he then said:In regard to the Ministry of Transport, he quite agreed that there were a large number of routine duties which this Department was performing, no doubt, with great proficiency, but they were all performed until this unnecessary new creation was brought to birth by a Department of the Board of Trade manned by moderately, or if they liked, ill-paid Civil servants, without the assistance of expensive experts from outside. It was an illustration of the policy pursued by the present Administration of multiplying recklessly, improvidently, without any calculation as to the necessities of the case, or as to the financial exigencies of the country, cumbrous and expensive bureaucratic machinery to perform duties which could be much more cheaply and much more efficiently performed as they were before.That was a very weighty condemnation from a very weighty source. With great respect to the right hon. Gentleman—a respect which I have always felt for him—I must reply that I am surprised. From a rigid economist, from such a 2430 ruthless critic, from such an exponent of economical and efficient management and administration, I think I might have claimed greater accuracy. He said there was a wanton waste of £400,000 to £500,000 a year. The total expenditure is given in that Report on salaries as £252,000. There is an exaggeration of 100 per cent. Of that £250,000, £45,000 is due to old Departments which have been transferred to us, and are doing practically the same work as they did under the right hon. Gentleman's Administration. That leaves £207,648 of wilful and wanton waste! Of the £207,000 a very large proportion, an increasing proportion, has been certified by the Select Committee as thoroughly justified, and they could not recommend any reduction at all in it. That brings the wanton waste down to £120,000 from £400,000 or £500,000! That £120,000 is justified by the Select Committee, because in every instance, and in every Department, they recommended an increased expenditure. That is the "wanton waste!" I do not think it is quite fair so to trounce a beginner.
Not a Parliamentary hand. Let us look at perhaps what matters more, because I believe these were election speeches. Is the money being fruitfully spent? Is the country being actually debited with £250,000 for salaries, and getting nothing in return? If it be getting something, is it something more or less than the expenditure? In every new business of any magnitude, you would expect to have a year or two before you would expect to show a profit. Everybody expects to sow for some time before he begins to reap The same thing may well apply to an administrative office of this kind, and if I can show that in one way or another I have already saved the country more than the expenditure incurred, and if I can persuade, or show, the Committee that that is an earnest of more saving to come, I think it w ill justify what I am doing.
I can give one instance of an actual saving, but I must ask the Committee not to press me too hard for more. It is not that I have not got them. but this is the reason: In this work, which will occupy more than 50 per cent. of the time of the officials of the Ministry, we are doing a technical audit in very difficult circum- 2431 stances. That audit is an audit of the railway companies' accounts. They are spending the Government money. In transactions of this magnitude there are bound to be great differences of opinion, especially when agreements have not been strictly drawn involving great sums of money. If I tell the Committee that this debit by such and such a railway has been struck out, and that claim disallowed, that will perhaps appear in the newspapers and be misinterpreted, and be talked about in the wrong way. It will be unfair to the railways. The railways have played the game honourably with the Government as far as I know. They have helped the Government in every way. When it was a mere question of honourable terms they could be depended upon. Though no doubt they were keen business men, that is no dishonour. I will give one illustration. In 1915, in the administration of the right hon. Gentleman, Mr. Runciman entered into an agreement with a certain railway company, the basis of which was a pool. Hon. Members in their experience of pools, especially of traffic pools, will realise that there are three essentials for a pool. The first is that you should fix the division of the various parties; the second that you should provide that each party shall adequately render the service, carry its proportion of business; and, thirdly, if there be any over-carrying by one party such party receives a carrying allowance or the working expenses for it. These are the three essentials of any pool of which I ever heard. This agreement which was made in 1915 omits two of the provisions which I have mentioned.
It was made by Mr. Runciman with the Metropolitan District Railway. That arrangement did not include the second and third provisions I have mentioned, the carrying allowance for excess, and the undertaking that there shall be an adequate service maintained. These two elementary provisions were forgotten—elementary in any general manager's office on the railway. That mistake has cost the country these amounts:—In 1916—£88,000; in 1917—£282,000; in 1918—£471,000; and in 1919—£707,000.
But the agreement was made in 1915 during the War. In 1920 the estimate of the amount as given in evidence, is £1,000,000. [An HON.MEMBER: "For one railway"?] For one agreement.
It was made by the Board of Trade. The right hon. Gentleman has said that the work which is going to be done by the Ministry of Transport was work which would have been done much more economically, better, and more efficiently by the Board of Trade. The Board of Trade before the War, in the railway branch—and that is the only branch the Board has for handling these questions—had a staff of 35. In 1916 they had a staff of 25. They were supposed to be doing the whole of the work that my Ministry is doing to-day in reference to railways. I will come back to that. That agreement was made by the Board of Trade in Mr. Runciman's time. In the years which have passed one point and another has been raised, and modifications have been made in the agreement; but these figures are the net result after these modifications have been allowed for. I heard this story by chance. It was mentioned in evidence by the Chairman of the company, who was before the Committee which sat to consider the question of London traffic—a Committee set up by my Department. That was how I heard of it. I did not know before that the agreement existed. I saw the Chairman immediately afterwards, and I said to him: "Look here. That sort of agreement is no good, and it is not the sort of thing to which I can assent." He replied: "I quite agree." I continued: "You will have to get that agreement cancelled." He agreed to have it cancelled, and had it cancelled.
I cannot say anything about the arrears. I am saying it was cancelled. The agreement was made in 1915. It was running on for years. It was one of many items, and the cancellation of that agreement alone justifies much of the expense of the Ministry of Transport.
The agreement was made for the period of the War. [An HON. MEMBER: "Who was the man that made the muddle?"] There are other matters of a graver or similar character. There are other points than this £1,000,000.
There was no possibility of finding it out. Unless you came across it by chance, there was no staff to find it out. I can tell the Committee that, in spite of the fact that during the whole of the years since 1914 that this wonderful organisation was doing things so well and so much more cheaply than my Ministry can do them, there are accounts of 1914 which have not yet been cleared up! This is one of the ways in which my Department is making a saving.
Mr. C. PALMER
I am sorry to interrupt the right hon. Gentleman. He speaks of saving. Have we not lost £1,500,000 paid under the agreement. Shall we get that money back?
I have saved the country the money which was to be spent this year. During the War the railway managers ran the railway machine. They kept it going. They worked the traffic, and worked it well. They acted within the current expenditure as honourable, impartial men. Those were the instructions from their Boards of Directors. That was their desire. I wish to pay a well-deserved tribute to them. But they had another function which was this: they had made agreements on behalf of their companies with the Government. These agreements were made across the table by both sides. They were not mutually solving a problem. The meeting of the two parties was to draft an agreement, and each of them was trying to do the best for his own side. There was nothing wrong in that. They made it perfectly clear. 2434 As a matter of fact, I myself remember it being made perfectly clear. The first agreement was made in the early days of the War.
I think it is well—this is my second attempt—to bring to the notice of hon. Members of the Committee what these agreements mean. I believe hon. Members will agree with me when they understand what these agreements are, and they are in the published documents in White Paper No. 654 which I have already quoted. The first agreement guaranteed the net receipts of the railway, and was made under an Act which, obviously, was never intended to apply to a long war like the Great War. So tentative was the whole thing that the certificate as to the control of the railways had to be renewed from week to week throughout the War by a new certificate, which took them over for another week. No legislation was undertaken to correct what was obviously a state of affairs which was never contemplated by the Act. Personally I came on the scene too late to say anything about it. But I could never see why the railways should have continued the arrangement throughout the War. I would ask the Committee to think what that means. It means that every penny which was spent on the railways was taxpayers' money. It means that every penny the companies earned was taxpayers' money. During the War the expenditure of the railways was down to a minimum. It was the mere bare working expenses.
Arrears accumulated, and a situation developed which had to be met at the end of the War. The railway companies, quite wisely and very shrewdly, made agreements to meet the situation which came at the end of the War. During the War, as I have already said, the managers loyally and honourably ran the railways, and as far as they possibly could, with the assistance of two accountants as consultants in certain matters, tried honestly and fairly, with the whole financial responsibility resting upon them, to adjudicate between the Government on the one hand and railway proprietors on the other. That was during the War.
The War stopped. I found—for I had no knowledge of it before—that the President of the Board of Trade (Mr. Runciman) had agreed with the railways that the guarantee of net receipts should continue for two years after the War. These 2435 two years were from some date yet to come. The two years have not begun to run yet. Under the Ministry of Transport Act, though few Members realise it, we reduced that guarantee by almost a year, because the two years by the Ministry of Transport Act runs from last August. Under the agreement, they do not begin to run yet, because the War is not officially at an end. The agreement to extend the control of the railways was given in this way. Here again I would invite the attention of my right hon. Friend (Mr. Asquith) to the way in which this magnificent staff of his did their work. Here is a letter from the chairman who made the agreement. The letter is dated 4th February, 1918.
Pardon me for a moment. This is a letter from the Chairman who negotiates for the Railway Companies. He says:I enclose a copy of Mr. Runciman's letter to me of September 5th, 1916. Needless to say the original is always at your service! You will remember the circumstances under which the letter was written, namely, that the general managers were disinclined to meet the men for a second (or was it the third?) time, having been thrown over by the men, unless they got an assurance from the Government that the period of control should be lengthened. The two years was a compromise.This is the enclosed letter—Many thanks for your private letter. The best reply I can give under the circumstances is to tell you what was decided at this morning's Cabinet. First, we agreed that a concession to the railway men was advisable, much as we all regretted the short life of the 'duration of the War' agreement. Second, the General Managers' Committee seemed to us to be the proper instrument for negotiating with the men. Third, they should do their best under the difficult conditions now surrounding the problem. Fourth, the Government undertakes to extend the period of the guarantee of net receipts to two years after the termination of the War.That is what caused the Ministry of Transport Act.
§ Sir FORTESCUE FLANNERY
Do I understand that a letter so important as the one which the right hon. Gentleman has just read, passing from the Board of Trade to the railway companies, was not recorded in the Department?
It cannot be found. It could not be produced then, and it has not been produced since! I do not know what happened to it. Without those guarantees, it would have been unnecessary for the present relationship between the State and the railways to have existed at all.
May I point out that these guarantees were continued in December, 1918, by the right hon. Gentleman sitting next to the Minister of Transport (Mr. Bonar Law), and by the then President of the Board of Trade.
§ Mr. BONAR LAW
I quite understand my right hon. Friend (Sir F. Banbury), but it has absolutely no bearing on this point. We undertook to carry out an agreement which had been made by our predecessors.
§ Mr. ASQUITH
The agreement was made in September, 1916, when the right hon. Gentleman (Mr.Bonar Law) and I were members of the same Cabinet.
§ Mr. BONAR LAW
I do not quarrel with that. All I say is that it has no bearing on the point which the Minister of Transport is answering, namely, whether or not the Ministry of Transport was required, or whether the work could have been better done by the Board of Trade officials?
Yes, there are to-day, say, 32 members of the staff doing the Board of Trade work of the Ministry of Transport, and that is practically the number which was in the Board of Trade before the War. There is really a very serious financial aspect of guaranteeing the receipts of the railways after the War, because we are now passing through a time of re-construction. We are also passing through a time of extraordinary 2437 disturbance, and the total amount of money income and expenditure of the railways is in the neighbourhood of 500 millions a year. I ask the Committee to appreciate those figures, which are given by the Select Committee in their Report. A large proportion of that is maintenance expenditure. I request the Committee to follow me in what that means in the responsibility of the Government and the responsibility of the taxpayer in checking this expenditure. Any item of betterment has got to come out. If a roof placed over a platform were made of wood and felt and afterwards replaced by steel, there is an element of betterment there, and that is not payable by the taxpayer, but the proportion attributable to the replacement of the wood is payable by the taxpayer. It is the same with the wagons, engines, carriages, and every kind of engineering works. If a larger station be put up and a smaller one pulled down, there is an element of betterment. The same applies to alterations in the rolling stock. I ask the Committee to think what that means, even if you are dealing with the most honourable men you can imagine.
I have nothing but praise for the railway managers as to the way they have acted, but they have a different point of view, and they have not the taxpayers' point of view. Take, for example, the cartage staff. I am going to give the Committee a few instances to show the diversity of the problem with which we have had to deal. We will suppose that a certain company has a considerable cartage staff, and, for some reason or other, that staff is reduced. They empty one stable and, perhaps, that is let for £100 or £1,000. Obviously, that cartage staff was working for and at the expense of the company. But in the control period it was working for and earning revenue for, and being kept by the State. The stable affected is rented, say, for £100 or £1,000. To whom does it belong? Under the agreement with the companies the rents before the period of control were below the line, and did not come into the control. But this is a new rent. This is earning revenue for the company; it comes into the State book, and so the rent of the stable ought to come to the State. You must have, in order to check these matters, someone looking after them from the point of view of the State.
2438 The same thing happened with the reserves. If they were made in the base year of 1913 they are continued now; but if they were increased for some other purpose, they are not debitable to the State. Take a very simple example and one that obviously requires discussion. We have to make sure that these things will not be overlooked. The railway com-panics sent wagons to France. These things are paid on the basis of maintenance of plant for as it existed in 1913. In each railway they have not eliminated those wagons which went to France. The War Office has maintained them, and when they come back they have to be reconditioned, and someone has to see that the maintenance of those wagons is properly dealt with. I will give one other example, but I could go on for a long time with them. Does the Committee realise that on every bottle of champagne or wine sold in a railway establishment, if under price, the loss of profit is the Government's. On this matter I have had a report made on every principal railway of the country, and I have had a varied experience. I have had a representative investigating this matter in the principal hotels. He has just finished his work, and he reports that in 33 per cent. of the hotels the cost of the wines and other charges might well be raised to keep them in line with the cost outside. If these prices were put up to the extent of 5s. a bottle on champagne—[Laughter.]
Yes, that is what we have to do, and that is what Parliament charged us with. I maintain that no business firm, however honourable they thought the other side was, would leave adjudication of questions like that to be done by the other side. You must have someone who is looking at the matter from your side. The right hon. Gentleman opposite (Mr. Asquith) asks why we did not go on under the highly efficient system existing in his time? We could not ask the railway companies to continue performing those duties. It is not fair to ask them to do it now, because they did it as patriots before; and to ask them to do it now would not be fair either to them or to the taxpayers.
2439 Up to now I have only dealt with small things, and I have been laughed at because I talked about champagne. I will now give two examples of rather larger things. During the War there was a landslip at Folkestone, and the line came down. The railway company put in a claim for £310,000. Is that ordinary maintenance; is it right for the State to pay that, and would it come under the control? Those are questions which have to be answered, and someone has to consider them. There are hundreds of these cases, and you have to have a staff to deal with them. There was a heavy snowstorm, the telegraph wires were blown down, and a claim was put in for £250,000 to make good the lines which had been blown down. Is that a claim which ought to be met? Is that the expenses of ordinary management? We have to decide those things. I give these as the kind of things which come before the Ministry of Transport, and they were never before dealt with systematically. Some of these cases were dealt with, some were not, and we are settling now cases going as far back as 1915 and 1916.
What the right hon. Gentleman suggests is that we should have gone on without a Ministry of Transport, and should have asked the railways to do this work themselves. I say it is unfair to ask them to settle these things between the State and themselves. We have gone on doing this work with a staff which was 35 before the War and 25 during the War, and that is how we have been safeguarding the taxpayers. There are now 32 men doing that work. In addition to that, we had an arrangement whereby two distinguished accountants gave a small portion of their time settling these matter's of difference.
I would now like to run through the principal agreements which exist with the railway companies. I published them in the Command Paper in so far as they exist, but they are very difficult documents to follow, and they are not in the ordinary form of agreements at all. The first thing I did when the Ministry of Transport started its work was to ask for these agreements with the railway companies. These arrangements, apart altogether from the guarantee, are embodied in agreements. The first I will ask the Committee to consider is what is called the 2440 Deferred Maintenance Agreement, of 1916. It provides that where the companies were unable to spend the 1913 quota of maintenance, it should be debited to working expenses in any event, and that the money they do not spend should be put into a reserve fund so that they may expend it at a later date after the War. That was the first arrangement—a quite proper arrangement in every way.
They then said we are finding the money is insufficient on account of increased costs; we want more, therefore. Negotiations took place with the Board of Trade, and it was agreed that they should have 115 per cent. The money which they have put by, and charged to working expenses as a debit to the State now in their hands, amounts to £36,000,000. All that by the terms of the agreement is handed over to them. Shortly afterwards the company said that 115 per cent. was not enough, as prices had further risen, and they must have more. The agreement was accordingly modified, so that the State is to make good to the railways all the work which they would have done had there been no war on the 1913 basis, at the cost at the time the work is done. I want the Committee to realise what that means. This is a 1916 agreement, and the documents are to be found in the Command Paper. Will the Committee realise what this deferred maintenance means? Look at the responsibility that rests on me and my staff, acting on behalf of the taxpayer. Suppose the companies press for rolling stock. What we have to consider is whether rolling stock is so urgently needed that we should buy it now in a very high market, or whether we can possibly get along without it and wait until prices fall? That is one of the considerations we have before us. We have to decide when the work is to be done, and how it is to be charged.
The next agreement to which I wish to refer is that of August, 1916, with regard to interest on capital expenditure. It was agreed that capital expenditure could not be stopped. The capital expended by the companies and approved on behalf of the Government bears interest at 5 per cent. per annum. Until the end of the War came and things settled down, that was a very small item. But since the formation of the Ministry of Transport, we have passed items of expenditure to the amount of £13,000,000. We have 2441 had to look at these from the point of view of the interest of the taxpayer, and also from the engineering and traffic points of view. We have had to ask ourselves whether the expenditure is necessary. There is another point which probably my right hon. Friend the Member for Paisley has not noticed, namely, that while the company spend any capital they claim interest for it. What happens if they release capital? Say a steamship is sold or lost; we cannot claim a rebate in respect of that, and there are from two to three millions in the hands of companies for steamships which have been sold, or for lines pulled up.
There is another agreement to which I wish to draw attention. I am sorry if I am wearying the Committee, but I must let the House of Commons know what are these agreements. This is called the Abnormal Wear and Tear Agreement. I am not giving the official titles, I am giving the names by which they are commonly known. Under that agreement it was agreed by the Government in January, 1916, that where abnormal wear and tear could be proved—physical abnormal wear and tear—allowance should be made for it. A company might come to us, and say "owing to circumstances our line or our works have been abnormally used and their physical deterioration is greater than it would have been under the conditions of 1913." It was agreed that that was a fair claim to be considered. The consulting auditors estimated that claim in April, 1919, at £40,000,000, and I will ask the Committee to consider what that means. Will they consider what the investigation meant of physical conditions as they might have been in 1913 and as the conditions of to-day are? We are to find out what would have been the condition had there been no abnormal wear and tear.
There is another claim under that agreement which the companies have told me they are going to press. It has never been admitted, and I do not think it is in the agreement at all. It is what they call a "stitch in time." They say that during the control they have not been able to carry out certain work which they would have carried out had there been no war, and they claim that they are entitled to be allowed for that. There is no reference to that in the agreement, and it has not been admitted; 2442 but that is a matter which will also have to be gone into. Then there is the Stores Agreement. Under that agreement the companies actually became storekeepers to the State-controlled railway. They bought stores for the railway and works, and they added them to the stores, which were issued at the average price of the stores in stock. The agreement was that at the end of the period of control, next autumn, the companies are to be put in the same position with regard to stores as they were in 1913. They can buy at present-day prices, and stock stores to the same value as in 1913. But what are "stores"? Are typewriters included? Does that mean scrap? There is no definition so far as I can see. The agreement may be perfectly right. I am not condemning it, but I want to explain the position to the Committee, and to ask it to realise what my Department will have to do in relation to that. We shall have to find out what stores will have to be replaced. Are we going to buy them now when the markets are high? Somebody must look after the taxpayers' interests. We cannot leave it to the companies. I believe this item has been estimated at £20,000,000. These are the sorts of things with which the Ministry will have to deal. I have gone more fully into them to-day, because I am certain that the Select Committee did not grasp the whole story. I am not sure that this Committee has grasped it, but these are the things with which the Ministry of Transport has got to deal with a view to saving the taxpayers' pocket. Without suggesting anything but the most honourable treatment on the part of the railway companies, I urge that this is one of the subjects with which the Ministry of Transport must deal.
§ Sir E. GEDDES
I do not say I have exhausted the list of agreements, but there have been no agreements made since I went to the Ministry of Transport. The right. hon. Gentleman the Member for Paisley (Mr. Asquith) has, in most unmeasured terms, declared that we are wasting the country's money. I have told the Committee what I am doing. If the country wants its interests safeguarded, if it wants these things watched over, it must find a staff to do it. I can 2443 say here that, whether I am the Minister of Transport or whether anyone else holds that position, it will be necessary to have a larger staff than I have at present if these checks are to be done thoroughly. When I estimated last December, I did not know the exact position. I did not know what claims were coming forward. I knew there was a lot to do, and I was asked by the Chancellor of the Exchequer to see that there was no Supplementary Estimate required. Another reason why the Estimate has a bigger margin than it would otherwise have had is that many of the claims had not then come forward. I knew many were coming, but I was not aware of the volume in which they would come. The right hon. Gentleman has referred to the devoted officers who slave for all they were worth as they did during the War, but are now doing nothing whatever but "lying on their backs, contemplating the sky," and waiting for something to happen. I think it is only fair to these men that the Committee should know something of what they are doing. I quite admit there are fields for economy which are very great, and which have not yet been explored. If I have not convinced the Committee of the necessity for the Ministry, then it is, I fear, beyond my power to do so.
What else does the Ministry do? We have made a comprehensive review of the rolling stock situation. The companies did not do it collectively. We did; we got programmes from the companies. We found out where were the weak spots. We have gone into the question of the renewal of rolling stock at this time. I decided with my colleagues that it was essential that the country should have rolling stock whatever it cost. It is in these ways that one spends money. We reviewed the whole steel question of the country. There is an enormous increase there, and the wagon capacity has not kept pace with it. We have arranged, with the co-operation of the companies, for the necessary special rolling stock for the steel trade to be built. We have dealt comprehensively with the coal traffic, the fish traffic, the meat traffic, and many others. We have to consider whether these great increases are permanent or temporary. If they be only temporary—the outcome of the War—the country cannot afford 2444 to build a lot of rolling stock which it will not need afterwards. We have been appealed to over and over again by traders, associations of traders, communities and districts, and by the railways to help, and we have helped them. It is to that, in no small measure, that the recovery of the carriage power of this country is due.
§ Sir E. GEDDES
I did not say that there was an arrangement with the steel trade. What I said was that we had reviewed, after conference with the steel trade, the necessity for increasing the special wagon capacity. After that review, we found that the companies, individually and district by district, were not doing enough. In consequence of that, large orders have been, and are being, placed to meet the increase in the steel traffic. I do not wish to go on item after item, for I have much ground to cover, but I hope I have shown the Committee that there are many directions in which the Ministry of Transport works, and which, I believe, were unsuspected.
Quite naturally, taxpayers and hon. Members of this House ask, "What are you doing to try and get general economies in working?" Again I would ask the Committee to try and visualise the position. Here we have railways of which we have guaranteed the receipts. The word "control" has been one of the bugbears of my recent life. We do not control railways; we pay their guaranteed net receipts, and they spend the money. I wanted to see how I could get the railways collectively, while they were working on a basis which was not comparable with their pre-War basis—because the interchange working, the exchange and flow of traffic, is all altered—how I could get the railways to look at the operating economies that were possible. We have to think of the psychology of the men. You have there a large number of general managers and officers, tired with the War, worried with present control—and I do not wonder at it—bothered with shortages, blamed by every trader for anything that goes wrong. You have to get them to take an interest. They have no dividend to work for. What are they going to work for? 2445 They are getting nothing but blame. I thought this out, and said, "Now, the only way I can get these men—very able, earnest and patriotic men—the only way I can get them to try and improve is to form a basis of comparison for them. They could then see how each is working as compared with the others." And so we got these statistics. I remember that, when I went to the Army in France, an officer said to me, "There are two things the Army in France will not stand. One is politics, arid the other is statistics!" Now I find that politicians do not like statistics; but the statistics are very useful. The Minister of Transport and his officers cannot go round to the railway of my right hon. Friend (Sir F. Banbury) or to some other railway, like a sergeant-major, and say, "Do this; do that; run this train to time," and so on. That is not possible. You cannot manage this sort of business by going round worrying; and so we got these figures. I know they are very detailed, but they are such as are kept by every civilised country in the world. The Argentine, Canada, the United States, France, India, Egypt, Brazil, Prussia, Belgium, Italy, Switzerland—they all get figures like this, and they afford a comparison.
As I have said, you have to have time, in a great machine of this kind, or in a new business, to show any improvement, but I notice one thing: The train load figure in this country—that is to say, the average amount of traffic which you carry in your average train—from January to March, went up by 1¼ tons. It does not sound much, but if we could get the average train load figure up to 10 tons, it would mean £1,500,000 a year. That increase of 1¼ tons, from January to March, is due to the only method that lies with any railway manager or any Minister of Transport; that is to say, the method of letting people know how they are, as compared with others in this situation. Before the War there were other means—not so good, I think; but at any rate now this is the only means.
Then I will give another figure. The net ton miles per engine hour—that is to say, the actual number of tons moved one mile in one hour of an engine's time—has gone up by 2 per cent. That 2 per cent., on a very modest estimate of engine time alone—not counting reduction in congestion of lines and many other factors-—is worth £825,000 a year. Those are the sort 2446 of indications which I see that the railways are recovering their old pre-War operative efficiency.
§ Sir E. GEDDES
Certainly. That, however, is taken only on engines. It is in those ways, by this checking of expenditure, and endeavouring to circulate to the railways what they had no power to get for themselves before—under the power which the Housegavetomein the Ministry of Transport Act—pit is in those ways that things can be done, and you can get economy. In addition to that, the Ministry of Transport has other functions. Parliament has lately placed upon it an investigation into the whole of the tramway charges, and, indeed, into the physical condition of the tramways, as also the whole physical condition and the charges and accounting of the docks; and in many other ways burdens are placed upon us. If that be taken into consideration, I claim, and, as a matter of fact, the Select Committee agreed, that the expenditure is not excessive. The Select Committee has left further provision. The Estimates which we submitted were submitted in December. If the Ministry of Transport had been this ruthless, profligate, wasteful Ministry, it would have already appointed all the officers and men provided in the Estimates. We did not do it. We have had a Vote on Account with an ample margin for all this. Therefore, not only have we not spent the money, and not only has the Select Committee endorsed what we have spent and provided more, but we had the sanction to fill the posts, and we did not fill them. That is what is called "waste."
I should like very briefly, because I have further ground to traverse, to run through what we are doing on the Estimates. Under sub-heads A and E the Select Committee recommended a reduction of £68,900. There, upon reviewing the position of the work, I can make a reduction of £80,000. With regard to sub-head H—Motor-Cars—I think the motor-car pool has been misrepresented. The Ministry of Transport was charged with a motor-car pool to economise for 2447 all Departments. When we took over in December last, we had strict instructions from the Cabinet that expenditure must be cut down. The work was done by 77 cars before we took it over. We estimated what it could be done for, and we did it with 44, and that 44 was reduced to 25. Quite independently of the Select Committee's Report, we can see our way to reducing it still further. It will probably come down to single figures very soon. It may be 15 now, and shortly it will go down still further. Under that head, instead of wasting money, we have been steadily doing what the country and the Government expects us to do, namely, to economise. Instead of a reduction of £30,000, it is quite possible that we may reduce it by £39,000.
The Appropriation-in-Aid naturally comes down, too. The Select Committee omitted to note that there is £34,000 off that. With regard to the Canal Vote Survey, I think there was a mistake about that. The Committee apparently thought that the £100,000 there was to carry out the work, as a result of the investigation by the Committee on Canals presided over by my hon. Friend the Member for the Ladywood Division of Birmingham (Mr. N. Chamberlain). That £100,000 was for technical assistance and cost of investigation. Three months have elapsed, and there has been a delay in setting up the Committee, but it has now commenced its labours, and the Government will either move or accept a reduction of £50,000.
§ Sir J. REMNANT
Does not the right hon. Gentleman consider that the Commission on Inland Water Navigation, appointed some ten years ago, could have given the information he seeks from this Committee?
§ Sir E. GEDDES
No, Sir. I have considered that very carefully, and have consulted my hon. Friend about it. The reason is that costs have completely changed. The capital cost of providing alternative works is much greater. The canal position has been entirely upset by the changes in wages and hours—far more than have the railways.
§ Sir E. GEDDES
It is a Committee that is sitting for the Ministry of Transport. Then the coastal subsidy is stopped from the end of this month. The provision in the Estimates is for clearing up the traffic that has already passed. As a matter of fact, there will be a saving of £100,000 there. That is my reply to those who have blamed the Department for gross and extravagant waste and squandering. The Press I must leave to themselves. I have placed my case before the House of Commons and the country. The House of Commons is always fair when it understands, and I leave my case in the hands of the House of Commons.
I now pass to railway policy, and again, I fear, I must spend some time upon it. I wish to give to some extent the historical and general facts about the railways. The railways are the backbone of the transport of the country. There is £1,300,000,000 of capital in them. The Act of 1844, passed early in the days of railways, provided, in one of its Clauses, 10 per cent. as a figure for the return on capital which railways might reach. It was looked upon more or less in the light of a minimum. At that time the bank rate was 2½ per cent. That has changed. Railways were a 4 per cent. investment in 1913, and the bank rate is now 7 per cent. That is a very remarkable change over. The speculative character, the possibility of high remuneration, has gone. When the State took possession of the railways, in 1914, they were just about 4 per cent. Since then it is said the State has turned them into a losing concern. I do not think that is a correct statement. So far as I know, and I believe I am right, and I ask to be challenged if I am wrong, the State has given no orders to the railways which have increased their working expenses, except in so far as wages and salaries are concerned.
During the War the railways were practically managed by a committee of general managers. Since the Ministry of Transport Act was passed, with the exception of directions under the powers of that Act in connection with fares and railways, there has been no direction given to the railways at all. Therefore, if wages have not gone up out of proportion to the general level of wages of the country, and if we can 2449 show that that is so, we can fairly say that the present position of the railways, which is not really in dispute, is brought about by economic changes as the result of the War. The wages of the railwaymen were reviewed the other day by a tribunal with an independent chairman of great experience as Chairman of an Industrial Court on Salaries and Wages and four railwaymen, four railway managers and four users of railways, and with one dissentient they came to the conclusion that railwaymen's wages were below the general level of comparable trades. Therefore, they have not been forced up out of proportion to other trades by the Government, and so I think one can fairly claim that the present position of the railways is not the outcome of direct Government control, if that be the word to use, but as the outcome of the general economic position.
As to the future, the present situation is very uncertain. Who can say what the charges, the costs, and the cost of living are going to be in one year or five years? What are reasonable freight charges going to be? You cannot hand back the railways in August next year without doing something. You have got to legislate in some way. Something has got to be done. I am sure it is the wish of the Committee and of the country that the railway shareholder should be treated fairly and reasonably. The railway shareholder has not got a highly speculative investment. There are hundreds of thousands of them. They are small holders of stock usually. They are not big capitalist holdings. To-day the return is less than the Bank rate. They have invested in undertakings of great public utility, and they are entitled to have security for their money. Beyond that, we have the community to consider. The community, as I see it, can say to the railways, "We made a, bargain with you. You built the railways, and we gave you certain rights, certain protection and certain powers, and we impose, certain obligations on you. Owing to the economic results of the War, you wish to alter that. You want increased charging powers. We agree. You cannot go on as you are. You cannot continue, and give a satisfactory service, and the State must have a satisfactory service. We agree we have got to treat you fairly." This is, as I see it, the attitude of the community to the railways.
2450 But we want to be sure of something else. We want to be sure that we are getting the cheapest and the most satisfactory service possible for the money. We want to be sure that all possible economies are being effected. We want to be sure that the charges and the facilities are reasonable. We want to ensure against arbitrary treatment of labour, which simply leads to strikes, and brings the whole economic life of the country to a standstill. We want to ensure that, in present-day conditions, one company will not stand up and say, "We refuse to meet this trade union," and thereby have a strike involving the whole of the railways of the country. Broadly speaking, that seems to me to be the attitude which the community may well take up. In the past the attitude of the community to the railways has frankly not been one of sympathy. They have looked upon the railways as great big capitalist undertakings. They have perhaps forgotten that they get only a small return on their money. They have said, "The more competition the better. If we only have two lines instead of one, they will cut each other's throats, and we shall benefit by it." That may have been sound 30 or 40 years ago, but it cannot be sound to-day. You cannot afford it to-day. It is a luxury you cannot afford. In all my experience I have never, until the other day, had a trader say to me, "Such-and-such set of rates are really too low. The railway is giving too much for the money." That is a very encouraging sign. It shows that we have a community of interest between the traders and the railways. That is the position which they have got to in America.
I do not know whether hon. Members have followed legislation in reference to railways in America. A very distinguished American, writing to a friend here the other day, put it extraordinarily succinctly, and this is what he said: "The United States of America Government made a good beginning in getting under as well as over the railways." That, I think, is what this country has got to do. It has got to get under as well as over the railways. We have got to help them to economise, and to raise capital. We have to give confidence to the investor. Otherwise the lines will die; they will wither, your service will be bad, and the country's economic life will be ruined. In the past we protected the public 2451 against the oppressive railways. Now we have to protect the railways in another way, but if we are going to help the railways in that way we have to protect the public still further. To what organisation shall we revert next August? Some people say our railway system is the best in the world. They say, "There is nothing better. Hand the railways back to the individual private companies; let each of them work as they did before, and put up their rates and their charging powers proportionately, and leave them alone." If the country came to the conclusion that our railways were, and are still, the best; that they were the cheapest, and will still be the cheapest, in the world, there is a great deal to be said for that. Why disturb a good situation? Therefore, I would ask the Committee to follow me a little in the investigations which I have been making. There is no doubt that the railways carried the War traffic magnificently. The recovery of the railways since the War has been remarkable. I think America is carrying more traffic than she did before the War. This country is certainly carrying very much more, and doing very much more work than before the War. No other belligerent can show anything like that. We have done that, in spite of the dislocation of the War, in spite of the eight hours' day, in spite of the fact that the companies had to train new men in skilled trades to take the place of those whose lives were lost in the War.
But let us look further. Let us see how our railways have developed. Let us see whether they have been hampered by legislation. Let us see, as far as we can, what are their operating results compared with other countries. You cannot judge railways by impressions—whether you get a corner seat, or whether you are going to arrive in time. You have to get to the bottom of the problem, and see how they compare in their essential operations with other countries. Compared with European countries, Prussia, France, and America, we have a short haul. Our haul is an average of 56 miles, France 80, and Prussia 73, but I do not think that ought to affect the figures I am giving. Let us see what is the average charge made to the public for a ton of freight traffic moved one mile. It is the only figure I know that you can compare with cost 2452 per ton mile of your freight. We have never had the figure before. We have never been able to compare it, and we have never known it before. At present the average cost of moving a ton a mile in this country is 1.49d.—practically l½d. I have not the post-War costs for any other country. On that basis, which I think is absolutely reliable—it is merely applying to the earnings and the tonnage of last year the same average distance this year—I get an average rate of 929d. That is the average rate of moving a ton a mile. In France it is 66d., in Prussia 68d., and in the United States of America 4d. These are taken from the normal rate of exchange, and not the post-War rate. They are the last rates I have got for any country, but they are all before the War increases. There is one factor which it is reasonable that the Committee should have in mind, and that is that in this country we have an abnormal proportion of coal. That ought to bring our rate a little lower. In spite of that, we are 9 as against France and Prussia 6. Our percentage of coal traffic is 58 as against France and Prussia 37 and 39. That is 38 per cent. higher than the French cost, and practically 38 per cent. above the Prussian cost.
§ Sir W. JOYNSON-HICKS
Can the right hon. Gentleman tell us how the figures are arrived at? Are these the statistics of the North Eastern Railway since the War, or have they been taken out on the figures that existed before the War in the best way they could?
§ Sir E. GEDDES
These are the ton-mile figures for every controlled railway in the Kingdom, compiled by the railways on a basis accepted by the railways and sent to the Ministry of Transport. They have been compiled since the beginning of this year. The other figures are the standard official figures of every country.
§ Mr MARSHALL STEVENS
The right hon. Gentleman might add that the comparison is not very comparable in regard to the terminals of the countries, and that perhaps later on, as the statistics progress, he will be able to give comparable figures.
§ Sir E. GEDDES
Let us take another point of view. This is a highly developed country. We say this is a densely populated country, and we know that on all sides there is great congestion on our 2453 lines. I thought, and probably every Member thought, that this country would stand very high in the density of its traffic. How do you measure density of traffic? By the number of tons sent over each mile of running track in the year. I do not mean light trains, but the number of tons you get over a mile of track. In this country we are carrying 551,000 tons, on the average, over each mile of running track in the year. Prussia carries 746,000, Germany 725,000, France 439,000, and the United States, where the conditions are different, 1,162,000. There are other very dense countries. Belgium is very dense, and the figures there are high. The figures I have given are the latest figures available for other countries and the present figures here.
§ Sir E. GEDDES
Certainly. They are the figures for this year. Therefore, you have this country doing a very much greater amount of work than it did before, but carrying less over each average mile of running track than many other countries. We may diagnose here one of the causes of high charges. This country has duplicated its track more than others.
§ Sir W. JOYNSON-HICKS
Is the right hon. Gentleman comparing this year's traffic route mileage in England with the pre-War traffic in Prussia?
§ Sir E. GEDDES
Yes. The figures are for this year in this country, and for the last year available in every other case. In this country the duplication of track is 1.8 on every route mile, in Prussia 1.4, in France 1.4, and in America 1.1. So there clearly we have a higher proportion of double track, treble track and quadruple track than these other countries.
Let us take the cost of construction. I am endeavouring to take the Committee with me to investigate whence comes the necessity for these high charges. The cost of construction in this country for the equipment of a railway—and it must be remembered that only half the rolling stock belongs to the railways, half being privately owned—is £54,000 per mile, compared with £31,000 in France, £26,000 in Prussia, and £14,000 in America. There you have two factors which, apart from the cost of operating, makes for the necessity of the high charge. These 2454 figures must give great food for reflection. We must see whether we cannot improve matters. What is the cause?
It is with the object of improving matters that the proposals of the Government are put forward. If the railways could have improved themselves before, they would have done it. The British railway manager is sought the world over. It is not that the railways of this country are badly managed. There must be some other reason for it. The Government believe the railways can be improved. There are two systems which we can adopt. One is national ownership—to purchase the railways on some terms, and to manage and operate them by the State, just as the State runs the Post Office.
§ Sir E. GEDDES
So far as I know, and I have investigated the matter, no country has ever adopted nationalisation for purely theoretical reasons. There always has been some reason other than the pure theory that nationalisation was a good thing, and that the railways should be run by the people for the people. I will tell the Committee what was the reasons in the countries whose circumstances I have had the opportunity of investigating. In Belgium and Switzerland, it was because foreign capital had got hold of the railways, and they wished to get the railways out of their hands. In Italy, they had got hopelessly entangled in bad leases, and to cut out the leases they nationalised the railways. In Japan, it was in order to terminate concessions which were preventing a reduction in fares that they bought out the railway concessionaires, and nationalised the railways. In Australasia and East Prussia, it was in order to provide the railways with proper capital. Private capital would not invest. In Germany, after 1870, Russia, and on certain Indian railways, there were military reasons. In Canada, they did it because two great companies were unable to carry the burden which was sought to be put upon them. There is no such reason in this country.
I believe the experience of other lands will prove—and I believe we are all convinced—that State management, promotion by seniority, and the fact that the State will never pay the market price for the best brains, are handicaps which 2455 you can never get over. It is a fact that no important operating improvement and no invention has ever come out of a State railway. The evidence I have collected and seen all shows that State management is costly, that it lacks initiative, and that it becomes red tape. Another thing which impresses everyone who thinks seriously on the matter was summed up in a report of a Royal Commission in Italy which investigated the question of the nationalisation of railways, and it is: that politics corrupt railway management, and that railway management corrupts politics. I do not believe that in this country, with our national characteristics, and with our constitutional practice, it would be possible for the State to run and manage the railways so well as private ownership. Therefore, the Cabinet, after full consideration, has decided not to recommend national ownership. At the same time, the Cabinet is profundly impressed with the need for enabling the railways to economise in every possible way, to encourage them to economise, and to remove the handicaps under which they are suffering, which are great. I could enumerate the handicaps, and if the Committee wishes me to do so I will do it. [HON. MEMBERS: "Go on."] I am running into a very long statement, and, out of consideration for the Committee, I propose to leave that out. The information will be given in another form in the proposals, and I think that will give my hon. Friends sufficient information.
§ Captain BENN
On a point of Order. Is the right hon. Gentleman entitled to take up the time of the Committee of Supply in discussing proposed legislation?
§ Sir E. GEDDES
I have said that the difficulties under which the railways suffer are very great. They have from time to time come to Parliament, and have endeavoured to put themselves in a position to economise. In some cases their measures have been sanctioned, but they have been coupled with such burdens that they could not avail themselves of the economies, and they have done without them. It is in that direction, and with the object of endeavouring to effect these 2456 economies and to enable the railways to effect economies, that the Government has framed its proposals. The proposals are these—
§ Captain BENN
On a point of Order. This Committee is for the purpose of examining the expenditure of the right hon. Gentleman's Department, and I ask you, is the right hon. Gentleman entitled to use Committee of Supply to outline legislative proposals?
§ Mr. BONAR LAW
On a point of Order. Part of the purpose for which the Ministry of Transport was created was to deal with the situation which was left as a result of the control of the railways, and part of the money is employed on the preparation of the proposals which are to be made.
§ Captain BENN
The right hon. Gentleman has told us that his proposals will involve legislation, and I put it to you as Chairman of the Committee, that that, is out of order in Committee of Supply.
§ The DEPUTY-CHAIRMAN (Sir E. Cornwall)
It is out of order to discuss proposed legislation in Committee of Supply. The rule is that Supply Day is put down to enable Members of the Committee to have an opportunity of discussing Supply; but the Committee may not wish me to rule very strictly on this occasion, as Members have been looking forward to a full explanation from the Minister of Transport with regard to his Department.
§ The DEPUTY-CHAIRMAN
I am not binding myself as to what the ruling will be in reference to future speeches.
§ Captain BENN
If the Standing Order be waived in favour of the right hon. Gentleman, will it not be waived in favour of other Members of the Committee?
§ The DEPUTY-CHAIRMAN
No; but the Chair, interpreting the desire of the Committee, may give latitude to a Minister on a special occasion.
§ Sir F. BANBURY
I submit that it is quite a new doctrine that in Committee of Supply matters which require legisla- 2457 tion can be discussed. But supposing that that is going to be done on this occasion, every other Member of the Committee must have the same facilities as the right hon. Gentleman.
§ The DEPUTY-CHAIRMAN
I have no doubt that the right hon. Gentleman will bear in mind the points of Order which have been raised, and that it is not open to him to deal with legislative proposals.
§ The DEPUTY-CHAIRMAN
Any further remarks which the right hon. Gentleman makes must be in accordance with the general practice of Committee of Supply.
§ Mr. BONAR LAW
I think that matters of this kind are generally dealt with, provided that they do not go entirely against the recognised rules, in accordance with the general wish of the House. My right hon. Friend said that his proposals would ultimately require legislation. That is obvious, but he is not in any sense outlining a Bill. All he wishes to do is to give the Committee a general outline of the views of the Government as to the way in which control should be dealt with.
§ Mr. WILSON-FOX
In view of the great importance attaching to the question, and the general desire of the Committee, while I do not wish to quarrel with the right hon. Gentleman in giving a general outline of his policy, inasmuch as there must be a discussion on it, perhaps the Leader of the House will give an undertaking that further time at an early date shall be given for the discussion of these matters.
§ Mr. BONAR LAW
Apart from any objection that might be taken, time is the essence of the matter at this period of the year, and I am afraid I cannot promise that. My right hon. Friend's wish is to meet the general desire of the Committee. I have spoken to him now, and he is quite ready, instead of making his speech—[HON. MEMBERS "Go on!"]—to circulate the proposals of the Government in the form of a White Paper—[HON. MEMBERS: "No!"]—if that will meet the wishes of the Committee. [HON. MEMBERS: "No!"]
§ Mr. BONAR LAW
I do not like to make any suggestion to the Committee in this matter, but I do feel that there is some point in the contention of those who say that there is only a limited time today in which to discuss the Estimates in Supply, and that there is some point in the criticism as to a great policy being introduced, but not discussed. I do not wish in any way to suggest something which the Committee does not desire, but personally I think that perhaps the best plan would be to circulate the proposals, and, if possible, find some other opportunity of discussing them.
§ The DEPUTY-CHAIRMAN
The right hon. Gentleman the Member for the City of London (Sir F. Banbury) submitted that matters involving legislation cannot be discussed in Committee. Of course, they cannot be discussed in Committee of Supply, but what I endeavoured to indicate was that sometimes, for the convenience and advantage of the Committee, latitude is given, with the consent of the Committee, to a Minister to enlarge upon his remarks. But in this case objection is taken, and objection being taken, there is no other course open to me but to rule that matters requiring legislation or matters involving legislation cannot be discussed in Committee of Supply.
§ Sir W. DAVISON
Is not the right hon. Gentleman justified in indicating the future policy of his Department, in order to show the necessity of the Estimates for his Ministry in undertaking that policy?
§ The DEPUTY-CHAIRMAN
I thought that what I have just said dealt with that point. Anything involving legislation, or showing the necessity of legislation, would not be in order in Committee of Supply. The ruling is that we cannot now discuss matters involving legislation, or showing the necessity for legislation, as objection has been taken, but that only the administration of the Department can be discussed.
§ Sir W. JOYNSON-HICKS
Perhaps, by general consent of the Committee, an arrangement can be made with the Leader of the House to enable the objection to be withdrawn, and then the discussion could be allowed to proceed. I would suggest to my right hon. Friend 2459 that there are other subjects as well as railways, such as roads and canals, which are concerned in these Estimates, and if my right hon. Friend will give us another day or a half-day in the Autumn Session to discuss these topics, objection might be withdrawn. The right hon. Gentleman might make a statement now, and this evening could be devoted entirely to railways, leaving the other matters to be dealt with in the Autumn Session.
§ Sir F. BANBURY
If that is to be done there is only one way of doing it, that is to move to report Progress now, for the Speaker to be sent for; then for the Leader of the House to move the adjournment of the House, and on that motion the Minister can make his statement. But short of that, he cannot break this old rule, which has been in existence for centuries. We are always breaking the rules of the House.
§ Sir F. FLANNERY
There was another way, according to your ruling, that was that if the objection that had been raised were waived, then the discussion might proceed with the consent of the Committee.
§ The DEPUTY-CHAIRMAN
I endeavoured at first not to give a definite ruling because of what might be the wish of the Committee, but, the Committee having pressed me to give a ruling, I had to give a ruling, and having given it I must adhere to it.
§ Mr. BONAR LAW
I think it is a difficulty which is felt by the whole Committee and by you. In the circumstances, as there is objection, my right hon. Friend is not clear that he would be justified in taking up time with this, and denying the Committee the opportunity of criticising the Estimates. Therefore I do not think the course suggested is practicable. What we shall do then is to circulate the statement of my right hon. Friend on policy as a White Paper, and consider later on in what form it can be discussed.
§ Mr. HOGGE
I should have thought that some more expeditious means would be used of letting the Committee and the public know to-morrow what these proposals really are. It is quite true that the ruling which you have given is in strict accordance with the precedent of the Committee, and Members of the Committee ought to realise that, however expectant we might be on this occasion on this particular subject, there are 20 other occasions on which this course could be used for a similar purpose if we gave way on this, and we should never be able to do what we come to do on these occasions, namely, to examine and criticise the Estimates of the Ministry of Transport. Before criticising the Revised Estimates, I may refer to some of the things which the right hon. Gentleman dealt with. He divided his speech into three parts. One of these parts was completed. The second ended in collision, and so we have only got the first part of his speech.
I am rather sorry that he took the trouble to deal with the speeches of my right hon. Friend the Member for Paisley (Mr. Asquith), because I think that his statement would have been much more lucid on his own particular topic had he resisted the temptation to refer to my right hon. Friend. He complained that he was only a beginner, and that hon. Members were ready to trounce him. He is a fairly lusty beginner, and he has himself in the course of his speech tried to trounce those of us who have criticised him and his Department. hope to show, in spite of the fact that he comes down to the House to-day with Revised Estimates, showing a reduction of £85,000, that his Ministry is still a very extravagant Ministry, and one whose work I and many others think can be carried out with much more efficiency. I would remind my right hon. Friend first, that on the 10th March we discussed the very methods which are dealt with by the Committee on National 2461 Expenditure. Those of us who sit on this side of the House, and criticised the Estimates, then said that they were extravagant, and we divided the House.
The Division then was 165 to 67. That is to say, not only the Minister himself, but the Government of which he formed a part, as recently as 10th March, said to this House that all the money in the Estimates was required, that the Minister could not do without it, and that the criticisms brought forward were unfair criticisms. Now, in the month of June, my right hon. Friend comes down and says, in effect, that he was wrong, and that he was asking for £85,000 too much. That is a habit of the Government, and one with which the Members of the Committee are familiar. We have had instances of it once too often. We had it last night on an Army Vote for the expenditure of money on red cloth for the troops. A few days ago the Government said that they would make that Vote a question of confidence, but last night they receded from that position, and the nation saved money. When my right hon. Friend makes that kind of criticism he should remember his own mistakes. He remembers Slough. According to a speech he made in this House, Slough was to be a pivot and indispensable—
§ Sir E. GEDDES
. I never had anything to do with Slough. I never have been at Slough, and know nothing about it, except what I have read in the newspapers.
§ The CHAIRMAN
A reference was made by the Minister in his speech, If I am not mistaken. Slough does not appear on these Votes, and I do not think it is, or has been, under the control of the Minister of Transport.
§ Sir E. GEDDES
In my speech I made no reference to Slough at all. I do not think I have ever made such a reference in my life.
§ Mr. HOGGE
I was not discussing Slough. What I was pointing out was that we had the same kind of thing with regard to Slough; we were induced to support it because of what it was going to do for the country and for transport, and then the Government, in view of criticism, receded from that position and sold what was said to be a valuable asset. That is all I meant to say, and having said it, I need add nothing further. We have to bear in mind that we have made these criticisms, and, in spite of the intervention of the Committee on National Expenditure, this House actually recorded in the Lobby a vote against those of us who called for these economies. I invite the Committee to look at the Estimates and to say whether they are really economies or not. The Minister of Transport makes a great deal of play with the contention that he is saving £85,000. But if the members of the Committee will look at the Supplementary Estimate and the revised Esti-mate, they will see that it is not a real saving at all, and that the £85,000 is saved by not making certain appointments which might have been made, and by a rearrangement of the pool of motorcars. I defy the Minister of Transport or the Parliamentary Secretary to put their fingers on a single item in the old Supplementary Estimates or the revised Estimate where they save a single penny on the proposal they brought before this House. In the Supplementary Estimate they had a sum of £40,000, which was put down for additional appointments during the year, that is, appointments that might be possible. In the revised Estimate they write that down for £1,000, thereby saving £39,000 which has not been spent, and they claim that as half of their saving of this £80,000. In addition to that, they deduct another £26,000 to make up their £80,000.
Look at what they do on the motor-car pool. In the Supplementary Estimate, if you look at the receipts you will find that they show a net loss of £4,500. They revise that on paper, and in their revised figures show a possible profit of £500, so that the loss of £4,500 is turned into a possible profit of £500, and the Ministry take credit for having saved the Nation £5,000. I submit that such a method of trying to show that you have 2463 saved £85,000 when none of it has been spent, and all that the Ministry is doing is not to spend the money, is throwing dust in the eyes of the taxpayer. I should like to have some reply to the criticisms previously made as to the points on which economy could be effected. Let me refer to one or two of them. On 10th March I made a speech in Committee on the Supplementary Estimates. I instanced two examples of a kind of thing that was said then, but of my statement absolutely no notice has been taken. I drew attention to the extravagant salaries being paid to many of these men. Incidentally, did the Committee notice the criticism of the Minister of Transport with regard to that? He said in effect, "We are not extravagant, if you compare us with the outside railways. If you lump our men together you will find that we are paying much less than is paid to men in comparable places in the railways outside." There is all the difference in the world between payments to a number of men whose only duty is to supervise, because the Ministry of Transport does not control, and the payments made to competent men outside on the railways, whose duty it is to control and manage. Obviously, those men are going to be paid much better. The right hon. Gentleman's defence on the point seems puerile. Take the case of the solicitor to the Minister of Transport. The Board of Trade is as big a Government Department as the Ministry of Transport can possibly be. You have your own solicitor in the Board of Trade and his maximum salary is only £1,800. But in this new Ministry of Transport the solicitor's maximum salary is £3,750.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal)
I do not want to interrupt unduly, but if the hon. Member will look at the Estimate he will see that this official is solicitor and secretary and combines both offices.
§ Mr. HOGGE
I gathered that before, and I was trying to save some time by not quoting my previous speech. Let us take the point in regard to the secretary. The Principal Secretary at the Ministry of Transport has a maximum salary of £1,500, as against the same official in the Board of Trade whose 2464 maximum salary is only £1,000. When we made our criticisms on the Supplementary Estimates we made the constructive suggestions to the Government that here was a method by which they could effect economy. That has not been done. All the various sections of the Ministry are still being run by director-generals with very large salaries, and with all their attachments. I repeat that the only economy which has been effected is the economy in possible appointments. The nation is not being saved a single penny on the machine which has been set up. I listened with a great deal of interest to the speech of the Minister and to the numerous statements he made as to what the Ministry involved. He made one strong point with regard to the loss of public money in maintaining receipts to the railway companies for, I think, two years after the termination of the War. Who is responsible for not having that date fixed? Surely the Government could, seeing that they have won the War, have hastened matters in such a way as to fix a date beyond which this money would not be taken from the pockets of the taxpayer. It is curious that anyone should say, "I came into the Ministry and found this and that and the other thing, and it is going to be a great expense to the community." The Minister is a Member of the Government which could have fixed the date and cut the loss.
We had a lot of conundrums put to us with regard to what would happen supposing some cliff at some particular place had fallen, and we were asked whether that should go to maintenance or something else. That kind of question could be answered by any individual who has had any connection with railway work. The answer to the question about the cliff, which fell, I think, at Folkestone, is that every railway in the country would put it down to a maintenance charge. Such questions have to be answered by business men in the railway world every day of their lives, and it is surprising to find a man with the railway experience of the Minister of Transport coming down and trying to make the House believe that these difficulties, which confront every man interested in railways, are the kind of difficulties which make a Ministry of Transport necessary. I think that a Ministry of Transport is not at all neces- 2465 sary. I am one of those who believe that this work could be done by some other Department of State. I also believe that it ought to be done by some other Department of State for the reason that we cannot afford to spend money on any new and costly Department. The Ministry of Transport is a temporary Department. That is quite clear, unless you change the policy of the Government, and we are not allowed to hear what that policy is, except that the Cabinet decided that it was not to be a policy of nationalisation. As to what it is, we will have to possess our souls in patience. As it is a temporary Department, is it worth our while to continue expenditure on this basis. On Wednesday next we are to have a Second Reading Debate on the Mines Regulation Bill. I should imagine that the mining industry is as great as the railway industry, and involves as many interests.
§ Mr. HOGGE
The Government propose to create a Minister of Mines who is not to be a separate Minister, but an additional Secretary to the Board of Trade with a salary of £1,500 per year. [HON. MEMBERS: "Two thousand a year!"] That is still £3,000 less than is paid to the Minister of Transport. What is the result of arrangements of this kind? If you have an expensive Minister at the head of the Department with the large salary and position that runs right through the whole Department and everybody in the Ministry tries to be as big as the Minister. You have in this Department, nine separate Departments with Director-Generals, with one with a salary of £3,750, others with salaries of £3,000, £2,500, £2,000 and so on. You have got heads of Departments in the Ministry of Transport who have larger salaries than some Cabinet Ministers. At a time like this when we are all looking round for methods by which we can save the nation's money, it is the duty of the Government to scrap the whole Ministry of Transport and to do all that is necessary with regard to the railways through the old machinery of the Board of Trade. I am not afraid of the difficulties that have been created by my right hon. Friend this afternoon. The Committee will remember how he stood at the box and put another of his conundrums as to a case where some railway had changed its rent for a particular holding from £100 to £1,000 and 2466 asked should it belong to the railway or to the State. I should have thought that that was a matter which could quite easily be dealt with by a competent auditor. There are plenty of auditors unemployed, and among discharged officers there are a great many professional men of that type looking for work and quite competent to do this kind of thing and who could do it at much less expense than that involved in the settling up of a great Department.
With regard to the quarrel which the Minister of Transport has with my right hon. Friend, the Member for Paisley (Mr. Asquith), he can deal with that himself as it does not interest me. There are a great many things done during the War by men who are inside the Coalition and outside for which it is very difficult to find explanations. I am glad I never supported any Coalition in this House at any time during the War. If anyone hopes by unearthing that kind of thing to divert the attention of the taxpayer from the real position, which is the spending of public money unnecessarily, then they are wrong. I think the Ministry will find, before the discussion is over, that a great many people are of the same opinion as I am, that it is a monstrous thing to try and create new vested interests in a great new Ministry of this kind till you have exhausted all the other methods of dealing with the question which lie at your hand, and which if not strong enough could be buttressed from outside to carry over the time till the railways have resumed the management of their own affairs or till the Government are able to impose some new system on the country.
§ Colonel GRETTON
As one of the Members of the Select Committee on National Expenditure I desire to make a few remarks. The terms of reference to the Select Committee laid it down that the Committee was to examine current expenditure defrayed out of moneys provided by Parliament and to report as to what, if any, economies in the execution of the policy decided by the Government might be effected therein. The Noble Lord, the Member for Oxford University (Lord H. Cecil), protested against the restriction confining the investigation in conformity with the policy of the Government, and it was suggested that the Committee should have authority to deal with policy. Under this restriction we endeavoured to ascertain what the Ministry 2467 of Transport was actually spending on salaries and other expenses in conformity with the policy laid down. The concluding paragraph of the Report states that the Ministry of Transport Act was conceived on a grandiose scale and that the Ministry had been constructed accordingly, and that Parliament was responsible and must be responsible for the policy pursued by the Ministry.
In regard to the details, I should like to call the attention of the Committee to the fact referred to by the last speaker, that the revised estimate does not in fact reduce the staff which was set down in the original estimate of the Department. It is similar to that which was originally proposed until we come to the staff on general purposes, where there is a deduction, and further on there is a further deduction of £26,000 for appointments not made during the current year. If the Committee pass the Estimates in the present form they will empower the Ministry to make all those appointments at the salaries set down, and if the Ministry wishes to make them they can go to the Treasury and say that they have the authority of Parliament to do so at the salaries stated, and that the Treasury must find the money in a Supplementary Estimate. As a matter of fact, the Select Committee on National Expenditure made definite recommendations that certain Departments should be reduced by definite sums, but that has not been done. The Committee in dealing with these matters is in a position of very great difficulty. You have to spend an interminable time in going into the details of every Department, and all you can do is to form an opinion as to whether the work done to carry out the policy of the Government was extravagant in the circumstances. Recommendations in some cases were made for reduction. There is one sort of expenditure which we did in fact in the Report approve of, and that is the expenditure for the checking of the accounts in which Government and public money is involved. We recommended that the expenditure should not be withheld for that. It was pointed out in the evidence given to us by the Department on this subject that the accounts were so numerous that it would be impossible for the Ministry to undertake a detailed audit of every item, and that what had to be done was to make a general examination 2468 of the accounts and the items could be adjusted.
I would like to call the attention of the Committee to the fact that if they think the Ministry of Transport is going too far and doing more than it was intended it should do, now is the time to act, on these Estimates, to reduce the staff of those Departments which are not connected with finance. That is a matter of policy in regard to which the Select Committee was not in a position to make any recommendations owing to its terms of reference. It is, at any rate, open to question whether some of these Departments are not over-manned and over-expensively staffed, considering the kind of work they have to do. I do not wish in any way to attack the Ministry of Transport. Parliament is responsible for setting it up and for the legal powers which are set forth in the Act, but it is undoubtedly open to investigation and, I think, serious criticism as to the dealings of the Ministry with the railway companies. The Minister claims that the Ministry does not control or manage the railways, but there is undoubtedly a good deal of interference going on with the working of the railways. There is a good deal done without, apparently, the assumption of responsibility in the way of interviewing managers and their officials and negotiating for various things to be done, and that kind of interference is apt to have a most deleterious effect on the working of a business machine, and if a management is constantly being interfered with and its efforts are modified by outsiders, the results are not likely to be nearly so good as they would otherwise be.
I would like to call attention to another matter of vital importance. In the Traffic Department of the Ministry there has been an attempt made to deal with docks. We shall all agree that, whatever the attempt has been, it has been singularly unsuccessful, and the congestion of the docks at the ports has remained one of the great factors which have increased the difficulties of carrying on the trade of this country. The ports are now doing probably something less than two-thirds of what they might do if the position were different, and the question undoubtedly will arise whether the ports will not have to be handled either through the Ministry of Transport or by their owners and railway companies combined. I would 2469 like to make a few remarks on the Vote for new undertakings. The evidence which the Committee got from the Development Department of the Ministry was that it had been concerned mainly in turning down schemes of development, which seems an exceedingly wise thing to do under the present circumstances of the Exchequer. I suggest for the consideration of the Committee that, under our present financial stress, £1,000,000 is too large a sum to be placed at the discretion of the Ministry for spending on schemes which are not specified, and that a very much smaller sum—I would suggest £250,000—would be ample for this purpose.
As regards roads, the position apparently is rather unsettled. There is a large Department in the Ministry dealing with roads, and apparently when the full scheme of taxation which is contemplated is in operation, a sum of about £8,000,000 will be spent in the maintenance and development of the roads of this country. Such a sum requires careful handling and competent management. I think the Roads Department is being made on a quite large enough scale, and it was the opinion of the Committee that that sum was a very large sum to spend. I think too great a load has been put upon the right hon. Gentleman the Minister of Transport. He has been too confident in taking up that load and in trying to do too much at once, and I confess I think it would have been better in these days of stress and of very necessary economy that less should be undertaken and well done, and that the staff of the Ministry should be kept within reasonable limits, and the expenditure of the Ministry within the bounds of economy and efficiency. A large staff leads to large expenditure, and on every ground of economy it is desirable that any extravagance in conception or over-sanguine efforts to undertake vast schemes and great undertakings should be checked, at any rate, until we are in a sounder financial position. So far as the audit of accounts is concerned, the right hon. Gentleman has made some complaints about the Committee on that point, but I think the Committee had some experience of business before it went into these questions, and that it did not require a lecture from the right hon. Gentleman on business methods.
§ Sir E. GEDDES
I never suggested for a moment that the Committee required a lecture or had not fully and thoroughly grasped everything that was brought to their notice, but the agreements which I brought to this Committee's notice were not brought to the notice of the Select Committee. The hon. and gallant Gentleman was not, unfortunately, able to be present when I gave my evidence, which was the principal evidence given. I did not go into these agreements, because I did not think it was necessary, but never for a moment did I suggest that the Committee were not fully able to appreciate everything put before them.
§ Colonel GRETTON
The right hon. Gentleman made some remarks to-day which gave me that impression, but I do not wish in any way to do him any injustice, and I certainly withdraw anything I have said to which he might take exception. With regard to the agreements, they are perhaps difficult to understand, but the main agreement is the key to the whole business, and all the rest are subordinate.
§ The CHAIRMAN
The hon. and gallant Gentleman referred to a Notice of Motion on the Paper to reduce the Vote, but I was not clear whether he desired to move it or not.
§ Mr. ASQUITH
I had not intended to take any active part in this discussion, and I do not think I should have done so but for one or two references made in a spirit of caustic good-humour by the Minister to some utterances of mine of which he seemed to think he had a right to complain. I daresay the reports which he received were, as they generally are in these days, of an abbreviated and condensed character, and possibly some qualifying phrases and expressions which I used may not have crept into them, but substantially they correctly represent what I said and thought, and still think. Let me say at once that any suggestion that the officials of the Ministry, from the right hon. Gentleman downwards, were wasting their time in indulging in idle contemplation was far from my thoughts. You can do a great deal of good work lying on your back, shutting your eyes, and every now and again opening them to the fresh air and light of heaven, ruminating over problems, settling policies, 2471 and determining the future, so far as you can, both of your office and of the country. I have no doubt some part, at any rate, of my right hon. Friend's time is profitably employed in those sequestered and not altogether academic occupations, and I am the last person to complain of that. I can only account for this long and elaborate list of highly salaried officials upon the assumption that it is considered necessary for this task of development and construction. But I want to come to the actual point of importance. What is the origin of the whole of this matter of the Ministry of Transport, and all its personnel and all its expense? It had its origin in a very simple fact, that early in the War it was found necessary for the Government to take control of the railways, and an Agreement was then entered into—I think myself not only a prudent but a necessary Agreement—the substance of which was that the Government guaranteed the railways the previous dividends, and promised to return the railways at the expiration of the War in a status quo ante, and that in return the State was entitled to use, and had power to use, the railways for the transport of troops, munitions, and, indeed, for all other purposes which the exigencies of the War involved. That, I think, was the substance of the Agreement—a very simple one. I do not think it presented any ambiguity, and, so far as I know, in carrying it out it did not require the addition of a single person to the staff of the Board of Trade. Later in the War—I think in the year 1916—my right hon. Friend, who was then President of the Board of Trade, with the consent of all his colleagues, extended the duration of that Agreement to a term of two years after the expiration of the War, and I am inclined to agree with my right hon. Friend opposite: it was a pity that "termination" was not sooner defined. You could not define it in 1916, and I do not think anyone will doubt that that was a wise and prudent step also. You could not with a clean-cut, the moment hostilities were over, return to a state of things which prevailed in time of peace.
The right hon. Gentleman, by way of endeavouring to prove the necessity of his Department and the somewhat complicated and extended staff, has read to the House a summary, at any rate, of a number of other auxiliary and ancillary 2472 agreements. To my mind, they do not present any difficulty at all. They follow the main provisions of the original agreement. I do not think there has been any trouble about their interpretation. The railway companies loyally accepted them, and the State on its part loyally accepted them, and so far as I know, there was never any friction of any sort or kind. The right hon. Gentleman referred incidentally to an agreement which he said was entered into by my right hon. Friend the then President of the Board of Trade, Mr. Runciman, with regard to the Underground railways. I never knew of it. It is obvious there are none of us here able to accept or refute the right hon. Gentleman's conclusion. That was the situation. I have said outside this House, and I repeat it here, after having had the opportunity only to-day of talking the whole matter over with a man who knows more than anybody else about the actual conditions at that time—I mean Mr. Runciman—that through the whole of this process—I agree at first sight it is a difficult one, and certainly a very responsible and delicate process—the supersession, for the time being, of the railway companies in the absolute and uncontrolled conduct of their undertakings. would have been perfectly adequate from the point of view of machinery, if the matter had been entrusted in the first instance to the Railway Department of the Board of Trade, which—and I speak with as long a knowledge and experience of this as anyone in the House—is one of the most competent Departments I have ever known. I think every railway man here would agree with me as to that. I will not mention names, but it has had the advantage of being presided over—I am not speaking of the transient political head of the Department—by some of the ablest members of the Civil Service. I believe that the Railway Department of the Board of Trade was thoroughly capable of dealing with all these matters. The right hon. Gentleman said there were only 35 clerks.
§ Sir E. GEDDES
The right hon. Gentleman will appreciate that that staff was presumably, employed fully on other matters before the railways were taken over.
§ Mr. ASQUITH
I think there was a case for increasing the staff, because of these additional duties thrown upon them, and that could easily be done. But it really all comes to this. The whole thing worked, as my right hon. Friend well knows, under the operation and supervision of a committee of railway managers, without friction or difficulty from first to last, and practically the only new duty which was cast upon the Government Department responsible for it was the duty of audit. I think the hon. Gentleman who has just sat down, if he will allow me to say so, in a most admirable and practical speech, said that the railway companies have a most complete and well-tried system of audit of their own. It is not as if you are dealing with accounts of new concerns starting for the first time in business. These are companies which for years have employed persons much more skilled than any Government Department—and I say that without any disparagement to the Civil Service—in this expert railway audit work. Their figures are accepted both by shareholders and creditors, and I believe in 99 cases out of 100 there would be no necessity for a State Department to question, or even canvas the audit which the railway companies themselves make.
§ Sir F. FLANNERY
Does the right hon. Gentleman remember that the interests of the railway companies are antagonistic to the country in regard to matters of this kind?
§ 7.0 P.M.
§ Mr. ASQUITH
I am quite aware of that, and that is the reason why I said the Board of Trade ought to have an Audit Department of its own. As I say, as regards the vast matters which come up for review, the Board of Trade might have appointed competent auditors of their own, and I believe the area of possible difference and dispute, or even criticism, would be narrowed to something very small. I cannot help thinking that an enlargement of the staff of the Railway Department of the Board of Trade, and the invocation of competent auditors to supervise the audit of the railway companies, would have adequately met the necessities of the case. But what have we got here? A Select Committee has made a very admirable report, after having gone very carefully into the matter. I have never said, and I hope I shall not be suposed to say or to think, that the Ministry of Transport 2474 is not performing, and has not performed, the duties transferred to it with efficiency. I am sure it has. But when I look at, as I am sure the Committee has looked at and studied, page 3 of the Second Report of the Select Committee on National Expenditure, and when I read in one column "Rank" and in the next column "Salary" of the officials we are now employing in this Department, I am absolutely unsatisfied that there is any kind of necessity for this enormous expenditure. There are 30 officials whose combined salaries amount to £54,000. First of all, you have a duplication—a very curious thing in such cases—of the offices of Secretary and Solicitor. The holder gets £3,750 a year, plus £500 special allowance, and, in order that he may do the duty of Solicitor as distinct from Secretary, he has two assistants, each of whom gets £1,200 a year. Then you have got a Director-General, but of what he is Director-General does not appear. He gets £3,000, and a Deputy-Director-General gets £2,500. Six lines lower down another Director-General gets £2,070, and another two lines down a Director-General gets £2,500. hree lines further down you have another Director-General getting £2,500. Six lines lower there is a Director-General with £3,000. I have not yet exhausted them, because when I get to the third line from the bottom there is another Director-General who gets £3,100. What does it all mean? There is no explanation whatever of their functions, actual, prospective, or potential. I suspect they are mostly prospective or potential. Is there any Department of the State—I speak as an old Minister well acquainted with the Civil Service—which is manned like that, or which has ever been manned like that? We have had no justification whatever offered us in the course of this Debate for the creation, duplication, and multiplication of officials, the great majority of whom, as it appears from the Vote, are not Civil Servants at all. They are people imported from outside, experts or business men-I do not care what you call them, but they are not Civil Servants at all.
That brings me to a point which is really of more general importance than the particular expenditure of this Ministry. I took part lately, at the invitation of the Chancellor of the Ex- 2475 chequer—and I was very glad to take part—in an inquiry held in regard to the salaries of the leading members of the Civil Service. These salaries, I think everybody will agree, are quite inadequate, in view of the existing conditions, of prices, and other matters—wholly inadequate. I have always thought they were inadequate. Remember the responsibilities of these men. They have to discharge duties of a highly confidential character. Remember the infinite possibilities—if they are so-minded—of abuse, and the great demand for men of their character and ability in the business world. I do not believe there is any service in the world which, in proportion to its duties, possibilities, and opportunities—if they were selfish enough to seek other opportunities elsewhere—which is so ill-remunerated as our Civil Service. Just look at this list in my hand. Before the War, the highest paid Civil Servant, the head of the Civil Service, the Secretary to the Treasury, got £2,500 a year. That was the utmost to which any Civil servant could aspire. What can the effect on the Civil Service itself be, of a Department recruited from men who are not Civil servants, who have never passed through the test of examination, the process of selection and promotion, as the higher parts of the Civil Service have done? These are men imported from outside, no doubt capable and competent in their way, who are getting, as Directors-General, salaries of £3,000 a year. There is one who is not called a Director-General, but is Chairman of the Rates Advisory Committee, who gets £5,000 a year, a salary wholly unknown in the Civil Service. These Directors-General get £3,000 and £2,500 a year. I say, from the point of view of the Civil Service, this is a disastrous experiment.
The House and the Committee, I hope, will extend its view in dealing with this matter beyond the scope of this particular Department, and have regard to the interests of the Civil Service as a whole. I still say, to set up, as you are doing in these Estimates, a new Department, which has taken over from the Board of Trade duties which were thoroughly well performed, and with a slight addition to the staff of the Board of Trade could have been equally well performed—even with the additional duties cast upon them—for 2476 the work of contemplative construction, in which the best part of the energies of these eminent experts seem to be absorbed, will create a precedent of the worst possible kind in the interests of the public service. From that point of view, and upon that ground, quite as much as upon the particular merits or demerits of this particular Department, I ask the Committee to indicate its sense of disapproval.
§ Mr. BONAR LAW
The right hon. Gentleman (Mr. Asquith) began with the skill and good humour which characterises him by explaining what he meant in saying that my right hon. Friend (Sir E. Geddes) and the other heads of the Departments were lying on their backs. He is quite right. Contemplation is as useful almost, if not quite, to the advance of civilisation as action. I think that is admitted. But I will say this, with some knowledge of how these arrangements were made, that if that had been the particular task of the Minister who was wanted by the Government, my right hon. Friend would not have been the individual who would have been chosen for the purpose. I do not mean that my right hon. Friend is not as able to think as most of us. I do mean that he was chosen for his post by the Government because there was a definite work to be done, and because we judged from his past experience that he was capable of doing that work. My right hon. Friend's whole speech, or the latter part of it, was directed, not against the Estimates, but against the Ministry itself. That is exactly the point made over and over again in the House when my right hon. Friend was delivering his speech, explaining the working of his Department, and what it has done since it was instituted. I read the "Times" report of my right hon. Friend's speech to which my right hon. Friend, the Minister of Transport, referred. Like him, I have had some experience of making platform speeches, sometimes without giving as much time to them as one would like to do if one had the opportunity. When I read that speech, I admired the phraseology, and came to the conclusion that my right hon. Friend had either been given a brief by somebody who had not studied his subject, or had read a leader in a particular newspaper in anticipation of that speech. Unless my right 2477 hon. Friend is prepared absolutely to deny it, I really suspect that he has given more examination to the subject since the speech of my right hon. Friend was delivered this afternoon than ever before.
We have all listened to the speech of my right hon. Friend (Sir E. Geddes). The case which he has put, it seems to me—and I am bound to say so—and I did not know what speech my right hon. Friend was going to deliver—an over-whelming justification for the appointment of these men at these salaries. If my right hon. Friend (Mr. Asquith) thinks that all that is to be done away with by talking about the disadvantage of starting this particular system in the Civil Service, and the effect it will have upon other Departments, I am sure he is mistaken. We are dealing here, and the Committee must realise it, with an absolutely unique situation. The arrangements which were made with regard to the railways during the War have left the British taxpayer in this position: that he is the person on whom the burden will fall for the whole running of the railways. The idea expressed by my right hon. Friend that the ordinary Civil Servant, however able, can deal with a business problem like that, with justice to the taxpayer, is an idea that is not entertained by any business man. We have evidence of it. My right hon. Friend in the course of my earlier speech interrupted me to say that I, too, was responsible for the agreement made by Mr. Runciman. I never for a moment denied it. I am not prepared to blame Mr. Runciman for that agreement. I should like to know more about it before I blame him in any way. But I do say this, that the simple fact—if it is a fact—though there is hardly room for doubt, I think—the simple fact that the agreement made then should be such that the railway company with which it was made was willing itself to cancel the contract under which the State had paid over £1,000,000, is the best possible proof that the ordinary Civil Servants at the Board of Trade were utterly incapable of dealing with the situation, and, to put it right, we must have men of similar training to the men who made the bargain on behalf of the railways.
The list of Directors-Generals and other officials of high salaries was gone through by my right hon. Friend. Perhaps he 2478 did not notice—perhaps he did not know—that there is this distinction between them and other members of the Civil Service, that though they have high salaries, they do not enjoy the privileges of the ordinary civil servant. Their appointments are in most cases temporary, and they get no pensions. But that is not the point. Does my right hon. Friend suggest that all this work of examination of an income and expenditure of something like £500,000,000 a year, in a considerable part of which there is doubt as to what should fall on the State and what should fall on the railway companies—does he put forward the idea that that can be dealt with except by the same type of men who are bargaining on the other side? That is an idea which seems to me to be utterly absurd. It is not a question of trained officers. It is a question of having engineers, and the same type of men as those who advise the railway managers, if the interests of the State are to be safeguarded in the same way as the interests of the railways. I do not blame the previous Government for the reasons I have given, but is it not obvious that the State would have been saved an immense sum of money if the Board of Trade, at the time these agreements were made, and while they were working them, had had men at their disposal of the same type as those who were making the agreements with the railways, and those who are in the Ministry of Transport now? No one else can do it. My right hon. Friend says there are far too many of these high salaries. I do not know whether he has had time to read the whole of the Committee's Report. I have read it. It is a very careful examination, and, on the whole, I do not think it was an unfair examination. The Committee went into every one of these Departments, and in no single case, to the best of my recollection, did they say that they either had too many men of that type, or that they were too highly paid. On the contrary the Committee pointed out, as is obviousthat trained expert directors of departments and technical experts are necessary for the work…and must necessarily be recruited outside the Civil Service at salaries reasonably commensurate with those which they could command in other than Government employment.Is not that obvious. Is that not common sense, if you are to get men capable of 2479 doing this work? Compare them with the men whom my right hon. Friend had in mind, men like Sir Francis Hopwood and Sir Llewellyn Smith, head of the Board of Trade, men whose ability, it is probable, and more than probable, is greater than that of these men who are getting these high salaries. To suppose that these civil servants are able to do the kind of work required is an absurdity. My right hon. Friend, for instance, and some of my colleagues on this Bench have, I think, quite as much ability—I am trying to put it without exaggeration—as any one of these highly-paid officials. But is there any Member of this House who would entrust that work to anyone with the experience of my right hon. Friend opposite, or any other Minister? Of course not! You have to have not only the ability, but the training. I say that. I can imagine no action, and this seems to me to be common sense, which would be more ridiculous than when you are superintending the expenditure of this vast sum of money, to say, because you are starting a new precedent in the Civil Service, therefore you will not pay the salaries which are necessary to get the work done in the best possible way. That is the worst kind of service to the State. I am not going into details in this matter, but the Committee has got to remember that we have not only this great work of saving the State money, but undoubtedly the expenditure will be more than paid by that work. It is quite true that it was not merely to take over this work that this Department was set up. It was set up with a view of improving the whole transport service of this country, and in this way the country will be benefited. We may be asked where is the proof of what is being done from that point of view, and I think that is a legitimate question. I think my right hon. Friend gave an indication of that. You cannot expect results from any business like this to come immediately you set up the business, but, from the information which has been put before the Government, I know that various Departments have schemes of transport which they wish to recommend to the Government of the country. In the old days these schemes would have been taken up by each Department and examined by them. Already this Ministry is employing these highly trained men to examine one of these pro- 2480 posals from the point of view both of cost, practicability and usefulness, and already they have saved considerable sums of money by using this staff in order to get these schemes done at the least possible rate.
My right hon. Friend, in introducing the proposals of the Government and the Government policy, gave an outline of the efforts made by the Ministry to centralise improvements and to provide some means of letting other railway companies know what is being done by its neighbours, and making pooling arrangements in every possible way, so as to make the best use of the transport of the country. Under the old system—there are many railway directors here who would not deny this—the jealousy between railways was so great that foolish as I think the policy was, the general idea was not so much to create new traffic as to secure from another railway the traffic which they have already got. Surely we are trying by some central examination and advice to get our railway system put on the best possible lines. I know perfectly well the feeling of jealousy which was shown in regard to the Ministry of Transport Bill in reference to a Department like this, which interferes with many other Departments and which does work which many people think could be done just as well without the Ministry of Transport. I know that the House of Commons by a big majority did think that this was a change worth making, and I think anyone who reads the Report of this Committee will recognise that so far there is nothing in the work of the Ministry which justifies the House of Commons in changing the opinion expressed when the Bill was passed.
§ Mr. REMER
I do not think any Minister of this or any other Government has received in this House more considerate or fair treatment than the Minister of Transport. He made a big point this afternoon about the Act being on the Statute Book which gave him the power we are complaining about to-day. I do not wish to labour this point, but I think it will be universally agreed that that Bill was very materially altered before it was put on the Statute Book. There is one point to which I wish particularly to call the attention of the Committee. We have heard something said about an Estimate of £250,000, but in the 2481 Estimate which came into my hands the figure is £339,571. Therefore I cannot understand what the right hon. Gentleman refers to when he mentions £250,000. It seems to me that the defence of the Minister this afternoon has been more one of attacking somebody else instead of defending his own action. The right hon. Gentleman has referred to all sorts of offences which were committed before the Ministry of Transport came into existence, and it is not fair to come here this afternoon with a defence of that kind, which is simply attacking Ministers in other Governments, when he should have been defending his own position. I do think any of the items such as the rents of the stables, the fall of the cliffs at Folkestone, and the effects of the snowstorms are matters which could have been dealt with by a much smaller staff than he has at the present moment. Even if those items to which he has referred are matters which involve the employment of this staff, obviously they are quite of a temporary nature.
It does seem to me that the Minister in dealing with his Department has not been going into the matter with the idea of what he can cut down, but with no idea of saving money at all. I think every business man who looks into this list will agree that it is an appalling thing to be placed before Members of this House. I do not think that the amount which is being complained of is confined to the £70,000 or the £80,000 referred to by the Select Committee. What we are dealing with is the high policy of the Government which is causing this expenditure, and I am convinced, after some considerable experience of the working of railways since the War, that the whole policy is a mistaken one. I spoke against the Second Reading of the Transport Bill and I opposed it several times in Committee, and I have not seen any reason since to change my mind about that particular Bill. I believe it contains a vainglorious scheme. It wanted to be more glorious than it turned out to be on the Statute Book. It may be true that our system of transport requires reforming, but I submit that this is not the time and this is not the way to do it. I would like to make an analogy of what must come into the mind of every business man in his business career. Every business man is ambitious that he should keep his work up to the full efficiency and keep his methods up-to-date, and 2482 instal every kind of labour-saving machinery, but there comes a time in every business man's career when he finds himself unable either through want of capital, or through being unable to secure an overdraft from the bank, when he has to wait until the time comes when he is able to carry those reforms through. From a national point of view, we are short of money. We cannot secure the money to fund our Floating Debt, and, therefore, I think this expense should not be incurred at the present time. We cannot afford these reforms, and, however beneficial they may seem, the times are not favourable for carrying them out.
There is one point in the Select Committee's Report to which I particularly desire to call the attention of the Committee. It is stated there that there is not going to be any cost to the nation for the Transport Ministry. I presume the meaning of that is that the railway rates are going to be raised in order to cover the cost of transport. That is only another way of the nation paying for that transport. They have to pay either in the form of taxation or higher railway fares, and I do not think it matters which.
§ Mr. REMER
Whichever it is, it is the same thing. Such a policy is ludicrous and absurd, and it is only another form of taxation. It is a plausible thing to say, as has been said by the Minister on other occasions, that we are going to do away with competitive trading. Personally, I believe in competitive trading, I believe if we have two routes to the same town we shall get a better service. You have an example of this in the journey from Liverpool to London, which is now taking 4½ hours, and it used to be done in 3½ hours, and that is a fair example that the general railway service now is much slower than when there was competition between the railways. The same thing applies to goods. It was a well-known fact in the time I am referring 2483 to, that goods could be lifted on any day and at any time in unlimited quantities. Now heaven only knows when you can get your goods away. There is no doubt that the price of commodities is higher in almost every direction by the fact that goods are being delayed at ports and sidings, and are not being dealt with as promptly as they should be. I am quite sure competition makes for efficiency as nothing else can do.
This Ministry is a useless and expensive Ministry. I quite agree with the right hon. Gentleman the Member for Peebles that its work could have been easily covered by an extension of the Board of Trade. It is a very usual excuse which comes from the Minister of Transport that the cause of delays on the railways and the cause of inefficiency is the War, and that the rest of the world are even worse off in those matters than we are. I do not think any comparison of our railways with those in the rest of Europe is fair. Our railways have, contrasted with other European railways, not suffered any dislocation; in comparison with them we have only suffered slight inconvenience. Their railways have been disturbed, blown up, and destroyed, and therefore any such comparison is most unfair. I have taken the trouble to make a good many inquiries at railway sidings. I have asked shunters what is the cause of the chaos on the road, and they tell me it is the needless interference of the Ministry and the endless forms of instruction—many of which are quite unworkable. They also tell me that if they did not wink every moment of the day at the ignoring of these needless and useless instructions, they would not get any work done. Until this useless Ministry clears out, and until we get rid of the demoralising influences of this new bureaucracy, we shall have neither order nor efficiency on our railways.
§ Sir F. FLANNERY
The Committee listened with infinite joy to the fighting speech of my right hon. Friend the Member for Paisley (Mr. Asquith), who stuck to his guns, and maintained his position as well as he could, and still said of my right hon. Friend the Minister of Transport thatHe lay beneath the moon,He basked beneath the sun,He led a life of going to doAnd died with nothing done.2484 That is a quotation which no doubt my right hon. Friend will recognise. In applying such a description to the present occupant of the office of Minister of Transport the right hon. Gentleman the Member for Paisley made a very serious mistake, if I may venture to say so, especially in his allegations against the Ministry and in his proposal for an alternative arrangement. He suggested—and I confess I was surprised that he did so—that the accountants of the railway companies were men of such experience and skill that the country should rely upon them for all the necessary professional services required and performed by the Ministry of Transport. Is it not the very essence of all business relations that each interest shall be separately represented by professional skill? There is no allegation of dishonesty, no allegation of corruption, when two accountants or two professional men of any kind are brought vis-a-vis as representatives to discuss and settle the details of the separate interests they represent. We have been told by the Minister of Transport, what we know to be the case, that there are differences of opinion between the country as represented by the Ministry and the railway companies, differences as to percentages upon deferred repairs, amounting to £36,000,000 with interest accruing, differences as to the "stitch in time" in regard to which the railways are claiming for injury done to them by not being able to make necessary repairs at the proper time and supplementary damage which has arisen to their plant in consequence; and differences on many other points of technical detail, involving many millions of money. Yet we have the Leader of the Opposition seriously suggesting to this Committee that the accountants of the railway companies which make these enormous claims, that are disputed, should be the sole persons to settle the details of the disputed items.
§ Sir D. MACLEAN
I was here when my right hon. Friend was speaking, and he said directly the contrary to what my hon Friend suggests. Inasmuch as he repeated it, I cannot understand my hon. Friend saying what he does. My right hon. Friend said distinctly this—that he did approve of a super-audit emanating from the Board of Trade to check, as far as necessary, the audits carried through by these experienced auditors.
Sir F. FANNERY
I am in the recollection of the Committee, and I shall be quite content to abide by a comparison of what appears in the OFFICIAL REPORT to-morrow. I repeat that the suggestion of the Member for Paisley was that the country should be contented with the audit of the companies. [HON MEMBERS: "No, no!"] At any rate, that is what I understood, and I am in the recollection of the Committee. The right hon. Gentleman went on to make comparisons as he ran down the list of officials, and he spoke in particular of the salary of £3,750 to be paid to the Secretary and Solicitor to the Department. He suggested that that was an instance of very great extravagance. After all, the Solicitor to the Department has to compete with the supply and demand for similar services outside. I happen to know that a comparison between these officials in the offices of a single railway company would show that the salary to which the right hon. Gentleman referred is a very moderate and a very economical one. First of all, the offices of Solicitor and Secretary are combined in the Department. Take any of the great railway companies—take the London and North-Western, for instance. Do the Committee know what salaries are paid by that Company to the separate holders of these two offices—to the Secretary on one side and to the Solicitor on the other? I venture to say—I do not wish to go into details of figures—that the combined salaries of these two officials under the North-Western Company—a single Company be it remembered—are over £5,000 a year, and yet this Ministry, which is to deal with the whole of the railway companies by way of administration, is paying for the services combined in one man only £3,750! If that comparison is accurate, as I believe it is, then the suggestion of the right hon. Gentleman that this is an instance of lack of economy—that it is an instance of extravagance, is not well founded from the point of view of what is done by railway companies outside.
Whatever may be the view of the right hon. Gentleman for Paisley upon the question of economy and extravagance and the necessity for the continuance of this Ministry, these views are not shared by the Select Committee appointed by this House for the special purpose of examining into this matter. I hold in 2486 my hands a document which I am afraid not every Member of this Parliament has read. It is highly technical. I do not intend to weary the Committee with any-lengthened extracts from it, but I do desire to read one or two quotations bearing on the subject before the Committee. First of all, may I say that a very careful perusal of this Report has led me to the conclusion that it is a most careful, most highly-skilled, most unbiassed, and most impartial Report. It has been thought out most carefully, and it is based on evidence apparently taken before the Committee at great length. I do not think there ever was presented to this House a Report which more succinctly and more definitely went into the questions at issue. Let me call the attention of this Committee to one or two extracts. The Report says:The operations of the railways include the ownership and management of approximately half of the dock area of the United Kingdom, and a considerable number of steamers upon different routes, canals, light railways, road transport and hotels. It is impossible that the present staff of the Ministry should undertake a close and independent audit of the whole of the accounts of all the railway companies.That was the point which I had in my mind when I referred to the wide extent of the operations of the Ministry. There is the statement of this Select Committee that it is impossible for the accountants to undertake audits which, I believe, the right hon. Gentleman the Member for Paisley desires to put upon them. Then the Committee go on to say:In certain cases the appointments are held temporarily by gentlemen at considerable financial loss to themselves, on their pre-war income.At considerable financial loss to themselves on their pre-War incomes! Is there any official, be it the Director of Public Prosecutions or otherwise, who will take up this question and prosecute. my right hon. Friends for profiteering, because here there is a direct case of profiteering by bringing in officials at a loss to themselves in comparison with their pre-War incomes? The Select Committee goes on to say:A system of dock statistics has been prepared to show the traffic of the various ports, the delays of ships, delays in handling and any other points of vital importance to the prompt and economical handling of the dock traffic.That is a kind of special duty, involving close attention, which my right hon. 2487 Friend did not mention in the course of his speech. Here is the very essence of the Report of Committee. They say:The Committee, therefore, cannot recommend any curtailment of the financial staff necessary to protect the Exchequer.That is a very definite statement, which, to my mind, goes to the root of the whole question that is before this Committee to-night. I should like to call attention to the fact that, whilst the Committee recommend a reduction of £70,000, the Ministry has effected a reduction of something over £80,000. That being so, the essential point for this Committee to-night is whether it is right and proper that that reduced sum should be voted. If the recommendations of the Select Committee, who laboured so hard upon the subject, are to be accepted, I think there is no doubt as to the decision at which this Committee will arrive. There is one paragraph at the end of the Select Committee's Report, which has already been referred to by the hon. and gallant Member who was the Chairman of the Sub-Committee, and to which I desire to make one more reference. It is the paragraph at the end, which says:The Ministry of Transport Act was conceived on a grandiose scale.Whatever portion of this Report of the Select Committee has or has not been read by hon. Members or the public outside, everyone, including the Press, seized upon that particular phrase. Looking at the Report as it stands, it seems to me that the Sub-Committee made the bulk of the Report, and that somebody in the Main Committee added these words without having read the body of the Report itself. At the very end of a Report which confirms the existence of the Ministry, which confirms the action of the Ministry, and the expenditure of the Ministry, we get, in this last paragraph, this Parthian shot. I think I have shown, and I think my right hon. Friend showed, that, so far from being grandiose, this Ministry is performing a useful and necessary function, and is performing it without unnecessary publicity or advertisement. I believe that, when the present Act of Parliament comes to a natural termination, and the work of the Ministry is reviewed, it will be found that it has been useful and necessary and of great advantage to the country, whether it is grandiose or not.
§ Mr. MYERS
In common with most hon. Members, I have listened with extreme interest to the speech of the Minister of Transport. I am not going to join in the criticism that has been urged from various quarters in respect of the administration of the Department. Complaints are heard from various sections of the community as to the length of time their goods are on the railways; and also, it must be admitted, murmurs of dissatisfaction are heard from the travelling public in respect of the increases that have been imposed upon railway fares. Having regard, however, to the circumstances of the case, and to the legacy handed down to the Minister of Transport, it would seem that, all things being considered, really good work has been done with the material that he had at hand. The most interesting part of his speech was, perhaps, the most extraordinary. The recital of the agreements which had hampered the activities of the Minister startled the House, I think, considerably. Those agreements are characterised, so far as we can understand them from the Minister's observations, by a pronounced lopsidedness in the direction of advantage to the railway companies. The agreement for deferred maintenance, which has left the companies in possession of £36,000,000 to meet any contingencies of the future, would seem to be open to some question, even though the Minister gave it his blessing. The agreement relating to capital expenditure is also open to some doubt and question, and the agreement relating to the replacement of stores on the 1913 basis seems to be an agreement the like of which one has never heard of before. In the latter part of his speech, when he was discussing the effect of railway operations in other countries, the right hon. Gentleman made the remark that politics usually pollute administration. One wonders to what extent the political influence of railway interests is behind those agreements. The most extraordinary part of the business in regard to these agreements is the Minister's statement that he did not know of their existence when he presented his Estimates last December, and that claims and continually being made, and others are to come, many in number and large in extent. The most striking part of his speech in that connection was that he had to wait weeks and months to get those 2489 agreements into his hands, and that, finally, he had himself to approach the railway companies in order to get them. That seems to be an evidence that the railway companies desired to cling to what they had got, and not even to assist the Minister of Transport in his investigation.
The Minister stated that the Government pay the companies their guaranteed net receipts. There is considerable misunderstanding in the country upon this point, and the country would like to be informed what actually is the amount that is paid to the railway companies. Inquiries have been made and questions asked, and I have no doubt whatever that a very definite reply could be given. I am sure the country would be interested to know exactly what the responsibilities of the Government are in cash payments to the railways of the country at the present time. The Minister further declared that the railways were earning something like 4 per cent., and he intimated that that 4 per cent. was on a capital of £1,300,000,000. Every writer upon railway matters that I have consulted, who can be taken as any authority at all, declares that not less than one-third of the railway capital of the country is watered stock, that is to say, that the actual railway capital of the country is nearer £800,000,000 than £1,300,000,000. If the earnings of the railways were calculated upon the actual capital that has been put down in pounds, shillings, and pence, the rate of interest would be considerably higher than 4 per cent. The Minister also said that the State has given no orders to the companies that would increase the costs of the undertakings, except those under the head of wages, and we were told that a Special Committee which has just been sitting, composed of railway directors, workmen, representatives of the public, and so on, has come to the conclusion that the increase of wages in the case of the railwaymen was not up to the normal standard of increase in other grades and occupations. When the railwaymen, during these last three or four years, have urged their claims for increased wages, they have been met by one or two propositions. The comparison of the receipts of the railways with expenditure, and so on, has been hurled at the heads of the railwaymen. The right hon. Gentleman the Member for Paisley stated that the arrangement entered into with the railway companies 2490 in the first instance was to hand the railways back to the companies after the War in as good a condition as in 1913, with the condition that in the meantime the railways performed certain services for the Government free of charge. It is estimated that in 1918, if the work done for the Government had been charged at pre-War rates, it would have brought £17,000,000 into the railway companies' exchequer for that year. When we have been contending questions of wages with the Government due allowance has not been made for the work done for the Government upon the railways, which was either done at a reduced charge or at no, charge at all.
Further, we are confronted with this position at the present moment—or at any rate it prevailed up to a quite recent date. The travelling public are familiar with the increased charges which are put upon railway travelling, and we are told that further charges are in contemplation. Up to a quite recent date, however, we understand that the goods traffic of this country was carried at the same rate as in pre-War days; that is to say, while all costs of maintenance and upkeep, wages, etc., were in the upward direction, the traders of the country have had the advantage of having work done for them by the railways at the same figure as before the War. Obviously that is another contribution to the argument that, if the traders of the company had been subject to the same law and the same tendencies as all other elements in society, considerably more revenue would have come into the coffers of the railway companies, and concessions could have been made to the railwaymen out of those extra receipts without having the extra trouble and contention that there has been between the Government and the railway companies these last three years. The Minister said the railways were a losing concern, but he instantly qualified that by the observation that it was not quite that at present. We have had that story before and there has never yet been any satisfaction given that that position could be sustained. Let me read a paragraph—The State is now running the railways at a loss, due in the main to the enormous increase made in the wages of railway workers since the beginning of the War and also to the great reduction effected in the hours of labour. This loss is now being borne by the general taxpayer and will soon 2491 have to be passed on to the general public in the form of increased fares and charges.That statement was made last year by the Prime Minister. It was circulated to the country as a reply to the demands of the railwaymen at the time the railwaymen had their notices handed in. There has never been any substantial support yet given to that declaration. As a matter of fact a good deal of evidence can be found upon the other side.
In 1913 the total receipts of the railways of the country were £139,000,000, the working expenses were £87,000,000, and the net receipts were £50,000,000. in 1918 the receipts had gone up to £197,000,000, or £60,000,000 more than 1913. The working expenses had gone up to £143,000,000. They were roughly £60,000,000 above the 1913 figures. But the net receipts had gone up from £50,000,000 to £53,000,000, and the net receipts as shown by the figures of the Board of Trade for 1917 and 1918 were the highest net receipts in the history of the railway service of this country, and at the very time these figures were being published by the Board of Trade we had the Prime Minister circulating a document to the public that the railways were being worked at a loss, and that loss was being passed on to the general public. A White Paper published by the Government in May of this year shows that the profits of the railways for 1916 and 1917 were £50,000,000 and £55,000,000 respectively, and that a surplus of £19,000,000 on two years found its way into the coffers of the Government, and this House and the country are entitled to know, in view of these figures of the Government and the Board of Trade, are the railways being worked at a loss, and, if so, to what extent, and where these net receipts of over £50,000,000 a year are going, who is getting them, and how are they being disposed of. Further, the Minister referred to the cost of our railway mileage in construction, and intimated that the cost of construction was £54,000 per mile, and in the other three countries which he named he said it was £30,000, £24,000 and £14,000 respectively. There is no secret as to where this cost comes in. It is well-known to those who have studied railway construction that the extra cost is due very largely to the penalties imposed upon railway develop- 2492 ment by lawyers' charges and the conduct of landlords.
Something was said about waste. While substantial economies may be effected something can be said in favour of the Minister that he has done exceptionally well with the material that he had at command. The legacy handed down to him from the previous administration was a tremendously heavy one. He mentioned the fact that in respect of mileage and the tonnage carried we do not compare favourably with the railway systems of other countries and there is some reason for that, and while he deprecates the new era of managment in a certain direction which prevails very largely in other countries we are under no doubt whatever on this side of the House upon this point. Up to recently as much went in dividends to shareholders as went in wages to the workers on the railways, and man for man, roughly speaking, there is a shareholder for every worker on the railway. We will apply to that problem the declaration which is well understood and which has been heard in this House coming from a prominent personage in the State, "we will sack the lot." There is no need for 51 railway companies. There is no need for several hundred railway directors or officials at £5,000 a year, which I take it all has to be provided for out of the income of the railway service. The railway system has got to be extended and developed. Only a few days ago I was in one of the richest districts in mineral wealth in the country. I have never been in a district so badly served by railways. A single line of railway where limestone, iron ore, lead ore, ironstone and all the rest of it is being mined. Scratch the surface and everywhere mineral wealth seems to be available. A single line of railway, two hours and three minutes to do 31 miles and no waiting for connections! It is development in those districts that is necessary and we shall never have development under the existing system of railway management from the point of view of competitive railway companies. I believe from the point of view of the railway workers they are more satisfied to-day that they can get a square deal at the hands of the Minister of Transport than they have been for some time. Only a few years back the railways were put in the hands of the military. At that time the railway men were defending 2493 an average weekly earning of 25s. 9d. a week. They have more confidence in the Minister of Transport being unlikely to do any thing in that direction, and while these extensions are desirable, economies ought to be put into operation wherever possible, but economy is not always in the direction of saving. Economy is in the direction of judicious spending and whatever charges his Department puts upon taxpayers, if the money is judiciously expended it is sound economy in the interests of the State. Subject to these observations I shall decline to go into the lobby to support any proposal to reduce the Vote.
§ Mr. WILSON-FOX
I do not propose to follow the last speaker in his general review of the future of the transport of this country, which I should have thought would be more apposite when the time comes to consider the questions which the Minister of Transport commenced, but abandoned in deference to the ruling of the Chair. I think the business before us is solely concerned with the Estimates put before the Committee by the Minister for Transport. I had the privilege lately of serving on a Sub-Committee which investigated the affairs of the Ministry of Transport, and I think that every Member of that Committee will be pleased at the references made to its work by the Minister and by other Members of this Committee. Having served upon that Committee and upon a good many other Sub-Committees of the Select Committee on National Expenditure during the last three years, I feel it is right and proper for me to adopt a judicial attitude. In anything I say I shall endeavour to be perfectly fair to the Minister of Transport and his staff, and I shall avoid, if I possibly can, taking any biassed or partisan view on the question we have had to investigate. That has been the attitude throughout its existence of the Select Committee on National Expenditure, and it is an attitude which has on many occasions met with the approval of Committees of this House. I entirely agree with the remarks made by the Minister of Transport in the opening part of his speech in connection with the use that is being made of the Report of the Select Committee.
I agree that very many of these comments are both misleading and unfair to him and to his Department. It is perfectly 2494 true that no charge of extravagance in expenditure was made by the Select Committee, and the impression I derived from what I saw after very careful study at the Ministry was that there was a very general desire on the part of the officials of that Department, from its heads downwards, to be careful in the expenditure of public money. The chief criticism I have to make on the Estimates is that there was far too much provision made for expenditure which the Department did not expect to incur, and therefore I consider that it was wrong, and the Treasury in passing the Estimates was wrong in giving these very wide margins. The Estimates seem to have been framed in what I may call the Vote of Credit atmosphere, under which we were for four or five years, during which Treasury control was absolutely abrogated and in which the Select Committee on National Expenditure vainly endeavoured for the most part to point out extravagance during the War and to cut down unnecessary expenditure. If we are to get back to what I may call the atmosphere of strict Parliamentary control, we have first as soon as possible, to get out of this Vote of Credit atmosphere, and the sooner we do it the sooner we shall be able to exercise effective supervision over the estimates and expenditure of the various Government Departments. On that point there is one very important matter mentioned in connection with this Report. For a great many years past this House has had no opportunity of seeing Estimates Committees in being, and at work. I believe that the last Estimates Committee dealing with Estimates—
§ It being a Quarter past Eight of the Clock, and there being Private Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further Proceeding was postponed without Question put.