Motion made, and Question proposed,
That a Supplementary sum, not exceeding £21,000,000, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1921, to meet Expenditure arising from the Government Control of Railways in Great Britain and Ireland under the Regulation of the Forces Act, 1871.
§ 4.0 P.M.
§ The MINISTER of TRANSPORT (Sir Eric Geddes)
In introducing this Supplementary Estimate, I would invite attention to the fact that the original Estimate, made October a year ago, was for £22,000,000. The Supplementary Estimate appears at first sight to be 100 per cent. additional to the original Estimate. It is really not quite so wide of the mark as that, because this figure is a balance figure. It is the balance between an income of £325,000,000 and an expenditure of £275,000,000 per annum, so that we really have a total of £600,000,000. It was estimated that the variant would be £22,000,000, but we have had to introduce an additional Estimate of £21,000,000, therefore the Supplemental Estimate on the whole sum is not 100 per cent., but 3.5 per cent. The Committee, I am sure, will realise that during the past year and few months the unexpected incidents which have arisen are a full justification for inability to estimate more closely on such very large sums of money. There is in the cost of material a rise of about £10,000,000. There is in coal a rise of about £3,000,000. During the War there were the findings of appointed tribunals which added an additional £20,000,000 to the wages bill. Rates, taxes, and compensation for damage and pilferage have gone up £3,000,000. There was the coal strike, which actually cost the railways in reduced traffic £8,000,000. There were the political disturbances in 1464 Ireland which could not be foreseen when the Estimate was made, and owing to the railways in that country being shut down during several months we lost about £2,000,000. The Committee will agree that those items could hardly have been foreseen October a year ago, and on them we have lost a revenue of from £45,000,000 to £50,000,000. That is the reason for having to come back to the House and admit that one has not estimated more closely. In addition we had a very sudden trade slump, not altogether unexpected, but still almost unforeseeable October a year ago, and as we proceed with the discussion of the Estimate the Committee will realise that under the agreements with the railways we have had to make up for arrears of maintenance—what they were unable to spend from 1914 onwards. It was almost impossible to get nearer than we did with the Estimate. Therefore I hope the Committee will not be unduly critical of the fact that I have had to come back with a Supplementary Estimate.
Coming to the actual figures, the original Estimate was for £22,000,000, and now we are concerned with the Supplementary Estimate of £21,000,000, but if the Committee will look at the last paragraph in the notes to the Estimate, they will see that a sum of over £4,000,000 was credited by the railway companies to the Government at the end of last year, and that, unlike ordinary Appropriations-in-Aid, it extends over a period from the very beginning of control. Therefore to get an accurate figure one has to take the £22,000,000 of the original Estimate and the £21,000,000 Supplementary Estimate and the £4,000,000 cash recovered from the railways, which gives us a total of £47,000,000, and the Vote on the Paper is really £4,000,000 under an accurate figure. This account is a running account. It is not an account as to which you can say actually for the current financial year that the expenditure in respect of the year is so much and the income in respect of the year is so much. During this year, just as I have brought into credit £4,000,000 recovered from the railways—and this £4,000,000 extends over the whole period from 1914 onwards—so in the expenditure for the current financial year there are large items which have really nothing to do with the actual operation of the railways in this year. They are charged on this 1465 year, but are in respect of liabilities which accrued in previous years of control. There, may well be, in fact it is certain, that there are in this account arrears of maintenance belonging to the years 1915 to 1919. They have been overtaken in 1920, and therefore they are included in 1920. So one cannot look at this account and say that it is the result of operating the railways for this year. It does not give a clear indication of the financial result of the railways for the year worked.
This is a mistake which has been made by very many people, including more than one chairman of the railway companies. My right hon. Friend the Member for the City of London (Sir F. Banbury), speaking to the shareholders of the Great Northern Railway on the 11th of February said:For the whole of the controlled railways the liability of the Government for 1919 was over £39,000,000, and for 1920 over £41,000,000. That is to say, that while it required about £47,000,000 to pay the dividends of 1913 on the whole of the controlled railways, only about £6,000,000 of that amount was earned in 1920.It is very important that the Committee should note those words—Now, ladies and gentleman, I do not think it is ever any use concealing unpleasant facts, and I have thought it my duty to lay the situation before you in plain words and plain figures as I have just done.My right hon. Friend is deputy-chairman of the Railway Companies' Association as well as chairman of the Great Northern Railway Company. His words justly carry great weight, but these are not plain facts; they are distorted facts. He takes the statement of receipts and expenditure which he knows are quite abnormal. He must know that they are abnormal. He disregards in this statement of what the railways are earning and what the property is worth from an earning point of view, such cataclysms as the coal strike. That is not an abnormal happening. He disregards the fact that the Irish railways were shut down. He disregards the fact that the £47,000,000 which he takes as the net receipts of the railways were for the best year they had ever had, and that this is a fixed charge against the railways accounts. He disregards the fact that prices have fallen, and fallen very greatly, and that the cost of living is very much down.
1466 I quite agree that I cannot ask him to prognosticate, but if you take the cost of living on the sliding scale by which the men are bound, and which I am quite sure they do not mean to dispute in the least to-day, it is 3s. down, which is £5,400,000 less in the railway wages. The right hon. Gentleman only takes the money paid by the Government to the railways during this year irrespective of whether it belongs to that year or not. He has taken the whole of the expenditure, and says that it is the expenditure on the railways. He has entirely disregarded that in these figures there are arrears of wages which were granted by the National Wages Hoard which belong to last year, and had to be paid this year. He disregards arrears of maintenance and excess maintenance, which I will deal with later. He disregards the fact that, owing to these agreements, the railways are spending to-day on the highest standard of maintenance which they have ever had, and that in a period of trade depression. Under these heads there are £20,000,000 or more. Twenty million pounds is the smallest estimate under these heads.
§ Sir F. BANBURY
May I call the attention of the right hon. Gentleman to these words in the paragraph to which he was alluding:to which must be added the £124,000 arrears paid applicable to the year 1919.Then it goes on to say this is given merely as an illustration of the financial effect based on the figures of 1920, and it must be borne in mind that the ratio of expenditure to receipts may materially alter when the Government hands the railways back to the companies. I do not propose to read the whole of my speech, but I shall be able to justify it if I am allowed to say a few words when the right hon. Gentleman finishes.
§ Sir E. GEDDES
I should be delighted to hear the justification which may be given by the right hon. Gentleman, but I am not concerned with what he said in other parts of his speech.
§ Sir E. GEDDES
What I am quoting from is the statement that on the whole of the controlled railways only about 6 millions of the amount was earned in 1920. That is a point on which not only the right hon. Gentleman is wrong but 1467 on which at least half a dozen Members of this House are wrong.
§ Sir E. GEDDES
It is almost impossible to say what are the exact figures. If you say what an industrial property has earned in a year you mean what it earns as profit after you have charged the expense attributable to that year and the receipts attributable to that year. The £6,000,000 mentioned is not that figure.
§ Sir E. GEDDES
I have just endeavoured to show that under the headings I have explained £20,000,000 or more could be added to that sum of £6,000,000.
§ Sir E. GEDDES
The hon. Member shakes his head. He asked me to give the exact figure. I say that £20,000,000 or more under the points I have given is the figure. If my hon. Friend desires, I will endeavour to elaborate it, but I do not want to speak at great length. The £6,000,000 mentioned as the earnings of the railways for the year is wrong, and I say that it is understated by more than £20,000,000. Now we come back to the estimates for the £47,000,000 total deficit for the year, and I will ask the Committee to allow mo to make it clear throughout these figures that there are three instances where by coincidence we get the same amount of money referring to entirely different things. It is an unfortunate coincidence. A sum of £47,000,000 represented the net earnings for 1913, and the £47,000,000 in this estimate is the £22,000,000 plus £21,000,000 plus £4,000,000 recovered, making a total of £17,000,000 which the Committee is being asked to provide for the year. This is the gross deficit on the intromissions on the cash transactions for the financial year. There was a "lag" on previous years' claims in March last of £6,000,000. Of this, £1,900,000 was for payments of arrears claimed on the maintenance of previous years which had not been settled. They were old claims belonging to previous, years settled this year. Then there was £4,100,000 in respect of claims belonging to March of last year, which sum comes out of the present financial year. These sums make up the £6,000,000. 1468 which sum comes out of the present financial year. These sums make up the £6,000,000.
Then in respect of back adjustments of wages there is a sum of £2,000,000, and additional cost of arrears of maintenance overtaken, £4,000,000. Under the agreement with the railways in the early years of the War, before the Armistice, when they were unable to keep up the full maintenance of their property an arrangement was made that they should receive the full 1913 figure £ for £. This was subsequently increased by 15 per cent. It was further agreed that when they received the 1913 figure £ for £ they should put that by in their own fund, and that when the work was done the State should pay the difference between the 115 per cent. and the actual cost of the work done. Some companies are greatly in arrears, but are overtaking those arrears. Under this head, that is to say, making up the difference between the amount which was reserved in the early years and the present cost of doing the work—the Committee may take it that the present cost of doing the engineering work is 200 per cent, higher than the pre-War cost—there is this sum of £4,000,000. The next item is £6,000,000 for excess maintenance As the Committee knows, on the original agreement with the railways we guaranteed the 1913 net receipts. We agreed to this: "When you cannot carry out the maintenance work you shall put by the equivalent of your 1913 figure (slightly increased afterwards) and then when you do the work the State shall make up the difference between the 1913 cost and the actual cost." If you take the 1913 figure, and assume a company with no arrears which has done the full 1913 quota of work at present-day cost at the State's expense, then if it spends anything more it is what we call excess. It has maintained its property for the whole period in excess of the 1913 standard in units of work. In this year there has been a sum on that account, for excess of maintenance, of £6,000,000. That excess must mean either betterment of the property at the State's expense or that there is some exceptional and justifiable reason for incurring the additional expenditure. In the current financial year there is this sum of £6,000,000 under that head, and by the end of the financial year there will be about £9,500,000 for the whole period.
§ Mr. HOPKINS
Is this £6,000,000, or the £9,500,000 which it is to be, included or allowed for in the present Estimate of £21,000,000?
§ Sir E. GEDDES
We have been paying the excess right through. The account, as I explained, is a current account. I said that the year 1914 is provisionally closed, though I do not admit that we cannot go back to those items. The subsequent years are not closed. These excess items have been challenged, and special justification asked for and special investigation is being made. I cannot really say how we are going to stand on these excesses, but I should like to read a letter written by Sir Herbert Walker, the acting chairman of the Railway Executive Committee, on the 9th August, 1914, which, I think, governs not only this question, but the whole of the arrangements come to with the railways. He wrote:We understand from the statements you made to us to-day that there is some apprehension on the part of the advisers of the Government that advantage may be taken by some companies of the settlement provisionally come to with the Government as to the basis of compensation under Section 16 of the Regulation of Forces Act, 1871, to spend abnormal sums out of revenue on the maintenance and renewal of their lines and stock. I have to say that while the Executive Committee cannot believe that any company would the capable of acting in such a manner, they have from the first regarded it as an obligation of honour to protect the Government against the possibility of such an event, and they had before your visit already taken steps to safeguard the position of the Government in this respect.This letter was sent to the President of the Board of Trade. This outstanding item of excess expenditure has accrued very fast lately, and we are in consultation with the Accountants Committee of the companies and are investigating where it has occurred. At the same time it is in this year's expenditure; but in putting it in the Estimate I do not wish the Committee to understand that I accept it. It is a running account, and the claim is made in this way. Some of it we have had to challenge for a variety of reasons. The North British Railway Company have had to make some reservation regarding their dividend owing to payment being 1470 stopped. That item is one which I am challenging, and which I hope by adjustment and negotiation I shall be able to deal with satisfactorily.
The next item which makes up the £47,000,000 is interest on new capital, £1,000,000. When the Government control started, the railway companies, quite naturally and properly, came to the Government and said: "You are going to control us and to take all our receipts for a certain time. We do not wish to be in the position of having to spend capital and get nothing for it, because if it is earning nothing, or if it is a saving, whether it is expenditure for economy or expenditure for additional earnings, you get the benefit, because you take the receipts." The Government agreed that capital spent during the control period, and subsequently capital which was sanctioned, should bear interest, and that the Government should take whatever advantage accrued owing to the expenditure of the capital. There is a sum of £1,000,000 on that account.
§ Sir E. GEDDES
The interest is £1,000,000 and it is at 4 or 5 per cent. I do not know what was the actual sum.
§ Sir E. GEDDES
Up to the time that the Ministry of Transport was created they were not, but since the Ministry of Transport started every item has been sanctioned and they have been scrutinised by engineers.
What I have endeavoured to explain to the Committee in the figures is a little difficult to convey. I started to explain the deficit of £47,000,000. I have now accounted for £19,000,000. I have accounted for the £6,000,000 of "lag" coming from the previous years, £2,000,000 for back adjustment of wages, £4,000,000 for the overtaking of arrears of maintenance, and £1,000,000 interest on capital. Now I come to the last figure of £28,000,000, which represents the balance required to meet the guaranteed net revenue from 1st April, 1920,to 1st March, 1921. We shall not get the March figures in this financial year. That £28,000,000 1471 deficiency is made up in this way. There is the coal strike, which could not be foreseen, £8,000,000. During the currency of this agreement we have accepted as a fixed charge every year the highest earnings that the company ever had, and as we have to pay that now, the cost of the coal strike falls directly on the State, because we have guaranteed the net earnings of the companies. Then there is a sum of £2,000,000 in respect of Ireland. That was due to what is called the munitions strike in Ireland. Something like one-third of the mileage of the railways was shut down, and we made a loss. The Irish railways are not suffering from trade depression to anything like the proportionate extent as the English railways. Then there is the trade depression, and, again, I would remind the Committee that we have to take the whole of it, because of our agreement to pay the highest net revenue the companies have ever earned, irrespective of the state of trade. That is £12,000,000, a falling-off in the three months December, January and February. That accounts for £22,000,000 out of the £28,000,000 which is the balance that I have to justify. The remainder, £6,000,000, is the deficit, for which we budgeted in the ordinary way, because of the delay in getting our rates and so forth, and increases of wages under the sliding scale. It is incorrect to represent even this sum of £28,000,000 as loss on the year's working, because the result is obtained after you have accepted as a fixed charge the highest net receipts and the highest standard of maintenance that the companies have ever had. It was a very prosperous year in 1913, and we have guaranteed them the full maintenance, of the 1913 standard, adjusted to present-day prices, which have added 200 per cent, for civil engineering work, and 215 per cent, for standard engineering work. If that be allowed for, it is impossible to say that even this £28,000,000 is the net result of working the railways, because nobody has ever worked the railways on the scale of expenditure or on the, net receipts on which they are worked to-day.
The only really substantial accusation levelled against the Government is that they have unduly forced up wages. That is said everywhere, and that is the only substantial thing. There are those. 1472 who bring in the additional—a considerable sum, but, proportionately, nothing like wages—statistical and costing charges. I do not propose to deal with that at this stage; it is, comparatively, very small. The main accusation against the Government, and, indeed against my own Ministry, is that we have unduly forced up wages. I do not feel that I need appear in a whites sheet, because, with one exception, practically the whole was done before the Ministry came into being. Shortly after the last big railway strike, which occurred in September a year ago, we set up a National Wages Board, and it was generally approved at the time. It was to have an independent Chairman. We had the advantage of securing Sir William Mackenzie, the President of the Industrial Court, as Chairman, and the Board consisted of four railway managers, four railway workers' representatives, and four representatives of the users of railways. Two of the representatives of the users of railways were Members of this House. To them was referred the men's claim, which they considered. There were 13 on the Committee, and 12 of them were unanimous, there being one dissentient as to parts of certain clauses of the Report, and he was a Scottish railway manager. With that one exception, it was a unanimous Report. The Report said:The Committee do not interpret the claim before them as a claim by the railwaymen to be put in a preferential position and to be granted rates of remuneration in excess of that to which, by the nature of their work, they are fairly entitled.It gave the men advances which were very detailed.
§ Sir E. GEDDES
They covered six pages of print, and every grade was dealt with in detail. They gave an advance to the railwaymen, because it was due, and because railway wages had not been advanced as much as others. It was a Committee composed as fairly as such a body could be. They considered the matter in great detail; they heard evidence, and, with one exception, they reported unanimously. They gave the men a general advance, covering a very large number of grades, practically all the important grades, and they differentiated between town and country. 1473 That is the last advance which was given. The Cabinet did that which I feel no Cabinet could have failed to do in face of an almost unanimous Report of a Committee of that strength; they accepted the finding of the Committee. They could not have done anything else. You cannot refer things to a Committee of that character, and then turn them down. The Cabinet accepted the Report, and it was published in the following announcement:In the opinion of the Cabinet this must be accepted with the qualification that should forthcoming increases of railway rates and charges consequent in large measure upon the increased cost of labour, not produce additional revenue, it would be impossible that the present level of wages could be maintained. In such circumstances, the improved standard of remuneration of railway-men, which the Government desire if possible to maintain, can only be maintained by hearty co-operation of the workers with the management, enabling such substantial economies in working to be effected as will adjust any adverse balance.That is the culmination of the advances to the railwaymen, and to say that the Government in agreeing to advances concurred in by such a Committee, including three railway managers, who, as I said, were not there representing their companies—they said that they would serve, but that they must not be taken as committing their companies—
§ Sir E. GEDDES
Nor the men. They came with their expert knowledge to assist the lay members of the Committee. In these circumstances, it is only creating prejudice to say that the Ministry of Transport and the Government have unduly forced up wages. It is not fair. The wages may be too high—I do not know—but that Committee did not find that they were too high at that time. There is a sliding scale, and it is on that scale that the wages are regulated to-day. If an ascertainment were taken to-day, the men would lose 3s., and if the level of living goes on dropping until the end of this month it will probably be 4s., which will amount to £7,200,000 a year. To say that the Government and the Ministry of Transport have arbitrarily forced up the wages of railwaymen is a distortion of the facts; it is not true. I will not detain the Committee longer at this stage, because I hope either myself or the Parliamentary Secretary will be able to deal with criticisms and other questions later on. I would like, however, 1474 to say this: I claim that in this position I am acting as the Treasury acts towards the Departments of State. The Treasury is the watchdog of the House of Commons. I am acting as Treasury for the House of Commons in relation to the railways. It is nothing against the railways. We hear a lot about the railways being accused of this and that, but I have never accused them. I say that they are good business men, and I am going to watch them and do my duty to the House of Commons. We have £275,000,000 on one side and £325,000,000 on the other. That has to be watched, and we cannot do it without a Treasury of this kind. To-day I am your Treasury for the railway agreements.
There is this great difference. The Treasury looks after the great Departments of State, and the money in those Departments is spent by State servants on State property. It may be that they spend too much on the upkeep or renewal of that property, but at any rate, the benefit of the expenditure inures to the State because the property is improving. In the case of the railways it is money spent by companies' servants on companies' property, and on 15th August, if you have improved the property, you hand it back improved to the company at the taxpayers' cost. Again, I am making no accusation of malâ fides against the companies, and I have never done so, but, if you have a Treasury to look after your own Departments spending money on State property, is there less reason to look after the railway companies spending money on the railways? The amount of money is great, and it is not only one year for which I am responsible. I am responsible for seven years of rising prices. If the Committee have not faith in my ability to look after the taxpayers' interests as the railway directors and managers will look after their share-holders' interests, do not pass my Estimates; if you have faith in me and my ability to do so, you will pass them.
§ Sir F. BANBURY
I am not authorised to speak for the railway companies as a whole, but I feel quite certain that they will endorse every word when I say that the railway companies welcome any investigation by the right hon. Gentleman, by the Treasury, or by any Department of the State. The railway companies have nothing to conceal. They are men 1475 of business who quite recognise the necessity for having their accounts audited. They are willing that they should be audited, and only too glad that their accounts should be looked into and investigated in a proper and fair manner. They have a grievance against the State. The agreements expressly provided that if there were any doubt as to the meaning of them, the doubt should be referred to a Court of Law, which should settle whether the railways or the State were right. They ask for nothing better. They only ask to be treated as an ordinary subject who enters into a bargain with another subject. If there be a dispute between them, they ask that that dispute shall be referred to a fair and impartial body, but that there shall be no attempt to say that the, agreement may be altered, before it is referred to that body, to the advantage of one party to the agreement. The right hon. Gentleman has done me the honour to refer to certain remarks which I made to the shareholders of the Great Northern Railway Company on the 11th of this month. The right hon. Gentleman did not quote the whole. I said:With reference to the available net income for the past year, which amounted to £2,480,541 and made it possible to pay the dividends which I just enumerated, there is a point which I wish particularly to impress upon you, and that is that £1,652,939, or two-thirds of the net income, was paid to us by the Government as representing additional interest on capital account and deficiency in net receipts of the railway for the past year. If this sum had not been received the real net income of the company would have amounted to only £827,602, to which must be added £124,000 paid as arrears of pay applicable to the year 1919. These two items added together would only amount to about one-third of the sum required to meet the dividends declared to-day. This must be taken merely as an illustration of the financial effect based on the figures for 1920; and it must be borne in mind that the ratio of expenditure to receipts may be materially altered when the Government hands the railways back to the companies. This position does not apply to the Great Northern Railway alone, but will in a greater or lesser degree affect all railway companies in the country. For the whole of the controlled railways, the liability of the Government for 1919 was over £39,000,000; for 1920 over £41,000,000. That is to say that while it required about £47,000,000 to pay the dividends of 1913 on the whole of the controlled railways, only about £6,000,000 of this amount was earned in 1920 and the balance of £41,000,000 had to be found by the Government. Now, ladies and gentle- 1476 men, I do not think it is ever any use concealing unpleasant facts, and I have thought it my duty to lay the situation before you in plain words and in plain figures.The right hon. Gentleman says, "Oh, but there is in that £41,000,000 a large amount'—which he has put at £20,000,000—"which was due to liabilities which had accrued in past years." It is very difficult to get at the exact amount. There is something, no doubt. Personally, I do not believe it is anything like £20,000,000, of anything like £10,000,000, or anything like £5,000,000. Take the Great Northern Railway Company. It was impossible during the War for the railway companies to carry out their programme of renewals and maintenance, for they could get neither the men nor the materials. Naturally, therefore, there are certain deferred amounts due on renewals and maintenance. Some of those, no doubt, were paid in the year 1920. But were the railway companies able to maintain the ordinary expenditure for renewals and maintenance in 1920? Some of them may have done so, but certainly not all. Take the Great Northern Railway Company. Our renewals in the ordinary course of events, not for 1913 only as the right hon. Gentleman seems to think, because as far as the Great Northern were concerned there was no increase in their renewals and maintenance in 1913—
§ Sir E. GEDDES
I have not said anything about the Great Northern Railway; I have not mentioned it. My statement dealt with the whole of the railways. If the right hon. Baronet is going to take one railway, it must be understood that does not represent the whole.
§ Sir F. BANBURY
In all probability what applies to one applies to all. [HON. MEMBERS: "No, no!"] In all probability. I, of course, can give accurate figures only for the company with which I am concerned. I was not giving any figures when I was interrupted. I was stating merely that in 1913, certainly with regard to the Great Northern Railway, and, I believe, with regard to the others, no extra amount was spent on arrears of maintenance over the amounts spent for the previous 10 or 12 years. In 1920, the Great Northern Company renewed their permanent way, which is one of the chief items. They renewed 59 miles. Sixty miles is what was ordinarily renewed in 1913 and in previous years. So 1477 that in 1920 we did not in any kind of way spend an extra shilling on the renewal of the permanent way. In regard to carriages and engines we were behindhand, and in regard to repairs we were a little in arrear. Taking it all round, I think I am correct in saying that there was no sum which had to be added to the ordinary programme and which had to be deducted from the unfortunate result, namely, that we had only about one-third of the amount required to pay interest on our various stocks and shares. If that does not apply to every railway, I believe it applies to the majority of the railways. If hon. Members had read the speeches of the several railway chairmen, they would have found that every one of them made his speech on the lines on which I made mine. I am not quite certain whether I understood the right hon. Gentleman as saying that £4,000,000 was spent last year in overtaking arrears. I may have misunderstood him. I think in making up the £47,000,000 he did say that £4,000,000 was spent in overtaking arrears.
§ Sir E. GEDDES
The £4,000,000 were, of course, not in the calendar year. I dealt with the financial year, which is what my Estimates concern. In that there is £4,000,000, additional cost of arrears overtaken. That probably means something over £6,000,000 worth of work, because £2,000,000 is drawn out of reserve.
§ Sir F. BANBURY
That figure of £6,000,000 does not correspond with the £20,000,000 which, in answer to my hon. and learned Friend the Member for Cambridge University (Mr. Rawlinson), the right hon. Gentleman said he thought might be saved. With regard to the Wages Board which was set up, I have only to say that it was set up by the Government and not by the companies. It had not on it a single person put there by the companies. It had 13 members; four were supposed to represent the men, four represented the traders and users of the railways, one was an independent person, and the remaining four—not a very large proportion—were railway managers, and they were not put there by the railway companies, which expressly said that they did not represent the railway companies. Of those four, one was against the Report and the 1478 other three signed it. I am very glad the right hon. Gentleman has stated that he does not in any kind of way blame the railway companies. I am not sure that that impression was in the public mind or in the minds of a considerable number of Members of this House. I am glad, therefore, that the right hon. Gentleman has taken the opportunity of making that announcement. It is rather interesting, because it confirms a letter which the right hon. Gentleman wrote to Sir Herbert Walker on accepting the resignation of the Railway Executive Committee in 1919. He said:Although the Railway Executive Committee has exercised its functions under the Board of Trade during the War, I would like to take this opportunity of saying how very much I have admired the effective and unostentatious way in which it has carried out its duties. I think that it has a record of which every individual may be justly proud, and for which the country owes a very great debt of gratitude. The times through which we have passed have been very difficult for railway companies, and their record of War service, although depleted of operating, maintenance and renewal staff, and with many of their principal officers away on War work, is pre-eminent in the history of the railways of all belligerents. To this splendid result directors, management and staff have contributed as one to an extent which can only be fully appreciated by those who have some inner knowledge of the difficulties and of the achievements attained. I feel sure that in solving the railway problem, and the wider transportation problem which the conditions of War had imposed, the Government will continue to receive the same willing co-operation from the railways as a whole.On 17th March, 1919, in a speech in the House of Commons, the right hon. Gentleman said:The (Railway) Executive Committee have done a work of which they are justly proud, and for which the country should be grateful."—[OFFICIAL REPORT, 17th March, 1919; col. 1770; Vol. 113.]Some of them are not showing their gratitude in a very pleasant way at the present moment when they suggest that bargains which have been entered into should be varied. [HON. MEMBERS: "No, no!"] Oh, yes.
On a point of Order. I understand this is a Supplementary Estimate. Shall we be in order in dealing with the Colwyn Report on these Estimates? The House will appreciate the importance of the question.
§ The CHAIRMAN
That is a question to which I cannot at present give a complete answer. My view is that, subject to what may develop during the Debate, the Colwyn Report is relevant to the matter now before us, in so far as it elucidates the agreements under which this money is to be paid. On the other hand, if it is sub judice, it is a matter for the Committee, and not for the Chairman. The Chairman does not rule a matter out because the subject-matter of it may be sub judice. That is always entrusted to the discretion of hon. Members themselves. I do not think a Supplementary Estimate is the occasion for debating at any length the future policy of the Government with regard to these agreements. That is the only distinction I draw.
§ Sir F. BANBURY
When interrupted, I was going to read one question, number 10. It is extraordinary. It is impossible to find out who asked it and who answered it. I have sat on many Committees, but I have never known the name of both the person who asks the question and the person who answered it not be put in. It must have been Sir George Beharrell, of the Ministry of Transport, or the Chairman or one of the members of the Committee, but which I cannot say. The statement is:No, I think we have to find out whether these agreements are really in the interests of the State. If we say that these agreements are not in the interest of the State, then we have to consider whether in the interest of the State these agreements should be carried out.5.0 P.M.
That is an extraordinary way of showing your gratitude to people who have rendered great service in the War, and who are asking only that the agreement entered into at the beginning of the War, and which enabled the State to obtain these great services, should be binding. I do not want any more gratitude of that sort. I have here a quantity of statements from the War Cabinet from Sir Douglas Haig, from the Select Committee on Transport, all testifying to the wonderfully efficient way in which the railway companies carried on during the War and to the great services rendered by them during that time. Not only did the railways carry troops, but much work was done for the Government in the railway workshops in the way of re- 1480 capping shells for the 18-pounder guns. I do not actually remember the figures, but I think this is within a fraction of what they were: We were recapping shells at a cost of threepence each. We made no profit at all out of that. Our shareholders were only receiving what they received in 1913; about 4 per cent, on their outlay, or perhaps a little bit more. What was the result of that action? At Woolwich the price charged per shell was, I believe, 7d.—I would not be sure whether the figures were 7d. and 4d. or 6d. and 3d. respectively—but it was a fact that we could do at 3d. a head what Woolwich charged more for, and Woolwich altered their tactics. The reason was very simple; we employed women. We were at war then and we wanted those shells to save the lives of our troops, but the trades unions said that only brass operatives must be employed at trade union rates. That is a lesson in economy which the Government have learnt from the railway companies. There were many others of that sort, and I say without hesitation that the railway shareholders did their best in a very trying time. They gave their services for nothing to the State, and that will always be remembered in adjusting the final settlement. The shareholders want nothing beyond that to which they are justly entitled, they do not ask for anything beyond their agreement, but what they do ask is that their agreements should be carried out and interpreted by a court of law if the necessity arises.
I think that the railway companies may first of all congratulate themselves on having the right hon. Baronet the Member for the City of London (Sir F. Banbury) as their champion, and incidentally I do not believe that they have any cause for complaint in the speech of my right hon. Friend (Sir E. Geddes). While we have had the Government's side and the railway companies' side, and while naturally I am compelled to deal with the situation from the railwaymen's standpoint, I think that every Member of this Committee feels that this matter is not only a question for the Government, for the railway companies, or for the railwaymen, but that we are concerned in doing justice to the general public who, after all, have got to pay. I believe that no one would minimise the importance of railways to 1481 the prosperity of the country. The development of the railways and the railway system is essential to the general prosperity of the country. In the same way, I say that while we are tempted to-day to blame the Government for the present method of running the railways, the real way to approach the question is to visualise the situation as it was in 1914. An impartial investigation to-day would, in my judgment, not only justify the action of the Government in taking over the railways, but it would also justify the agreement then made. I go beyond that, and I say that it was impossible in the interests of the country to make any other agreement than that which was then made.
Let the Committee understand what it meant. There were no fewer than 114 different railway companies. The expeditionary force had to be transferred to France. If every soldier, every gun, every wagon, every round of ammunition had had to be charged to their respective companies, it would have required as large a staff to do the work of checking as it would have to do the work itself, and in the interval, as everyone knows perfectly well, we should have been in a very dangerous position. That is from the standpoint of the agreement, and I do not think that anyone can complain. I observe the right hon. Baronet (Sir F. Banbury) suggests that someone is anxious to treat that agreement as "a scrap of paper." I do not think that anyone seriously takes that view. After all, £1,300,000,000 of capital is not such as to be treated as "a scrap of paper." On the other hand, no railway shareholder—and I speak as a railway shareholder, probably the largest in this House because, unlike those associated with some other undertakings, I have always advocated the policy of backing up the industry in which you are engaged, and we have very large and substantial sums of money in the different railways in this country—and therefore while no one desires to injure the railway shareholder equally, we, as members of this Committee, are not entitled to say that, having observed the letter and the spirit of the agreement made in 1914, the railway companies are to be exempted, more than anyone else, from the War risks that 1482 have followed since that period. That is really the crux of the whole position.
While I believe that agreements must be observed, and while I believe that this Committee and the country generally will desire that they should be observed, I join issue entirely with those who are to-day suggesting that the railways are bankrupt, that they must be bankrupt, that they are nothing more or less than a lot of scrap-iron. I propose to examine the situation. The right hon. Baronet (Sir F. Banbury) in the course of his speech said that he, in making his statement for the Great Northern Railway shareholders, said what practically every railway chairman in the country said. My comment on that is that it was very significant that every chairman played the same tune. It was very significant indeed if you come to examine the whole of these speeches made at the half-yearly meetings. It might have been as if some trade union had entered into an agreement to make the matter one resolution. At all events, I am entitled to complain to this House that if the object was to bring home to the shareholders the serious state of affairs, as any chairman was entitled to do, and if the chairman were warning the country of the danger to the shareholders, as they were entitled to do as responsible chairmen, they ought either to have ascertained the facts or they ought certainly to have done nothing calculated deliberately to mislead the country. I am going to assert—I hope the right hon. Baronet will not go away—
I am going to assert this, and I am going to prove what I say, because it is a remarkable fact that when wages were referred to many Members of this House applauded the sentiment that the real cause of the trouble was the abnormal increase in wages. [HON. MEMBERS: "Hear, hear!"] Then I am correct in interpreting that to mean that many Members of the Committee really and honestly believe that the statement made by these chairmen was true? [Some HON. MEMBERS: "Hear, hear!"] I say, as the representative of the men, that if those statements were true I, for one, could not defend the position of the men. But I am going to submit to the House that not only are they not true, 1483 but that they are a wicked libel, and that the gentlemen who made them either did so in ignorance or else they were intended deliberately to mislead the public.
Let us take what the chairman of the Brighton Railway said. This is his speech, and hon. Members will notice its similarity to those of all the other chairmen. He said:I should like to draw your further notice to the so-called standardisation of hours of work. There are instances of men in the signal boxes of country stations who do nothing outside their boxes, and even when in them they are not engaged in railway work for a considerable interval, while their colleagues in busy boxes at the great London stations are at work, and hard at work, during the whole time they are on duty with correspondingly greater responsibility, and yet we are not allowed to make any differentiation in the rate of wages in each particular case. Loud cries of 'shame' from the shareholders.There are many more quotations that I am going to read to the Committee, but let us deal with this one for a moment. Here is a chairman who says to his shareholders at a half-yearly meeting, "Owing to this action and to trade union pressure, we, the innocent railway companies and our innocent general managers and our innocent legal advisers, have been forced into a position in consequence of which the signalmen in country districts passing 70 trains a day are to be paid the same as signalmen in the great London termini who are passing 600 or 700 trains a day." You can understand the shareholders crying "shame"; you can understand Members of this Committee reading that and saying, "Yes, that is wrong"; you can understand criticism of the Government and of the Ministry of Transport by the people who read that kind of thing. Incidentally, let me say that that statement has been repeated by a representative deputation as well, the members of which believe the same thing. But what are the real facts? Not only is it not true that these signalmen are not paid the same rate, but the rates of signalmen vary in 22 different classes on one railway. There are 22 different rates of pay, according to the position of the signalmen; from the man in the small country box who passes only a few trains a day to the man in the busy box at the city station. That is the kind of statement made by the people paid to protect the interest of their share- 1484 holders. Those people are paid to know all the facts of the railways, they are paid to understand all their business. That is a kind of statement with which the public mind has been prejudiced at these half-yearly meetings.
Now let me take another case. This is from a Member of this House who is not here at the moment. He is an hon. Friend of mine, the Member for Montgomeryshire (Major David Davies), the chairman of the Cambrian Railway. This is his statement at the half-yearly meeting, and a more outrageous way of prejudicing the case I never heard:A signal box man who earned 21s. in 1913 now obtained 134s. 6d. per week, and in another ease a man who earned 17s. a week now received 133s. a week,
Then it only shows again how the case has been prejudiced in other places. That does not help it; it aggravates it. It only shows, if this is the way these briefs are got up, that there ought to be more attention paid to accuracy. Let me deal with this case. I have to-day looked up the Cambrian conditions, and not only is there no such figure, but it is impossible for any signal man on the Cambrian railway to receive more under all scales than £3 7s. at this moment. That is the maximum—and I am dealing here with the maximum and not the minimum. Compare that statement with the statement to the shareholders, that owing to the Government's action, owing to the wicked trade unions, owing to the pressure on all these innocent railway companies, a signal man in 1913 gets 17s. a week and to-day gets 133s. I challenge any railway director, any railway manager, or the Government to show any scale in existence that bears out any of these statements.
I do not know what it includes. I say it is simply not true. If that is the explanation, why was not that said?
Here is a statement made by a railway chairman that a man who got 17s. a week in 1913 is to-day getting 133s.
§ Mr. INSKIP
Did the right hon Gentleman tell the hon. Member concerned that he was going to describe the sentence in question as untrue in the House to-day?
The hon. and learned Member probably does not know the procedure, or he would not have asked that question. It is an understood thing that there is no railway interest as railway interest in this House, and we are dealing with a public matter.
§ Mr. INSKIP
My intervention was merely for our guidance on a question of procedure, as to whether the hon. Member who made this statement had had notice that a serious criticism was going to be made upon his figures, because in that event his absence would support the right hon. Gentleman's complaint.
§ Mr. IRVING
That is not a point of Order. The Speaker would have called the right hon. Gentleman to Order.
I would point out that this Debate was to have taken place last week. As a matter of fact, I only examined this matter to-day, because, as the right hon. Baronet (Sir F. Banbury) said, there was a similarity in the tunes called by various chairmen. I want now to take the next point, which, after all, is very important, and it is with regard to the Wage Board itself. I am sorry the right hon. Baronet said a word against this Board, for this reason. This House of Commons has repeatedly urged labour to accept arbitration, and it has pleaded with the trade unions that, instead of having strikes and all the misery occasioned by strikes, they should trust their case to some independent tribunal. I am within the recollection of Members in all parts of the House when I say that that has been a general policy urged in all quarters of the House. When that was urged on the railwaymen's unions it was a difficult job to get them to accept it, but at all events, we got them to agree to the setting up of an independent tribunal. What was this tribunal composed of? There were four railway general managers, four representatives of the men's unions, one nominated by the Federation of British Industries, one nominated by the Chambers of Commerce, one nominated by the Co-operative Union as representing the consuming 1486 public, and one representing the Parliamentary Committee of the Trade Union Congress. Before that tribunal the whole question of the men's conditions was considered, and that tribunal came to the conclusion that an advance was necessary, and if to-day this House of Commons or anyone outside is going to condemn the system by which round-the-table commonsense methods can be adopted, you will drive men not to agree to arbitration, but to resort to the power of strikes.
Let me draw the attention of the House to this grave position, because here, in spite of all you have heard about these half-yearly meetings, this railway agreement is the only agreement in this country in any trade or industry that recognises definitely that we are living in an abnormal time, and it is very curious to see it criticised to-day when it is no secret that it was only by one vote that it was accepted by the men. Remember what this agreement does. This is the only agreement that says, "If the cost of living goes up, your wages go up, and if the cost of living goes down, your wages go down." They go down to this extent—that at the moment, according to the figures now existing, I think there is a reduction nearly due of 3s. We all hope the tendency will be in the same direction, because one of the advantages of this agreement is this. We deliberately made it, and, as representing the men, I was not blind to the disadvantages of the men, but I deliberately agreed to this arrangement, whereby the men got more advantage by the cost of living coming down than they did by it going up, although I knew it was going up at the time, but I made the arrangement because I wanted to do something to encourage the cost of living to come down, and not to create a vested interest to encourage it to go up. The result is that all the talk that we hear to-day about the abnormal wages on the railways amounts to this—that there is a difference at the present time of over a sovereign a week average in the whole of the grades, which is due to fluctuations in the cost of living, and if the cost of living comes down it is automatically wiped off. When we remember that each shilling represents £1,700,000 per annum, the House will at least appreciate that there is not the justification for all this 1487 alarm that we have heard about the bankruptcy of the railway service. The right hon. Baronet, amongst his other attacks, complained that the only function of the Ministry of Transport was the compiling of unnecessary statistics, and he went on to say—and perhaps my right hon. Friend will correct this figure if I am wrong—that in his opinion the Ministry of Transport was responsible for a sum between £500,000 and £600,000 per annum for the collecting of these statistics alone. I should be amazed—
§ Sir F. BANBURY
I gave the actual figure which it cost the Great Northern, which was £33,000, and I said I presumed that probably the result over the whole of the railways would be somewhere about £500,000 or £600,000. Whatever happens on the Great Northern, we generally multiply it by 20 to get the figure for the whole of the railways.
Yes:The cost of compiling statistics of the Ministry of Transport was £33,000. I think I may say that in all probability the cost of compiling these statistics, which, in my opinion, for the most part are utterly Useless, for the whole of the railways must amount to something like £500,000 or £600,000.
My right hon. Friend still agrees that it is utterly useless. I am going to submit that it is not only not useless, but that there is one thing this House of Commons, if it is going to have some control over the expenditure, must look into, and that is the revelations of these statistics. I will endeavour to show what I have gleaned from these statistics and why I believe the right hon. Baronet does not like these statistics. I can quite understand the reluctance of the railway companies to have some of these statistics looked into. In the first place, let the House observe that the expenditure involved in this matter is £275,000,000 per annum.
No. My point is that here are £275,000,000 of public money that are involved, of which the Government are the guardians, and of which some 1488 justification for the control and expenditure of this money must be shown. The Ministry asked the railway companies to give them these statistics—the useless statistics of which the right hon. Baronet has complained. What is the first thing that these statistics prove? Here let me observe that, until we had these statistics, we were the only country in the world that could not tell you what your railways were doing. We were the only country in the world that could not tell you where your weakness in train mileage and your wastage were. Having obtained these statistics, what was the first thing we discovered? We discovered that the average wagon load in Great Britain was 5½ tons, but, on an examination of the statistics, we found it went so low as 4 tons in some companies and as high as 9 tons in others. That could only be obtained when these useless statistics were submitted to the Committee, and the Committee's duty was to ask for, and they did demand, an improvement. When it is remembered that the average train load for Great Britain is only 133 tons, if these statistics enable you to point out to those companies who are not putting out their maximum effort, and are wasting public money, that they ought at least to do as well as the others, and point out what the others are doing, then they are not useless, but they are very valuable statistics indeed. Let us come to another thing the statistics revealed. They revealed the fact that one in every four engines in this country was under, or awaiting, repair, and when this House remembers what each engine is worth, and that under the agreement the Ministry of Transport must pay for the upkeep and maintenance of surplus engines, the Committee will see the millions of pounds involved.
This was last year, and I am dealing with these useless statistics which first showed that there was a surplus every day in the year of 700 engines.
Surplus to the maximum requirements, and they showed that 27 per cent, of the engine power was on given days awaiting repair. Let me examine these useless statistics a little further, because when we went into the train miles—and, naturally, the first thing 1489 that occurs to practical men is that, if there is a surplus of engines, and if the tonnage shows so and so, it may be that better facilities can be obtained for the travelling public—we found that, for the four weeks ending 25th April last year, the tonnage had dropped from 27,000,000 to 24,000,000, that is, a drop in four weeks of 3,000,000 tons, and we also found that there was a drop in the total passenger train miles of 200,000. We said, "This is very peculiar; this is Easter." I say you never had these statistics I am quoting. I say no Government Department had them.
I make a qualification, and say, with the exception of the North Eastern. But what I want to develop again is this. These figures show that this was an Easter period. When we examined the Whitsuntide period, we still found a reduction in the total tonnage. When we examined August we also found a reduction. This House had been asking whether the country could have cheap excursions. They asked at Easter, at Whitsuntide and in August whether it was possible to give facilities for people to go to the seaside, and the answer given from the Treasury box repeatedly was that the engine power and the coaches had been gone very carefully into, and it was found impossible to do it. When we examined these figures, we not only found it was not impossible, but I assert here that, as a result of examining these figures, you have got the early announcement this year as to your Easter and Whitsuntide excursions. My right hon. Friend cannot deny it, because, as a matter of fact, the minutes of the Advisory Committee show that when we examined these figures we immediately found that it was not only possible to give facilities to the travelling public, but possible to earn revenue that would not otherwise have been earned. I say that, whether the railways go back to private ownership or not, if this country is to have an efficient transport system it has got to have the most up-to-date data possible. That you can only obtain, not only by having these useless statistics, but by having many more statistics if they are necessary.
I hope I have shown the Committee the fallacy of the repeated statement that the present deficiency is due to the abnormal 1490 railway wages. The existing sliding scale arrangement provides for an automatic reduction, with the cost of living, of over £25,000,000 per annum. Secondly, let it be observed that the present rate of wages was the result of a joint inquiry, after a full and exhaustive examination of the whole thing. Do not depreciate the work of a round-table conference. Thirdly, I say, as representing the men, that we, of course, are interested in the prosperity of our own concern. It is no object of ours to depreciate railway companies. We are the very first to suffer. We are as anxious as the railway companies to see that justice is done to their undertakings. We will see that justice is done so far as we can help, but equally we say, whether it be railway companies or railwaymen, the public interest is greater than either of them. The public interest must be of paramount importance. For all those reasons, I find myself unable to challenge the Supplementary Estimates to-day. I have naturally kept clear of dealing with the future of the railways, because that will be a matter of Debate when the Bill is introduced, but while it may have been good tactics for the whole of the railway chairmen to have frightened the old widows who have all their investments in trust securities, while it may have been good tactics to have sung one song with the view of alarming the British public, I say with some knowledge of railway work, and some responsibility in the railway world, that I see no reason for the alarm with regard to the future of the railways, and I see no reason for alarm that justice will not be done to the railways. I see no reason for the panic in railway stocks, as I have confidence that, with both sides trying to do their best to realise the facts of the situation, keeping in mind the public interest, the railway companies, the railway shareholders and the railwaymen have no cause for alarm.
§ Sir H. MACKINDER
I hope the right hon. Gentleman who has just sat down will forgive me if I do not follow him into the particular argument which has been his subject. I feel that I am no expert upon that, and that I should be merely wasting the time of the House if I went through the form of appearing to meet his points. But the right hon. Gentleman was replying to the right hon. Baronet (Sir F. Banbury), and there are other portions of the right hon. 1491 Baronet's speech about which I wish to make some remarks. I was glad I succeeded in catching your eye, because it has been my fortune, good or bad, to be a Member of Lord Colwyn's Committee, and that Committee has been the subject of much discussion outside, and, perhaps, a little vituperation, within the last few weeks. I am not going to run away from the Report of that Committee, and I know that the House of Commons will allow one of five of its Members, who constituted a majority of that Committee to state the broad conclusions, as elucidating these documents, at which we arrived, and, for the moment, while I am speaking, at any rate, will put aside the arguments which have been put forward in so many directions outside. I am going to speak as one who has spent a very large part of the last five months in the contemplation of these Agreements in every detail.
May I preface what I am going to say further by this: I am as conscious as anyone of the difficult position in which those who are responsible for our railways stand to-day. I am conscious that great questions of policy are in front of them and in front of the State in reference to these railways. But I am in this position: This House is making an effort at the present time to recover its control over the national finances, and the very first element of tradition, the unwritten law of this House in that matter, is that ever since the days of Charles II control over the national finances by this House has depended upon the appropriation of specific sums to specific ends If we allow the question of these agreements, which will relate to the past when 15th August comes, to be mixed up with the broad questions of the future; with questions of expense in regard to the future, with appeals for our gratitude, with any other questions but those which directly concern them, namely, the ascertainment and the settlement of the agreements, then we shall not be doing that which is now in harmony with the present policy of this House—namely, to recover control over national expenditure.
Before I sit down I am going to ask the right hon. Gentleman what, in view of the Report of the Colwyn Committee, he proposes to do in regard to two items which stand in this Supplementary Esti- 1492 mate—repairs in excess of standard, and arrears of maintenance made good? The Colwyn Committee recommended to him that speedy action should be taken in regard to these two subjects. I am well aware that there will at once arise in the minds of railway directors the question of legal rights. I am not going to refer—it would obviously be out of order—to a matter which is sub judice between one railway company and the Ministry of Transport, although I believe the latter does not admit that it is sub judice as yet. At any rate, the railway claims the matter as sub judice, and I am not going to refer to the correspondence which has been published in regard to it I am going to deal with the broad question. So far as I can see, there are legal questions of two orders raised by the mass of documents from which you must extract these agreements. There are smaller questions which may easily arise in the 114 separate settlements which will have to be made by the Government with 114 different companies. I can well believe—I express no opinion on the point sub judice—that the speediest and most satisfactory way of settling such disputes is to let them go to the Railway and Canal Commission for what I will call summary arbitration. But there are legal questions of a very different order which may be raised in connection with these agreements.
Let me refer to only one matter in order to give the House an idea of what is involved. I refer to the net receipts agreement. This was made on the second day after the declaration of the War, and was the outcome of a short discussion, the essence of which is on record in our Report. The railways thought, for the purposes of carrying out the Regulation of the Forces Act, 1871, that it was not necessary to form a pool into which the receipts of the railways should be paid. I have no doubt they were so advised by their solicitors. But the law officers of the Crown advised the Board of Trade that the matter was one of such doubt that they thought it would be desirable to make a special agreement. Take a second point that arises. I understand that it is quite possible that the railways, or some of the railways, may put forward claims for compensation within the meaning of the Regulation of the Forces Act, 1871, but outside the agreement made on the second day of the War. In regard to the whole question of the 1493 relation of this agreement for the net receipts to the full compensation stipulated for in the Regulation of the Forces Act, 1871, I feel that, as Sir Alexander Butterworth has said, it is one of those questions upon which 20 lawyers would give you 20 different opinions. If you are going to settle the legal rights which are involved in this kind of question, do not let there be any mistake about it, you are in for a prolonged, costly, and, I am afraid, bitter litigation. [An HON. MEMBER: "They want to give us no agreement at all!"] Do not let us judge the thing by prejudice. Let me say, as to this question of litigation, that Sir Alexander Butterworth spent four very helpful and valuable days with the Committee. I should like to cite the very words with which he ended his examination. He said—page 257 of the Minutes of Evidence:I have had more than once to refer to the possibility of litigation. That was inevitable because the agreement itself provides a tribunal to decide questions in difference. But may I say in matters such as these we have been discussing, involving national interests, that I believe litigation is as little desired by the railway companies as by those who represent the Government. It would be a sorry aftermath to our national struggle.A little lower down Sir Alexander says:Certainly, speaking as General Manager of the North Eastern Railway Company, I am confident that we shall, to use a phrase much in vogue now, 'explore every avenue' before appealing to the Courts for a decision upon our claims.A little later down, Lord Colwyn addressing Sir Alexander Butterworth said:My final word is the one wish that this will not end in litigation, and that by your efforts and our efforts that may be obviated.
§ Sir E. GEDDES
Yes, in the Vote Office. The volume has been issued with the Parliamentary papers, and I gave an instruction to the Stationery Office that they were to be available for Members.
§ Sir F. BANBURY
They were not available in the Vote Office last week-end. I saw Mr. Speaker about the matter. Mr. Speaker said they were not available. He did not seem to think they would be.
Is it competent for an hon. Member to quote from a Blue Book evidence which is not available to hon. Members in the Vote Office?
§ The DEPUTY-CHAIRMAN (Mr. Rawlinson)
The fact that it is not obtainable from the Vote Office does not necessarily make, it out of order. It may be obtainable by purchase.
§ Sir H. MACKINDER
I have just been looking at this Blue Book. There is no number upon it, but there is an extraordinary price upon it—25s. net. I suppose that is the pressure for economy. I submit, however, that a Member of the Committee must, if we are to arrive at any rational result in this House, be at liberty to quote from evidence given before a Commission and published in a Blue Book which, whether distributed to this House or not, is officially published and on sale. Just now I pointed to the fact that Lord Colwyn and Sir Alexander Butterworth agreed that litigation was undesirable, and I wish to say this, that we on the Colwyn Committee felt very strongly that that was the spirit in which we ought to go on with our work. In our Report we have used a phrase which has been much quoted outside, and which has been picked out from our cake like a plum, and the public asked to believe that everything was up to sample—that is a phrase in which occur the words:tenacious insistence upon documentary rights.We are supposed to wish to break these agreements. We are supposed to suggest that the railway companies—
§ Mr. CAUTLEY
Was not the Committee appointed for that purpose—to find out some means of breaking up the agreements?
§ Sir F. BANBURY
On a point of Order. May I say that I have just been to the Vote Office, and I find that the Minutes of Evidence of the Colwyn Committee cannot be obtained.
§ The DEPUTY-CHAIRMAN
If the evidence has been published it is obtainable by the public. It may probably be a matter of strong comment that the Government have not provided it, but it does not make it out of Order to quote documents published, and which can be bought by anybody.
§ Sir E. GEDDES
I should like to say I gave instructions, and I had every reason to believe that they were carried out, that a copy of the Report and the evidence should be sent to every railway company. I did not know it was not printed by the Stationery Office, but the Report is certainly on sale.
§ 6.0 P.M.
§ Sir H. MACKINDER
May I just state where I am in my argument, because it is a little difficult in view of these points of Order. The position to which I have arrived is that most certainly there are legal rights, but you have to ascertain them. I take it that the law holds that whenever two parties have been for long in relationship with one another there must be rights and obligations between them. But when you come to large questions of this kind the difficulty is to ascertain those rights. Of course, you may obtain an opinion from a lawyer. It is not worth much as a rule unless it is paid for, and even then it is only an opinion, and you cannot test the value of it until you have put it against other opinions in litigation. After spending some five months considering these agreements, with all the greater issues involved, if you are going to attempt to ascertain the legal rights then you are in for litigation on a very great scale. I have quoted from the evidence a statement of Sir Alexander Butterworth, saying that he would explore all avenues to avoid that, and I have 1496 quoted from Lord Colwyn's final statement showing that he took that view, and hoped the result would be that some other road than litigation might emerge.
We embodied that spirit and idea in our Report, and the very phrase in which we embodied it has been lifted clean out, as if with a pair of pincers, as something which should condemn the whole Report. The implication is that there is a document that can be read, but from the beginning to the end of this whole transaction there has never been what, in any ordinary sense, can be called a lawyer's parchment. The whole thing has been an agreement as between gentlemen, and to make the suggestion that there are documentary rights in the ordinary sense is to mislead the public. There is no question of tearing up a scrap of paper. There are a thousand scraps of paper; in fact, there are enough for a paper chase, some of them written on more than once, layer upon layer, and the problem is to piece them together so as to make a coherent document of any kind. I submit that it is essential that we should approach this whole question, not with the idea of making prejudice, but of trying to see light. What the Colwyn Committee have tried to do is, in the first place, to help the Minister and this House, and the public, to see light through this great mass of correspondence.
The original Memorandum itself described the agreement as one whereby the Government was to make good the net receipts of the companies, and that refers merely to one item in what I would describe as an understanding. It does not at any point say, or even leave it to be inferred, that Government traffic is to be carried free. The first record that we could find of that fact is the notice issued to the Press on the 15th September, 1914. That is to say, there was really an understanding, of which one point was defined by the original Memorandum, and the point that Government traffic was to be carried free was not embodied in the Memorandum. As late as 1916, when the Pink Book was issued, the Treasury thought it necessary, when agreeing to the Supplementary Agreements in that Pink Book, to stipulate with the companies that the question of the free carriage of Government traffic was never to be raised again, and that the Government 1497 was to be entitled to any surplus profits accruing under the agreements. Right up to 1916 this matter remained in such a state that the Treasury found it necessary to make that stipulation.
There is no mention of the matter of maintenance. Here is the Government guaranteeing the railways and promising to make good the deficit in their net receipts. Obviously those are determined by receipts and expenditure and of course the Government becomes interested in the expenditure, because it has to make good the net receipts. The Government in the original agreement do not make one reference to the question of maintenance, and it is only a day or two afterwards that we get an anxious letter from the Chancellor of the Exchequer calling attention to this omission and stating that he hopes the matter will not be lost sight of. Then there follows the circular issued to the railway companies calling attention to that obligation of honour. Now you find printed in leading articles in the newspaper statements as to the scrapping of documentary rights when we are really talking about documents of that sort. No one would be more definitely opposed to the scrapping of agreements than I would be. I am not out for the breaking of covenants but we are here in the presence of a great volume of papers, memoranda, official and private letters, circular letters, instructions to accountants, all mixed with irrelevant matters, and out of that there had to be extracted a coherent theory as to what the agreement really was. I would remind the House that even the all-important point, the extension of the agreement for two years after the War, is contained in a private letter, no copy of which was kept at the Board of Trade, and to this day I have not seen the private letter to which it was a reply. I must just say one word as to the character of the inquiry from which I and my colleagues obtained our information.
What has all this got to do with the railway agreement, because that money has been spent.
§ The DEPUTY-CHAIRMAN
The hon. Member is justifying the Report of the Colwyn Commission and he is making this comparison.
§ Sir H. MACKINDER
It seems to me that this is an attempt to prevent me replying of exactly a similar character to that which has been going on in the Press, and in the speeches of the chairmen of railway companies. I feel that in commenting on this agreement, and using the knowledge I have obtained, and in view of the prejudice which has been accumulated outside against this report, I am entitled to say a few words about the character of the inquiry out of which that Report has come. It seems to me that the order has gone out that it was to be burked from some central source. It seems that there is not to be a frontal attack, but a general concensus of plans to outflank that report by attacking the constitution of the committee or by plastering it over with the word "repudiation." I want to refer to one episode early in the inquiry. There has been quoted an answer given in the evidence to this effect:I think we have to find out whether these agreements are really in the interests of the State. If we say they are not in the interests of the State, then we have to consider whether they should be carried out.That passage was quoted by the Chairman of the London and North Western Railway on Friday. It was attributed to the first witness who came before the Committee, but that was not correct, and the records show that it was a statement made by a Member of the Committee. The right hon. Gentleman might as well have quoted the reservation of two members of the Committee who are Members of this House. In the reservations which were not accepted by the majority of the Committee, the question is definitely put by these hon. Members as to whether we ought not to ignore these agreements. They were so impressed by all the circumstances that surrounded the making of these agreements and by the confusion of the record that they deliberately felt, after hearing the whole inquiry, that it was necessary to attach to their signature the reservations printed in the Report. This House well knows that when five members of a body are chosen from different parties there are likely to be different points of view, and among the Members of this Committee there were some who did not take the same 1499 view as other Members. In fact, however, six Members of the Committee—a three-fourths majority—refused to accept the suggestion of breaking and repudiating the agreements. The Committee merely wished to ascertain what the agreements were and what their interpretation should be. Perhaps I should explain why names were suppressed. We worked there to ascertain the truth, and we felt that to protect ourselves it would be wise that every question should be asked in the name of the Committee, and that there should be no temptation for the advertisement of the particular points of view of any party in the State by the attachment of this or that name. Rightly or wrongly, we took that course. We believed that every question should be asked in the name of the Committee, as that would give the greatest certainty that the inquiry would be conducted solely with the object of ascertaining the truth.
Let me state broadly what my view, as a Member of the majority of that Committee, is as to the effect of the Report. I would never have signed any document which, to my mind, amounted to a repudiation. What we have done, in my belief, is, as regards the final payments in this great transaction, to throw the onus of proof on the companies who are claiming the payment from the Government. I suggest that that is not an unreasonable attitude for us to have taken up. It occurs every day in ordinary commercial affairs. If you have any great contract involving large sums of money, is it not customary to pay instalments as the work proceeds and to reserve the final instalment pending final measurements and the settlement of disputed points? We are near the end of a vast financial transaction—a transaction which is one and indivisible because of the questions of arrears of maintenance and of stores. It is a transaction which has extended over seven years, and I suppose that something not far short of £2,000,000,000 has been concerned in it. What we propose is that, in regard to the last £100,000,000 or £200,000,000, the companies shall not be paid the instalments on the presumption that the money has been earned, but that they shall be called upon to show in 1500 regard to the final amount that their claim is justified. It amounts not to repudiation, but it provides that in regard to the last five or ten per cent, of the payments in this gigantic transaction the claim to those payments shall be proved.
Let me take two points to illustrate what I have been saying. In this Supplementary Estimate there are two figures, one being for repairs in excess of standard. The House knows that the railways were guaranteed the standard of repairs of 1913, and one document was written placing upon the companies an obligation of honour to make sure that the net receipts were the right net receipts, and that they would not spend on the maintenance of the railways an excessive and unusual amount compared with 1913. Sir A. Butterworth drew our attention to the fact that the Executive Committee had, in that matter, acted as watchdogs for the Government. I wish to say, after going through this inquiry, I feel that the work of the Executive Committee has never been fully recognised in this country; it certainly has not been recognised as it should have been. The Executive Committee consisted of only 12 general managers. There are 114 companies concerned and, as Sir A. Butter-worth told us, in the year 1916 the Executive Committee found that 26 companies were piling up expenditure on maintenance to such an extent that it was necessary to hold meetings with their general managers, and it was necessary for the representatives of the Executive Committee to point out to them that they were exceeding by more than 10 per cent, the amount spent on maintenance in the year 1913, and that the Government would want an explanation and approval in the case of these companies. That was in 1916. To-day we have no Executive Committee. To-day there is no longer a body acting in a position of trust as watchdogs for the Government among the companies concerned. To-day there are other quite legitimate motives besides patriotism at work among those responsible for the railways, and if, in 1916, the Railway Executive itself felt it necessary to call the attention of 26 general managers to the fact that they were spending in excess on maintenance, what security have we today unless we interpret this agreement with some strictness, that we shall be able 1501 to prevent the spending of large sums of money which belong to the taxpayer on excessive maintenance.
I would call the attention of hon. Members, and especially of those connected with railways, to this fact. It is not merely a question of justice as between taxpayer and shareholders but it is also a question of justice as between one railway and another railway, one company and another company, and one body of shareholders and another body of shareholders. One company should not interpret the agreement in a more liberal manner than another. One company and one body of shareholders should not dip its hands more deeply into the public pocket than another. If one company had a railway notoriously not in such a good condition in 1913 as that of another company, surely it is not to be entitled, by calling on the generosity of the taxpayer, to raise the condition of its railway to the same level as that of the other company. With regard to the matter of maintenance, questions arose as between current maintenance and deferred maintenance. With regard to current maintenance, I must ask the Committee to notice the terms of the circular which was sent out on the 13th August, 1914, by the Executive Committee to the controlled companies, and I desire to quote the following passage from it:—Questions may arise as to the amount to be expended on the maintenance and renewal of way and works, or rolling stock. Under these heads it will not be open to a company to include in its working expenses any greater sum than is required to maintain its works and plant in an efficient condition, including due allowance for renewals, and if the expenditure of any company upon any item of maintenance exceeds the corresponding figure in the previous year the Government will no doubt, in the absence of special justification, expect it to be shown that the additional expenditure was rendered necessary by their requirements, or by the exceptional character or quantity of the traffic carried during the period of Government control.I have seen a good many statements with regard to the 1913 quantum, and I want to draw the attention of the House to the fact that, intentionally or unintentionally, there has been much confusion caused thereby. Now the 1913 quantum was a quantum of work and not of money. It was the amount of work done in 1913 in the way of maintenance. It is true the work is of various kinds. It was admitted you 1502 must have some common measure, and it was agreed that that common measure should be the cost at 1913 prices. Therefore we come to this position—that the quantum of maintenance which any company is entitled to have paid for by the country is the work done on maintenance in 1913, measured by 1913 prices adjusted to the time when the work was actually carried out. I have seen a good deal of complaint as to the statement that 1913 was the best year. It is important to meet that point, because we say that the money spent in 1913 is a liberal measure of what the amount of maintenance ought to be. I have seen it stated that we made a gross error. As a matter of fact, the return on the capital of railways was not at its highest in 1913. Fresh capital had been issued. The statement we make is, that the net receipts were at their highest in 1913. I want to draw the attention of the House to the fact that in regard to all the capital which was not earning its full return at the beginning of 1913, supplementary interest is allowed by the Government. Therefore the quantity of capital engaged is reduced to the capital which in 1913 had actually earned the highest returns in the history of the company. We argued, therefore, that the repairs done in 1913—the quantum repairs—formed a fair measure to be spread over seven years of what the companies are entitled to under this Agreement.
What do we find? We find that on the 30th September last, of the 14 great companies, seven had not yet spent upon arrears of maintenance the amount to which they were entitled, whilst seven had spent more than that to which they were entitled, and of those seven, two had spent not only more than they were entitled to up to the 13th September, but more than they would be entitled to up to the 15th August next. I know that as the railways were in varying conditions it is not possible to make a comparison as between one railway and another. The comparison must be between the railway as it is to-day and as it was in 1913: that is to say, a railway which in 1913 built its own locomotives is presumably doing the same thing now, while a railway which in that year bought them outside, is presumably still buying them outside. We admit the custom of each company and simply compare the condition of the com- 1503 pany with what it was doing in 1913. Perfect fairness is given to the varied conditions of the different companies. If you tell me that under the conditions of to-day companies which did the repairs in their own shops have now to go outside and pay a more costly bill, we say that in so far as that is true nearly all the railways may have to-day to go outside to do their renewals, and, therefore, in that respect they are all on the same footing. If one railway has been able to make a better contract than another, if one railway has been able to get its renewals done more cheaply than another by outside contractors, it follows that one railway is commercially better managed than another, and certainly the House of Commons, on behalf of the nation, ought not to be asked for a subsidy in proportion to incapacity of management.
With regard to arrears of maintenance, our recommendations may seem to be drastic, but I can assure the Committee that there was no idea of repudiation in our minds. We merely wished to be fair and reasonable, and on that point I would draw the attention of the Committee to the fact—and this is where the great sum of money is involved—that what is known as the formula for ascertaining arrears of maintenance was a formula devised, not for the purpose of finally measuring the liability of the State under that head, but for the purpose of roughly ascertaining the amount of instalments that ought from time to time to be paid to the companies, and were justified. It was the same thing as a certificate of a clerk of works. Some £90,000,000 is involved in the understanding of that formula, so I would ask the Committee's attention to it for a moment. I am not going into the details, but the principle of it is to apply to the payments on account of maintenance, say, in the year 1920, a percentage correction, in order to reduce those payments to 1913 prices. That will give a measure of the amount of work done in 1920, because it is reduced to 1913 prices. That sum is then deducted from the money actually spent in 1913, and the difference is a measure of the deficiency of maintenance in 1920. With regard to this, I will read an answer that was given to us by Sir Alexander Butterworth. It is No. 4532, on page 203 of the Minutes of Evidence
§ The DEPUTY-CHAIRMAN (Sir E. Cornwall)
Before I came into the Chair I understood the Chairman of Ways and Means to indicate that the Colwyn Report could only be used in so far as it had a bearing on this Vote. I have not been in the Chair long enough to give any further ruling at present, but, as far as I have heard, the hon. Gentleman seems to me to be departing from the ruling which the Chairman gave.
§ Sir H. MACKINDER
May I state what it is that I wish to prove? I wish to show that, whereas the right hon. Baronet opposite (Sir F. Banbury) said that all that the railways wanted was that the agreement should not be altered, I wish to show that, without altering the agreement, there are at least two readings of it—that there is a reading which has been made by the railwaymen right through the War and administered by them as a routine and that there is for the first time now available for the Ministry of Transport, the House of Commons and the country, a carefully prepared interpretation of that agreement—not a repudiation—which puts upon it a rather different meaning, and one which involves the large sum of money with which this Vote is concerned.
§ Sir H. MACKINDER
The right hon. Gentleman has heard the view of a prominent member of the Railway Executive that it was desirable that this matter should not be made a matter of litigation; and, in order that it might not be made a matter of litigation, it seemed to us desirable that the two interpretations should be before the country and before the railway directors, in order that they might be able to judge what course they will take.
§ Sir G. YOUNGER
On a point of Order The extract from the evidence which the right hon. Gentleman was proposing to read refers to the ultimate payment of £90,000,000, and has nothing whatever to do with this one.
§ Sir H. MACKINDER
As the right hon. Gentleman has told us, you cannot isolate this sum of £22,000,000. It is a portion of a great running concern, and in that £22,000,000 is a portion of the £90,000,000. I think, therefore, that I am 1505 justified in saying that that £22,000,000 includes a sum the payment of which, on the principles hitherto advocated by the railway companies, commits us to the £90,000,000. The quotation that I want to give from the evidence of Sir Alexander Butterworth shows that he admits that you may have two readings of this same agreement without any repudiation of it. In answer to a question as to the formula, he said:I would ask that you really put it to the accountants through some Government representative. The Minister of Transport might take it up and really get to the bottom of the question whether there is some flaw in the formula that would give us more than the cost of the renewals, either executed or estimated, because it is certainly to the best of my knowledge and belief not intended to do that;and he went on to say:We have no wish to take advantage of some imperfection in the formula.We asked that the opinion of officials might be given upon that particular question, and we obtained a series of points which, it is claimed, were defects in the formula, and defects, all of them, in the direction of giving money to the companies at the expense of the country. That money, we say, ought to be cut off now, and, so far as it is contained in this Estimate, ought not now to be paid. I will give only two examples to show in what way we claim that this formula is defective. I will not take complicated cases, but quite simple ones. The Government, during the War, borrowed a certain number of locomotives from the companies, took them across to France, undertook to maintain them in repair, and undertook to re-condition them when it gave them back to the companies. Therefore, the Government actually paid for the maintenance of those locomotives. No corresponding reduction, however, is made by the formula in the amount of money paid over to the companies by the taxpayer, and the result, therefore, is that, while the Government kept the engines in repair, they also paid the companies to keep them in repair. I do not say that that was an intentional mistake on the part of the companies, but I say that all these formulæ were devised by railwaymen, and, whenever a defect became visible from their point of view, attention was called to it and they saw to it that a change was made. But there was no 1506 competent person with railway experience, until the Ministry of Transport was established, to watch these things daily for the purpose of seeing that the Government was not damnified.
The other illustration is one of many, and is, again, quite simple. For the purpose of renewals or repairs you have to reduce the expenditure of, say, 1920 to 1913 prices, and in order to do that you apply a certain percentage correction. If there is an error of 1 per cent, in that correction, it amounts, in the case of one great railway, for one year only, to a sum of £250,000 paid in excess. Now, in the case of partial renewals—that is to say, repairs—a portion of the material that was in the old work is scrapped, and is available for sale. Everyone who had experience of such matters during the War knows that in proportion as prices rose, so did the value of scrap rise, and the sum received for scrap ought to be credited in that account on behalf of the Government against the cost of new materials. That has not been done, and from that single source there may well arise an error of 2 per cent, in the percentage correction which is applied in order to reduce the 1920 price to that of 1913. If, for one great railway in one year, the effect of an error of 1 per cent, is £250,000, the Committee will appreciate the amount of the excess payments to the companies involved by that source of error alone. Sir Alexander Butterworth admitted that, rather than litigate, he would like to consider these matters, and he admitted that there was no wish on the part of the railways to take advantage of an error in the formula.
I would go further, and say that a good many of these arrears will never have to be made good. It may be difficult to show precisely where that would occur, but the Committee has only to remember that, as everyone knows, the faster you run machinery, or any moving thing, the greater is the wear and tear. Everyone knows that the number of express trains, and the speed of the trains, was reduced—and reduced to the inconvenience of the public—during the War, and from that source alone a certain amount of money will be saved. I am aware that it will be argued that there is waste in the matter of repairs deferred—the "stitch in time" argument, as it is called in this controversy. There is, however, an escape 1507 from that, because there is provision, outside this payment for repairs and renewals, for abnormal wear and tear, and all that our Report does is to say that, when you have had your quantum, when you have had your liberal 1913 allowance for repairs, if there are still more defects, you must prove them, and show that they are abnormal wear and tear due to the Government user. We have simply said that you must go to that heading of the agreement instead of the other. We think that, inasmuch as these large sums of money have been overpaid to the companies—I do not say to the right hon. Baronet's line, but to the companies—in the matter of repairs, and inasmuch as there is no control to stop a company from spending the taxpayers' money to any extent, the time has come when companies ought to be put to the proof in regard to their repairs, and when these automatic payments of instalments, this last 5 or 10 per cent, of the money due to them, ought to be held up.
I feel that this question is so huge that it is impossible for me to do justice to it here, but I do venture to say that outside there has been no attempt to meet the criticisms of the Colwyn Report face to face. There have simply been attempts to side-track it. It is necessary to meet our criticism. There is no element of repudiation involved. It may be said that the railways cannot go on at the present moment unless you continue to pay this money—that they must have working capital. The State, however, never undertook to find them working capital. It may be said that they could get it under the stores agreement, and as to that I have only to say that we do not suggest a repudiation of that agreement, even when we use the word "review." We do say, however, that the obligation on the State under that agreement should not be twice discharged, to the extent, probably, of £20,000,000. Sir Alexander Butterworth admitted, when we put it to him, that under the present interpretation the chances were that the railways would be twice paid by the State, that it was a new point to him, and that if it were proved he certainly did not wish to be paid twice over. It is gross unfairness, it amounts practically to conspiracy for misrepresentation to attach the word "repudiation" to a recommendation which expressly recom- 1508 mends that the essence of that contract shall be maintained, but that it shall be reviewed to this extent, that security shall be obtained that the obligation of the State is not discharged twice over, and Sir Alexander Butterworth agreed.
Lastly, there has been very currently put about the view that the railways were to be set free from the State neither better nor worse for the purpose of earning dividends in the future, and on that basis a very liberal interpretation of all these payments which are involved in this excess Estimate, and in others, is asked for. I have been through all these agreements, and I have spent the last four months on them, and I cannot find that the State has ever admitted a liability to put the railways back in the same position, neither better nor worse, as dividend-earning concerns, than they were before the War. I do not say for a moment that their future is not a matter of concern to the State. I am not an advocate of Nationalisation, and if the railways are to be able to play their part they must be financially sound, so financially sound that they can raise the necessary future capital. But I am simply on the question of these agreements, and the settling with the railways for the past must be kept perfectly separate from the great question of reestablishing them for the future. Do not let us have camouflaged grants from the Exchequer under a one-sided interpretation of these agreements. Let us retain the control of this House upon the finances of the nation, and if we are going to help the railways, let us do it frankly knowing what we are doing, having accurate statements in regard to the past before us, and having the future not confused by the settlement in regard to the past. The right hon. Baronet (Sir F. Banbury) is not only chairman of a great railway company, but he was also last Session chairman of the Committee on National Expenditure, and if he can reconcile his duties in this respect in those two capacities, I believe we shall have come very near to a friendly and national settlement of these questions.
§ Sir D. MACLEAN
I beg to move to reduce the Vote by £1,000,000.
The Committee is in a very considerable difficulty in dealing with this Estimate, and I do not think the difficulty has been 1509 very materially lightened by the speech, admirable though it was from the hon. Member's own point of view, which has just been delivered. He has given us a sufficiently lengthy and almost impassioned address on the Report of the Committee which was set up to consider this very intricate and tangled question. We have had some remarks from the right hon. Baronet (Sir F. Banbury), and also a speech by my right hon. Friend (Mr. Thomas). To some extent they were in agreement on very vital points, and I wish to say, as an ordinary taxpayer, that when I find the right hon. Baronet and my right hon. Friend in agreement, I begin to get rather suspicious. My right hon. Friend desires to preserve the dividends of the shareholders, and the right hon. Baronet wishes to preserve the wages of the railway workers. Where does the public come in in all this? We are asked to find no less a sum in this current financial year than £48,000,000. The original Estimate was £23,000,000, the sum now required is £22,000,000, and by the last clause under Sub-head A, an additional £4,000,000 has been credited to the companies, making somewhere about £47,000,000 or £48,000,000. The public point I wish to bring before the Committee is this. Are we justified in granting this huge sum—because it is a huge sum—to the Government without any declaration of the policy they propose to adopt, having this Report in their hands? I was not able to listen to the whole of the right hon. Gentleman's (Sir E. Geddes) speech, but I heard a good deal of it, and I had some notes given to me afterwards. He confines himself, very properly I think, strictly to the items composing the £21,000,000 which now come before the Committee. He carefully kept off this Report, because it is quite evident that the Government have not made up their mind what their policy is to be. That may be convenient for the Government, but I very much doubt how far our duty goes in allowing this Estimate to go from our hands without some declaration by the Government as to what line they propose to take in regard to these huge sums. I have read every word of this Report—not all the evidence, but the whole Report. There are not very many hon. Members listening to me who can make that claim. It represents 1510 a very large amount of very careful examination.
§ The DEPUTY-CHAIRMAN
The right hon. Gentleman, in discussing anything that arises from the Report, may use it in so far as it has a bearing on the Supplementary Estimates, but may not discuss the value of the Report as a Report. In so far as there is anything in the Report to illustrate this particular Estimate, it can be referred to, but not otherwise.
§ Sir D. MACLEAN
I should very much like to know how the hon. Member (Sir H. Mackinder) discussed it—whether he discussed it as a Report, or how. I promise that I am going to pass from it. I was only just going to say the Report, as I read it, showed very great care on the part of the members—
§ The DEPUTY-CHAIRMAN
It was those remarks that led me to rise and ask the right hon. Gentleman not to discuss the Report. The work done by the members of the Committee is not a matter which is before this Committee now.
§ Major HAYWARD
On a point of Order. As the whole of the agreement covers each particular item under the Report in the Estimates, is it not in order to discuss the whole of the agreement?
§ D. MACLEAN
Then I shall be very interested to see how hon. Members succeed in replying to the hon. Gentleman. I am not to pay any compliments to the Members who sat on this Committee. That, I understand, I am to reserve for another occasion. How is it possible, after all, for the Members of the Committee to found their judgment on this Estimate—that is the real point—without having some knowledge of what line the Government propose to take? If the Committee is satisfied as to the lines upon which the Government propose to move they will give them £21,000,000, and there must be a later stage in which, not 1511 having heard what the Government propose to do, we will resume control of the amount to be expended in connection with this great railway mix-up, because that is what it really is. What I am asking is that the Minister of Transport should tell us what the Government propose to do with regard to the suggestions and advice which are made to them not by the Report to which I myself refer, but contained in the speech of the hon. Gentleman (Sir H. Mackinder). What answer has he got to that speech? I think he must reply to it, and let us know what the Government propose to do. This £47,000,000 or £48,000,000 is comparatively trifling in these days, but it is a big House of Commons point that I am submitting. There are £8,000,000 for the strike, £2,000,000 for disturbed conditions, and the various other items which he has given. Is the Committee prepared to give that sum to the Government and leave the whole question entirely in the dark as far as the public is concerned, as to what the Government propose to do in the future? The Committee is entitled to know. I will withdraw my Amendment as soon as I am satisfied on this really important House of Commons point, as soon as I hear, whether I agree or disagree from the Government, what they propose to do.
§ 7.0 P.M.
§ Mr. MARRIOTT
I agree with the Chair that there has been introduced into this Debate a good deal of irrelevant matter. There is really before the Committee a perfectly simple issue and that is whether the House is to enable the Government to fulfil its obligations to the railway companies. The Government is asking the Committee to vote £21,000,000 in order that it may fulfil those obligations. Two very important speeches have been delivered from the other aide of the House. My hon. Friend who has just sat down (Sir H. Mackinder) has given to the House a most elaborate vindication of the Report of a very important Committee. I want to know from the responsible Minister why, precisely, that Committee was appointed at all? We have heard from the hon. Member opposite (Sir H. Mackinder) what he conceived to be the functions of the Committee, but I want to know why the right hon. Gentleman below me (Sir E. Geddes) appointed that Committee in the first 1512 instance. I think, if I may venture to say so, that he appointed the Committee to do precisely what the Committee has done. How did it proceed to do it? The hon. Gentleman opposite has told us. The Committee did not contain a single representative of the railway interests on either side of the House, either of Labour—
§ The DEPUTY-CHAIRMAN
I am sure the hon. Gentleman is very desirous of helping the Chair and I hope he will do so, but he cannot do that by discussing the Committee's Report, which he is now obviously doing.
§ Mr. MARRIOTT
I fully appreciate, if I may respectfully say so, your difficulty in the matter, and I hope that you appreciate mine, which is to attempt to answer to some extent a speech of over an hour's duration delivered from the other side of the House. I do not for one moment suggest that it was the object of the speech, but I do suggest that no one who listened to that speech could draw any other conclusion than that the effect of the speech, whatever the purpose, will be very gravely to prejudice the position of the railway companies in the whole of this matter. That is the position which I am venturing to put before this Committee. The Colwyn Committee and the speech of my hon. Friend opposite have created, either intentionally or not, an atmosphere which is prejudicial, I venture to say, to a fair consideration of the fair claims of the railway companies. I know that the Colwyn Committee put in its Report many congratulatory phrases. For example, I read that it has recognised from the outset:That the nature of the agreement into, which the Government had entered was such as to impose a position of trust on the companies.And in a circular letter dated 13th August, 1914, the Railway Executive Committee reported their view of the position in the following terms: 'It is hardly necessary to point out that the arrangement is one which, in spite of its great convenience, both to themselves and the companies, the Government could not have agreed to had they not been assured of the absolute good faith of the companies, and had they not felt certain that they could rely on all officers of the companies concerned acting loyally up to the spirit of that arrangement.'What does the Colwyn Report proceed to say in comment upon that? They say: 1513We desire unequivocally to record our opinion that throughout these negotiations the members of the Railway Executive Committee realised this spirit to the full—
§ Mr. MARRIOTT
Yes—realised this spirit to the full, a spirit which was consistently exhibited in circular letters issued from time to time to the individual companies.I recognise that, and I accept it as a very handsome testimonial, but then the hon. Gentleman opposite has told us that it was the object and the function of the Committee to open up the question of this agreement.
§ Sir H. MACKINDER
What I said was that the reservations printed by two members showed that those two members wished to open up the agreement, but the majority of the Committee did not.
§ Mr. MARRIOTT
I am in the recollection of the Committee, and the hon. Member did use the term "review the agreements."
§ Sir H. MACKINDER
That is a separate question. That is on the storage agreement. I said there that we wanted to review it in order to see that money was not paid twice over.
§ The DEPUTY-CHAIRMAN
The Colwyn Report is not before the Committee at this sitting. What is before the Committee is a Supplementary Estimate. In so far as the Colwyn Committee's Report assists us in the purpose of considering the Supplementary Estimates members can refer to it, but to take the report as a report, and to be continually referring to the Committee's deliberations, its recommendations, its minutes, and its evidence is entirely out of order.
Does your ruling not mean that it would be quite Impossible for the right hon. Gentleman the Minister of Transport to reply to the right hon. Gentleman the Member for Peebles (Sir D. Maclean)?
§ The DEPUTY-CHAIRMAN
I have no intention of causing that result at all. I am sure that if hon. Members will try 1514 they can keep in order. I must remind the Committee that the only duty of the Chair is to assist the Committee in carrying on a useful and orderly discussion.
§ Mr. MARRIOTT
I am very much obliged to you, Sir. I will do my utmost to keep within your ruling, but you will appreciate the difficulty in which hon. Members have been placed, first by the initial speech of the Minister, then by the speech addressed to the Committee from the other side of the House, and—
Thirdly, by not having the copy of the evidence before us to which everybody is referring.
§ Mr. MARRIOTT
That is no fault of mine. I was extremely anxious to obtain a copy of the evidence, and was unable to do so in the Vote Office. From that evidence the hon. Member opposite (Sir H. Mackinder) quoted repeatedly in the course of his speech, but I am compelled to fall back upon the report of the Committee, and not the evidence. However, I will leave that point to be elaborated by someone who is more skilled in meeting the directions of the Chair than I am. But in passing away from the whole question of the Colwyn Report I want to say that I feel that the introduction to this Debate of the findings of that Committee has placed the railway companies in a position of grave disadvantage. Now I come to the speech made by the right hon. Gentleman the Member for Derby (Mr J. H. Thomas). What was the gist of that speech? He began by saying, and I very cordially assent to that, that this matter was to be regarded from three points of view, first, the point of view of the railway shareholders; second, the point of view of the railway employés; and third, the point of view of the State, that is to say, of the community and the taxpayer. I entirely agree. I wish to emphasise this with all the earnestness at my command, that the paramount interest in this matter is not that of the railway world and is not that of the railway shareholder, but the paramount interest is that of the taxpayer and of the community at large. It is from that point of view that I desire to say a word or two with regard to the speech of the hon. Member for Derby. He was, and I quite understand it, mainly, or very largely, concerned with the question of wages.
1515 A very clear distinction ought to be drawn between wages and the cost of labour. The two things are not by any means the same. You can have a very large wages bill and a very small cost of labour. You have got it in the mines of the United States of America. It was, however, with money wages that the right hon. Gentleman opposite (Mr. Thomas) was dealing. I would like, first, to indicate briefly how this matter stands as it was introduced to us by the Minister for Transport. In the year 1913 the total sum paid in wages by the controlled railway companies was £47,000,000. The total amount paid in 1920, according to the evidence of Sir Geo. Beharrell, was £164,000,000. I am not talking of any particular railway company, I am taking the whole of the controlled railway companies. In 1913 the number of people employed was 643,135; in 1920, the number was 700,000. The 700,000 who in 1920 were employed at an aggregate wage of £164,000,000 were not dealing with as much tonnage as were the employés in 1913. In 1913 the tonnage carried by the railways was over 375,500,000 tons; in 1920 that had fallen to 340,000,000 tons. Then look at the other expenses involved in the Bill presented to the House this afternoon. In the year 1913 the controlled companies were paying for their fuel £9,100,000; in 1920 they were paying £23,800,000 In 1913 they were paying for materials—these are Sir George Beharrell's figures—£33,000,000; in 1920 they were paying £92,000,000 for materials. With these figures before them the Committee cannot wonder at the Bill which the Minister of Transport has been compelled to present this afternoon. I repeat that in all this expense far the most important item and the point to which the management of railway companies in future whether that management be vested in the individual companies or whether it be vested in the State—it does not matter one straw, whether the railways are nationalised or handed back to the original companies—
§ Mr. MARRIOTT
Yes, and I am sure they would be very competent, or, at least, so I judge from what I have heard this afternoon. Whatever the management in the future, into the hands of whomsoever it may be vested, they will 1516 be confronted with the figures which I have given to the Committee, and in particular they will be confronted by the wages bill. The right hon. Member for Derby (Mr. Thomas), quite unintentionally, confused the mind of the Committee in regard to some remarks which had fallen from various railway chairmen. On this question of wages I would quote two cases, not from any speeches of railway chairmen, but which came from the Report of the Advisory Committee appointed by the Government to consider railway rates; the report of Mr. Gore Brown's Committee called attention not only to the rise in wages, but to what is infinitely more important, the rise in the cost of labour. One case quoted is that of a certain signal box, the total cost of which before the War was 21s. a week in wages. The cost of that same signal box to-day is £7 a week in wages. It is not merely a question of the rise in the rate of wages. It is perfectly true that the rate of wages has gone up from 21s. to 70s., but here is a case where the cost of this particular signal box has gone up from 21s. to £7, because where one man was previously employed at 21s., there are two employed now at 70s., which amounts to £7 a week. There is another case of a certain level crossing which before the War cost the railway company concerned £65 a year. That level crossing is costing the same railway company to-day over £500 a year. No industry in the world could stand cost of labour of that kind. It is not merely a question of wages, but it is very much more a question of what is called standardisation of hours. I am wholly in sympathy with the reduction of hours of men who are subject to any sort of physical or mental strain. To keep a signalman at Clapham Junction on the stretch for a large number of hours is not only inhumanity, but it is a very great danger to the travelling public; but to apply the same standard1 to a signalman at Clapham Junction and to a man on a Highland railway who only sees half a dozen or a dozen trains pass in a year, or, let us say, in a day, although there are a very few in the course of a year, is a palpable absurdity from which we must escape at the earliest possible moment.
I want to recall the Committee to thereat question underlying the Debate. This matter, which was proposed to the 1517 Committee in a very reasoned speech by the Minister, goes to the whole root of public faith and public confidence. It is not merely a question, so far as this Vote is concerned, whether the Government is to be enabled to keep faith with those with whom it has made a bargain; but it goes a great deal further and deeper than any question of a mere agreement between the Government and a railway company. Beyond everything else, two things are essential in the industrial recovery for which we are looking in the early future. One is absolute confidence in the keeping of bargains and the other is an abundance of working capital. How can the railway companies, or how can any other industrial concern, hope to go to the public to obtain from the public that capital without which no business can be developed if the return on that capital is to be made insecure by any attack on the sanctity of contract?
§ Mr. HOPKINS
It would be somewhat difficult to exaggerate the importance of this Vote, having regard to the present financial position of the country. It is not only a question of £21,000,000, but the very much larger sum which is bound to come later on. I was glad to hear one hon. Member (Sir H. Mackinder), who was partly responsible for the Colwyn Report, disclaim any intention or any desire on the part of the majority of the members of that Committee to repudiate the agreement. If that was the frame of mind of the majority of the members, I do think that their Report was very unfortunately worded in many instances, particularly in one of their conclusions on page 33:In view of the history of the negotiations leading up to the agreement of 1914, we have considered whether we should recommend a revision of that agreement.
§ Mr. HIGHAM
On a point of Order. May I point out that the hon. Member is now dealing with the Colwyn Report. Are we to have that subject over again?
§ The DEPUTY-CHAIRMAN
I was otherwise occupied at the moment, and was not paying close attention to what the hon. Member had said, but I will now listen carefully.
§ Mr. HOPKINS
You will find that I am not transgressing your ruling. The hon. Member opposite stated that the majority Members of the Colwyn Com- 1518 mittee had no desire to repudiate the agreement entered into, and I was reading six lines of their Report.
§ The DEPUTY-CHAIRMAN
That is exactly what I ruled out of order. What Members of that particular Committee did is no concern of this Committee now. In so far as the hon. Member may find material in the Report to assist him in discussing these Supplementary Estimates, that would be in order, and so would material from any other source, but I cannot allow discussion as to whether certain Members of the Colwyn Committee desired to repudiate the agreements or not.
§ Mr. HOPKINS
I regret that it is not possible under your ruling to make any answer to the speech of the hon. Member opposite. The difficulties encountered by the Committee are not due to the agreements themselves; at any rate the early agreements. These agreements were to any railway man perfectly plain in their meaning. Every railwayman knows that in every agreement for the rental or working of a railway, there are always doubtful points as to what is repairs and when repairs are merged into renewals and when both repairs and renewals are merged into betterment. These could be discussed, arranged anad settled under the earlier agreement, and I do think that the Government of that date were to blame for entering into that agreement. They had to make some arrangement to carry out the intention of Parliament under the Act of 1871 which says that full compensation for any loss or injury caused by the exercise of the powers of control of the railways shall be made good to the railways. No doubt the agreement with regard to net receipts was the most convenient form in which that compensation could be arranged and secured. My hon. Friend opposite pointed out that the agreement was so imperfect that it did not even specify that Government troops and Government cargoes were to be carried free. If the agreement omitted that, it was entirely immaterial. If the net receipts were to be made up by the Government it was quite immaterial whether the Government paid in cash or whether it was a matter of account.
The real difficulty originated in September, 1916, when Mr. Runciman, as a decision of the Cabinet of that day, agreed that control was to be continued for two 1519 years after the termination of the War. He wrote a most extraordinary letter, which I have no doubt hon. Members have read with great curiosity. It begins, "My dear Claughton," and it communicates that very expensive decision of the Government, and it finishes—You may show this letter if you think fit to any of your colleagues who may care to see it.I suppose that no more fatuous sentence was ever added to a letter. We can hardly imagine railway managers not caring to see and not being interested in a concession which, I think, they can hardly have expected in their wildest moments to have got without some condition, and obviously conditions ought to have been attached to that concession. The agreements that were made were very good—quite suitable agreements for war time. In war time the companies could not overspend, neither could they get the materials, but those agreements certainly ought to have been modified when they were applied to peace time. But we have to face the fact that the Government of that day did prolong these agreements, and by doing so brought about the infinite difficulties which have now to be settled.
I do not agree with the conclusion of the Committee that it was impracticable to revise these agreements. In my Opinion it was worse than impracticable. It would have been dishonest. We have got to recognise these agreements as they are. I do not think that it will be so difficult to come to a reasonable arrangement. The railway managers and the railway staff were carrying out their duties and their contract with the Government honestly, and I do not see any reason to expect that they want to depart from that honest policy. Naturally, while the position is insecure they cannot give way or resign their rights on doubtful points, but I feel quite confident that those two instances which were quoted by my hon. Friend are obviously points which could not be honestly maintained against the Government when the settlement came, and I do not believe that any board of directors or manager of an English railway would attempt to maintain them. There is one point in the settlement of this matter which ought to be taken very carefully into consideration by the Government. That is that no Department of the Ministry of Transport 1520 should be the judge or conciliator in, or have anything immediately to do with settling, these disputed questions. The business of the Ministry of Transport is to defend the public interest. I was very glad to hear the Minister of Transport say that he regarded himself as the watchdog of the public in these matters. If the Ministry of Transport had been in existence in September, 1916, and had been consulted before that idiotic letter was sent by Mr. Runciman, I am sure that in half an hour the Ministry of Transport would have saved the public.
§ Sir D. MACLEAN
On a point of Order. The hon. Member has just used a word in reference to a letter written by Mr. Runciman. All those letters are in that Report, and is it in Order for him to make reference to that letter in the Report without giving an opportunity to hon. Members who take an entirely different view of supplying a direct answer to him?
§ The DEPUTY-CHAIRMAN
I am obliged to the right hon. Gentleman (Sir D. Maclean). I have allowed the hon. Gentleman (Mr. Hopkins) to go on because I did not wish continually to be calling hon. Members to Order, but I must ask the hon. Gentleman not to refer further to the letters and the particulars in the Colwyn Report.
§ Mr. HOPKINS
I will say in reference to that letter that, if the Ministry of Transport had been advising the Government of the day in 1916 it is more than probable that the cost of the Ministry of Transport as a Department for the next 50 years would have been saved in a half hour, but, just because the Minister of Transport is a watchdog for the public interest, he cannot easily be a judge in this case, because he is an advocate, a party interested in the settlement of this matter. On the other hand, I should be extremely sorry to see these questions taken into the Law Courts for decision. I recognise that if the railway companies desire to take that course no one can prevent them, but I feel confident that if some tribunal could be set up in which both sides would have confidence, and on which both sides could discuss their case without prejudice, it ought to be possible to come to an arrangement of these claims. It would certainly be to the benefit of the State to have the 1521 matter settled, and it would be to the benefit of the railways to know exactly where they stand. I do not think that the Committee can do otherwise than vote the money now asked for, but before any further sums are asked for on this account, I do think that the Government should have taken all the steps in their power to clear up any difficulties and to give the Committee an exact statement what the liabilities are under the agreements.
I rather regretted to gather from the Minister of Transport that in this payment there is a sum of, I think, £6,000,000 for excess maintenance. As I read these agreements, I am not convinced that the companies have a right to any maintenance over the work which was performed in 1913. That may be a disputable point, but before any further payments on that account are made, some decision should be come to as to how far the companies are justified in exceeding the 1913 railway maintenance and charging to the taxpayer. I hope that the Ministry of Transport will confine their activities in this matter to watching the taxpayers' interest, bearing in mind that they and the Government of to-day are not responsible for these agreements, and also bearing in mind that any solution reached by the Ministry itself would be challenged in all quarters. Some would say that the amount was too much and some that it was too little, and if the Ministry want to see the sort of criticism to which it will be exposed, even with the best arrangement that they can make with the company, they can look at the "Evening News" to-day, which has the headline:More Waste! The Ministry of Transport ask for £21,000,000.These are not headlines which convey to to the readers anything of the facts of the case. They know perfectly well that this is not more waste. It is mere payment of a debt which is under consideration. That is the sort of criticism which would be made, but if this affair were referred for settlement to an impartial and satisfactory tribunal which would have the confidence of both sides, and an early settlement were arranged, it would benefit both sides to the controversy.
§ Mr. HIGHAM
I have listened for the last three and a half hours to this Debate. I have heard a very illuminating address 1522 from the right hon. Member for Derby (Mr. Thomas) who has explained the advantages of a Committee to examine into the affairs of railways, which is quite acceptable to him and is preferable to strikes. I have heard the very lucid explanation of the Colwyn Report from the hon. Member on my left. It seems to me that the Debate resolves itself into just this, that the Minister of Transport comes to this Committee and asks for £21,000,000—for money which the Government have contracted to pay the railways for certain things, some of which they have already paid and some of which they propose to pay if the accounts are in order. Therefore it seems to me that all this Committee has to do is to make up its mind whether it has confidence in the Ministry of Transport properly to spend this money or not. All that I have heard in the Debate served only to emphasise my belief in the necessity of continuing the Ministry of Transport. In that Ministry you have the only possible organisation which can exist between this House, representing the taxpayer, and, on the other side, the railways of the country. I do not say that the agreements were not made in perfect good faith or that the railways will not carry them out in perfect good faith, but in dealing with vast sums like these there must be some central authority which can decide for right or wrong what should be done with the taxpayers' money. If Estimates come before this House asking for millions to be spent on this or any other thing we ought to watch them with the keenest possible concern. But this is a different matter entirely. It is not a matter of waste except in so far as we individual Members may waste time in discussing it.
I am not at all fearsome of anything the newspapers may say with regard to my individual capacity as a Member in voting for this particular appropriation. The Minister of Transport is an independent factor. He has said more than once that he cares nothing for politics as politics, and that he has only one interest at heart, and that is to see that none of this money is wasted and that nothing is done which can bring criticism on the Government or the railways. In short, he is to act the part of impartial arbitrator. There is only one regret that any Member should feel, and that is that next autumn a man who thoroughly knows his business, who knows from one end to the 1523 other all the ramifications of railways and railway expenditure, is to leave the Ministry, and that probably we may have to put the work into the hands of a far less competent man. What we have got now is a Ministry of experts who know their business. Critic though I am of many Government Departments, I feel that this Ministry has no axes to grind except to serve the taxpayers' interest, and if it brings forward Estimates which it may not in its heart of hearts agree with, but which are part of a contract, and he asks the House of Commons to authorise the paying out of this money, I think it is our duty to vote it. Therefore, I hope, with all respect to older Members than myself, that this Debate will not go on much longer, and that we shall come to a decision one way or another. Let us meet this matter in the right spirit; let us trust the Minister of Transport and pay the bill and then get on with other business.
§ Major HILLS
I agree with the last speaker in his appeal for brevity. The right hon. Member for Derby (Mr. Thomas) told the Committee that he strongly supported the 1914 agreement, and that that agreement must be observed. The right, hon. Gentleman also said that the real cause of the trouble on the railways was not the labour trouble, and I understood him to say that if there were more skill in management a large saving could be effected on the railways. I would ask the Committee to remember the enormous cost of labour. It is quite out of proportion to what has affected other industries. We were also told that the people who run the railways in this country were the only people who did not know our train mileage. I could hardly believe my ears. Is it seriously suggested that any one concerned with the railways does not know the train mileage? I can speak for only one railway, and I can say that it is the element which everybody concerned with the railways must know. That statement rather vitiated all the right hon. Gentleman's criticism. The right hon. Gentleman would mislead the Committee grossly if he allowed them to think that there are vast savings to be effected on the railways. I can assure him that the management is just about as good as it could be. I have seen management in many forms 1524 of human activity, and I declare that on the railways there is not a great saving possible. It was suggested that more engines could be run, and he said that engines were always under repair. There are certain facts which people ought to know. In the War it was not possible to keep the engines up to standard. A second fact of importance is the very high requirement of the Board of Trade as to safety. It would be a very serious disaster if hopes were aroused of the effecting of large savings, which I am sure are not possible.
In referring to the speech of the hon. Member for Camlachie, Glasgow (Sir H. Mackinder), I shall not mention the Colwyn Report. I would put this to the hon. Member. It may be that you can find that the agreement has not been carried out. He quoted a case where he said that the companies were asking for payment twice over, and another case where they asked to be paid maintenance on more that the 1913 level, and he said that they could not justify that by special circumstances. Speaking for myself, I say on all those cases that no one wants more than the 1914 agreement. I know I have the right hon. Member for Derby entirely with me in this.
§ Major HILLS
It is a very complicated question. Look at the question of maintenance. An hon. Member says that you must not charge the taxpayer more for maintenance that the amount of work done in 1913 charged at the 1920 price. In 1913 the railway carried a few trains of passengers and goods. In the War it carried vast stores of the Admiralty. The whole conditions changed. There you might have an increased charge. I entirely agree that any company which goes to the Ministry and asks for an increased charge must have its claim put to the proof. What I object to in my hon. Friend's speech is that he tried, no doubt unconsciously, to pile up a case for one side only. He is questioning an agreement that has been in force for seven years. He is questioning it in the light of after-events, and he is giving only one side of the case. It is very difficult to make progress when you start by using vague words like "reviewing an agreement." Either an agreement is an agreement, or it is not. 1525 In this special case there is a special condition which the Committee ought to remember—it is expressly provided that if there is any dispute it is to be decided by the Railway and Canal Commission. There will be argument on detail, but I do not foresee any big dispute. The terms of the agreement are perfectly well known to both sides, and they have been observed much better than the hon. Gentleman said. When I read in the Report some of the remarks made, my mind went back to 1914. I remembered the spirit in which the agreement was made and the way in which it was carried out, and I felt angry at the insinuations that were made. Still I do not mean to deal with that. Years after you cannot expect to carry public opinion with you if you go back over every step that has been taken, and represent one side as always getting the better of things and the other side as always being in the second place. I wonder what those very able gentlemen who represented the Board of Trade during the War must think of this criticism. They are really made to look uncommonly stupid. A great deal has happened which I think would modify the rather biased view taken by the hon. Member for Camlachie of what the companies have done. Anyhow, all this is really beside the mark.
All that anyone asks for is that the agreement should be carried out. I do not think that my hon. Friend, when he comes to consider the agreement, will want to break it. The right hon. Member for Derby made his position perfectly clear. He said that the agreement is one which could not be avoided in the circumstances, that it was a proper agreement and that its terms must be observed. Now, as the last speaker very fairly said, all we are doing is to vote the money payable under the agreement. If I had liked I could have gone into great detail. I could have dealt with the whole of the speech of the hon. and learned Member for Camlachie, but I will not do so, for there are many others who want to speak. I do not think an agreement on these outstanding questions ought to be impossible. The question is big and the subject complicated, but seeing the way the agreement worked during the War, a settlement ought not to be difficult. On the present Estimates I have no doubt about my own vote. The Minister of Transport has 1526 made it quite clear that he considers the money is payable under the agreement,, and I shall certainly support him.
§ 8.0 P.M.
Lieut.-Colonel A. MURRAY
Every hon. Member who has followed this discussion will agree that it has been somewhat unsatisfactory, for it has led us nowhere. It was bound to be the case, when the Vote was put down for to-day, that the public interest, and indeed the interest of this House, would centre round the recommendation of the Colwyn Report. You have ruled that it is not possible for us to refer in any detail to that. Report, although remarks in connection with it fell from an hon. Gentleman below the Gangway, but I propose to observe your ruling, and confine my re marks as far as possible to other elements in the Debate. The right hon. Gentleman the Member for Peebles (Sir D. Maclean) moved a reduction of this Vote, and asked the Minister in charge what was to be the policy of the Government in respect of the recommendation of a certain Committee. If I may do so, I am going to suggest to the Minister what his answer should be, and it is, that the recommendations of that Committee will provide him with the light reading which is necessary to his leisure hours, but in so far as the recommendation proposing to abrogate the agreements that were made between the State and the railway companies at the commencement of the War, that he will not concern himself with the recommendation at all. I was very glad to hear one remark of the hon. Member for Camlachie (Sir Halford Mackinder). He said that it was not his intention, nor was it the intention of those acting with him, to suggest that the agreement made between the Government and the railways should be repudiated. I was glad to hear that statement, because reading certain recommendations for which the hon. Gentleman and his colleagues were responsible, I should certainly not have taken away that impression from them. I hope the right hon Gentleman on the Treasury Bench will take note of the fact that despite the recommendations of the Committee, the hon. Gentleman and his friends have no such intentions in view. I might have quoted from the Report which you have ruled out of order, to show that what indeed the hon. Gentleman wanted to do was to throw the onus 1527 of proof upon the companies, and to ensure that the claims to payment of above, £100,000,000 sterling should be made good, was in fact tantamount to repudiation.
I will not refer to a case that is sub-judice at the present moment, but it is a case where, in fact, the Ministry of Transport have already put into operation the recommendations of this Committee. The hon. Member for Camlachie referred in his speech to the evidence of Sir Alexander Butterworth, and said that Sir Alexander Butterworth did not wish litigation between the Government and the railways. No one wishes for litigation between the Government and the railways, but I should like to ask the hon. Member for Camlachie whether Sir Alexander Butterworth approved of the recommendations of this Committee, and whether he would suggest that if there were disputes between the Government and the railway companies in regard to any particular point in these agreements that that dispute should be settled by the ipse dixit of the Colwyn Committee or by the Railway and Canal Commissioners, or a judicial committee. To that point the hon. Member for Camlachie made no reference at all. The House finds itself in a very difficult position now. The Debate was bound to centre round this Report. A speech has been made recommending to the House and the public the contents of that Report. It has not been possible adequately to reply to a speech that has been made, and the House and the public outside will gain no advantage at all from the Debate that has taken place. I agree, therefore, that the only question before the House is—as far as this Debate is concerned the question of the Report ought to be wiped out, for it has not been a satisfactory Debate—whether or not we should grant this money to implement the agreements between the railway companies and the State. There is no question, to my mind, as to how my vote will be given, nor was there with the hon. Member who has just sat down. It was with great gratification that I heard the speech of the right hon. Gentleman for Derby. In his speech he said that these agreements must be observed. When those words are read throughout the country to-morrow they will be reassuring to the great mass of 1528 the public who are interested as proprietors of railways, to trustees, trade unions, friendly societies and others who are interested in this matter. His speech will go a long way to restore the confidence that is necessary to successful enterprise.
§ Mr. SEDDON
I agree to some extent with the last speaker that many of the speeches have certainly not been in accord with the subject before the House, namely, the Supplementary Estimate to which we are asked to give our consent. But I always understood before I was a Member of this House that this was the grand inquest of national questions. Latter speeches have led me to believe that that was wrong. I was going by the earlier speeches, those of the Members for the City of London and for Derby. We were then getting to close grips.
Lieut.-Colonel A. MURRAY
May I point out that when we were getting to close grips the Chair issued a rule preventing us from going any further?
§ Mr. SEDDON
The hon. Member misunderstands me. It was not the Report I was referring to, but the speech of the right hon. Gentleman delivered as chairman of a railway company, and my hon. Friend the Member for Derby naturally said that there seemed to be a common parentage for these speeches, and his inference from the speeches of every chairman was that the cause of these troubles of the railway companies was based upon the abnormal wages that were paid to the railwaymen of this country. I think that is accurately stating the Debate, as far as the two right hon. Gentlemen were concerned. I had hoped it would have gone along those lines, but unfortunately an hon. Member who sat in the Committee thought he would defend his Committee, and those who do not like the suggestion of the Committee thought it their duty to belabour him, with the result that we are forgetting the Estimate and forgetting that, after all, when we get right down the question is as to the utility and advisability of keeping in being the Ministry of Transport. My mind goes back to a discussion on a former occasion, when the right hon. Gentleman the Member for Paisley took part in the discussion. He gave us what an ancient 1529 writer would call many grand plausibilities, and he was very facetious about the grandiose Ministry that has been set up. He described Director This, That and the other. When I listened to that speech, notwithstanding the charges that a man may be a waster if he vote for the Government, I made up my mind that I would inquire for myself whether this new Ministry had got any value, or whether handing back the railways to the companies would be in the interest of the country, and carry out our obligations to these undertakings.
I have made certain inquiries, and I would like the hon. Member to answer the queries I am going to put to him. I have made observations and inquiries, and notwithstanding the bouquets that have been thrown by the right hon. Baronet about the patriotic fervour of the railway companies of this country—I know in August, 1914, it was almost universal, and not only railway companies but individuals who were prepared to do their uttermost without thought of return or reward in helping the country—railway companies are not run for pleasure, nor for the good of the health of those who run them. They are commercial undertakings, and as the War dragged on there was a tendency for those who represented the railway companies to make demands that never was dreamt of in August, 1914. We hear about the agreements. I have searched this Report, and I find that there is very little to lead me to the conclusion there was an agreement. But I do find that the railway companies' representatives were running continuously to the Board of Trade, the Ministry at the time, pointing out that this and the other had arisen, and getting conditions varied in the interests of the company which they represented. I do not blame them, but here we are, as representing the taxpayers, confronted with the question as to whether these Supplementary Estimates are justified, and whether the railway companies are entitled to all the bouquets that have been thrown at them, that they have in the letter and the spirit carried out the good intentions of August, 1914. Well, I hae ma doots, as the Scotsman says.
I remember when the right hon. Gentleman the Minister of Transport was dealing with what Mr. Gladstone, when he was 1530 Chancellor of the Exchequer, would have called the candle-ends. He was dealing with the question of the hotels run by the railway companies. He referred to champagne, and there was great hilarity in the country, and I suppose those that were poking their fun at the Minister had the idea he was trying to evade responsibility and lead off on a different matter. As a matter of fact the hotels run by the railway companies in this country run into the neighbourhood of £7,000,000 sterling, and this country took the responsibility of the hotels as well as of the railways. It is common knowledge to those who put up at railway hotels that, before the Ministry of Transport, champagne was considerably cheaper in a railway hotel than at ordinary hotels where persons had to buy it, and were subject to the condition of the market. I suppose those who were running the hotels thought it would be a good chance to advertise the best place to stop. They knew that this difference in the price of champagne would be made up out of the taxpayers' pockets, and no one would pay attention to it except perhaps the Chancellor of the Exchequer.
On the question of refurnishing the hotels—and I put this as a question to the Minister in charge—I am informed that at a certain hotel the furniture was covered with an article called pegamoid, which is a substitute for morocco leather, but that having to recover it, and the burden falling on the taxpayer, that substitute has been changed for real morocco leather. Then again, on the questions of linen, of cutlery, of renewing furniture, I am informed that there has been a prodigality that would not be tolerated by any railway company. The attitude seems to have been, "As long as the country pays, get the very best you can, because it will be much more valuable when the railways and hotels are handed back to their rightful owners." I am told that at a certain railway station which was little more than a shed with a few sleepers and a clinker track, that has now been converted into a real up-to-date station, with bricks for sleepers and flags for the cinders, and that has been charged to the taxpayer. In regard to painting, it is alleged that there is more white lead being used than ever before, and more coats of paint being put on. It is also alleged in regard to the permanent way that certain railways which 1531 were rather sparing and economical in pre-War days, when all the costs came out of revenue, have taken advantage of the taxpayer by putting more sleepers to the mile than formerly. In addition to that, I am told that in some of the warehouses and docks owned by railway companies old hydraulic lifts have been superseded by new electric elevators. All these charges are being levelled against the railway companies, and if they are true, I say there never was a greater need made out for a watchdog on economy than here.
I want to say a word with reference to the speech of my right hon. Friend (Mr. Thomas). The tone of the speech which he answered does not speak well for the future relationship of capital and labour. I remember more than a score of years ago, along with my hon. Friend the Member for North Salford (Mr. Tillett), who, I regret, is unwell at the present time, at the Trade Union Congress moving a resolution for compulsory arbitration. It was then turned down by the big organisations, which felt—and there was justification for it at the moment—that they were powerful enough to secure what they thought were their rightful demands without being forced into compulsory arbitration. The railway workers, under the guidance of my right hon. Friend, took a great responsibility. I think it was a wise step, if the spirit on both sides is in pursuit of justice and not to take any advantage either on one side or the other, but I gathered from the observations that have been made that this attempt to settle the differences or claims between Capital and Labour round the board of arbitration is going to be made into a whip for the railway servants for having done it. If that is so, without entering the domain of prophecy, I can say that the future relationship of Capital and Labour is going to be very difficult indeed. It has been said frequently that this is a question bristling with difficulties. We all know that. The finances of a railway company are difficult. Talk about a Philadelphia lawyer, but, I guarantee that outside of the trained railway auditor you can take the highest skilled auditor in the country and present him with railway finance, and he will be at sea for some time, and the man who is a trained railway auditor will be able to make rings 1532 round him, unless he has had the advantage of getting the same experience as the man representing the railway finance. With reference to the right hon. Gentleman, it may not be complimentary to say it, but the old adage applies that a poacher makes the best gamekeeper. In any case, no one can dispute this, that he does understand railways, and when the right hon. Member for Paisley was poking his fun at this grandiose Ministry, I am convinced that the country up to now has got value for its money. I suppose there are about a dozen auditors representing the railway companies, and one or two auditors at the most representing the Ministry of Transport. I think there is provision made for two, and there you have got two men who, although they have had the training, are pitted against ten or a dozen men who have all got the same object, because—let us make no mistake about it—the men who represent the railway companies are out to get the best they can for the companies they represent, and I am not blaming them. By the same token, the auditor who is representing the Government must get the best he can so far as the Government and the taxpayers are concerned. There is an acid test with regard to the Ministry of Transport. Will it pay the taxpayer? I do not place all the railway companies in the same category, but it is a notorious fact that some of them, having come under Government control, have made the attempt to take advantage of the public purse in improving their property, and whatever the figure may be—it may run into millions or only into hundreds of thousands—if there is undisputed proof that certain railway companies have tried to dip their hands into the public exchequer and rob the taxpayer, then I say the Government were justified in appointing the Minister of Transport, and I hope the inquiry will be as searching as it can possibly be by the expert who represents the Government in the particular department. One word in conclusion. I think the railway companies have set a good example with reference to their workpeople. I hope that example will not be weakened or endangered because of some of the charges that have been expressed in this House. I believe that if the future of this country is to be one of progress, then there must be harmony between capital 1533 and labour. The example of the railway workers in having a sliding scale is in the right direction, and I sincerely trust that that relation which has been set up between the railway worker and the companies, with the Minister of Transport sitting as umpire, will not only be continued, but will be extended throughout the whole length and breadth of industrialism in this country.
§ Mr. STEPHEN WALSH
I have been listening for a good many hours to the Debate this afternoon, and it does not seem to me that the gravest point in the submission of these Estimates has been met at all. The White Paper states that the original Estimate was £22,000,000. The Supplementary Estimate is £21,000,000. I have seen a good many Estimates presented, and a great many Supplementary Estimates to make up the balance during a financial year, but I have never known a Supplementary Estimate containing so great a ratio to the original one as the one presented this afternoon. I do not quite understand the £4,000,000 additional, to which the White Paper alludes, but it would seem to me that £4,000,000 has been paid in the meantime out of the Civil Contingencies Fund, and that, in addition to the £4,000,000, there will be required £21,000,000 more to carry out the working agreements with the railway companies and with the workpeople at the same time. That is to say, if I have got the thing in right proportion, £47,000,000 is really required, and the Minister presents us with an original Estimate of £23,000,000.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal)
I think my hon. Friend did not happen to be in his place when my right hon. Friend the Minister of Transport explained this matter, or he would not be making these observations now. May I just help him by pointing out that this Supplementary Estimate covers matters which could not have been foreseen as to £8,000,000?
§ Mr. WALSH
I know all that. The right hon. Member for Peebles (Sir D. Maclean) made a reference to the £4,000,000 payment from the Civil Contingencies Fund when the right hon. Gentleman the Minister of Transport was sitting in his place, and he gave no denial to the statement that that 1534 £4,000,000 had been raised. Let me just deal with the point raised by the hon. Gentleman on the Front Bench. Supposing we take the £8,000,000 that is said to have been lost in consequence of the coal miners strike; supposing we take the £2,000,000 that is supposed to have been lost in consequence of the troubles in Ireland and the consequent depression in trade—that is £10,000,000. Even then no department is worthy of the name that comes forward with a £11,000,000 Supplementary Estimate upon an original Estimate of £22,000,000. This Department was from the very beginning hailed as a department of super-men. I believe myself that the Minister in charge of the Department is an extremely capable man. I believe he has done extremely good work, but I should feel myself very humiliated if, with all this knowledge of railway affairs, of which every hon. Member has spoken—everybody has praised him, everybody has spoken of his high motives, of his length and experience, and of his great public motive and desire to act as a watchdog in the public interest—if with all that long knowledge, I had been unable to present an estimate that was not to be exceeded by 50 per cent. I should think myself no longer lit for public affairs. It is no credit to this House; indeed, it is indicative in my honest opinion, of the complete lack of financial control which right hon. Gentlemen at the head of departments have constantly shown, that an Estimate like this should be presented. It is no good going right back. There is not a single Department during the last six or seven years that has not shown a perfect lack of prevision. The Board of Trade, in its railway relations, simply repeated what it has done in its coal mine relations. Here, again, we have this new Ministry, which was to hold all the other Departments in check so to speak, to keep an effective watch and control over things, and almost the first time it presents Estimates they are exceeded by well over 50 per cent.
It would be out of order to debate the contents of that Report, but I think it is permissible for a very humble Member of the House to direct attention to the way in which these things are done. Here is a Committee which sits for five months upon most important matters within the public purview. The right hon. Gentleman in charge of the Depart- 1535 ment gives authority for the Report to be printed and only by paying 25s. each can we get a copy of that, which concerns the nation so intimately. An expensive and a long continued Committee sits and reports on matters of the greatest public importance, and this House is deprived of the opportunity, except by constant breaches of order, of discussing what is contained in that Report. And this is really a Government of super-men! We have only just lost the echoes of the question as to whether Labour was fit to govern. I wonder if Labour could misgovern more than has been proved this afternoon. There are thousands of documents; there is not a single legal agreement. All kinds of private memoranda, all kinds of irrelevant papers, but there is not a single paper that can be touched on which bears upon its face the stamp and authority of a legal document. Yet this is the way the business has been done during the last six and a half years, and I submit it is because of this completely irresponsible way in which business is done by great public Departments that we are met this afternoon with a Supplementary Estimate of £21,000,000.
There is one thing I have noticed. How very circumspect are those hon. and right hon. Gentlemen who are connected with railway companies when they are dealing with matters amounting to many millions of railway money, as against the outspoken and forcible way when they are dealing with comparatively trifling amounts affecting the nation as a whole. I know no more effective watchdog of finance than the right hon. Baronet the Member for the City of London (Sir F. Banbury). Let the ordinary Estimates be exceeded by £100, who so indignant as he? The whole vials of his wrath are poured upon the unfortunate Minister who has exceeded the Estimates by £100. Now, however, "with 'bated breath and whispering humbleness," he beseeches the Committee to look over this matter because, after all, the whole thing depends on the public keeping faith with the railway companies. Nobody wishes to be guilty of a breach of faith to the railway companies. The most extreme of us have never recommended that there should be any repudiation of agreements, of obligations, but I wonder if there is any other Department except that closely connected with the railways in which the 1536 right hon. Baronet would have been so mealy-mouthed as he has been this afternoon? A Government of business men! Labour cannot govern! They know nothing of these matters of high politics! They have not been brought up to deal with figures! What do they know of finance? "A senator's brat is a governor born! "Really, however, if ever a Labour Government, or, for the matter of that, any body of men selected indiscriminately out of the road—out of Parliament Street—were to act in this matter—well, I should think it would be impossible for any such body to have misgoverned in this way and to have reached a conclusion such as the pitiable one of this afternoon: to come upon an original Estimate of £22,000,000 with a Supplementary Estimate for £21,000,000.
We cannot repudiate it. There is only one conclusion. We cannot turn our backs upon agreements made, whether legal or not, if they were made in good faith. But to act in the way the Minister of Transport is now acting when some months ago he submitted to us a particular Estimate—his Department surely should have a broad pre-vision and knowledge of existing services—seems to need a lot of explanation. It may be true as he has told us, that he could not foresee the coal strike. It may be true that he could not see the later phases of the Irish rebellion. But take out the £8,000,000 in one case and the £2,000,000 in the other; even then there is a more than 50 per cent, increase upon the original Estimate. No Minister has a right to act in this way in the House of Commons. Any Ministry so acting has not a proper sense of public responsibilty, and because the Members of the House of Commons have been ciphers, mainly because they have paid no attention to these things, Ministers are allowed to act in this way. Though we cannot turn our backs upon our obligations, I do hope the time will come when we shall see Ministers taking their responsibilities in a more serious way than has been evidenced up to now.
Sir W. BARTON
I could not help remembering as the hon. Gentleman (Mr. Walsh) was speaking some words which I heard him repeat—"a Daniel come to judgment." I thank him for those words; for it does appear to me that up till the time he spoke this quite important 1537 judgment was going to go by default. We had speakers all the afternoon, all of them ending with almost a pæan of praise for the wonderful ability of this Department that comes before us asking for an excess Estimate of practically nearly 100 per cent. That is really the question before us; but we can only fairly decide; that in the light of the legal and equitable relations of the railway companies with the nation, and despite what appeared to be the ruling of one of your predecessors in the Chair, I cannot but think that to arrive at what is really and truly that relation we must have some regard for the Colwyn Commission and their Report. I want heartily to agree with my right hon. Friend opposite in this, that this Committee is placed at a very great disadvantage—and indeed at a very wrong disadvantage—in being deprived of the Minutes of Evidence. To tell us when we go to the Vote Office that we can go outside and purchase these Minutes for 25s., even if we were willing to do it, does not alter the position here. We have inquired day by day at the Vote Office and day by day we have been told that the publication was not there. I never remember in all the years I have been at the House of Commons any Department telling Members when they wanted necessary information that they could go outside the House and purchase it. It appears to me rather an arrogant position for a Department to take up, and if arrogance is going to be one of the features of a Department, such arrogance will tend to its early decay and death.
I want to try and look at the position from the beginning. When the War broke out the Government took over the railways, and the instrument, I believe—and they might have chosen one or two instruments—they chose for that purpose was the Regulation of the Forces Act, 1871. That Act, as I understand it, operated in three quite definite directions. In the first place, it gave the Government immediate possession and complete control. In the second place, it guaranteed to the shareholders complete indemnity against loss or damage arising directly out of that possession and control. In the third place, it provided for arbitration. If any of us here were now confronted with the contingency of war and were asked deliberately to suggest a scheme which would be fair as between 1538 the nation and between the railways or the shareholders, I do not think we could suggest a fairer or a more adequate scheme than that. Still, there it was set aside! Why? This House is supposed to be—I think honestly—the watch-dog of the nation's finance. This House was never consulted. It had provided by an Act of Parliament for the certain contingency which arose. When it arose, without consultation with this House, it was set aside by what is called an agreement between the Board of Trade on the one hand and the Railway Executive Committee on the other. I want here and now to enter my solemn protest against such a thing having taken place at all.
The Board of Trade presumably were well acquainted with the fact that an Act of Parliament ought to be superseded by another Act of Parliament. Not only were the Board of Trade concerned, but it is clear throughout the whole Report that the Treasury were from time to time consulted. I protest that an Act of Parliament should have been set aside and in its place put a mere Departmental arrangement. After having studied the Colwyn Report fairly carefully, I have concluded that if I were deeply interested in railways I should be very thankful for that Report, because it is a most harmless and innocuous document. The Report contains eight summarised recommendations, and they amount to nothing which the chairmen and directors of the railway companies would not quite willingly accept. In place of the Act of 1871, an agreement was come to that the railway companies should be compensated on the basis of the net receipts of 1913, which is the best year the railway companies have had. Although I have heard that statement questioned this afternoon, nevertheless my statement has been clearly demonstrated to be true. It provided that in the event of failure to agree there should again be arbitration. What is the difference between that and the Act of Parliament which provided for these things I have mentioned?
The Act limited the nation's responsibility to actual loss and damage arising out of the taking of possession and control by the nation. I am prepared to say, that subject to the fact that it may be ultra vires, and that it is contrary to the Act of Parliament, this is the agreement, that it provides for net receipts on the 1539 basis of 1913 and for arbitration. Whatever loss may arise consequent upon control and possession by the State, those losses come upon the nation and not upon the shareholders. Very many documents enter into this agreement, but such experience as I have of business would lead me to think that they all proceeded from the original agreement of net receipts of 1913. What are they? Surely they mean the amount of money over after the payment of all ordinary expenditure and after provision for the usual depreciation and maintenance. Those are the net receipts, and if you grant any company that for any period of time, its shareholders are put into a position totally independent of contingencies and losses which may come, from whatever source they may come. The one thing certain is that the dividends are all right, and that is the real difference, between those two agreements. I really wonder what was the object of this Colwyn Committee at all? Was it the intention of the Minister of Transport to challenge this agreement? If that was not his intention then I am mystified as to what his intention really was. The suggestion throughout the Report is that the Railway Executive Committee were professionals and that the Board of Trade and the British Treasury were amateurs, and that the Railway Executive Committee came propounding this and that position, and that the Board of Trade in their ignorance and the Treasury in their ignorance were led into making concessions which were not in the interests of the taxpayer, and which presumably should not have been conceded at all.
In quite a humble way I had some years' connection with the Public Accountants Committee of this House, and in that connection I have been brought into contact from time to time with the heads of our great spending Departments, with the accounting officers, and the officers representing the Treasury. I have had in my lifetime some little business experience, and I am bound to say that I do not know any body of business men that I would place in a position of equality of ability with those permanent officials of ours, and when it is suggested that the Railway Executive Committee got the better of these simple, ingenuous, permanent officials, I do not 1540 believe it. I find running right through the Report that the Board of Trade were usually very careful to consult the Treasury and have their confirmation of all they said and did. I am driven to this position. I have very little confidence in this Colwyn Committee, and I cannot understand what it was set up for. If you had wanted to suggest that this so-called agreement was not an agreement, I could have understood the position. Two of the Members of the Colwyn Committee signed a separate minority reservation both of them saying that they regarded the whole agreement as ultra vires. I cannot understand how two hon. Members of this House could make that reservation and could also have signed in advance this very agreement. The two things seem absolutely contradictory. I contend that this House is not now in a position to enable it to judge between the railway companies and the country.
This Report is no good. This demand for a Supplementary Estimate of 100 per cent, is absolutely a fraud. The country will expect us to justify the attitude we are adopting towards this matter. I believe the public will be astounded at the mildness with which we have accepted the position. Even the Government themselves must be surprised how mildly the Committee is taking this totally absurd position. We are not in a position to judge the relationship between the railway companies and the Government, and, frankly, I would like before I commit myself one way or the other to have much more information. I suppose the right people to give it are the Law Officers of the Crown, but for once in a way, if it were possible, I would like to pass the family doctor and have an outside opinion as to whether it is lawful for a Minister of the Crown to set aside the law of the land, and enter into a binding agreement between his Department and another interest in the country. The Committee, before it comes to a decision on this matter, should have a legal opinion on that point. Probably the Treasury Bench realise that they are in a tight corner in regard to it. I would like further to know what would be the real difference in money between the arrangements under the contract originally entered into between the Government and the railway companies and the present suggested modification. We are told 1541 there is a such a mass of documents, such a variety of correspondence, such a multitude of agreements, that really it is difficult to get the facts. But surely, in a matter which involves a payment of 100 or 200 million sterling or more, nothing should be allowed to stand between this Committee and full and proper information. Therefore, I want to know what would be the amount chargeable under the original agreement, and the amount chargeable under the modification contained in this very innocuous Report. Personally, I think the difference would be very little. The whole Committee at the present time is in a position of such complete mystery that I think the right, thing to do would be to move that this Estimate be referred back, and that a fresh Committee be set up to provide this House with all the necessary information, and to enable hon. Members to judge fairly and justly as between the taxpayers and the railway companies—as between the Minister of Transport and this extraordinary excess Vote which we are asked to pass. We must take this matter seriously. The country realises that it is in a dangerous financial position, and it looks to us for help and guidance. It has become a commonplace here that Parliament is a declining body. I do not think it is, and I will tell hon. Members why. Immediately Parliament is out of Session, if a grave matter arises, there is immediately a cry, "Why is Parliament not sitting?" Now that we are in Session, and confronted with what, in my opinion, is a most grave situation, not only for the moment but for the immediate future, I suggest we shall act weakly and not be doing what the country expects, if we do not solemnly protest against this excess Estimate, and let the Government clearly understand that these things will not be allowed.
§ Mr. NEAL
I hope my hon. Friend the Member for Ince (Mr. Walsh) will remain in the Committee for a few minutes, as I want to suggest that if we had had the advantage of his presence at the commencement of this afternoon, we should not have had the opportunity of admiring the intense vigour with which he addressed this Committee a few minutes ago. He is a member of this assembly, for whom we all have the greatest possible esteem and respect, and I am quite sure he will desire to 1542 know what the facts are which have really justified the introduction of what he has called this 100 per cent, excess Supplementary Estimate. I am not quite sure whether the hon. Member for Old-ham (Sir W. Barton) was present when the Minister of Transport introduced his Estimate this afternoon—
§ Mr. NEAL
Then I cannot offer the same excuse for him as I did for the hon. Member for Ince. The hon. Gentleman must appreciate that there are vital and important differences between this Estimate and Estimates which usually Ministers have to submit to the House. As a rule the Minister has to submit to the House an Estimate of the expenditure of his own Department, but my right hon. Friend the Minister of Transport here has had to submit Estimates, not of his Department, but of 114 controlled railway companies.
§ Mr. NEAL
I hope that my hon. Friend will allow me to make a reasoned statement, and I am quite sure that when I have finished we shall be at one about this matter. My right hon. Friend has to submit, not Estimates of receipts or of expenditure which he can control; he has to put before the Committee Estimates arising from the net results, not only of the normal working of one of the greatest, if not the greatest, commercial undertaking in the Kingdom, namely, the railways, but he has also to try and foretell what claims they will make upon the Government of an abnormal character.
§ Mr. NEAL
So far we are agreed. What is the difference? Is it 100 per cent? The accounts out of which these Estimates arise are not, as my hon. Friends would seem to suggest, accounts dealing with £22,000,000 upon which there is an excess of £21,000,000; they are accounts dealing with items, on the one side or the other, totalling to over £600,000,000 in the year, and the divergence in the Estimates is not a divergence of 100 per cent., but one of less than 3½ per cent. So far as it is a divergence of 3½ per cent., that is abundantly covered by three or four items. Under this 1914 agreement, the railway companies are guaranteed, 1543 not only against the loss incident to Government control but against all exceptional circumstances and contingencies which come into operation while that guarantee is in force. What are the exceptional circumstances and contingencies that have arisen since, in February, 1920, there were presented to a Committee of this House Estimates based upon calculations made in the previous October? We are considering now variations which have arisen over the period from October, 1919, to the present time. What is it that has happened that no one could have been expected to foresee? In the first place, there were outstanding claims for adjustments of wages, of which we had had no notice whatever. We were dependent entirely upon the information that we could collect or gather. These amounted to between £4,000,000 and £5,000,000. Then there came the Coal Strike, which was coincident with, if not the cause of, the slump in trade which followed immediately upon its cessation. It is estimated, and no one has challenged our figures yet, that that Coal Strike involved a loss of £8,000,000.
§ Mr. NEAL
The figures are shown quite plainly and simply in the monthly returns, in the decrease of the railway companies' receipts. Then there was a loss of £2,000,000 caused by that unfortunate industrial disturbance in Ireland, when the railwaymen declined to carry Government traffic; and there was a loss of £12,000,000 caused by the slump in trade, three months of which comes into this Estimate. Those items more than account for the £21,000,000 for which we are asking to-day. In addition, there is a sum of £4,000,000, not, as my hon. Friend thought, paid out of the Civil Contingencies Fund, but actually recovered from the railway companies in respect of reserves that they have been accumulating. I make no complaint of that.
§ Mr. NEAL
Yes. May I point out just what the position is? Since the Ministry of Transport came into being there have 1544 been two re-adjustments of rates and charges, in order to endeavour to make the revenue of the railway companies meet their expenditure. The first of these became operative in January, 1920, and the second in August and September, 1920. On a review of the position as to what has been realised from those charges, and as to the items of expenditure—to some of which I shall invite the attention of the Committee a little more closely later—the Minister finds, either that there must be a further attempt to increase the charges, or there must be this Vote passed by the House of Commons. When the question was that of raising the railway charges, my right hon. Friend was attacked on all hands because he was raising too much money. The fact is that the estimate result of those charges was cut so fine, in the endeavour to restrict the increase of passenger fares and goods rates, that there was no sufficient or adequate margin to meet contingencies such as those which have fallen upon us in the last twelve months, and that is the reason why we are here with these Supplementary Estimates. I hope that I have dealt with the points which were made by way of criticism—criticism with which we are familiar, which is wholesome, and which we welcome—but we have received to-day at the hands of the Committee something to which we are not so much accustomed. From most of those who have taken part in the Debate there has been practically no criticism of the administration of my right hon. Friend the Minister of Transport. The hon. Member for Oldham (Sir W. Barton) asked, "Why did not you set up this Committee?" I will follow the ruling, Mr. Wilson, of your predecessors in the Chair, and will not discuss that, except to say that I do not understand why my hon. Friend asks, "Why did you set up that Committee?" and then, in the very next sentence, "Why did you not set up another?" I do not understand it, unless it is intended to be a suggestion that the first Committee was an incompetent one.
§ Mr. NEAL
The right hon. Baronet says "Hear, hear," but, with the exception of himself and the hon. Member for Old-ham, I think no one has any doubt why that Committee was set up. It was set up 1545 to give the House and the country the very information that my hon. Friend the Member for Oldham says they are entitled to have.
§ Mr. NEAL
The Report has been at the service of all hon. Members as a Command Paper. My right hon. Friend explained how much he regretted to find, when he got here to-day, that the Minutes of Evidence had not been published as a Command Paper. I do not know the reason for that, but I regret extremely that any hon. Member should have had the slightest difficulty in obtaining that volume. I can say that the more cheerfully, because I have spent many weary hours in reading it, and I would like to think that other hon. Members had had the same task imposed upon them. The third question is, what is the agreement? May I point out that that, in its first essence, is a legal question. The documents have been collated with industry by the Minister of Transport from many sources—they were scattered documents which had to be put together almost in a scrap book—and then out of them you had to try to spell the agreement. But the question as to what is the agreement is in its essence a legal question. Upon that matter the Government is taking the usual course of being advised by the Law Officers of the Crown. It is taking that advice in the view of all the documents which have been found, and in view of the fact that at this moment proceedings have been commenced by one railway company against the Government
Lieut.-Colonel A. MURRAY
What exactly is it that you have put to the Law Officers of the Crown, and in what form?
§ Mr. NEAL
Then the hon. and gallant Gentleman must bear with me if I quite good naturedly and not rudely say it is not one which I think I ought to answer at this moment, as the case is submitted to the Law Officers of the Crown on behalf of the Government. The first question is what is the agreement? May I 1546 point out what has been said to be the agreement in some of the documents? On 6th August, 1914, there was a document which is the foundation of all others under which the State guarantees certain net revenues of the railways, based upon 1913 figures, adjusted as it was thought then with relation to the 1914 figures for the first six months. Immediately that agreement had been executed the railway executive realised extreme difficulty in dealing with it. Before they realised it the right hon. Gentleman who was then the President of the Board of Trade seemed to have realised it, and he called their attention to it, and on 9th August there was written to him by Mr. Herbert Walker, now Sir Herbert Walker, a letter which has been quoted in which this was said quite plainly:We understand, from the statements you made to us to-day that there is some apprehension on the part of the advisers of the Government that advantage may be taken by some companies of the settlement provisionally come to with the Government as to the basis of compensation under Section 16 of the Regulation of Forces Act, 1871, to spend abnormal sums out of revenue on the maintenance and renewal of their lines and stock. I have to say that while the Executive Committee cannot believe that any company would be capable of acting in such a manner, they have from the first regarded it as an obligation of honour to protect the Government against the possibility of such an event, and they had, before your visit, already taken steps to safeguard the position of the company in this respect.A more proper letter, conceived in a more proper spirit, it would be difficult to find. That was confirmed four days later by a circular letter addressed by the same gentleman to the railway companies which came under, control. It emphasised abundantly the fact that this arrangement of guaranteeing net receipts did put the State in the position that it was dependent on the honour of the railway companies whom he was addressing—some 70 or 80 of them, because the Irish railways were not then within the scope of the agreement. If that spirit continues to-day in its entirety, the future progress of an extremely difficult negotiation will be much facilitated on both sides. But how difficult it was to live up to that—and I throw no stones yet—was demonstrated immediately the Railway Executive Committee received the first year's complete accounts, for early in 1916—again I quote this statement from Sir A. K. Butterworth: 1547It was brought to the notice of the Railway Executive Committee that the expenditure of many companies in 1915 upon maintenance of way and works and rolling stock considerably exceeded the corresponding expenditure in 1913. In consequence of this all companies whose accounts for 1915 disclosed an increase in their expenditure on abstract A or B (after adjustment for difference in costs) of more than 10 per cent, over the 1913 figures, were invited to meet the Compensation Accounts Committee. Meetings were held with 26 companies.I think that demonstrated this fact, that approximately one-third of the controlled companies in the very first year of control had exceeded their 1913 standard of maintenance—a standard of maintenance which was the highest on record of the companies by over 10 per cent, and they were asked by the Executive Committee, which was then functioning as the custodian of the national interest, to account for that excess. The difficulty is not less to-day.
§ Mr. NEAL
That I cannot inform the hon. Member. I think it is a matter that probably adjusted itself in later accounts more or less. But the evidence that we have at the moment does not show precisely what was done with it. That leads me to this. What were the items in the account that required Government scrutiny? You cannot have the physical standard of maintenance ascertained as it was in the year 1913. You cannot set back the clock and inspect the whole permanent ways and the whole of the rolling stock of the companies, and therefore you can only have it measured in terms of money—in 1913 terms of money adjusted to present day values. What is one of the things that the Ministry has to do to-day to this agreement? It has to watch as closely as it can, with advisors, not only financial, but engineering, both civil and mechanical, that that, standard is not exceeded. But you are immediately face to face with all manner of difficulties. When you talk of maintenance you cover four separate things. You cover ordinary repairs, which normally would be paid out of revenue, and therefore are paid fully by the State; you cover partial renewals, which may be extremely slight in their character or may approach to complete renewals; you have complete renewals themselves, and you reach the point of 1548 betterment. Items under that head appear month by month in the accounts presented to the Government by 114 companies. You cannot check any month's accounts and say, "Have you done that particular piece of work this month?" because you cannot cut up the work of railway companies into slices in that way. There have to be provisions made, there have to be adjustments made, there have to be anticipations made, and the result is that month by month we are face to face with accounts which come in with items for maintenance which require the most careful examination, and of which no one can foretell what will be the position from month to month.
Then we come to a more difficult matter still, deferred maintenance. The railway companies have put their case to us, and may I say this for the railway companies, that I think the Executive Committee always put their case perfectly frankly before the Government Departments concerned. They said, "We are not now able to do all our maintenance, partly because we are doing Government work. We are making stretchers, and we are building wagons, and we shall have to defer some of our maintenance. When we do it, it ought to be paid for by the State. If we did it now it would appear in the current accounts. As we fail to do it now, we fail to debit the current account with its cost, and that ought to be made good." Then that was expanded. They said, "It ought to be made good at the cost at the day when it is done." And you have got a series of most complicated and difficult problems arising on every one of these accounts, month by month, as to what is the deferred maintenance, and as to how much ought to be paid in respect of that. There are many other matters with which I do not want to worry the Committee. I have said enough to indicate the difficulty of these agreements, but whether there is an agreement beyond the 1914 agreement, whether each of these other documents sets up a new agreement, or whether, to quote the words of the President of the Board of Trade—used more than once and adopted by others—whether they were "interpretations and amplifications" of the original agreement, is a very difficult question which may have to be solved, as a last resort, by the tribunal appointed for the purpose. It is extremely difficult.
§ Mr. NEAL
My hon. and gallant Friend says "Hear, hear," but it is an extremely difficult problem for any tribunal to settle, and not settle once but to settle in the claims of many companies with different sets of circumstances, until you open up a most refreshing vista of litigation that shall secure that at least a considerable proportion of the profession to which I have the honour to belong will not join the ranks of the unemployed for many years to come. Then when you have got your interpretations in the Court you still have the difficult task of applying those interpretations to the figures, the facts and the state of the repairs, and to all matters of that kind. Is it to be wondered at that my right hon. Friend the Minister, finding himself face to face with a problem of this magnitude and of this complexity, involving as it does many millions of pounds on the one side or the other, and desiring, as I hope every hon. Member of this House will give him credit for desiring, above everything else, to be just, not only to the taxpayer but to the great transport interests of this country, should ask the assistance and advice of a Committee to look into this matter perfectly impartially and to see what was 10 be done under the circumstances?
Certain direct questions have been addressed to my right hon. Friend. Two were addressed to him by the hon. and learned Member for the Camlachie Division of Glasgow (Sir H. Mackinder) as to the first two recommendations of a certain Committee which I will not refer to further. A very potent question was asked by my right hon. Friend the Member for Peebles (Sir D. Maclean) who, for the purpose of getting information, moved to reduce the Vote by £1,000,000. He asked, what is the policy of the Government? The policy of the Government can, I think, be quite plainly stated. First ascertain the legal position, be advised upon that, so far as you can, and then see, in the light of the advice you get, what are the obligations, the obligations on the part of the State, the obligations on the part of the companies, interpreted in the light of the documents of August, 1914. When you have found those obligations, do what you can to effect that settlement which shall be just, shall be reasonable, and shall not be 1550 oppressive either to the taxpayer or to the railway company shareholder.
Lieut.-Commander HILTON YOUNG
In a passing word which struck a spark of illumination and threw a flood of light on the Debate, the Parliamentary Secretary to the Ministry of Transport raised a wholly new issue which is perhaps, the issue which is most germane to these Supplementary Estimates. He suggested to us that the true issue before us was whether the sum should be met by a Vote, as we are asked to meet it tonight, or by the only alternative, a further rise in rates. As I understand the very illuminating analysis which the Minister of Transport has given to us to-night, removing every carry forward and removing every casual charge, there yet remains the sum which, if my memory serves me aright, is a deficit of £6,000,000, unmet by the new rates. The issue is too large and too wide for me to raise at so advanced a period of the Debate, but I think the opinion should be registered by anybody who holds it that it is an issue which it is idle to continue to postpone, and that if on this occasion we are not making the railways, in the simplest and the most crude language, pay, and if we postpone the hour at which they are going to pay their own expenses and dividends, we are only putting off the evil hour and1 increasing our difficulties. It may be looked upon as a fantastic proposition again to raise railway rates at the present time in order to make both ends meet in the railway balance sheet, but there are propositions more fantastic, and one is to continue the present system of subsidy. It is like a man who has got hold of a wild bull. It is extremely difficult to hold on and it is extremely painful to let go, but the sooner you let go the better, because the longer you hold on the more tired you get and the more infuriated the bull becomes.
There is another issue which is raised upon this Supplementary Estimate, which it would be wrong not to refer to. I believe that many Members of this Committee, having listened to the Debate, would feel this very strongly, that were they to suppose that by voting this money to-night they were in any way prejudicing the great issues outstanding between the State and the railway companies, they would have to reconsider their position very seriously. But I imagine the posi- 1551 tion not to be in any respect such. I imagine that by passing this Supplementary Estimate to-night, we are in no way prejudicing the great outstanding disputes between the State and the railway companies. We are simply maintaining the status quo. We are voting sums on account on an unclosed account, and the final balance will have to be struck in accordance with the decision arrived at when that decision is taken, and in my humble judgment that does enable me to see a simpler issue and to see no difficulty in supporting the Supplementary Estimates.
I would refer to the great issue on the merits, which has been touched upon, but from which we have occasionally glanced off to so many different facets in the course of this discussion. Many hon. Members who have spoken from the point of view of the legitimate claims of the railway shareholders and the railway companies have stated the issue for themselves in too simple a manner. They have made their case too easy. The issue before the nation on this question is not so simple as this: Shall a binding agreement be kept or not? On such an issue there can be no two opinions. Let us fully recognise, if we will, that there is an agreement, which may be scattered over 1,000 different documents. What difference does that make? No difference at all. Let us recognise that in all these documents there is some sort of binding agreement. The issue is a great and complex one. Does this binding agreement standing on the documents cover the actual circumstances of the case? The case as I see it, and the case which I venture to call the case for the taxpayer, is that that agreement as it stands on the documents does not cover the circumstances of the case as they have developed in the course of years. The argument seems to me a plain one, that it was struck in contemplation of circumstances very different from those that have actually occurred. It was struck on the whole basis of a short duration; but owing to the fact that the time during which the agreement was supposed to last has not been short, but has been long, and owing to the fact that it has not been wholly a period of war, but owing to the extension of the agreement, partly a period of peace, the terms of the original agreement have been found inapplicable. They have been 1552 altered, they have been racked hither and thither, and, so far as any man coming to it with a fresh mind can see, the original agreement has fallen to pieces.
I will mention one or two instances which are clear proof of the manner in which the original agreement has fallen to pieces owing to the unexpected circumstance of the length of its duration and its continuation in peace. In the first place, there are four great disputes outstanding. There is the confinement of the maintenance to the 1913 standard, subsequently extended by concessions in excess of that standard. Those concessions were perfectly reasonable when first made if the agreement were only to last during the War, because while the War lasted and the scarcity of labour lasted it was impossible that works of maintenance in excess of that standard could be undertaken, but as soon as that natural safeguard was withdrawn by the extension of the agreement into peace the basis of the safeguard on which the concession was given immediately falls to the ground. The second great dispute is that of deferred maintenance. That agreement has now a result which must seem very extraordinary to any one coming to it with a fresh mind, in that the State may be called upon to pay for repairs which are actually never carried out. Why have they never been carried out? It was perfectly sensible to make an arrangement in the first place when it was expected to last for a short period. If it had only lasted for a short period those works ought to have been done, but when it lasts for a long period a number of works are cancelled, and the old basis of the agreement falls to pieces.
The third dispute is the notorious extension of the agreement about stores. The effect of that is that we see the State making a voluntary contribution to the companies of additional working capital required to maintain their stores on the 1913 basis. That, again, was a perfectly reasonable agreement if the War had only been going to last for a short time, if the period of high prices had only been a short period and had been succeeded by a rapid fall in prices, but when the War came to an end, and prices stayed up, and showed no signs of falling, and there was that totally unexpected circumstance, a great rise in rates, permitted and allowed by the State, the whole circum- 1553 stances changed and had the result of making the whole agreement ridiculous and absolutely one-sided. There, again, is an instance in which the unexpected lapse of time and the continuance into peace destroys the whole basis of the agreement. One final instance. There is the fourth great dispute, the dispute about the classification of profits under and above the line. As carried out during the long duration of the agreement, it is a surprising result that a company which sells a capital asset should continue to enjoy the interest or fresh earning power of the capital realised, and should also have its net receipts made up by the State as if it had never realised the asset. If the agreement had been to last for a short time, no such realisation would have been expected in that short period—the possibility was not worth providing for—but on agreements covering a long period such realisations would occur, and actually have occurred, and have led to this fantastic result. The whole field of controversy between the companies and the Government appear to me to show the same characteristic. They show an agreement drawn up in contemplation of one set of circumstances, a short war, falling totally to pieces under the duration of another set of circumstances which was never contemplated in the original agreement, and that is a long war and a period of peace to follow. In these circumstances I certainly welcome the strong attitude adopted by the Minister of Transport to-night when he declares, and I say rightly declares, himself in this respect to be about to exercise the same vigilance on behalf of the taxpayer as the Treasury in any other matter.
§ Sir GODFREY COLLINS
The Debate has ranged over a wide field of questions, and there have been many references to the Report of the Colwyn Committee. The hon. Member for Oldham told the Committee that he was not in a position to judge, between the railway companies and the Government. If the Report of the Colwyn Committee enables the House of Commons to judge more accurately of the dispute between the railway companies and the Government, my colleagues on that Committee may feel that their labours have not been in vain. The Report has been much criticised. One sentence out of the 5,100 questions which were asked and answered—
§ The DEPUTY-CHAIRMAN (Sir E. Cornwall)
The hon. Member seems to have started a discussion of a Report which has been ruled out of order many times during this sitting.
§ Sir G. COLLINS
I do not want to infringe your ruling, and I will endeavour to keep strictly within the four corners of the Supplementary Estimate. In the Supplementary Estimate sums are required for repairs in excess of standard and also for arrears of maintenance. I was anxious that the railway directors should inform the Committee if the present basis of payment is unfair and inaccurate, and I would like to ask the Minister on what basis he proposes to make these payments in future. The right hon. Baronet in the early part of our Debate referred to the subject, and I was anxious to find out from him whether the payment for stores is on an unfair basis. The payment for stores is based on an agreement made in 1916 under which the Exchequer subsidises the price of each article so that when the article is replaced in store it will be on the 1914 standard. Does the right hon. Baronet think that is a fair basis, and that the taxpayers' money this year should be so used that the stores taken out of the stock of a particular railway company this should be replaced in stock at the 1914 basis? The money so far in this Estimate for that particular purpose alone involves the payment of about £20,000,000.
§ Sir G. COLLINS
That is the point. The agreement was made in 1916, but since 1916 Parliament has raised the railway rates and fares. There is a further sum of the taxpayers' money to recoup these railway companies, to replace these particular goods in their stores at the 1914 standard. The money is required in the Estimate for that particular purpose. I was hopeful that in the course of this Debate the railway directors who have been showering abuse on this Committee—
§ Sir F. BANBURY
May I point out that the Committee heard only one side of the case? They heard only witnesses from the Ministry of Transport, and practically nobody else. Since the beginning of the War coal went up. The railway com- 1555 panies had large stocks of coal. The Government had the advantage of them, and took them at a price at which they were then long before the coal prices went up.
§ Sir G. COLLINS
I have no doubt that the railway executive acted fairly to the Government and the taxpayers for many months and many years during the War. I do not suggest that they are acting unfairly now. I am only anxious to find out to what extent they are anxious to dip into the public purse. What is the extent of the public liability? Are they going to maintain the spirit which they showed in 1915? I understand that the claim was so made—
§ Sir G. COLLINS
That the claim is about to be made. I was hoping this afternoon that the claim might be made on the Floor of the House. Large sums of the taxpeyers' money are involved. The House of Commons is entitled to know from the railway director the extent of the claim. From information which I have had supplied to me I understand that the claim on the one point to which I am addressing myself especially is £20,000,000.
§ Sir G. COLLINS
We are anxious to find out the claim because the Ministry of Transport will have to come to this House to ask for the taxpayers' money to meet the claim of the railway companies. We are anxious to deal fairly and justly with all the claims of the railway companies. We are not anxious to tear up these scraps of paper. We are anxious to meet liabilities, but we are entitled to know.
§ Sir G. COLLINS
We had the privilege of hearing evidence on four consecutive days and if the railway companies had been anxious to give evidence before the Committee we should have welcomed them.
§ Sir G. COLLINS
That is a matter which they decided themselves in their 1556 own good judgment. I hope before the Debate closes we may hear a definite expression of opinion from those interested in the railway as to what their fair claim [...]s from the public purse. The right hon. Member for Peebles (Sir D. Maclean) has moved to reduce the sum by £1,000,000 with the view to elicit some information from the Minister. My colleagues and myself have come in close contact with the officials of the Ministry of Transport. The Ministry itself has been under a cloud of abuse and misrepresentation for many months. I am convinced that the officials of the Ministry are as anxious to conserve the taxpayers' money as any public-spirited officials in this country, and if every official in all the different Ministries were animated by the same spirit as the Ministry of Transport, the taxpayers' burden would not be so heavy as it is to-day. The Committee can trust the Ministry of Transport to safeguard the public purse. I would ask the Minister of Transport if he could give some assurance to the House that the charges from the railway companies will continue to be closely scrutinised. Can he present information to this House month by month revealing the burdens which are falling on the taxpayer from the railway deficits whish have arisen? If he can give any such information the Committee can pass with satisfaction the Estimates that have been presented.
A great many Members of this Committee and the Government are indebted to the hon. and gallant Member for Norwich (Lieut.-Commander Hilton Young) for putting before the Committee the fact that by passing this Motion we are not prejudicing the issue between the Government and the railway companies. Unless that is made perfectly clear by the Minister in his reply some of us, at all events, would feel compelled to vote against this sum at present. I think we shall never be able to pass a satisfactory judgment on this question unless we are permitted to have a full Debate upon all the questions affecting the various agreements that have been made. The Rules of Procedure to-day have hampered us extremely in this discussion. The Government owes it to the country that the Report of the Colwyn Committee should be debated in this House. It owes to the House, and the Minister owes it to the Members of this House who sat upon that Committee for some- 1557 thing like five months going into this question, that their Report and their findings should be fully debated in this House. I do not propose to trespass in any way by going into the matter of the Colwyn Committee. Things have been said here which are wrong. It has been said that the Members of the Committee never heard the other side. That ought to be replied to. It is not true, but we cannot go into that. We are tied by the rulings of the Chair. The right hon. Member for the City of London says, "Wait until the companies make their claim." What are we doing now but considering their claim? They have made a claim to-night of £48,000,000. If there is no claim, what is the Minister here for? We know perfectly well that there is a claim.
§ Sir F. BANBURY
The hon. Gentleman must have learned very little on the Colwyn Committee. Does he know that the agreement was to take all the receipts of the railway companies and pay all the expenditure? The claim will be for any damage, and that cannot be advanced until control is ended.
The right hon. Gentleman cannot confuse the issue by contrasting the claims made under the Agreement of 1914 with the claim the companies are preparing to launch under the Act of 1871. We are asked to find a sum of £21,000,000 for the railways. We are told that the coal strike cost them £8,000,000. Has it cost nothing to anyone else? Why should we pay £8,000,000 to the companies? We are asked to find £2,000,000 for the railways because conditions in Ireland are disturbed. They cost monetary loss to a great many other people. Why are no bills coming in from them? We are asked to find millions because of bad trade. If everybody suffering from from bad trade could send in bills to the Government it would not be £21,000,000, but hundreds of millions that the Minister would be asking for here. Why is it that the railway companies are in this comfortable condition that whatever happens to them they can send in a bill? They say it is "Because we have got an agreement." It seems to me that it is a matter of very considerable importance that this House should know something about this agreement. How is it that they happen to have such a claim as this so as to put them into a very comfortable position? It is an 1558 agreement obtained, I understand, under the Act of 1871, and they are claiming now for losses that are not losses due to control. The coal strike is not due to control, bad trade is not due to control, disturbed conditions in Ireland. Their claim is not launched for losses due to control, but for every consequence of the War, everything that happened during or after the War. Let me read to the right hon. Member for the City of London Section 16 of the Act of 1871 under which he claims:There shall be paid to any person or body of persons whose railroads or plant may be taken possession of in pursuance of this Section out of the moneys to be provided by Parliament, such full compensation for any loss or injury they may have sustained by the exercise of the powers of the Secretary of State under this Section.They are entitled to all losses due to control and nothing more. What does their agreement give them?
§ 10.0 P.M.
§ Sir F. BANBURY
The hon. Gentleman seems to be totally oblivious to the fact that in 1914 the Government came to the railway companies and said they intended to take them over. The railway companies did not go to the Government to obtain an agreement. They would have preferred to remain without an agreement and managed their own affairs. They would have made a great deal more out of it. The Government then came to an agreement in addition to the Act of 1871, and that agreement is still in force, unless it is to be treated as a scrap of paper.
I have no doubt that from the composite statements of the Member for the City of London and myself we shall get at the facts. He has supplemented my knowledge, let me supplement his. He probably is aware that in 1912 arrangements were being made for dealing with such a contingency as might arise, and in 1912 the railway companies were called together, and it was pointed out to them that should an emergency arise their railroads would be taken possession of under the 1871 Act. That Act had two defects. One company might lose traffic and another might gain, and under the Act the Government would be compelled to compensate the company that lost without being able to set off against it the gain of the company that gained. That was the difficulty under the Act, and in 1912 the railway companies 1559 were asked to assist the Government in getting over that difficulty, and a suggestion was made that there should be a pool, and they were left to work out such an arrangement as would be suitable to them. I am speaking subject to correction.
§ Mr. HOHLER
On a point of Order. Has this anything to do with the Vote? It seems to me it might just as well have taken place in 1811.
§ The DEPUTY-CHAIRMAN
I should like to hear the reply of the hon. Member as to the historical connection.
I submit to you, Sir, that we are asked to find £21,000,000 on a claim under an agreement. I am endeavouring to give the House some information as to how that agreement was arrived at.
§ Mr. LESLIE SCOTT
On a point of Order. It is perfectly true that this £21,000,000 is wanted in order to carry out certain agreements, and to that extent it is in order to refer to the agreement, but the House dealt with it in the Ministry of Transport Act of 1919, Section 3, and in that Act the Minister got the powers under which he now asks for this £21.000,000. For it says that where at the passing of this Act possession has been taken of any railroad under the Act of 1871, then he may keep possession without a warrant from the Secretary of State upon the same terms as to compensation "as those heretofore in force." That is a statutory recognition of the agreements with the railway companies existing on the 15th August, 1919, when that Act was passed. I submit that any attack on those agreements is out of order.
§ The DEPUTY-CHAIRMAN
I am much obliged to the hon. and learned Gentleman. I will bear in mind what he says.
It is clear that there are hon. Members who are not very desirous that the House should be in possession of the full facts of the case. I will leave 1912 and come to 31st July, 1914. On that date a memorandum was prepared by the Board of Trade under the Act of 1871 and was submitted to the railway companies. The memorandum read: 1560To ascertain the compensation payable, the aggregate net receipts of the railways taken over, during the period for which they are taken over, shall be compared with a similar aggregate for the corresponding period of the previous year. The ascertained efficiency, if any, less any amount of such deficiency which is attributable to causes other than the operation of the Act, shall be the amount of compensation due.The presence of those words limits the compensation to the railway companies to the loss caused by control. That memorandum was put to the railway companies and the companies said they would not agree to it as long as those words were in—"less any amount of such deficiency which is attributable to causes other than the operation of the Act." In other words, although the railways were taken over under the 1871 Act, they would not accept an agreement which limited them to compensation due under the 1871 Act. Those words, they said, must come out or they would not accept the agreement; and those words came out. It is because those words came out that the railway companies are able to claim in this present year of grace losses, not only for control, but losses for railway strikes and bad trade and disturbances in Ireland and any other mortal thing on the earth or in the waters under the earth. I asked myself, when I came to this point, what was it that induced the Government of that time to take those words out? How did the Government of that day assume such a liability? It is true that they were taking the railways only under a weekly tenancy and that the War was likely to be of only short duration. I am no lawyer, but it appears to me that by taking those words out they assumed a liability, not only for control, but for all the consequence due to the War. Why? Because unless they did it they could not get an agreement with the railway companies, and if they could not get an agreement with the railway companies they could not get unified operation of the railways; and that meant that they could not get facilities for the despatch of things that were vital to the carrying on of the War. That was the position. In those early days in August the Expeditionary Force was wanted across the waters in Belgium.
§ The DEPUTY-CHAIRMAN
I think the hon. Member is now getting too far away from the Supplementary Estimates.
It only shows the difficulty of carrying on this Debate apart from discussion of the whole of the terms of the agreement.
§ The DEPUTY-CHAIRMAN
The hon. Member need not refer to difficulty. He must confine himself to the rules of the House with regard to Supplementary Estimates. If we were discussing the Main Estimates, or if a day had been set apart for discussion of the Colwyn Committee's Report, it would be quite different. The rules governing Supplementary Estimates are quite well known, and must be adhered to.
I accede to your ruling, and am exceedingly sorry to have trespassed upon it in any way. We are to be faced with a further demand in the ensuing year. We have the statement that the Government are now taking a legal opinion upon the whole question, and when they get that they intend to ask what their obligations are; and when that is done they will endeavour to arrive at a settlement. I would ask the Minister of Transport whether he can give the House any assurance that when that legal opinion is obtained, and the Government have made up their minds as to a policy, the House will be given an opportunity of debating it before the Government enters upon a final settlement.
§ Mr. L. SCOTT
I want to raise a question which bears directly on these Supplementary Estimates. Under the provisions at present obtaining money has, of course, to be paid to the railway companies by the Government to make up the annual deficiency. One cause of that deficiency is that there are large volumes of goods carried in this country from port to port in competition with sea-borne traffic coastwise, and from other places in competition with canal traffic. I want to deal with the coastwise traffic and the hon. Member for Ladywood (Mr. N. Chamberlain) will deal with the canal position. In August last the subsidy for coastwise traffic was withdrawn, that is since the last Estimate was before the House. In July the Rates Advisory Committee were asked by the Government to deal specially with this question of rates on the railways in competition with coastwise traffic. In December they reported that the question was one of such great difficulty that they could not deal with it and they 1562 implied that they would not be able to deal with it for a very long time. I want to deal with the extreme gravity of the question from the public point of view. The competition of the railways with the coastwise traffic on these artificially cut rates is so serious now that coastwise vessels are being laid up rapidly. The last report of the Liverpool Steamship Owners' Association calls attention to the great danger the nation is facing in the matter. During 1920, although we had a larger mercantile tonnage than in 1913–14–British tonnage was nearly equal and the world tonnage was larger—the use we were table to make of our ocean steamers was only four-fifths of the use we made of them in 1913. The reason we were prevented from using our shipping more than we did last year was very largely the congestion of the ports. The congestion of the ports was directly caused by the fact that the ports could not be cleared, and the reason the ports could not be cleared was that the railways were congested, and the reason the railways were congested was that so much traffic was going by the railways on these cut rates instead of by coastwise traffic.
Before the War, roughly speaking, the inwards overseas trade in this country came to some 20 different large ports. From there it was redistributed, as pointed out by the Rates Advisory Committee, to some 55 different ports, very largely coastwise. The reason why the coastwise steamers are not being used to-day is that they cannot compete with the rates charged by the railways. These rates were fixed haphazard, casually, to meet individual cases over a past history of some 50 years, but the result is that a very large volume of merchandise is to-day carried on the railways from port to port which would normally go coastwise. The railways do not earn on that traffic as much on their cut rates as they would if the rates were put up to a proper figure, and there is the very big indirect result to this country of coastwise traffic being put out of action and ports congested, thus stopping the flow of trade. The result of that is that we are not getting in our imports as we should, freights on the ocean liners are raised, and prices, wages, and cost of living are all up. You are in a vicious circle, and this comparatively small point of the competition between these port to port rates and the coastwise traffic is having a 1563 vast national effect. As to what ought to be done, the Ministry of Shipping, in instructing the Rates Advisory Committee last July, said:The Government attach great importance to the maintenance of the coastwise traffic, and the Committee are to advise what increases should be made in the exceptional rates charged in consequence of water competition.The Committee itself reported, with details, pointing out the extreme degree to which this cutting of rates had gone below the normal rate on the railways, and they said exactly as the Government had said, that it was vitally important that this matter should be remedied, but there were such a very large number of these rates that if they were to be left to deal with them scientifically it would take a very long time. In the meantime our coastwise traffic will be strangled, and the congestion of our ports will remain, and the country will suffer. I recognise that between now and the end of this financial year probably it will not be possible for the Government to deal with the whole question fully and effectively, but I do say that the matter is one which ought to be dealt with drastically at once. Therefore, what I propose to do upon this Vote is not to move a reduction of the Vote now, because of the shortness of time, but to call attention to this pressing point, and to urge upon the Government the importance of taking the matter in hand forthwith. Unless the matter has been dealt with satisfactorily in the meantime, when the Estimate comes up for the next financial year I shall certainly move a reduction of the Vote.
§ Mr. NEVILLE CHAMBERLAIN
The point which I want to put is closely analogous to that which has been put by my hon. and learned Friend who has just sat down. The Parliamentary Secretary said a little while ago that the reason why he is here asking for £21,000,000 is because, when the railway rates were fixed they were cut so finely as to leave no margin for any possible contingency, which has, in fact, since arisen. This is not merely a matter which concerns the railways, or even the taxpayers in general, but the effect of this subsidy to-day is to strangle and to prevent, if something is not done, any possibility of the canals being resuscitated in the 1564 future, and taking their place, as they should, as one of the important transport agencies in the country. One of the reasons why I supported the setting-up of the Ministry of Transport was because I thought that if you got inland waterways and railways under the same hands waterways would have a chance, because the Minister would not seek to favour one agency rather than another, but would give each its fair chance. I have been disappointed in that. I am not attacking the Minister now for it, but the fact is there has been differential treatment between them, and for this reason the subsidy which was given to the controlled canals, in pursuance of the guarantee, when taken over at the beginning of the War, came to an end last August. The railway subsidy does not come to an end till next August, and the canals have found themselves face to face with a subsidised and unfair competition on the part of the railways which is very rapidly starving them to death. It is not only a question of the rates. There are services which are given by the railways free, and those services are given free because they are given in connection with competitive traffic which would otherwise be carried by the waterways. The matter has been investigated by the Rates Advisory Committee, which reported on the 18th November last, and speaking of these services they say:Except for the competition of the water carriers who can take much of the town traffic from wharves adjoining the traders' works, and the import traffic from alongside ship, there appears to be no reason for the free service rendered.What I would like to point out is, that to-day, under the present subsidy, these free services are being given at the taxpayers' expense. They are given simply, as pointed out by the Rates Advisory Committee, for the purpose of strangling the competitive water traffic, and I venture to say the trader does not want to see that competition strangled. On the contrary, he wants to see the canals take a fair share, and the railways allowed to charge economic rates, and economic rates only. I believe that, so far as the Minister himself is concerned, I am preaching to the converted. I am told that an article recently appeared from his pen in a magazine. I had not had the pleasure of reading it myself, but I am informed that in the course of that article he says that if something is not 1565 done soon to help the canals, there will be no canals to help. Last year my right hon. Friend asked me to undertake the chairmanship of a Committee to investigate possible developments of the canals of this country. It is obviously impossible that any recommendation made by my Committee could help the canals in the present financial condition of the country. No proposition which would involve the expenditure of large capital sums upon the development of canals or anything else has any chance of passing this House. Therefore, we can do nothing to help them. I should have thought, if anybody in this country could have helped canals, it would be the Minister of Transport himself. Therefore, I would like to support my hon. and learned Friend in pressing that attention may be given by the Government to this matter, and I hope when my right hon. Friend replies he will be able to tell us what steps he, proposes to take in order to preserve the canals and waterways of this country from the unfair competition from which at present they are suffering under the subsidisation of railways
§ Sir E. GEDDES
I desire to thank the Committee for the very careful and painstaking consideration they have given to the Supplementary Estimate. If I may for one moment deal with the case of the canals and the coastal shipping as presented by two hon. Members, it is, as they know, an extraordinarily difficult matter to deal with the rates separately, as their number is legion. I have referred the matter to a Committee, and they are considering a revision. I hope that work will not take so long about it as my hon. Friend forecaste. I am entirely in sympathy with trying to get these rates justifiably, on a sound commercial basis. It is just a question whether it is physically possible to deal with it, but I am asking that the Committee" shall, if possible, get on with the subject more expeditiously than my hon. Friend fears they will do. As to the general question, the Parliamentary question, whether or not the Committee are going to pass this Vote with the various questions which have arisen—the purport, validity, and intent of the various so called railway agreements, and this mass of documents which embody the understanding between the railways and the State—and so on—the point has been put: what about 1566 the Report, the Report we have not been able to discuss to-night. That Report is an intricate document. A strong Cabinet Committee—it would not be possible to get a stronger—met promptly and the case was referred to the Law Officers of the Crown. The mass of documents has been collected and commented upon by this Committee, which did not profess to give a legal opinion. The Law Officers have promised to give us their considered opinion in a week. The matter will then come before the Cabinet.
§ Sir E. GEDDES
Yes, a week from now. The matter is intricate. I had a talk with the Attorney-General to-day, and he asked that they should have a little more time to consider the various questions which have been raised. As soon as the opinion of the Law Officers of the Crown has been received the matter will come again before the Cabinet. In the meantime I have done what I feel in all the circumstances of the case I was entitled to do, and which I believe the House will approve. As the Committee will be aware, I felt it my duty, pending investigation, to stop £1,000,000 out of the December accounts to the companies as a whole, not to all the companies. But there are some where the expenditure appears to require more justification. That is not the majority. However, in the case of December I have stopped the £1,000,000: none of that has been paid.
In this Vote I am asking for funds to meet that payment. I do not, however, propose to pay it until the opinion of the Law Officers has been received, and subject to that opinion, and subject also to close investigation. Here I feel I am really not on controversial ground, but that the railway directors would actually wish that the excess payments which are under investigation, and in one way or another sub judice, should be closely investigated and carefully looked into. They are that class of payment referred to in the letter which I read to the Committee in my opening statement to-day—concerning the abnormal wear and tear which is the second phase of these agreements. I have disallowed this payment altogether until each item has been especially justified. Ample provision has 1567 been made for arrears of maintenance which have been overtaken. I am continuing in the January account to pay these arrears and maintenance, that is to say, the State's proportion, which, subject to the Law Officers, I doubt whether I am free to withhold without altering the procedure agreed to and worked to up till February. Payments on account of arrears of maintenance accruing I have been obliged to withhold because I have not got the money with which to pay.
With regard to interest on capital, the last item which concerns this Vote, I am doing nothing, but it is not anything like as big as the other items, and in most cases there need be no fear that we are irrevocably committing ourselves to any particular line. I have been asked: Is it perfectly clear that if we continue making payments—and I am making them on a restricted basis—we are doing nothing more than giving payments on account? There has been some controversy tonight, and in the Press, and statements have been made by eminent people concerned in railways as to whether the railways have yet formulated a claim. What my hon. Friend said is quite correct. It is true there are certain final claims which have not yet been formulated. There is, for example, the replacement of stores, but there is also a running claim, which has gone on being put forward month by month and year by year, and I say, with great respect to the right hon. Baronet the Member for the City of London (Sir F. Banbury), who said that the railways had not formulated their claim, that they have formulated their claim every month. The money is going out every month, and the difficulty is that they do not know what they are going to spend upon overtaking the arrears, which is part of the claim. They say that they should spend something in excess of the 1913 standard. If it is put to me "Can you guarantee the House that if we pass this Estimate you are not irretrievably handing over money which may come into dispute?" I would have to safeguard myself by saying that certain companies—and they are very few—have spent this money in maintenance, that is on repair and renewal of their property, in excess of their 1913 standard of work. There are certain 1568 companies who are vastly in excess, running perhaps to over a million per company. We have only a limited number of months for the control to run, and if this money is paid, it may be that certain companies would not be strong enough financially to pay it back.
I wish to point out also that the question of finance at the present time is a difficulty with the railways. Do not let us disguise the fact that they are having great difficulties to face. They are an essential industry and deserve fair treatment, and so far as I can speak for the Government, we are determined that they shall have fair treatment. But if the view that some persons hold is correct that these agreements and understandings made with the railways at the beginning of the War, under the stress of War, and on a weekly tenure—because no one knew how long the War was going to last—have not worked out on the same basis of fairness and equity as was manifested by the companies when the agreements were made, and when the companies in the first enthusiasm of the War took up the burden and did their part manfully, I feel sure if the same spirit of fairness is manifested now, the House, on its part, will desire to deal fairly and justly with the railway companies as to their future.
I wish to say here that I invite an authorised accredited representative of the railways to discuss this question with me. There is some difficulty in discussing it authoritatively by reason of the constitution of the Railway Companies' Association, which, consisting of nearly 200 companies, must have complete unanimity before it can express an opinion. I am, however, open to discuss the whole matter in a fair spirit with the companies, and I hope that the Amendment will not be pressed by the right hon. Gentleman.
§ Sir D. MACLEAN
We are indebted to the right hon. Gentleman for the statement he has just made. He has told us almost all we wanted to know at the present moment. I hope, referring to his concluding sentences, that this question will be kept free from any party spirit or undue acrimony. It is far too serious a question to be bandied about and to become the sport of party or personal grievance, and, as far as those who work with me are concerned, I can give an assurance that we will endeavour to deal with this great question in a broad spirit. The public, I am sure, will be viewing 1569 with very considerable concern the grant of this very large sum of money, for this reason, among others, that they feel they are being taxed very heavily, both by the increase of fares and of goods rates; and they will not be able to understand the present position of the railway undertakings in this country unless there is a full and open discussion, which will explain how it is that these vastly increased charges which they feel in their businesses and in their private affairs have come to be imposed, and how it is possible, in justice to the country as a whole, that these tens of millions should continue to be poured out. It is of the greatest possible importance that we should have an untrammelled discussion of this Report and of all matters ancillary at the earliest possible moment. I shall be willing to withdraw my Amendment if the Leader of the House will undertake to find time for such a discussion as that as early as possible. The real thing is to get at the facts. The Committee has made several unavailing attempts to-day to get a discussion on which the rulings of the Chair have been against it, but I am sure that if as speedily as possible we can get a Debate on the lines the right hon. Gentleman has indicated, the heated atmosphere in which this matter has hitherto been discussed may be dispelled and a fair settlement of this much-vexed question may be arrived at.
I agree with the right hon. Gentleman the Member for Peebles, and I think all hon. Members will agree, that, particularly in view of this discussion, we should have a full Debate, and as early as possible, on the Colwyn Report. The Minister of Transport has said that the Government has asked the Law Officers of the Crown for their advice on the legal aspect, and I would suggest that we ought to have their opinion before we have the Debate. Not only should we have the opinion of the Law Officers, but we should have some few days in which to consider it. The Debate should not be rushed upon before we have the Law Officers' opinion, or have had time adequately to consider it.
§ Mr. BONAR LAW (Leader of the House)
As far as the Government are concerned, we entirely share the view of my right hon. Friend that this is not at all a subject which should be dealt with 1570 from any point of view as a party question or dispute. Further, in my view, it is not a subject which should be looked upon from the point of view of any prejudice against the railways. As my right hon. Friend the Minister of Transport has said, there is no industry which is more essential to the country than the railway industry of the United Kingdom, and I repeat what he has said, namely, that any action which we take as a Government, or which the House of Commons takes, will certainly be fair to the railway interests in this matter. The only point which necessitates my rising is whether or not we can give a day for discussion. It is to the interest of everyone, including the railway companies, now that the subject has been raised that there should be a full discussion of it. I cannot, as my right hon. Friend will understand, promise time before Easter, but I shall certainly do my best, if the House desire it, as I have no doubt will be and, I think, ought to be the case, give a day as early as possible after Easter.
§ Mr. BONAR LAW
I am sorry to interrupt my hon. Friend, but I would make an appeal to him for this reason. Unless we get the Committee of ways and Means set up, which must be done before eleven o'clock, we cannot have the Report stage. I would also remind him that we shall not only have an opportunity of discussing this same subject on Report, but that it is necessary to bring in a special Consolidated Fund Bill for it. So that there will be two opportunities for discussion.
I only want to ask the right hon. Gentleman one question. Seeing that we are going to vote some £40,000,000 for the railways, will he promise me that he will see that the Government will restore the pre-War service on the west coast of Scotland?
§ Mr. BONAR LAW
I would like very much to give the small promise for which my hon. Friend asks, but it is really not quite reasonable to expect me to give such a promise in connection with a subject of public interest like this.
§ Amendment, by leave, withdrawn.
§ Original Question put, and agreed to.
§ Resolution to be reported to-morrow.
§ Committee to sit again to-morrow.