§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now react a Second time."
§ Mr. LAMB
I beg to move, to leave out the word "now," and, at the end of the Question, to add the words, "upon this day six months."
In moving the Amendment standing in my name and that of my hon. Friend the Member for Penrith and Cockermouth (Mr. Dixey), I should like to say, first of all, that my opposition is not actuated by any feeling whatsoever of animus against the railway companies. My opposition is based upon apprehensions which are very genuine and which, I believe, I shall be able to show to be very well founded. Before going further I wish to pay my meed of respect to the railway companies for what they have done, not only in this country, but elsewhere, in the development of the country. Since the advent of steam, undoubtedly, railway companies have done a great deal to develop and extend the usefulness of our nation at home and abroad. When we have said that, it does not entitle us to give the railways all they ask without giving full and due consideration to what they are asking us to give them.
Let me refer very briefly to the flood of literature which I, and, no doubt, most Members of the House have been receiving. Shareholders, of course, are acting within their rights in communicating with their Members of Parliament, but I am afraid that many of those who have written to us, or rather—for there is very little of it in their own handwriting—those who have sent us printed matter which has been supplied to them by others, have done so with very little thought of what that printed matter 302 really meant, or of what was the other side of the question. At all events, this literature has come, and we have to give due consideration to it. But there are others who have seen us, and some of them have given reasons for asking us to support this Bill. I will be very brief about this, and will only take two communications. One asks me to be fair and generous to the railway companies. I hope that anything I say or anything that this House may do will be fair, but when they ask us to be generous, it is a very different thing. To be generous at the expense of the rights of others will certainly not be legitimate. Therefore, I cannot agree to the suggestion of being generous in all circumstances, although I would always wish to be fair.
Another reason given to me while I was coming to London, was that if it were not for the railway companies I should not be able to come to London. That was on Monday morning. My reply to that was that if it were not for agriculture and trade and industry, the railways would not be there for me to travel by. I think that is a very conclusive reply. Undoubtedly the benefit is mutual, and one which has to be considered in a mutual atmosphere. Another statement has been made to me that the reason we ought to give very due, if not undue, consideration to the railways is that a great deal of money is invested in the railways, and that they were in existence before road transport. They might have been there before organised road transport, but they were not there before the old stage coach. That was road transport, and it disappeared. We have also to remember that the canals were there before the railway companies —and where are the canals? I would like to read something which a Commission said of the canals. The Royal Commission on Canals and Waterways in their final report issued in 1909 said:The railways had defeated canal competition by the purchase of links in a through system of navigation and the discouragement of through traffic, and they referred to accusation brought against the railway companies of neglecting to repair their own canals and thus suppressing, traffic. They pointed out that Parliament, in many cases, had endeavoured to annex conditions to the amalgamations of railways and canals compelling railway companies to maintain their canals in an efficient condition and keep them free and open for traffic, but that these conditions had not 303 been effective since such obligations can be more easily evaded than enforced, and, in short, that it is difficult to make a company maintain an effectual competition with itself.I hope that we shall bear in mind the statement made by that Commission, because I shall refer to it at a later stage. I do not think, perhaps, all of us realise that a great deal of the difficulty of the railways has been caused by an economic condition having arisen owing to the invention of the internal combustion engine. Other industries, particularly the primary industries, have found that, owing to conditions which were created by the War, and which have remained with us, and also other conditions such as improved transport, they have had to adapt themselves to those new conditions. I cannot help thinking that the railway companies will have to do the same. I know they are doing so to a certain extent, and it is very much better that they should continue on that line rather than come here and ask us to give them powers additional to those they possess with a view to further protecting their position. We have to remember that the big industry of agriculture is to-day certainly undergoing very great trials which are admitted by all to be very largely due to the change in circumstances, and particularly to a change in forms of transport—not only internal transport, but in the facilities which transport now gives for the importation of foodstuffs from other countries. There is no protection given to agriculturists against this new form of transport. Railways are talking about wanting further facilities to enable them to protect themselves against the new form of road transport in respect of the internal combustion engine.
There is also the great industry of coal. We are constantly telling the colliers and the coalowners that they must co-ordinate and do everything they possibly can, that they must paddle their own canoe and adapt themselves to the new conditions. If we ask agriculture and coal and other industries to do this, why should we not ask railway companies to do the same? We must remember that when we talk of industry it includes not only the capitalist but the worker, and the effect which it will have on the worker in this case is very great. Why should the worker in one of these unsheltered industries be compelled 304 to maintain those engaged in the sheltered industries? If increased rates come about, they will undoubtedly have to be paid by industry, and that means that they will be paid in part by the workers. If out of the unsheltered trades you have to provide something further to entrench those who are in sheltered or semi-sheltered trades, it will be a very great hardship.
One finds oneself in a somewhat more difficult position with a Bill of this description than if it were introduced at the Treasury Box. I have no complaint to make about the very admirable speech of the hon. Member who introduced the Bill. It was brief and terse and did not lead to much argument. It was simply "I move," and there is not much that one can say about such a speech. We are thrown back upon the fact that we have to consider the Bill just as it is presented or in the light of what has been written and circulated to us. We have not had an opportunity of hearing the personal views of those who are promoting the Bill as to its interpretation and so on. We are somewhat handicapped as compared with what would have been the case if somebody at the outset had explained what were the views of the promoters with regard to the provisions of the Bill. I am compelled, as I have already suggested, to rely very largely upon what has been written about it.
I propose to refer to two statements made by Sir Josiah Stamp. I take it that no one will question his right to speak for the railways, and, consequently, whatever he says I am entitled to view as being said with authority. At the annual meeting of the London, Midland and Scottish Railway Company he expressed this view with regard to the Bill:The company seek powers to provide passenger and goods services on the publicly-owned roads in any district to which access is afforded to their systems either by themselves or by agreement with other road users, and this Bill enables them to apply their funds for the purposes of such services and agreements in the interests of the general public and of the railway shareholders.I suppose that one of the chief duties or necessities of the general public is cheap transport. Let me read what the companies said:If the nation is to obtain the cheapest possible form of transport, and this is one of the first needs of the country, it is essential 305 that the railways should have powers to operate road vehicles as part of their organisation.This appeared in the "Railway Gazette" of the 27th January, 1928. There is another statement on the same point which I should like to read. I would, however, like to point out, first of all, that although the railways have full and unrestricted powers to operate road vehicles for purposes of their statutory business, they are now claiming freedom to embark upon an entirely new business. We have to remember that they are also claiming liberties to finance it out of the great resources of their railway finances. That is a very important point. They say they are not allowed to compete. I say that they are already competing; they can, and they do. They have no fewer than 35,000 vehicles on the roads to-day. Though they are very largely horse-drawn vehicles, they are on the roads and they are there for the purpose of their legitimate business. Of those 35,000 vehicles, 4,000 are motor vehicles. While they have powers in connection with their business to utilise the roads to the full, they have not the powers to embark upon an entirely new business. I do not think that they should be given the right to do so. Their road transport in connection with their business is losing money at the present time. The railways have lost £3,000,000 upon this section of their work, and we have to remember that the public pay for that because it is taken into consideration by the Railway Rates Tribunal when they are fixing the rates. The railway companies have concessions made to them when the rates become operative, in consideration of the fact that this sum of £3,000,000 has been lost, and that they anticipate losing it again in the current year. If these road services which the railway companies now run cannot be run at a profit, I do not see that they have the right to ask us to increase their facilities for losing money.
In regard to the new powers for which they ask, we might ask them whether they wish to run long journeys on the roads. If they say, "No," I do not see how they will cheapen transport. It is admitted by the railway companies and by everybody that cheap transport is the great desideratum for the public. If, on the other hand, they say that they do wish to run long journeys, my reply is 306 that they will only further deplete the amount of traffic which is run at the present time upon the railways. We are told by the railway companies that these new proposals are made because they are going to co-ordinate. What do they mean by co-ordination? I have a very grave doubt that when they use the word "co-ordination" they mean that they are going to get rid of competition, and that is what we are afraid of. We have to remember that if, temporarily, industry is given a lower rate, that is no advantage whatever. It is no advantage to industry if they accept a rate for traffic, temporarily, and eventually, when competition has been killed, the rate is raised, and they are permanently saddled with the higher rate. Therefore, we must not allow ourselves to be misled by the suggestion that this movement by the railways for road transport may lead to lower rates. We must be sure that those lower rates are going to be continued and that the competition which has caused those lower rates is not going to be removed.
On the subject of competition, the right hon. Member for Central Edinburgh (Mr. W. Graham) has referred to wasteful competition, and to co-ordination as a means of getting rid of it. I think everybody would agree that anything wasteful ought to be eliminated. We would agree to the elimination of wasteful competition, even on the railways. But all competition is not wasteful, by a long way. I can give three instances where the agriculturists, in particular—I am speaking not only for agriculture but for very large industries as well—were favourably affected by competition. There was an instance, not very long ago, where, because the agriculturists could point to cheaper sea transport than railway transport, considerable concessions were given to them in the transport of Scottish seed potatoes from Scotland to England. Agriculturists appreciate the migration of Scottish seed to England, perhaps more than we do Scottish migration in other respects. In the second instance, an application was made for exceptional rates by the railway companies. On 13th February, 1928, the London, Midland and Scottish Railway, the London and North Eastern Railway, the Great Western Railway and the Cheshire Lines Committee applied 307 to the Railway Rates Tribunal to sanction a number of exceptional rates from 40 to 75 per cent. below standard charges. Their representative said:These rates are all desired in order to meet road competition, or practically all of them are desired to meet road competition. Road competition has offered the trader a more economical proposition than the present railway rates, and, in view of the commercial officers, it is necessary for these rates to be brought into operation in order to give us an opportunity to meet the road competition.There, we have an instance of the benefit to the agriculturist of having road competition with the railways, and not being subject to a monopoly or to the competition having been removed. Does anyone seriously believe that the object of the railway companies in seeking to establish a new business is to intensify competition with their railway business? Nobody would believe that they wish to do so. Then there is the question of milk. Many milk producers were only able to secure reduction of railway rates by showing the railway companies that they could send more cheaply by road, and by agreement with the railway companies the charges for carrying milk have in many cases been considerably lowered, not only to the advantage of the farmer but to the great advantage of the consumers of milk. Then there is the question of fruit. I am speaking for the National Federation of Fruit and Potato Trades Associations, which represents 5,000 wholesale distributors of fruit and vegetables. I have a letter from the association, in which they say:The Measure will result in the removal of competition, and we maintain that that competition is necessary as a safeguard to the public interest. In the past as a result of railway monopoly the fruit trade has suffered through inefficient and over-costly services. The lever provided by the development of free competitive road transport has already effected some improvement under both headings, and this tendency to improvement, we fear, would be threatened if the Measure became law. It is suggested that railway transport has already become less efficient through the reduction in competition among the railway companies themselves, under the grouping system. The Measure now presented undoubtedly tends to reduce still further the possibility of competition in transport, and would, in fact, render possible the creation of a still greater monopoly, thus removing the principal incentive to efficiency.308 I will not read more of the letter, but it gives an indication of the fear of those who are engaged in the fruit trade.
There is another aspect of the question, and that is that the new modes of road transport which have been established are not of a nature similar to that which has been or can be supplied by the railway companies. It is what is generally known as the door-to-door transport. The railway companies will never get back the door-to-door transport. I have in my constituency men who are employed on the railway, who have a free pass on the railway, but they do not travel by the railway. When they leave their work they get on to an omnibus, which takes them to their own door, whereas if they went by the railway they would have to walk a considerable distance home at the other end. Therefore, it must be realised that the traffic which has been developed by the road transport companies is a new service from door-to-door which never will, under any circumstances, be brought back to the railways, and it is not desirable that it should be.
This door-to-door transport is very important for trade. I am old enough to remember the time when in the thickly-populated area of North Staffordshire the whole of the provisions were brought down from Liverpool by the railway. The man in business requiring hams, bacon, or anything of that description had to buy anywhere from 10 days to a fortnight ahead, before he required the goods for his business to ensure having them in time, because of the period it took for railway transport. To-day, the man in business can sit in his office at, say, five o'clock in the evening and can telephone through to the merchants in Liverpool, and can have the goods on his doorstep by nine or 10 o'clock next morning. The railways cannot do that, simply because the new method of transport has eliminated a great deal of hand labour in regard to transhipment. That is a very great advantage to traders, because not only does it mean that the business man can take advantage of the market by buying when the markets are suitable, but in not having to buy so long ahead in order to keep his shop supplied he can work his shop on very much less capital. These benefits are not simply going to the transport companies, but also to the 309 traders. The interest of the traders are as much affected as the interests of one class of transport and another. I have dealt with the question of unsheltered and sheltered trades, and will say no more on that subject.
With regard to co-ordination, I am afraid that this Bill will lead, not to co-ordination, but to the elimination of competition. I would like to read the theoretical expression in regard to co-ordination of those who are putting forward this Bill. I again refer to Sir Josiah Stamp. In the same Report from which I have already quoted, he said:Most people agree that transport by road and rail requires co-ordination in the public interest, and that the most economic combination of these two means for each particular set of circumstances must be discovered and made available. Now the road transport people with no railway control or interests cannot achieve this, but the railways, by extending their use of road vehicles, will he able to explore its possibilities and afford a service. An outside authority without financial responsibility could not dragoon the two elements into economic fusion.Not a good word "dragoon!" I do not know whether Sir Josiab Stamp intended us to take that word without examining it. It did not sound very nice. I consulted Webster to see what Webster said about it. He says that "to dragoon" isTo compel or attempt to compel to submission by violent measures; to harass and to persecute.Sir Josiah Stamp let light into his ideas of co-ordination. I do not know whether it is an idea which we shall accept. It seemed to me that there was not much sunlight in it; I would rather say that it was all moonshine and no sunlight. That is the theoretical view which he set forth. I have a letter which will give some idea of what has been the practical result of co-ordination from the railway standpoint. It is a letter from a large motor transport company. It says:Details of experience in co-ordination In 1924, the Omnibus Owners' Association called the attention of the Great Western Railway to the fact that they were running an omnibus service for which they have had no legal power, in the opinion of the association. The railway company replied that, notwitnstanding that perhaps they had no legal power, they were not prepared to drop the service.The Canal Commission said in their Report that it was almost impossible to put in safeguards which you could 310 make a railway company observe. I have quoted an instance of that.
The railway company were nut prepared to drop their services; but would be prepared to discuss with various omnibus companies the question of co-ordination or working agreements. Some omnibus companies refused; others, including this one, agreed to negotiate. The result was an agreement covering those parts of North Wales in which the Great Western Railway Company operate, particularly in the littoral between Carnarvon and Cardigan. Great detail was gone into, but the following are extracts of important parts of the arrangement.
I wish the House to pay particular attention to these three extracts:(a) Neither company shall provide omnibus services over routes allocated to the other.There is no competition in that.(b) The omnibus company shall not institute new services which compete with the Great Western Company's line of railway.That is eliminating competition.(c) Between Aberystwyth and Cardigan (where there is no railway) the railway company fares not to be lower than the existing omnibus company fares, and if either party wishes higher or lower fares, this to be done in agreement with each other.I have one or two notes on the second and last extract. The note on the second extract is this:(b) In connection with the second of these, several new routes could have been opened, but we were barred from doing it, and the railway company naturally would not, as they wished to keep all traffic on their railway. We were the only alternative people who could have opened the new routes, the capital required being too much for small man.(c) In connection with the last of these, frequent applications have been made by us to the railway company for a reduction in fares, owing to the poorness of the people concerned, and for revision from time to time. These have always been refused, the contention of the railway company being that if lower fares were put on, the route would lose money.This company was prepared to run on lower fares, but they were not allowed to do so because of this co-ordination which has eliminated competition.The route is 40 miles long and covers a district where the people cannot afford to pay high fares, and there is no other way of travelling.311 This is a district where the workers are in the primary industries and are not in a position to pay high fares. The omnibus company were willing to run at low fares, but the railway company would not allow them to do so.
This company's omnibuses and the railway company's omnibuses run over exactly the same route for the whole distance. We commenced it first, and they followed some months afterwards. This agreement was come to because the railway company intended running on most of our routes there; and said providing we agree to certain terms, which included the above, they would refrain.They have threatened these people in order to make them come to this so-called co-ordinating agreement.We are thus barred from the opening of new routes, and cannot reduce the fares on the existing routes where both companies run omnibuses, under the threat of further competition.It is one instance which shows what co-ordination will probably mean. The public will receive no benefits and such arrangements will only exist for the purpose of keeping up fares and restricting the means of travel.I have given you a theoretical view and an actual case of the results of this so-called co-ordination. We are told that the railway companies demand the right to run these new services because of the inequality in rating they have to meet. I am not going into the details of the rating of railway companies because I have a much better and sounder argument than that, but I must say that the particular system of rating is not to their disadvantage at the present time. In 1925, when we passed the Rating and Valuation Act, the valuations and assessments on railway companies and other special services were eliminated from it, and since that time railway companies and others have been negotiating with the authorities for the purpose of preparing another Bill, which I believe is on the stocks at the moment. It looks to me as if the railway companies were trying to play a game of toss with a penny with two heads, or are making the call, "Heads I win, tails you lose." They desire to win both ways. They wish to have the advantage of the assessments they have received, because already some Assessment Committees have adopted the suggestions which were made on this point, and while they are accepting this 312 they are using the argument about the inequality of rating in asking for permission to enter into an entirely new business. That is not playing the game.
If they have a real grievance I should be the last one to say that they should not be given fair consideration, but I cannot agree with a proposal which is calculated to allow them to gain under both heads. I have not said anything about the shareholders of railway companies, but I would like to mention this. I do not think the shareholders are very much afraid of their railways. In the same Report, to which I have already referred, a statement is made that a new issue of £6,000,000, of new capital for the London and North Western Railway, was offered to the shareholders; the people who should know all about their own particular property, and of the £6,000,000 £5,750,000 was taken up by the shareholders, leaving the remainder to be taken up by other people. That, however, is not the particular point. The particular point is this, that although there was only £6,000,000 asked for there were applications for over £42,000,000. Therefore, I do not think the shareholders are very much afraid of the position. I think railway companies should reorganise under the new conditions to carry on their railways, as they expect other industries to do. I was pleased to read that portion of the Report where they said that they had adopted a new spirit in industry and were co-operating with their men; that very useful suggestions had been made by the men which, in many instances, had resulted in great economy. Those are the lines upon which they should go, and the more fully they co-operate with their men the better. While the men are willing to admit that the directors and shareholders are the people to arrange and manage the finance it should be equally admitted by the directors that the people employed in the working of the railways should know something of the practical side of the industry.
This House has always been here, and I hope always will be, to protect the interests of all and not the interests of a section. I hope they will not protect the interests of the shareholders of this or any other railway company, or any and company, but will take into fair and full consideration the rights of all traders and individuals. While giving to shareholders 313 of a company all the rights to which they are entitled—I do not wish to deny any of them—we must not be over-persuaded by the arguments put forward on the one side without giving due consideration to the arguments put forward on the other. In asking that the Bill should be read this day six months I am asking for it to be killed. I think I am justified in doing so by the statement which was made by the Prime Minister this afternoon. He said that the Government intended to appoint a Committee to inquire into the whole question of internal communications, and I think the House should agree that it will be much better for us to have the Report of that Committee before coming to a decision on this Bill.
I put forward that argument quite seriously. The previous Committee which considered this question said quite definitely in their Report that this further extension of the powers of railway companies should not be given; that powers should not be given to railway companies to run on the roads in the interests of the public. If I had time I could give hon. Members the reference. We cannot fully discuss all the details of this question in one or two sittings, and we may come to a decision which will not only be contrary to the opinions of the previous Committee but may be contrary to the findings of the Committee which is now being set up. We shall be much wiser if we vote against this Bill to-morrow night when the Debate finishes and give the new Committee an opportunity of considering this question in its fullest sense, so that when we have their Report we shall be able to give it due consideration and come to a decision with much better judgment than we shall do now.
§ Mr. DIXEY
I beg to second the Amendment.
I do so recognising quite well that there is a strong combination of people interested in the passing of this Measure. The right hon. Member for Derby (Mr. J. H. Thomas) always carries considerable weight in his own party and, naturally, he will carry some hon. Members opposite with him in support of this Bill. I realise also that there are many hon. Members on this side who, in order to see fair play to the taxpayers and shareholders of railway companies, who are possibly in their 314 opinion not treated equitably at the present moment, will naturally be inclined to sympathise with the objects of this Bill. If this Bill were merely to give equity to shareholders of railway companies, if I thought it was introduced for that purpose only, I should be inclined to withdraw my opposition to the Bill. Quite frankly, I cannot say that I consider that to be the case. Why? There is not a demand for more motor transport throughout the country as a general rule. In fact my own personal experience tells me that there is to-day too much motor bus competition on various routes. [Laughter.] Hon. Members laugh, hut I have known of certain corporations which have repeatedly refused to grant licences for further services for motor buses because the public were already quite well supplied and further services on the roads in those districts would be dangerous for all. There is no genuine demand from the ordinary people of the country for increased motor bus services.
I suggest that the main object of the railway companies in bringing forward this Bill is plain. They realise that the present motor bus services are cutting too deeply into their passenger traffic receipts. They realise that people today prefer the motor bus, which drops them at their doorsteps, to the slow trains and the spasmodic service to which some of us arc accustomed. For the present state of affairs the railway companies have themselves largely to blame. I do not want to say anything that will give offence to hon. Gentlemen on this side of the House who represent the railway companies and do so well in this House, nor do I want to say anything against the right hon. Member for Derby. I can well understand the right hon. Gentleman's support of the Bill. He is already a very important man in this country. He already exercises tremendous influence in trade union circles. I predict that if the right hon. Gentleman gets these Bills through, the result will be that he will control practically every transport worker, on roads and railways, in the country. It is a most unholy alliance to my mind when we have gentlemen like my hon. Friend the Member for Epsom (Sir R. Blades), the hon. Member for the Exchange Division of Manchester (Mr. Fielden), and the right hon. Member for Derby 315 smiling across the Floor of the House to each other, when we realise all the time that the Bill is going to give a monopoly to the railway companies as traffic runners in this country, and that the right hon. Member for Derby will be the dictator of labour in this country.
In looking at the matter further it is only fair to consider also the motorbus services at present running. Those services were started by people who realised that the country wanted a new industry. It was started by people, some of them very small men indeed. who put their money into these enterprises. This Bill will give the railway companies the power to squeeze out every small motor-bus company in the country. It is all very well for hon. Gentlemen to say that the Bill is required to co-ordinate the services. It is perfectly obvious that the railway companies desire to drive people back to the railways. That is what is at the back of their minds. They have their permanent way to keep up and long stretches of lines which are of little use locally for passenger traffic. Undoubtedly, in the minds of the promoters of this Bill is the desire to force people, if possible, to use the railways instead of the roads. To do that they have first to eliminate private competition. If they start motorbus services and drive passengers off the roads, bit by bit, they can withdraw their own bus services or run very attenuated services, and then force the people generally to use the railways. That is a fair criticism of the motives behind the Bill.
I will now deal with one or two other small points. There is the position of the private haulage contractor. He has been a very useful man to the business community. He has filled a gap. The railway companies in using the roads for haulage are in a position to cut rates. They can afford to undertake haulage by road at considerably lower rates than the small private contractors. Moreover, they are in a position to force a large number of private haulage contractors to shut down, because they can refuse traffic where the haulage contractor of necessity has to send some of his stuff by rail. The railway company is able, therefore, to make the private contractor's position practically untenable. 316 A third point is the effect of the Bill's proposals on the public. After all is said and done, apart from the shoals of postcards that we have had from railway shareholders and railway servants, there is a large body of people who are not interested at all definitely in railways. In any case, their shareholding in railway companies is so small as to be of no moment. But from a business point of view the general public do desire to maintain a certain amount of competition. I suggest that owing to the huge amalgamations of railway companies, the London, Midland and Scottish Company, so well represented in this House, has a monopoly in given area, and the Great Western Railway has a monopoly in another area. If we run the risk of eliminating private competition, whether for haulage work or passenger carrying, we may hand over the transport system of the country to a monopoly. I for one would far sooner have a nationalised railway system at any time.
Another point I want to bring before the House relates to the position of the railway user. The railway companies cannot have it both ways. If they are going to take a lot more of their people from the railroads and carry them by omnibus, that will mean that fewer people than ever will travel by the trains, with the result that the companies will find their passenger trains putting less money into their pockets than they do now. The effect on the unfortunate people who have to travel by rail ought to receive the serious consideration of the House, because there are large numbers of people who unfortunately are compelled to travel by rail, whether they like it or not. The railway services will then become even more attenuated and these people will suffer. Another important point is the question of agricultural rates. I do not pretent to be an authority on rates, but all of us have commonsense, and we know that our roads to-day cannot carry the present motor traffic. If the railway companies are permitted to put still further traffic on the roads for haulage or passenger carrying, that must result in roads which are already much overcrowded becoming even more crowded, more dangerous and more expensive to maintain. If we could afford to-morrow—possibly the right hon. Member for Derby thinks that we can, 317 but the Government think that we cannot —to spend many millions of money on the making of really good new roads—there is no suggestion of the kind—it would be very silly to extract more money from the taxpayer in order to keep these roads fit for fresh traffic which is not required.
Finally, I think the suggestion made by the Mover of the Amendment is a proper suggestion. It seems to me extraordinary that the railway companies should come forward with Bills of this kind, seeking huge powers with no safeguards. We are to have a Debate from 7.30 to 11 o'clock to-night, and to-morrow night, and this House is asked to hand over the tremendous powers which these Bills will confer on the railway companies, without any proper Debate. The Bills are to be rushed through on Second Reading and we are not to have an opportunity of going into them in detail. I assure hon. Members on the Labour benches that every Clause in the Bill now before us needs careful watching and careful scrutiny. I am not exaggerating the case at all. I am simply putting the matter as it appears from my own point of view, and it seems to me that the best solution of the question would be to have a proper inquiry such as the Prime Minister suggested to-day, into the whole subject —an inquiry in which the rights of all parties concerned would be considered. I, for one, would have perfect confidence in such a committee and if they came to the decision that this was the proper thing and the right thing I would support it.
§ Mr. E. C. GRENFELL
Evidently the time has come when the Mover and Seconder of this Amendment ought to be told what this Bill is. I cannot but think that the very modest way in which my hon. Friend the Member for Stone (Mr. Lamb) moved the Amendment struck all Members in the House, and when the Seconder opened his speech in the same modest way, I felt that we were going to have a quiet evening. But if the Mover, all through his speech, seemed to appertain to the old style, the last few sentences of the speech of my hon. Friend the Member for Penrith (Mr. Dixey) seemed to be in the style of the more explosive modern engine, which has disturbed us and caused all this trouble. What is the Bill with which we are dealing this evening? It seems to me that 318 the question at issue is whether the railway companies, alone, in England, are to be debarred from using roads as freely as anyone else in this country. That is how the question appears to me as an outsider who is not in any way concerned in railways, personally or through any particular interest.
I should like to describe the Bill from the beginning. It is a peculiar thing that under existing road transport arrangements, every one may use the roads in country and in town, quite independently except the railway companies. That is due to the fact that railway companies are statutory companies, and that special restraints have been placed upon them. This was done originally in order to protect the shareholders. I do not believe that anyone would say that the opposition to the present Bill is actuated by philanthropists, who are solely considering the merits of the question and the dangers involved to the shareholders of the railway companies should the Bill pass. The Bill contains only one Clause which is vital to both sides in this discussion. Clause 2 authorises the company to provide and use road vehicles in any district to which access is afforded by the system of the company concerned. That is what the railway company asks and that is what the opponents of the Bill wish to prevent Practically all the rest of the Bill consists of Clauses restraining the railway company from being on a par with the present road transport companies who have an absolutely free hand. Clause 3 authorises the company to make such reasonable fares, rates and charges as they may think fit, but there is a right of appeal to the Railway Rates Tribunal, and, as far as I understand it, there is nothing to compel the ordinary road transport people to refer any of their charges to the Railway Rates Tribunal.
Clause 4 is not of great importance and Clause 6 enables the company to enter into relations with existing companies to provide any funds which may be necessary, to invest in their securities or guarantee their dividends. These are things which would be allowed to any road transport company except the railways, but Clause 7 is much more important. It provides that the road service must be an ancillary service. The word "ancillary" is a beautiful word, 319 and one that is not always appreciated; but, at any rate, this Clause imposes a distinct check upon the railway company as compared with the ordinary road transport company. Clause 7 provides for the protection of the public against anomalies and the protection of the shareholders against waste. Any shareholder in a road transport company can have his investments jeopardised by the directors rushing into wild schemes, but this Clause 7 absolutely restrains the directors of railway companies from doing certain things, and at the same time it protects the shareholders, in the first case, from waste, and the traders, in the second case, from unduly high rates. Clause 8 requires the company to include in its annual account certain particulars of receipts and expenditure and so on.
Every Clause of the Bill, except Clause 2 is in restraint of the railway companies, and it appears to me that the railway company can hardly be said to have brought in those Clauses, without having given an indication that they are prepared to have some handicap placed upon them in their relation and competition with the existing road companies. The case for the Bill is that in the opinion of the railway authorities—and they are people who have some knowledge of transport, as I think even the independents will admit—the losses which railway companies have sustained through modern inventions, and through the action of the independents may be modified by some form of arrangement and co-ordination. Co-ordination also is a beautiful word, on the meaning of which some doubt seems to be thrown by a previous speaker. The railway authorities, however, believe that by some form of co-ordination, a process can be introduced into the road services which will promote efficiency. Since the last Bill, that is, six years ago, when the losses which the railways have had were only anticipated, but were not fully known, the railroads have lost a very large amount of traffic. I think the receipts in the last two years from the passenger service of the four big lines have shrunk by £5,000,000, which is a considerable figure. I have not got by me the loss in freights, but the continued loss of revenue must inevitably result in higher rail rates for the remainder of the traffic.
§ Mr. GRENFELL
Yes, till they lose it all. The hon. Member for Stone referred to the extinction of the canals and stage coaches, but the railways do not propose that they shall follow the canals and the stage coaches, and why should they? They, or their shareholders, have invested a great deal of capital. They know as much about the modern form of transport and the modern engines as the independents can do, and possibly more, and the outcry against the railways today is, to my mind, only due to the fact that the independents know perfectly well that they have got a strangle-hold on the railways. The name of the railways, the name of any great. institution, is a thing out of which it is easy to make bad feeling, and there is nothing so easy as to say, "Oh, the big man will establish a monopoly." Nothing has been more appealing to the public than the fact that it was attractive to smuggle. That was not because people actually disliked the Government, but it was big and fair game.
I was connected with a steamship company where the losses of plate and linen amounted to enormous sums, and no doubt still do. It was found that passengers usually used the towels instead of packing paper, and that the silver spoons had an irresistible attraction as souvenirs, and the excuse was that these little things did not matter to a big company. In this case it has been a cheap cry to say that the great railway companies are out for monopolies. Because they are so big, they are unpopular, and the amount of literature we have all had on the subject has shown how well this stunt has been worked. My hon. Friend the Member for Argyll (Mr. Macquisten) says the railways will be ruined in the long run, but I sincerely hope they will not.
The hon. Member for Stone referred to the condition of agriculture to-day, but that is not due to the railways. In the early days of the railways, I believe, the railways developed agriculture to a very large extent, and I believe that to-day the dreadful plight of many of the agricultural counties is not due to the railways but to natural conditions, to cheap sea transport, virgin soil and Free Trade. But if agriculture is at a low ebb, I do not propose that the £1,200,000,000 of money invested 321 in railways should go the same way as the canal or stage coach capital, if we can prevent it.
I do not myself understand—I am not a railway man—but I believe some method between the existing road companies and the railways can make things work more smoothly. The hon. Member for Stone suggested that he wished for more transport on the roads, more freedom, more competition, and more omnibuses, but when we came to his seconder, we found him objecting to the amount of traffic already on the roads, asking that it should be stopped, and differing in every way from his predecessor. Which are we to have? It may be that with a certain amount of co-ordination, the railways may be able to retrieve their losses without hurting the public. That, I do not know, but I think the present methods that are adopted of encouraging, with State funds, competition with the railways is distinctly unjust. We cannot look on the proposed expenditure of £3,000,000 on a great new road between Salford and Liverpool, which in itself will compete with three great railways and the Manchester Canal, and think that it is fair that those four institutions should contribute largely towards providing this new competitor to take away their traffic. It is useless to say that the railroads are unfairly benefited by the present rating arrangements, because, as a matter of fact, the railways pay an undue proportion of the cost of the highways and not, as stated, less.
What is the present position existing between the road transport and the big railways? What is the cost of the permanent plant of the railways? There is the capital cost of purchasing land and constructing the permanent way and the stations, which amounts to £900,000,000, and if we take the cost of that per annum, there is £45,000,000 to pay in interest on that. The ordinary road transport companies have none of these charges except the cost of garages, which cannot amount to a very great sum. There is the maintenance of the permanent way, £14,000,000 a year, and the transport companies pay no undue proportion on the permanent way, namely, the roads. There is also the signalling and wages of signalmen, £9,000,000 a year, and if you add those three sums together, namely, £45,000,000, 322 £14,000,000, and £9,000,000, you get a yearly cost to the railways of £68,000,000.
In regard to the road transport companies, they find the permanent way provided for them free of charge; that is to say, they pay certain taxes, and the railways also pay similar taxes. The transport companies contribute less than one-third of the current annual expenditure on the highways, and the police themselves do the signalling and the controlling of the traffic, except for the smart young gentlemen belonging to the Automobile Association, and they pay nothing of the railway passenger duty, which is £400,000 a year. It does not seem to me that that is a very fair division of responsibility, but it looks as if there is a very undue handicap on the railroads as compared with the road transport companies. Another thing to which I should like to draw the attention of the House is that the National Wages Board for Railways drew attention to the unfair position of railways in reference to road competition when they were reporting in December. 1925, on a claim of the companies for a reduction in wages. The board is not composed entirely of railway people. There were Sir Edward Manville, of the Association of British Chambers of Commerce; Mr. H. J. May, of the Co-operative Union; Sir Thomas Robinson, of the Federation of British Industries; and Mr. E. L. Poulton, of the Trade Union General Council. I will read their report, which stated that they were not satisfied that a sufficient case had been made out for reduction of wages. They added:The Board desire to add that they are unanimously of opinion that the rapid growth of road motor transport undoubtedly constitutes a serious menace to the railway industry. The majority of road hauliers are not common carriers, are under no legal obligation to provide regular services, and are at large in the matter of the charges they make. They are, therefore, in a position to select the traffics for which they cater and to vary their charges to meet the circumstances of each particular case. On the other hand, the railway companies are common carriers and have no such freedom, their charges being subject to statutory restrictions.It goes on to say:The unfairness of this position is further emphasised by the fact that the railway companies are not permitted a free use of the roads. They are thus put in a position 323 of assisting to subsidise a formidable and increasing competition, a state of affairs which ought not to be allowed to continue. The consequence of this unequal system of competition is that, while serious inroads are being made upon railway revenues, road transport undertakings are extracting a handsome profit out of the transport needs of the public and are helped to do so by subsidies granted out of public funds.That does not seem to show that there is fair treatment as between the railways and the independent companies. Another thing that cheeks the railway companies is that they are not allowed unlimited profits. The profits are limited to those of 1913, plus interest on further issues of capital that they might have made. Any ancillary trade in which they might engage has to be so treated that, if they make a profit in that trade, it goes to the company's profit and loss account, but if there should be a loss it is not allowed to go into that standard revenue. That is an important thing to remember. If the railway companies are allowed by the passing of this Bill to engage in road transport, they could not, and would not as wise men, rush voluntarily into a competition and establish a monopoly which might. result in the loss of many millions, which would fall on their stock holders, and which they could not put on the traders of the country.
The opposition to the Bill refers to the monopoly that would be created. I have worked it out, and I cannot see what monopoly the railways can get. It would be suicidal for them to begin attacking, first in one place and then in another, the existing road transport. I put aside the idea that they would attack it all over the country at once, but, according to the figures of to-day, I understand that in road transport 70 per cent. of the goods are already carried by the owners of the goods, and that leaves 30 per cent. on which to wage war. If the railway companies begin to attack motor transport, first in one place and then in another, well, we have seen what happened in America. The road carriers may be driven off by the cutting of rates, but as soon as the railways, having destroyed by its monopoly the road transport, begin to put up rates to some fearful figure in order to drive people back to the railways, what will happen? Those yellow coaches will all appear again, road transport will revive, 324 and a little thing called the jitney will appear. No one can believe that our railway companies are going to be so foolish as to indulge in a warfare of that sort. Their shareholders would not stand it, the public would not stand it, and the tribunal would not stand it. I have noticed that some of the criticisms directed at shareholders' meetings against railway company directors has been that they are too old. I quite agree that that might be a criticism. I have no interest in railways, but I once had. I inherited it. My father became a director of one of the biggest constituent companies of the London, Midland and Scottish Railway 86 years ago, and I believe he had been a director for three days when it was found that he was under age; he was only 20, and he was asked to retire. It can well be understood that, that being my only connection with railways, I have never felt very much inclined to take their side from prejudice. I may say, after writing to the Secretary of the London, Midland and Scottish Railway, a few days ago, that the young man did become a director when he attained riper years.
Another point that has been raised is that the railway companies are permitted to run road transport, provided they are bringing goods or people to their railways. I should like to know why that restriction is adhered to. The railway companies are allowed to have ancillary companies which run hotels, but I am not aware of any rule that you must go for a railway journey before you can have a meal or sleep in a hotel connected with it. I have yet to learn that in the ancillary service of a steamship line you must take a ticket to travel on the railway before you can go on to the steamship belonging to that ancillary service. I fail also to understand why railways should be penalised in the running of road transport. I remember that six years ago, when a similar Bill was before the House, the present Home Secretary, in a very able and statesmanlike speech, opposed the Bill; he has to-day reached a position of responsibility—responsibility with discretion. I can only say that the speech of my hon. Friend the Member for Stone was equally judicious and fair.
I really think that the House, on giving this matter consideration, will see that 325 the railway companies have been unfairly treated. Their position is getting worse. It has been the proudest boast of this country that the railways and roads were superior to those of any other country. Our roads are still superior by a long way. I believe our railways to be superior. There is still room for both. It is time these harassing restrictions were removed from the railways, and I sincerely hope the House will consider this Bill favourably and to-morrow give. it a Second Reading. I am sure the railway companies themselves are prepared to consider in Committee any suggestions which may be made to them. They have altered the Bill since 1922, because certain circumstances have arisen; the development of road transport has been so great that they have eliminated some of the old Clauses which they feel ought not to have been inserted in 1922. In that connection I would say that six years ago the Home Secretary said that the two Clauses which had been put in were not necessary, and that the railway companies might well have left them out, and that is the reason why. I think, the railway companies have not included them this year.
§ 9.0 p.m.
§ Mr. MITCHELL BANKS
It has been laid down by a great British statesman that our constitution knows nothing of mandates and delegates. While the man who represents any particular constituency ought to do his best for his constituents, he ought first to think of the interests of the country at large, and if these are not reconcilable with the interests of his constituents then the latter must take second place. That is a maxim which sometimes gives hon. Members great uneasiness of conscience in certain Debates; but to-night I am in the fortunate situation of being able to gratify the wishes of my constituents in the Swindon Division and at the same time, by supporting the Second Reading of this Bill, to do what I think is in the interests of the public at large. Without wishing to be uncomplimentary to the hon. Member who moved that this Bill should be read a Second time six months hence, it seems to me that his speech was characterised by what somebody has called "A very plain perception of the obvious." Of course it is obvious that there is a tendency on the part of any individual or group 326 which has a monopoly, by which it is absolved from the necessity of facing competition, to get slack and careless, and, as we used to say, to "profiteer" at the expense of the public. As he said, it was difficult in the matter of the railway companies and the canals to ensure that a railway company, which was like wise the owner of canals, should maintain an effectual competition against itself. But that is an argument in favour of free competition, and against monopoly, and it is on that very argument that I base my support of this Bill, because the powers which the railway companies seek in this Bill, so far from giving them a monopoly, enable them to enter into free competition with others who, it seems to me, consider that they have got some sort of vested interest. Suppose that in the year 1927 you are engaged in making money out of a certain form of transport and that you are limited to that, and suppose a newer and perhaps more convenient form of transport comes into being What would be wrong would be to say, "Here is a new phenomenon, here is a new enterprise and I ask to be protected against that. I ask that this new enterprise should be curtailed, and its activities he circumscribed, in order to maintain my old monopoly." But we are doing no such thing. We are merely asking for power, not to protect ourselves against the haulier companies and motor services, but to be allowed to do what any body but a railway company could do, that is, to enter into free competition with them. It seems to me that the arguments which have been addressed to the House by the hon. Gentleman and his friends might have been valid if he had been urging them on behalf of transport companies and others if they were saying to the railways, "You have got a monopoly of conveying people by rail, and we should like to compete with you therein." He might have based a proposition of that sort on the arguments he used; but to say, because monopolies are bad, that, therefore, it is bad to allow a new competitor to enter into a new field, seems to me to be as grossly illogical as any argument I have ever heard in this House.
I am bound to say that I agree with one hon. Member who said that the Clauses of this Bill require careful consideration. 327 Of course they do, and without doubt they will receive such careful consideration in the course of the Bill's progress through Committee. To-night we are only considering its main principle. The question is, Will it confer upon the railway companies a monopoly? Of course it will not, unless it results in a monopoly indirectly through a course of conduct on the part of the railway companies which I believe to be precluded by the provisions of this Bill. As far as I know, the only way in which it has been suggested that the railway companies can contrive to secure a monopoly of road transport is that they, backed as they are by their great resources, which no competitiors can face, will begin by cutting prices, and, having so wiped their competitors off the roads, will then force up their charges and bleed the public through the monopoly they have secured. As my hon. Friend opposite has said, Clause 7 of the Bill is of the greatest possible importance. Speaking without careful consideration, it does seem to me that that Clause, in conjunction with Clause 3 of the Bill, precludes a railway company from that course of conduct upon which alone a monopoly can he based. As hon. Members will probably recollect, the Railways Act of 1921 provided that charges—meaning rates and fares and tolls—should be fixed in the first instance at such a level as would, in the opinion of the Rates Tribunal, yield with efficient and economical working and management an annual net revenue which is called "The Standard Revenue." Subsection 4 of Clause 58, which deals with that, goes on to say:When fixing the charges necessary to produce the standard revenue, the tribunal shall take into consideration the charges in respect of any business carried on by the company ancillary or subsidiary to its railways.That is, such business as we ask to be allowed to do under the provisions of this Bill. Those charges are not subject to the jurisdiction of the tribunal, but to sum up the sub-section from which I am reading: If in the opinion of the tribunal the companies are not taking reasonable steps to get adequate charges for that ancillary business,then the tribunal shall, in fixing the charges under this part of this Act, take 328 into account the revenue which would be produced by any such business if such adequate charges were in operation.In plain English it means this: The tribunal will say to the railway company, "With regard to this ancillary business, you have not charged enough. If you had, you would not have to charge so much in that sphere over which we have control in order to produce your standard revenue. Therefore, we shall reduce the charges in that sphere over which we have control." I think that speaks for itself. That is giving to the tribunal power to see that if there are any losses they shall be borne by the railway. Section 59, Sub-section (6), of the Railways Act of 1921 deals with the ancillary business contemplated, and it states that when you are having your review of the charges you can go on the same principle as when you originally fixed those charges,Provided that the tribunal shall have regard to the financial results obtained from the operation of all ancillary or subsidiary business carried on by the company and if satisfied that the net revenue resulting therefrom is, having regard to all the circumstances, unduly low, may, for the purpose of such review, make such deductions from the charges which would otherwise have been fixed as they think proper.It says that the tribunal may make such deductions. I agree that the terms of Clause 7 ought to be more strict, but I think that that Clause does give the tribunal control over the ancillary business by allowing them to make deductions in the other sphere so as to prevent the railway companies entering into cut-throat competition. Clause 3 enables them to reduce rates if they are regarded as excessive as applied to the public. Obviously, it is only right that the Committee should take the utmost precautions to see that the rights of the public are safeguarded as well as the rights of the present transport companies. The Committee should see that a rate war is not entered upon with a view, in the first place, to abolishing competition, and bleeding the public when competition has been eliminated. I am disposed to think that the terms of the Bill are already sufficient for this purpose, and, if they are not, proper terms can be provided in Committee. The principle of the Bill, so far from increasing the chance of creating a monopoly, increases that open competition which, broadly speaking, always redounds 329 to the public benefit, and on those grounds I support the Second reading.
§ Mr. WILLIAM GRAHAM
The subject before the House to-night is one which all parties in this Chamber must carefully consider. There is division of opinion in all parts of the House, but I wish to state the case for transport as a whole, and as we see the problem in the light of the Railway Bills now under discussion. I think a very large part of the reply in this Debate is to be found in an analysis of the Railways Act of 1921. These Bills are drawn in the most comprehensive terms. That is elementary common sense on the part of railway amalagamations to-day, because, quite clearly, if concessions are to be made they will be made during the Committee stage, and from some proposition which is stated at its highest point as the Bills are originally presented to this House. We need not therefore, express any surprise regarding the terms of these Measures.
Let the House go back quite frankly and impartially to 1921 and to subsequent Debates. Many of us who took part in the nine weeks' analysis of the Act of 1921, during the only summer this country has enjoyed since the War, will remember that the Minister of Transport promised economies of all kinds, improvements, and public benefits under that legislation. There is not the least doubt now that at that time the case was overstated, even after making allowance for the effect of the industrial depression we have experienced during the last four or five years. Even when the largest allowance is made for that state of affairs, it remains true that the Act of 1921 has not provided those advantages and economies which were promised. As regards the railway companies, they have been compelled during that time, in order to maintain a certain rate of dividend, to make inroads into their reserve funds strengthened by the £51,000,000 net and other sums which were paid to the companies in respect of war-time agreements. Taking all those circumstances into account, and remembering that at the moment the railway companies seem to be just turning the corner and getting into a happier state of things, they find this problem relating to road transport 330 competition. The House will recall that round about the time of the Act of 1921, or at all events in the year immediately following, there was an inquiry by the Balfour-Browne Committee which was singularly inconclusive in its character. One side of that Committee broadly supported the railway companies having such powers as we are discussing to-day, and the other side opposed.
That, Mr. Deputy-Speaker, is the position, very roughly summarised, in which the House of Commons approaches this problem. The Bills raise many minor considerations into which I will not enter at the moment. There is anxiety on the part of railway staffs as to how many men are going to be displaced under co-ordination or other agreement arising from road transport powers, and there is a desire that someone should make a statement which will reassure the railway staffs on that point. There is a far-reaching and important economic consideration confronting the country as to what will be the precise result of the application of such powers to the railway companies, whether it will lead to a form of monopoly, or whether there will be more relief from some points of view in the competition of the roads of Great Britain than there can be under existing or future circumstances.
All of these considerations are before us, but, as hon. Members who have already spoken in the Debate have pointed out, there can only be one duty for the House of Commons in this matter, and that is to fight to the very best of our ability to protect the public interest. I have been long enough in the House, of course, to recognise that, in trying to fight for the public interest, we are sharply divided in fundamental matters. I am going to try to state the case to-night from the Labour Benches on lines which will be so far familiar to the House, but which, I trust, will be strictly relevant to these Bills, and I recognise that, the very moment we say that we stand for public ownership and public control of transport as a whole in this country, we are in conflict with hon. Members on the other side of the House. With regard to these Bills, I do not suppose that their most enthusiastic supporter would deny that they may appreciably alter the whole 331 problem of domestic transport in Great Britain. We cannot consider them tonight purely as railway promotions, any more than we could so consider promotions that might in other cases be put before us by the ordinary road transport interests. We must look to underlying principles, and I do beg the House to remember that in this matter we are not dealing with Socialism and anti-Socialism, or public ownership and private ownership, in the old and strict use of those terms.
No one could sit through the nine weeks of the proceedings on the Railways Bill of 1921 without appreciating the fact that, in setting up these four great amalgamations, in wiping out a hundred and more constituent companies, in federating on a geographical basis £1,300,000,000 of capital in a great enterprise in the State, we were putting that service to a material extent on a public utility basis, upon which, in fact, it had very largely been resting under the mass of preceding legislation and under regulations of all kinds. Everyone, however, whether individualist or Socialist, recognises that this is a very great change, and, as we shall see a little later in this Debate, practically the railway industry is regulated from top to bottom.
That is the state of affairs which confronts us, and side by side with that, of course, there has been a great deal of development in municipal enterprise in different departments of transport. Hon. Members must have had their attention directed to an important scheme, to give the House only one instance, covering nine important authorities in Lancashire, which propose to unite to set up an express motor omnibus service covering a considerable and populous area in an industrial district. Agreements of that kind must proceed, and will proceed, dictated by economic and other considerations over which, I am bound to say, neither individualists nor Socialists have very much real influence. These changes are taking place every day, and, in my view, they are altering the whole character of this transport problem. We on this side of the House say, first of all, that, whatever divisions there may be on these details, we are at least united in this, that in our judgment these 332 changes are making in the direction of that public ownership and public control for which we stand.
Be that as it may, there is, to pass to the second point, an immediate question with regard to the position of the municipalities. Again we are perfectly clear and frank. In regard to these Measures we shall do everything that is in our power to protect the interests of the local authorities. That will be a central and an important part of our case, and the Bills raise that controversy in a very sharp form, because, of course, the companies contemplate some kind of working agreement with the local authorities, and all kinds of indirect problems, notably in licensing and other matters of that kind, are raised the moment they come within the jurisdiction of any municipality or borough council, or, in some cases, of the county authorities themselves. Up to this point, according to our information, there has been no agreement with the local authorities, and I recognise that the railway amalgamations are not likely to reach a decision on that, or to propose it, until they are confronted by the representatives of the local authorities in the proceedings before the Joint Committe of the two Houses to which in all likelihood these Bills will be referred. I want, however, to say that, quite apart from any views which hon. Members in all parts of the House may have in regard to matters of public ownership and control, it cannot pay any of us, and it cannot be in the public interest, to do anything to prejudice the local authorities or the municipalities in this phase of transport, in which they have sunk many millions of the ratepayers' money, and in regard to which, of course, they are entitled to the fullest consideration.
I have occupied a few minutes by way of introduction in making these points plain, because we in this part of the House regard them as being among the fundamentals of our case, and we believe that they are very sharply raised by the series of Railway Bills on which the House must pronounce to-morrow. Let us now approach the problem under another head at rather closer quarters. These Bills also raise the question as to how far agreement will be reached in appropriate areas throughout the country 333 on the lines of the common fund and common management suggested for passenger transport services within the Metropolitan area, or in London at large. The House is familiar with the broad outline of that plan. It contemplates a kind of working agreement between the underground railways, the omnibus services, the steamy services owned by the large amalgamations, and the trams of the London County Council: and the central note of that is a common fund and a common management designed to secure a co-ordination of all those services in order to provide a basis for efficiency, facilities for the public, and, above all, the extension of tubes and other facilities, particularly in some of the hard-pressed suburbs of this city. We on these benches have always urged, both outside this House and here, that again we are not prepared to support a scheme of that kind unless the municipal interests and the public interests are fully secured; but it is undeniable that that class of co-ordination will proceed, I trust on sound lines, not only in London, but in other parts of the country where there is great density of population, and where conditions are broadly analogous to what we find in the Metropolis itself.
These are the three lines of argument which we press in the consideration of these Bills, and we have not the least doubt that, in the proceedings before the Joint Committee, these issues will be raised. The hon. and learned Member for Swindon (Mr. Banks) went, if I may say so with respect, very near to the heart of a difficulty which, for all practical purposes, is irrespective of party difference. He tried to outline the kind of safeguards to the public on these Bills in terms of the Railways Act, 1921, and I believe it to be of vital importance that the House should specially consider that point.
What did the Railways Act of 1921 do for the purposes of this part of our discussion? It amalgamated the constituent companies, it set up on a compulsory basis a rates tribunal, and it gave a direction to that rates tribunal so to fix the charges for passengers and freights as to yield, with economical working and efficient management, as near as may be the standard revenue or the net revenue of the last pre-War year, 1913. It went beyond 334 that. It directed the rates tribunal to take into account certain classes of capital expenditure, past, present, and future, so long as that remained unremunerative. That also is to be taken into account in arriving at the standard revenue. The important point to the House is that that is a compulsory part of the Act of 1921. The hon. Member who has just spoken referred to a Subsection in that Act of Parliament which brings these ancillary services, of which, of course, these road powers would be part, within the scope of the legislation of 1921.
On the Second Reading Debate, the House should be clear as to what is intended. If, for example, any hon. Member took the Bill of the London, Midland and Scottish Railway Co. and read it, more particularly the relevant Clause, he might come to the conclusion that all that was intended was the establishment of these road services, and, if traders or passengers or others were dissatisfied with the charges, they had a right to appeal to the Rates Tribunal. So far the theory would be that that would be a safeguard in their interests and in that of the public. That is the broad face of the Bill. But, of course, as the hon. Member suggested, if we are correct in this interpretation of the Act of 1921 the railway companies could not, in fact, disentangle these ancillary services from all the terms and conditions in the last resort laid down in that legislation.
The question for the House of Commons on the Second Reading is whether in these Bills the public is protected by safeguards of that kind. That is obviously a very debatable proposition, but perhaps most of my colleagues on these Benches have been inclined to state the case in substantially the following way. The Act of 1921 ensures a certain return to the railway companies, namely, the revenue of 1913. When, however, the return goes above that point, there is a passage in that legislation which provides that 80 per cent. of the excess, or some figure like that, shall be returned to the public in some shape or form. That return, of course, would normally take the form of lower fares or lower freights or other charges. It seems to me that during this Debate, either to-night or to-morrow, somebody, speaking for the railway companies or against them, must 335 state whether these ancillary services on the road are in fact completely under that legislative umbrella or control. Because plainly, on the Second Reading of these Measures that is a vital consideration as regards the protection of the public. It means this, in practice, that you extend to these ancillary services on the roads the regulations of the Act of 1921, and, if that be so, then many of these troubles of road competition and rate cutting and the allied issues tend to disappear. I attach the very greatest importance to safeguards of that kind, and I trust that whatever happens there will, in the last resort, when these Bills come back to the House of Commons, be no dubiety at all on that point. It is a form of protection to which, in the light of all the evidence both in 1921 and since, the public of this country are entitled.
In the last place, there are only two other points which I intend to press. We have appealed to the Government—and they have made their reply to-day—for a comprehensive inquiry into the whole problem of transport. We put that on the broadest possible basis, and the Government have indicated that they are sympathetic to that idea, and, presumably, the inquiry will start at some early date. I want to amplify our position. Let me explain that we are not recommending anything in the nature of a prolonged Royal Commission on the Bill. I say to the House of Commons that, in the light of the Committee work before 1921 and in view of all that happened in the Act of that year and in the light of the events since, there is really no need for the great delay and national loss that would be involved if a Royal Commission were appointed. There is at the present time a mass of material in public Departments bearing upon this problem. There is much that arose from the discussion and analysis of the Railways Act of 1921. There is a great deal connected directly or indirectly with the Board of Trade and Ministry of Transport machinery of that time. I have always taken the view that that material could be quite rapidly, accurately and conveniently summarised. One of the most important questions to determine is the exact incidence of local rates on railway amalgamations and on 336 ordinary road transport, the amount to which that has been affected by the extent to which the Road Fund has been modified in recent times, and a whole variety of problems of that kind, so that the inquiry should be expeditiously undertaken and should not be in the nature of a prolonged review. That is one definite proposal we make arising out of the discussion of these Bills.
There is another even more urgent in character. How are the local authorities and the public at large to be protected? Obviously, in an immediate sense largely through the method of licensing all classes of vehicles. That is a fundamental and immediate part of this problem. What is the evidence of leading municipal authorities, lawyers, and others on this question of licensing? So far as I understand it, it is divided into two parts: first, as to what really is possible under general legislation, general Acts of Parliament now in existence; and, in the second place, the precise position under local Acts of Parliament. The criticism made is that that general legislation is antiquated and chaotic. It has been described in some quarters as patchy in character. On the other hand, while local Acts of Parliament may be more precise, they are undoubtedly more varied in character, and we find leading local authorities in adjacent parts of the country whose powers differ materially even in a matter of this kind. That is not a state of affairs which the House of Commons seeking to protect the public interest on these Bills can contemplate with anything like ease.
Now in Clause 4 of the draft Road Traffic Bill, which has been circulated for the information of Members, there is considerable reference to this problem of licensing. If I remember rightly, it puts the duty very largely into the hands of the local authorities, and my suggestion to the House would be that the public interest demands on this point, not progress with the Bill during the present Parliament, which after all may carry it well into next year, but immediate attention to that central point of licensing even on these very Bills themselves. Is the Government prepared to embark on that task? If so, the difficulties of the local authorities would be so far solved and they would get a reply to a question they are asking all over the country "What 337 will be our position generally, that is as regards legislation at large, if these railway Bills go through, and what will be the effect on our local Acts of Parliament of the promotions of the railway companies?" On that point I believe they are entitled to an immediate reply from the Government. My colleagues on these benches will exercise their votes in whatever way they please, but I trust, not merely from the party but from the national point of view, they will indicate that there are bed-rock considerations on which the Government might pronounce at this stage and that a definite and vigorous statement on these lines will clear away much of the doubt that surrounds these promotions by the railway companies.
§ Mr. PALIN
I cannot say that I agree with those who have moved the rejection of these Bills, because I believe something has got to be done and done immediately. My difficulty about the whole business is that the right thing is being done in the wrong way. We are starting at the wrong end to bring order out of chaos. The inquiry ought to have preceded the introduction of these Bills. No one wishes to deny to railway directors and shareholders anything that is their just due. As a matter of fact there are some people who believe if they had their just due some of them would have been out a long time ago. But when railway shareholders and directors come on their hands and knees to beg Parliament to do something for them, we have a right to inquire how they got there. I am certain they have got into their present position very largely by their own stupidity. If they had attended to their business as they should have done they would not have driven the amount of traffic on to the roads that is there to-day. It is very largely due to the superiority and the good humoured contempt with which they have treated their customers when they have suggested certain facilities which should be granted them that the customers have sought to protect themselves. They are complaining that some of the most remunerative traffic has been lost. Those who read the reports of the meetings of Chambers of Commerce will see very frequent complaints as to the way they are treated by railway companies. It is not a question 338 of rates altogether. It is a question of facilities.
Consider the case of a manufacturer who makes a contract to deliver certain goods for export to a certain ship which leaves at a certain time. At one time, particularly before the War, the railway companies had canvassers waiting on that manufacturer to know what they could do for him, and if he told them he was in a difficulty owing to various things over which he had no control and was going to be a little late, they would offer him exceptional facilities to enable him to keep his contract, and they got the traffic. They even went to the extent of loading, say, piece goods in a parcel van behind an express train. All those privileges have been swept away. They will not give any facilities in that direction, and if he cannot get them, what is the manufacturer or merchant to do? He has to put them on the road, and he has put them there. The railway companies have driven him there and they are coming, by these Bills, to ask Parliament to drive him back again, and people in this country do not like to be driven. Furthermore they have adopted ideas of working railways which I believe originally came from America, and no one has protested against them more than the right hon. Gentleman the Member for Derby (Mr Thomas), who is supporting these Bills. The control system operates very badly so far as prompt delivery of goods is concerned. I remember seeing not long ago in a report of the Bradford Chamber of Commerce that it had taken a wagon of wool six days to be transported from Huddersfield to Bradford. I was told recently by one of the officials of that Chamber that they could produce some hundreds of cases of a similar character. When complaints are made, the railway companies will always find an excuse for delay but they never remedy it, and we frequently find that short distance traffic of that character, which is remunerative, has been lost simply because they would not relax a system which perhaps gives great economies in the matter of engine power and man power but certainly causes very great delay to the traffic carried. Therefore that traffic again has been driven on to the road.
If the railway companies are coming here to ask for further powers to get that traffic back, what are they going to do with regard to facilities? Are they 339 going to meet the manufacturer and the merchant as they did? Are they going to give prompt delivery of goods if they do bring them back on to the railway? So far I have not heard that there is any change of heart at all but they are going to go on in their own sweet way. I went on a deputation from a Chamber of Commerce to meet an official of a railway company and some of these things were raised. He smiled at us in a good humoured way and said he had been in the railway business for something like 40 years and might be permitted to know more about how to work the business than we could. These people ought to know more about their business. If there is not prompt delivery of goods, and if reasonable facilities are not offered, the railway companies must not wonder why people use the roads. It is a very serious matter to have all this traffic on the roads. It ought not to be there. If the railways were managed in an efficient manner there would be no need for it to be there. The railways have been laid down at great cost, and they ought to be used. The roads had not been constructed to carry the kind of traffic that is being carried upon them to-day. As a matter of fact, it is not merely the case of loads of five or six tons being placed on the roads. I have seen proceeding along the Great North Road tremendously heavy loads of material for constructing bridges, boilers and other things which ought not to be on the roads and which are a danger on the roads. If there is no desire to protect the people of the country from a monopoly, surely life and limb ought to be considered in these matters. The railway companies have a perfect right to claim that they succeed in carrying goods and passengers on the railways with a smaller loss of life and a smaller number of accidents than is the case on the roads. That cannot be gainsaid.
What is going to happen if the railway companies exercised the proposed powers to carry goods on the roads? In regard to London, for instance, the Government, if they had had the welfare of the people at heart, might have caused an inquiry to be held into these matters before any further powers were given to the railway companies. There is no doubt that the railway companies can carry from the 340 termini of the great trunk railways to the docks in the east of London all the traffic that comes along at a less cost than they do by sending it round London on the railway. What is going to happen to the people of London when you put 500 or 600 lorries on the streets in addition to the present traffic? What is going to happen in the West End where the roads are broad and yet greatly congested? What is going to happen in the East End where, we are told, the roads are totally unsuited for traffic at the present time? It will be a very serious state of things, and this matter ought to be considered very carefully before any powers are granted. The same applies with regard to roads elsewhere. In London you have the London Traffic Advisory Committee which might get the Government to make a move, but in the country they have no such protection.
A great deal has been said about the unfairness of the rates which the railway companies pay. I think that is all wrong. As a matter of fact, the railway companies obtain full value for all the rates they pay, and, what is more, they get very favourable consideration by assessment committees when they come with tears in their eyes and tell them that traffic has gone down. The assessments of the railway companies were reduced practically commensurate with the traffic they lost when the electrification of the tramways took place. With regard to village traffic, I do not think they will get that back again. After the War not only could the villages not obtain adequate facilities for travel, but even the large towns could not. Until the charabanc took up the question of providing facilities in connection with seaside resorts at reasonable fares, the railway companies refused to run excursions of this description. While I do not want to see my friends the railway workers reduced to some of the conditions that prevail among some of the transport companies, I feel that the railway companies, finding themselves in a difficulty, will now possibly give us more than they would have given us some years ago. If they fail efficiently to work the railways, what is the remedy? Transfer the railways to the people to be worked in the interest of the people. Failing that, we should have some degree of co-ordination. There is no reason why the local services should not be complementary rather than competitive with 341 the railways, but the railway companies will not make any agreement with the local authorities. They never have made agreements with the local authorities.
Take the case of the city of Sheffield, for instance. Arrangements could have been made there with the railway companies undoubtedly to their advantage. In the city of Bradford attempts were made to deliver all the parcels for the railway companies in that city on very favourable terms to the railway company. Local representatives of the railway companies agreed that the municipality should deliver all the parcels for them, but when it came to London no agreement was possible. They are having to pay for that now. If things go on at the present rate they will not only get their Bills, but they will get a Bill which they will not like. It is true that the municipalities have not quite as much capital at stake as the railway companies. It is only something like £70,000,000 or £80,000,000, but that sum ought to be as great a concern to Labour representatives in Parliament as protecting the capital of the railway shareholders. We have been bombarded with letters, and told that all these shareholders are orphans and widows. Solicitors have been sending letters to me for a week. I remember the time when the orphans and the widows were always trotted out when railwaymen wanted protection from increased hours, and so on.
If we are really sincere in wanting to do the best we can to get a proper transport system for this country, and we certainly need it, we must have the coordination of all the forms of transport, each getting a fair chance. I trust that when co-ordination takes place, it will not be possible to say that all this heavy traffic destroys the beauty of our roads and the peacefulness of our buildings, but that it will go back to the railways, and that we shall have a system which will prove to be to the advantage of the whole of the country, and not of a few people. I trust that the House will insist that this inquiry shall be held, and that there will be a Measure brought in within the lifetime of the present Parliament that will restore order out of chaos, and enable us to reap the full advantage of the capital invested in the present transport system. At the present time, the only real argument that can be 342 advanced in favour of these Bills is "Let us do evil in order that good may come." By passing these Bills and causing more traffic to be placed on to the roads, you will only make the position so intolerable that sooner or later a co-ordinating Bill will be passed in this House in order to protect the people, for they will certainly need protection if all the traffic that I anticipate will be forced on to the roads if these Bills are passed into law.
§ Sir ROBERT SANDERS
I assure the hon. Member who has just spoken that I am not a railway director, nor have I any interest in any transport company. I look upon these matters from the point of view of one who is interested in seeing what is the best thing to be done in an important matter like this, for the country in general and agriculture in particular. I start with the premise that it is a very strong thing for the House to throw out a private Bill of this sort on Second Reading. When the House proposes to do such a thing, the burden of proof lies upon the objector. In this case the railway companies start on a very strong ground. They are, admittedly, the biggest ratepayers in the country. A great deal of those rates go to the upkeep of the roads and the railway companies are really to the best of my knowledge, the only people and the only sort of corporation that cannot make full use of the roads to which they contribute such a large share of the upkeep. That seems to me to give them a very strong prima facie case, and to upset that case very strong reasons must be shown.
The opposers of the Bill are not merely trying to upset the case—that could be done in Committee, and that is the proper place to do it—but they are asking that the case should not be considered. To get the House to assent to that, very strong reasons ought to be brought forward. What are the reasons that have been brought forward up to now? The rejection of the Bill was moved by a representative of the Farmers' Union. I have a good many friends amongst farmers, and a good many friends in the Farmers' Union, but I must say that, as a race, agriculturists are on the cautious side. I think their objection to this Bill is sheerly and entirely a matter of caution. They are easily frightened. They fear that after the passing of these 343 Bills, the rates for the carrying of agricultural produce will go up. If I thought that, I should be rather inclined to vote against the Second Reading, but I do not think it. My impression is that the effect will be quite the opposite. Surely, it is almost a commonplace that competition has a tendency to lower prices. The hon. Member for Penrith and Cockermouth (Mr. Dixey), who seconded the rejection of the Bill, actually said that the effect of this competition would be to bring down prices. Therefore, it seems to me from the start that that is a strong argument in favour of the case of the railway companies, and a strong argument that the caution displayed by the Mover of the rejection and his friends, is misplaced. The rates are more likely to go down than to increase. Undertakings that are run on a big scale can generally do their work cheaper than undertakings that are run by a number of small people. Supposing for a moment that the railway companies did put up rates. The, bogey that is raised is that they will reduce the rates, first of all, until they have starved their competitors out of the field and then they will put up the rates against their customers. My hon. and learned Friend the Member for Swindon (Mr. Banks) showed pretty clearly that that is a bogy and nothing else but a bogy. He showed, in the first place, that by Act of Parliament, the railway companies would not be able to starve out their competitors, and, in the second place, he showed, and I think it is quite clear in the Bill itself, that the rates charged will have to go before the Railway Rates Tribunal, and if they were charging more than was fair, the Railway Rates Tribunal could compel them to lower their charges.
That is true in regard to railway companies. If they charge extortionate rates there is the tribunal to whom you can refer the matter, and get the charges reduced. If the railway companies do not come in, and if there should be formed a ring or a monopoly by the present transport companies, there would be no tribunal of appeal, as in the case of the railways, and you would be absolutely at their mercy. Therefore, taking the matter from one point to another, it seems to me that as far as the agricultural interest is concerned the balance of advantage 344 is very strongly in their favour in the event of this Bill being passed, because it is much more likely that the rates for carrying agricultural produce will go down in consequence of these facilities being given than that they will go up.
My hon. Friend who moved the rejection of the Bill referred to the jealousy that is felt by the agricultural labourer on account of the high wages that are paid to railwaymen, who subsist in what is called a sheltered industry. I know from personal experience that that is true, that the railwaymen are pointed at as favoured people who are getting very much higher wages than the agricultural labourer has any chance of earning. But directly they come into the road transport industry they cease to be sheltered. That industry is no more sheltered than any other. It is true that. the railway companies are sheltered so long as they remain on the railways, but as soon as they come on to the roads they are open to free competition from any other company or individual or body of men, and that sheltered industry practically disappears.
Then there is the question of the increased traffic on the roads. I realise that the traffic on the roads is becoming greater and greater every year, and that it is becoming more expensive, more troublesome, more difficult as time goes on to deal with it. My own view is that the provisions of these Bills, if carried, these powers, if granted, to the railway companies would not have the effect of increasing but rather of decreasing the traffic on the roads. That is a very serious consideration in favour of, at all events, passing the Second Reading of these Bills.
We have heard a good deal about co-ordination this evening, but I have noticed that every hon. Member who has used the word has given a different interpretation to it. The meaning that I attach to it is this, that lorries and tractors on the roads would be used as feeders to the railways, if they are supplied by the railway companies, and the result of granting these powers would be that the traffic which now goes only on the roads would go partly by road and partly by rail. This seems to me to be obviously in the interests of the railway companies, if they get these powers, and the effect would be not to make the burden on the roads greater, but less.
§ Sir R. SANDERS
They cannot take up intermediate traffic. I agree that the railway companies can take up traffic and take it to the railways, and that is what I imagine they would do if they got these powers.
§ Sir R. SANDERS
They would use motor traffic as a feeder to the railways. These are the reasons why I think agriculture would gain instead of lose by the passing of this and other similar Bills. But I quite recognise that it is a matter for argument. The hon. Member for Barnstaple (Sir B. Peto) seems to differ from me, and I quite agree that he has a right to hold his opinions, but I have no doubt that people interested in other industries are also thinking that, their industries may possibly suffer if these powers are given. The whole thing is a matter for argument. I do not say that I would support the Bill word by word and line by line, but there is a prima facie case which ought to be sent to Committee, where arguments on both sides can be thrashed out. That is the proper course to take with regard to Bills like this. I shall certainly do what is the constitutional and proper thing to do, that is, vote for the Second Reading.
§ Sir JAMES GRANT
I am sorry that I find myself in disagreement with my very old friend the right hon. Member for Wells (Sir R. Sanders). I take the very opposite view to him on most of the points he raised. He has told us that he considers these Bills will reduce the traffic on the roads. That may be the effect ultimately, but I cannot understand the grounds on which he takes the view that this Bill will reduce traffic for the time being. If railway companies come on to the roads it means an excess of traffic, a traffic which the roads cannot stand. It will put an enormous amount of traffic on the roads for many years to come. My right hon. Friend may be right that ultimately there will be a diminution of traffic, but that will be when the railway companies have a monopoly on the roads. He also told us, and no doubt believes it, that it would be for the benefit of the agricultural industry 346 if the present competition on the roads is eliminated.
§ Sir J. GRANT
I apologise to my right hon. Friend; I misunderstood. He did say, however, that railway companies were unduly burdened with rates. There I totally disagree with him, and I propose to some to that point later. The question now before us is undoubtedly one of great national interest; it will have a tremendous effect upon the transport question of the future. The duty before us is to see that whatever we do in regard to these Bills is in the national interest. We must not be biased one side or the other. There are two contending interests here, roads and railways, and the only thing we have to consider is the national interest and betterment of the general public. The railway companies are seeking these powers and it is for them to make clear to us that if they get what they ask for they will benefit the country as a whole. If the railway companies could tell us that at the present time road transport does not give the facilities which are required in the general interest of the country; if they could tell us that industries are suffering from lack of road transport; if they could tell us that the passenger traffic is not sufficiently catered for, make it clear that the country could be better linked up with road transport than it is, that portions of the country untouched by rail are not supplied with road transport, and that spots of beauty and historic interests are not catered for by road transport—some of us may think they are desecrated by road transport—then I think they would have a case to bring before this House, and say that they are the people who should fill the void and satisfy the requirements of the country.
Is that the case? If it were, I should certainly consider it my duty to accept the railways' request that they should come in and supply such wants. But I submit that nothing of the sort is the case. The hon. Member for Penrith and Cockermouth (Mr. Dixey) made it quite clear, and I agree with him, that the requirements of the country are supplied at the present moment, that industry does not require any more road transport and that the passenger traffic is fully 347 satisfied. That being the case, what is the reason for the railway companies' request for these further facilities? We are driven to the conclusion that it, is not in the public interest. They came here, I do not blame them, for one purpose only; they feel themselves a depressed industry, and they come to the House of Commons and ask us to do something which will put them in a better financial position. Plainly and truly, they want to make some more money, and they ask us to help them.
The railway industry is not the only depressed industry in the country. Unfortunately, we see many industries that are depressed. What do they do when they are in such a situation? They reorganise; they look to the question of cost; they go in for up-to-date methods; they face the situation. An analogous case to the railways was brought to my notice the other day, and that was the case of the gas companies of the country. Years ago the best artificial light we had in this country was gas, which was supplied by the gas companies. In course of time the companies were attacked by electric lighting, which they found a very formidable competitor. They had very hard times in the years that followed. There were moments when few people would have said there was any future before the gas companies of the country. But the controllers of the gas industry faced the situation, took off their coats, and used their minds. What is the result to-day? Instead of failing before what appeared to be overwhelming competition, they are in a better position than they have even been before. That seems to me to be an example that the railway companies would he well advised to copy, instead of coming to this House for fresh powers. They should use the vast resources they have behind them to reorganise their industry instead of using those resources to cripple the present road transport industry. The railway companies, before coming to this House and asking for further rights, should use the enormous rights they have enjoyed for so many years; they should do more for themselves and stand on their own feet.
We hear a good deal on the question of electrifying the railways and cheapening the cost. Why is it that the railway 348 companies, before they seek to injure another industry, do not try to improve their own industry by adopting this means of cheapening their cost. I am asked, Who is going to find the capital? The railway companies are in a position to do so. Further, why is it that at the present moment the railway companies do not hold out a hand to the transport companies of the country and co-ordinate with them? It is open to them to do so. They at present have transport facilities on the roads; they can carry anything from their stations and take anything there. Why is it that they make no efforts in this direction. Why, on the contrary, have they set their faces against the motor transport industry of the country? Their attitude is one of antagonism. They make no attempt at co-operation. One can quite well imagine that those who are engaged in the motor transport industry fear the advent of the railway companies on the roads, because they have already had experience of the railway companies' attitude, which is one of antagonism to them, and they believe, rightly or wrongly, that if the railway companies once get on the roads, they will use every endeavour and all their capital to crush the road transport industry.
There are few things which would be of greater benefit to industry at the present time than increased efficiency on our railways. I am sure right hon. and hon. Members will agree with me that when we go into industrial areas, we are constantly being told of the inefficiency of the railways, of the cost of traction on the railways, of heart-breaking delays on the railways and a hundred and one other things of that kind. We are told that the railways to-day are not as efficient as they were before the great amalgamations. One is forced to the conclusion that there is truth in that complaint and that this want, of efficiency constitutes a drag on the industry of the country. I think it is true that the railway service of the country at the present time is not as efficient as it might be. But I ask the House, can anything in the Bills now before us make the railways more efficient? Is there a line, is there a word in the proposals of the railway companies indicating a means of securing greater efficiency on the railways? No. These 349 Bills are all directed towards leaving the rails as they are, and going on to the roads. These Bills seek to open the way for the vast railway monopolies to come on to the roads and compete with existing road transport companies.
I contend that the proposals do not, in any way, bring us nearer to that most desirable end for the industry of the country, namely, increased railway efficiency. I feel it is not the duty of this House to bolster up the railways. It would be very much better to maintain the competition which at present exists between the two separate systems of road and rail. I think that is much more the duty of the House of Commons, than trying to bolster up the railways. Let the railways stick to their own job and leave the other industry alone. We have had an idea put forward here about the rights of the railway companies to go on the roads. The railways have no rights apart from those which the House of Commons has given them in the past. It may be arguable that the House of Commons should give them further rights, but at the present moment they possess no further rights, and the House of Commons should only confer further rights upon them if it is considered to be in the public interest to do so. As far as I can see in these Bills, the companies do not even claim to be doing anything towards bettering the conditions of the country as a whole.
If I may turn from that point, I should like, to refer to the question of the burden of rates borne by the railway companies. We have all received a great deal of correspondence with regard to this question, mostly from the employés of the railway companies and others who are interested in them. In many of these communications we have been given to understand that an undue burden of rates is borne by the railway companies. The right hon. Gentleman the Member for Wells told us that the railways were among the largest ratepayers in the country. Why should they not be? How are rates levied? They are levied on capacity to pay. [HON. MEMBERS: "Not always!"] They are rated on the value of their property, and are the railways to be an exception to the rule, or are they to come into the general position of all industries and of all of us in this country and be rated on their value? Surely, there 350 can be no claim for the railway companies to be specially exempted. The right hon. Gentleman cannot say that there is any undue burden upon them. On the contrary, the railway companies, of all the industries in this country, have an exception made in their favour, for in regard to their track, they pay only 25 per cent., where everybody else pays 100 per cent.
All this propaganda that has been put about has been very good indeed, and I congratulate the companies on the success of their efforts. No doubt propaganda is very necessary to make the railway case palatable, but in a great question of this sort I think that propaganda ought to be legitimate, and I do not think the way in which this question of rates has been put before the country, to the effect that the railway companies suffer an undue burden, has been altogether legitimate. I will give some figures with regard to what the railway companies pay in rates, and I think these figures can be relied upon. I find that the total capital expenditure on railways, that is to say, on track, goods and passenger stations, power stations and docks, in 1926, was £969,800,000, and the total net assessment for this property in England, Wales and Scotland was £12,700,000, which is equivalent to 1.30 per cent. of the capital expenditure, whereas the average owner or occupier of a factory premises, offices, houses, hotels and similar properties is assessed at approximately 4 per cent. of the value of the property occupied. That is a fact, and it shows that the ordinary industries and individuals are rated nearly three times the extent that the railway companies are rated. As I say, the railway companies' total assessment is £12,700,000, and the rates payable in connection with that assessment amount to £7,891,000, which is equivalent to 62 per cent. of the total assessment. The total assessment of other property in Great Britain is S138,343,000, on which rates are collected amounting to £157,302,000, which is equivalent to 83½ per cent. of the total assessment. In view of those figures, I think we must disapprove of the idea that the railway companies bear too heavy a burden of rates.
Apart from that, what our correspondence has mostly insisted upon has been the burden which the railway companies hear in the way of highway rates, but I 351 cannot consider that it is any hardship on the railways to have to pay highway rates, although their competitors do run upon those highways. Is there any industry in this country that is more dependent upon the roads than are the railway companies? Could a single train be started in this country if it was not for the roads? Are we to exempt the railway companies from paying rates? Let me give some facts, and I take them with the more assurance because they appear in a pamphlet written by Mr. Davenport in which he supports the railway case. In 1926, the railway rates were some £8,000,000. The proportion that went in highway rates was £1,485,000. They are all the rates of this vast property that went towards the highway rates. I do not think, on reflection, that hon. Members will say that is anything very burdensome. Everything the railway does is dependent on the roads. They are using roads every moment, and they have 35,000 vehicles running on the roads. Mr. Davenport says:The railway system of rates assessment works happily for two facts; first, that the amounts paid by the railway companies in highway rates have been declining while the value of roads for collecting goods and passengers has been steadily increasing; second, that the highway rates paid by the railway companies are only 4.3 per cent. of the total highway rates.He goes on:It is, in fact, surprising that the railways do not have to pay more in ratio to the use of the roads, but the rates paid on 40,000 to 50,000 motor garages in the country as well as on premises and plant of motor manufacturers, oil companies, and other businesses connected with the expanding motor industry, are helping to lessen the rates paid by the railway companies.He concludes by saying that it is clear from these figures that the railway companies are not subsidising transport nor are they unfairly treated in the matter of highway rates. This very well informed pamphlet is written by one who supports the railway case. I would only just touch upon a matter which is probably one of the most important questions that has been brought before the House, and that is whether this is an opportune moment to deal with this question at all, and whether, as we have in view a Government inquiry, we ought to deal with a matter of this kind which enormously affects the national transport of the 352 country. Surely we ought to know where we are before we involve ourselves in action of this nature. I agree with the right hon. Member for Edinburgh (Mr. W. Graham) and others who put this question forward, and it is a point the Government ought very seriously to consider. I hope that the House, too, will seriously consider the advisability of passing these Bills in the public interest, and that they will always keep before them the possibility that, if they are passed, they will do away with one of the safeguards of the public, and that is the competition between the roads and the railways.
§ Mr. BROMLEY
In rising, I shall, I suppose, give effect to the suggestion of the Seconder of the rejection of the Bill who spoke of what he called the unholy alliance between the railway companies and railway servants. I remember the hon. Gentleman on a certain occasion in this House being very vociferous when the railway unions were fighting the railway companies, and I suggest to him that he cannot have it both ways, but we have very good reason as railway servants for being on the side, not only of the companies on this occasion, but of fair play and national advancement. If the organised railwaymen wished to put any arguments of a selfish nature, we could point out that by the Act of 1921 the railway companies have been brought into line in dealing with their servants under certain machinery, and that the conditions of service of railwaymen are to that extent controlled. The railway unions have expended a tremendous amount of money in assisting to run that machinery. My own organisation has spent the enormous sum of about £40,000 in dealing with only one section of the railway service. Seeing that we have tried to work the machinery set up by this honourable House, to protect the interest of our members and to render efficient railway service, if on no higher ground than that we should have a right to voice our opinions in agreement with the railway companies against what is manifestly and easily proveable to be unfair competition.
But we put it on higher grounds than that, and I would say to my hon. Friend the Member for one of the Newcastle Divisions, who voiced the position of municipal authorities: If I thought this Measure was not likely to give at 353 least a square deal and fair play to municipal authorities I should not be supporting it as earnestly as I am at the moment. Although there is some £1,300,000,000 of capital sunk in railway companies, I realise that there is not only, as my hon. Friend says, £70,000,000 or £80,000,000, but nearly £100,000,000, of the capital of the citizens invested in municipal under- takings. I think the opposition which has been heard in this House to-night on behalf of municipal authorities shows they are not so perturbed about their position. Whilst there were some negotiations in December of last year between the railway companies and the representatives of the Municipal Association, there was no further approach—at least no negotiations—until last week, on the 22nd of this month. I understand that although the railway companies, before the Second Reading of this Bill came on, did not give everything that some people have asked, there have been certain side winds blowing among Members of this House—this has not been voiced particularly on the Floor of the House—which have not given quite a fair indication of what has taken place. As late as yesterday, at a meeting of the Municipal Association, there was a vote of only 19 to 18 on the question of whether there should be continued opposition to the Bills—and that, as stated definitely by their leader, not on a question of prineiple at all, because they agree with the railway companies having power, but in order that they may have bargaining power. Therefore, I hope we shall not hear anything further about unfairness or want of consideration in that direction. On this side of the House, at least, every one would see there was a fair deal there, The Bill will have to have a Third Reading, and if there were anything unfair or any lack of consideration for that particular interest, I am sure hon. Members on both sides of the House would see, even at that late stage, that a square deal was provided.
The hon. Member for Southern Derby-shire (Sir J. Grant) referred to the danger of increasing road transport and also of delays occurring on railways. I suggest to the House that if these Bills were not passed we are not likely to prevent further vehicles being put on the roads, for new vehicles are continually being placed 354 on the roads and causing unfair competition, which I will try to illustrate. Let us consider the temptation for people to put vehicles on the road irrespective of public safety and running in competition with railways which have certain restrictions placed upon them. I would like to mention the case of the Edinburgh Omnibus Company, which advertised its prospectus on the 29th January this year, and it stated in that advertisement that the net profits per omnibus would be £1,250 per annum, the cost of the omnibus being £1,450. The expenditure side indicated that drivers' and conductors' wages, plus National Insurance, would be £215 17s. 4d. per annum, and although they would be making these tremendous profits the rent and rates paid per omnibus would he £19 11s. 2d. for the privilege of running over our public roads.
Railway companies have certain restrictions placed upon them, but if other people who are not restricted are allowed to use the roads and make big profits, then there will not be any limitation to the overcrowding of the roads about which so many complaints have been made. It is quite easy to gibe at railways for delays when some accident happens. Such incidents are immediately brought under the public eye, but we have only to look at the figures of accidents on roads to see how much more safe the railways are for travelling. Many things occur on the roads, as every motorist knows, when he wishes that there was a railway station near to him. All these small people who are making such enormous profits, when they have a breakdown on the road, hand their passengers over to the railway companies to take them home. Some time ago a milk van got into a ditch and subsequently the milk had to be handed over to the railway company to carry it to its destination. An hon. Member told me yesterday that he intended to vote against giving the railway companies the powers they were asking for, but to-day he is prepared to vote for these Bills. The hon. Member to whom I refer had to travel from Hastings after 10 o'clock last night and he ran into a fog. Some one had to walk in front of the motor and search for the linger-post, and after wandering about for some hours they came back to the 355 same finger-post, and finally got London about 7.30 this morning.
I want now to say a word with regard to something against which railwaymen have to protect themselves, and it has a great deal to do with the fear of hon. Members that the roads may become more congested with traffic. How much more necessary, therefore, is it for this House to see that, if there is to be further transport on the roads, it is done in the most efficient manner possible. The great danger which we, as railway servants, have to face, and which, of course, is troubling the railway companies, is not from the organised and comparatively decently paid municipal employés on their tramways and internal servicea, but from the multiplicity of companies whose object is to get rich quickly, and who have put a motor or two, or a freight wagon or two, on to the roads. While the railway companies have in charge of their trains men with years of experience, almost perfect eyesight, good bearing, even a certain standard of education, compelled to pass continual examinations, and getting, at least in comparison with the past, a reasonable wage, we find, in the case of this kind of road transport, men in charge—indeed, sometimes, youths under 21—of any ramshackle vehicle, their colour vision never tested; and we do not know even what form vision they possess, because they can drive these vehicles with one eye. They may even be stone deaf; they may be youths who are likely to crack up in an emergency, and their wages are often as low as 30s. and 35s. a week.
The railway unions, in fact, having expended so many thousands of pounds in assisting to carry out the will of this honourable House and to get machinery to regulate our wages, and having dealt with the railway companies for so long, are now meeting competition that is unregulated, with no physical tests as regards eyesight or hearing, with youths without experience and very young in years, receiving miserably low wages. That, I suggest to this House, is neither good for the railway companies, the railway servants, or the nation and the public generally. Is it to the interest of our people that underpaid wage-earners should replace some who are decently paid? Will it increase the spending 356 power of the people? Is it the safest possible thing for the public of this country that people who may be miles away from being as efficient as the railwayman should take this work? Further, their hours are unlimited; men go away for days at a time, sleeping where they can, and I have had it admitted to me that sometimes men find themselves asleep on their lorries.
To quote some experiences of my own, I have travelled with some of this road transport around one important industrial town, just to see what it was. In many cases the vehicle was merely a wooden structure roughly nailed together on wheels, plying for hire and carrying passengers, and, if some boy on a, small toy bicycle had run into it, it would have knocked the whole bag of tricks off except the wheels and the engine. Then I have travelled, only within the last few weeks, near another great industrial town, in a heavy motor carrying a number of passengers, with a young boy in charge and a young girl taking the tickets; and, during the time we were running, these two were having practically a joy ride in front. There was no place for the girl conductor, so she went up and sat and talked to the young fellow who was driving. I have no objection to young people talking together, but there are times when it is inappropriate, and, although I served a railway company on locomotives for over 20 years, and travelled many thousands of miles on engines of all descriptions, I am not ashamed to admit to this House that, after I had seen one or two of these trips, I got off and walked, because I wanted to feel perfectly safe. I suggest, therefore, that it would not be in the public interest for this House to encourage competition of that description.
May I say a word with regard to the hon. Gentleman's examination of certain phases of railway rating? He told the House that railway companies got tremendous reductions in their rates, but he did not go on properly to describe them and to inform the House as to where they were given and in what circumstances. It is true that in urban areas railway companies have certain deductions allowed from their rates purely for their track and for sanitary and such like purposes. The railway 357 companies do not require anything of the sort on their urban track, but there is no deduction whatever on any of their stations or buildings or anything else but running track, and when you come to rural areas that allowance is not made. I think the hon. Gentleman should have put that to the House. The railway companies pay altogether in rates nearly £8,000,000 per annum, or 20 per cent. of their net income. Why then should they not have the facilities asked for—not to crowd the roads with vehicles, but to be given a fair opportunity of working their own traffic in the district, which would give them just the facilties to which they are entitled?
The hon. Gentleman who moved the rejection of the Bill told a story which somewhat interested me as a railway man. He said that railway men with free passes were travelling by bus because the bus took them from door to door, instead of travelling by train with their free passes. I was very much interested as to why they left the railway where they were working to walk to the bus to take them home when they could have travelled from where they were working, even if they had to walk at the other end. I do not think he would find a large number of such cases.
§ Mr. BROMLEY
I am glad I put that point, because if there does happen to be one railway porter, one swallow does not make a summer or even a winter like last year, and it does not really affect the argument. May I pass to another point? We have had many epistles sent to us. There was one from the Fruit and Potato Growers' Association. In the bottom paragraph on the front page it says:In the past as a result of railway monopoly the fruit trade has suffered through inefficient and over-costly services. The lever provided by the development of free competitive road transport has already effected some improvement under both headings.I would suggest that the Fruit and Potato Growers' Association might possibly look in another direction. I know a fruit country in the middle of England, and I know that every year—whether in a boom year of fruit or a poor year it 358 does not matter—beautiful fruit is allowed to fall from the trees and rot on the ground, because the road transport is so inefficient that it does not get the fruit to the railways. If the railway companies have power to run a motor freight service around this district and collect stuff, they may be able to fill a wagon.
§ Mr. BROMLEY
They have not the power which this Bill would give them. I am speaking now of a service which could encircle a district and, instead of a train having to call at every station along the route, could he taken to certain centres, which would not only facilitate traffic but would allow the small grower to get it to stations where now road transport is inefficient. Stuff, as I know myself, is gathered in the orchard and carried across fields to the roads, and the little local carrier with his little wooden hutch on wheels comes along and is full up and the fruit cannot be sold and is spoilt. There is more in it, if the fruit and potato salesmen will look it up, than meets the eye.
Then I do not know whether hon. Members have thought of possibilities like this. Road transport people do not cater for heavy traffic, neither do they appear so far to cater for cattle traffic, and the railway company is often put in this difficulty. A small consignment of one or two beasts is given them to take in a triangular direction. They take them on the main line, and they have to be put off at a junction and wait for a branch train to take them somewhere else. The railway companies might have power, instead of taking them to or from either of their stations, with specially fitted vehicles as they have on railways for special consignments, to run them diagonally across country. There is no road transport to do it to-day. The railway companies might have those facilities for taking to or from their railway service and thus often prevent a small truck or two of cattle standing at a junction for two or three hours because they cannot get an engine or a special train to run them a few miles. Then the opinion has been expressed that these ancillary services will be likely to punish in some way either railway shareholders on the one 359 hand or the traders on the other. In actual fact, in this case they have it both ways. If there is a loss on it it cannot be taken from the railway earnings. If there is a profit, the Wages Tribunal will see that it is taken into consideration. Therefore, I want the House to consider the fair play asked for in this Bill and give it a Second Reading. There will then be an opportunity before Third Reading of anything that may be wrong in particular instances to be rectified.
§ Ordered, "That the Debate be now adjourned."— [Lieut.-Colonel Moore-Brabazon.]
§ Debate to be resumed To-morrow at Half-past Seven o'clock.
§ Second Reading deferred till Tomorrow, at Half-past Seven of the clock.