HC Deb 01 May 1929 vol 227 cc1647-81
Mr. SCURR

I beg to move, in page 5, to leave out from the word "agreement" in line 12, to the end of line 26.

Anyone who followed the Debate on the Second Reading of this Bill and the proceedings in Committee upstairs and who read the Report of the London Traffic Advisory Committee, known as the Blue Report, will know that one of the great things supposed to underlie these proposals is the fact of a common fund. I feel sure that the hon. Member for Central Wandsworth (Sir H. Jackson), who is exceedingly proud of that baby, the Blue Report, and on every possible occasion quotes from it, and who, during the last Amendment, used a phrase from it as an argument against that Amendment, will on this occasion vote with me on this Amendment, because throughout the Blue Report there is a reference to one common fund, into which all the receipts of all the participating undertakings could be paid after their expenses and prior charges had been deducted. Under the proposals which have been inserted in the Bill, largely as a result of the pressure of the Com- bine, this idea of one common fund has totally disappeared, and in place of it we have two common funds.

When we, from this side, have put forward the proposition that Lord Ashfield and the Underground Combine were anxious to get a monopolistic control of the passenger traffic of London, we have been told that we were wrong, that the only object of these Bills was to carry out the exceedingly mild proposals of the London Traffic Committee and to bring about a co-ordination of London traffic which was essential if the Tubes which are so necessary for the future were to be built. But when we look at this Clause we find that the Combine have said, "We have a common fund of our own." What are the ramifications of that fund, what are the relations of the undertakings in that fund to one another, and how it is distributed, the public is not allowed to know. That is, in every sense of the term, the private preserve of the Combine, and I should say, from the figures quoted by my hon. Friend the Member for Finsbury (Mr. Gillett) in the last Debate, that it is for that undertaking an exceedingly profitable thing and that the Combine are not anxious that there should be any interference with that common fund. Therefore, they propose that they should retain it and that only those amounts which are paid to the undertakings from that common fund should then be distributed to another common fund, into which the London County Council has to put all its surplus after the charges laid down in the Bill have been met.

This is the most preposterous proposal which has been inserted in these preposterous Bills. It leaves the Underground Combine to do practically what it likes in regard to its own surplus, but says to the London County Council, the municipal authority that has had a successful undertaking, that has made it possible for cheap passenger traffic in the County of London, and even outside the county, the municipality that by reason of the application of the strict principles of municipal finance has paid off nearly half its capital by the operation of its sinking fund, "You are not to have any of these advantages; you have to pay over your surplus right away into this common fund, but the Combine, with many of its undertakings in a bad financial position and many of them not efficiently managed, is to retain its common fund, and only then is its balance to go into the common fund which is supposed to postulate a common management."

There is not a common management provided for in this Bill. There is a management really by the Combine, with the acquiescence of two or three directors who may be appointed, by favour of the Combine, by the London County Council. This preposterous proposal was never contemplated in the Blue Report, and if the hon. Member for Central Wandsworth should refer to the fact that three representatives of the trade unions signed that Report, and should claim that therefore we should support this Bill, I claim that he, having himself signed the Blue Report, and having signed it for one common fund, should come into the Lobby with us in support of this Amendment. He cannot have sauce for the goose and not sauce for the gander, and I will leave it to the judgment of the House to decide which is which, though, so far as I can see, the London public are the goose in this matter, and they are being carved to make a very succulent repast for Lord Ashfield and his Combine.

Mr. GILLETT

I beg to second the Amendment.

This Clause is one of the most amazing proposals in the Bill. It is amazing that the London County Council should propose such a Clause; it is a reflection on their simplicity, and it would make one think they were utterly incapable of tackling a subject like this. Surely the members for the London County Council can scarcely realise the complexity of the traffic Combine. I remember, when I was a member of the Finance Committee of the London County Council, being told by one of the ablest officials of the council at that time that the finance of the Combine was so complicated that, after a most careful study of the figures that were presented, you could not really understand the position of the various concerns in it. Hon. Members to-day have not the advice of that very distinguished gentleman, and, therefore, they have seen their way to put their names to a Clause of this kind.

The first thing we should like to know from them is, if these two pools are to be kept in being, what funds are going into the pool belonging to the Combine? It is easy enough to understand the takings of a concern going into a common pool, and it is moderately easy to imagine that the different concerns can follow the expenditure, but if you are going to have three or four concerns, first of all, pooling their own funds, and if you are only then going to pass on the balance, how is the London County Council going to check the sum of money that is going into the second pool, and what is the object; of having this second pool unless it is going in some way to benefit the Combine? Why is not one pool sufficient, if all things are to be shared alike? I could understand this proposal being in the Bill promoted by the Combine, but to find the London County Council accepting a proposal of this kind is utterly amazing, and I can only imagine that the members of that council are so infatuated with the idea of getting rid of their trams at any cost that they are prepared to accept any terms, however impossible it may be to follow the figures of these concerns.

We shall have the opportunity later on of dealing with the question of those who are going to audit the accounts. As far as I can see, there is not an auditor to represent the interests of the London County Council. Anyone who has know- ledge of the manipulation of accounts, knows very well what can be done in the matter of accounts, and unless you have the closest connection with them you do not know where money goes, what depreciation has been written off, what sums have been put to reserve—

Sir H. CAUTLEY

Is that the way banking business is conducted? It seems a very vague statement to make.

Mr. GILLETT

The hon. Member may think it is very witty—

Sir H. CAUTLEY

I am surprised that the hon. Gentleman should make such a statement.

Mr. GILLETT

I do not suggest that the manipulation of accounts is wrong, but the hon. Member knows that you can set out accounts in different ways, and endless questions can arise as to how much has been put to reserve, how much to sinking fund, and how much is allowed for depreciation, and it is impossible to follow the accounts unless you are able to keep in close touch with them. This is one of the worst Clauses of the Bill, and I hope that the House will reject it.

Sir CYRIL COBB

I hope that the House will not accept the Amendment. If this alternative provision to Clause 3 is cut out, we should make the Bill entirely unworkable. It is to be remembered that there is an existing combined undertaking at the moment, and that it has an existing common fund into which they pay large sums. It must be remembered, too, that the undertaking has obtained its money for extensions of the Tube and the Underground from the Treasury very largely under the Trade Facilities Act. I believe that it has obtained something like £12,000,000, and it is on the guarantee of that existing common fund that the Treasury have allowed it to have this money. Therefore we should make this scheme practically unworkable if we were to upset that existing arrangement. It has also to be remembered that, as far as new undertakings are brought into the Combine, they have not to pay any money into the existing common fund of the Underground companies. They are free from that, and to that extent it is essential that we should have the alternative method which is provided for in Clause 3, Subsections (1) and (2). Therefore, inasmuch as it is essential that these alternative methods should be retained, and as I see no possibility of working the scheme unless they are retained, I hope that the House will reject the Amendment.

Mr. HARRIS

The hon. Member for West Fulham (Sir C. Cobb) is well versed in this subject, and I have no doubt that he has enlightened the House to some extent on the mysteries of these particular paragraphs and this very remarkable Clause. I do not suppose that in the whole history of Parliament we have had more curious and more complex financial operation than the House is now asked to approve. It is notorious that the finance of the Underground Electric, that is, the parent company, is very complex, involved and very difficult to follow. I had an opportunity of hearing the master mind endeavour to explain it, and even after his explanation I was to a certain extent left in doubt as to the financial position. I do not think that anybody would suggest that the wording of this Clause makes the position clearer. May I try and explain to a certain extent how the concern works? A number of companies are involved. First, of course, is the District Railway, the oldest company. It might be described as the parent company, although it is by no means the parent, for, although it is the oldest company, it is not the first to enter into the mysterious operations of this group of interests, because behind them were the Tubes, which were largely financed from America. It is more correct to say that, originally, a London finance group which started most of the Tubes got into difficulties, and American finance came in and saved the situation. American finance, having got its finger in the pie, proceeded to take over the District Railway. To be perfectly fair, I think that we owe a debt of obligation to the people who took over the District Railway, because they electrified it.

I believe that the next operation was the founding of the Underground Electric, which owned interests in various concerns, but had nothing to do with actual operation. Then the London General Omnibus Company was bought over by the same group of financiers, and the same people who were running the Tubes and District Railway proceeded to run the London General Omnibus Company. The third operation was to buy out the various tramway companies on the outskirts of London. Then there were four groups, but that was not the end, for the London General Omnibus Company began to buy out interests in a number of small omnibus companies as well as interests in omnibus companies which they did not control, such, for instance, as Tillings, Limited. What the exact relation of Tillings, Limited, is to the London General Omnibus Company I do not know, but there is some interlocking and some inter-connection. We know that Tillings, Limited, are associated very intimately financially with the London General Omnibus Company. As far as I understand it, all these undertakings have their own boards of directors, and their own managers, but they have one thing in common: they own the same chairman, Lord Ashfield, who is chairman of most of the companies. The owning company is the top dog. They also have a board on which the various companies are represented.

During the War it was found that the Underground Company was not paying, largely because of the fact that many of its men had gone overseas, and because of the shortage of coal and various other reasons. It was running at a loss, and so the Government in their wisdom in 1915 arranged for a pool. That is the origin of the pool which seems likely to drown London traffic in due course if this Bill becomes an Act of Parliament. The pool was formed, not for permanent purposes or in order to establish a principle, but to meet War conditions, and the Underground associated companies were financed out of the pockets of the omnibus company. As a matter of fact, that was the beginning of the war with the London Tramways. It was the fact that the profits were pooled which enabled them to put up a very strong cutting competition with the trams. It is that pool which, as I understand it, the promoters of the other Bill wish to retain. I respectfully submit to the House that they cannot have it both ways. If they want to retain their own pool, then they cannot expect to come into the advantages of taking over the London County Council Tramways, because those tramways have a right to say that if they are going to come into the general machine, the whole of the profits, without any first consideration, should be shared alike by all the interests concerned, and the County Council should not be subject to the operation of any pool which was in operation before this agreement was made.

I do not pretend to understand the working of these particular sections. They are very much bracketed. I do not know why the brackets are put in, except to make it difficult for the layman to understand. I know they were drafted by very ingenious and skilful draftsmen, but why it should be necessary, in order to secure the interests of the London County Council—in whose interest this Bill is supposed to Be drawn up—to bracket certain words, perhaps the hon. Member for Central Wandsworth (Sir H. Jackson) will make clear to the House. What I do respectfully suggest is that if Parliament is asked to intervene and to set up a new kind of organisation for London traffic, we should keep quite clear of complicated company Acts of this character. It is far too involved for the ordinary public to understand. It is essential that the general public should understand what is going on. Let me assume for a moment that fares do not go up and that everything is going on all right. The public naturally always wants to understand exactly what is going on. In the London County Council Tramways our finance is so simple that it can be posted up inside the ordinary tramcars, and the general public who may look at the figures can understand exactly what is going on. With these two Bills you have got to jump over one, and then you jump into the other, and it passes the wit of the ordinary ratepayer to understand the working of such complicated financial operations. I suggest that these two Clauses should be dropped, and perhaps in the intervening weeks we may be able to devise something much simpler and more effective.

Sir H. CAUTLEY

As Chairman of the Committee, I do not propose to take any part in the Debate of a partisan character at all, and it is on questions of fact only that I rise now. In existing conditions the constituent members of the Combine have a common fund and common management. During the course of their existence they have in fact—not in terms— pledged their common fund to provide for losses such as have been mentioned by several hon. Members. The present Bill proposes to bring into this Combine a number of outside bodies, including local authorities who own tramways Although I agree with what has been said up to date, that it would have been better to have had only one common fund, such a position is quite impossible to attain by reason of the fact that the existing common fund of the existing Combine was pledged in this way. Therefore, you had to approach this subject, if the Bill was to go through at all, with the existing position fixed and the existing common fund charged, and the present Combine could only bargain and deal with the balances remaining after the charges of the present common fund were discharged.

This Bill provides that any further body, local authority or private owner coming into the new Combine shall start with the common fund formed and the proceeds remaining from its own undertaking and the balances obtained from the existing Combine, after these charges on its common fund are provided for. That is a perfectly fair arrangement, and it will be seen that it is borne out by the last paragraph (b), where every constituent of the existing common fund has to hand over to the new common fund any balances that it receives out of the existing common fund at the present moment. Whether you approve it or not is a different matter, but, as far as the equity of it is concerned, it is absolutely fair, because everybody starts fair at the present moment with the common fund on equal terms.

Mr. GARDNER

The last speech was most interesting. As the hon. Gentleman sat through the Committee upstairs and heard all the expert witnesses, I should have thought he would have been able to enlighten the House as to a proposal of this importance. As far as I am concerned, I am as far off it as ever, and I hope that the hon. Member for Central Wandsworth (Sir H. Jackson) will enlighten us on the subject. Under the Bill there will be a common management, competition is to be eliminated and the management may say that they will cut down the tramway service by one-half and the people of London will be compelled to use the underground railways. If these tubes are used and their profits are high, the money goes into the common fund, about which there is no common understanding. I want to know from the hon. Member for Central Wandsworth whether the Combine are going to be able, under the common fund arrangement, to share their profits out to the shareholders? Suppose half of the trams are cut off, as they may well be in certain areas, and the people are driven to the tubes. That was one of the pet schemes advanced when the London Traffic Act was before the House in 1924, namely, that it was a wasteful thing for people to ride in omnibuses half empty when there were half empty trains. In other words, people will be compelled to go into the tubes under this common fund arrangement, as I understand it, and it will enable the companies to be in a position still to distribute the proceeds of these underground operations to the advantage of the shareholders, even if it means a loss to the London County Council tramways. As I said, I thought the Chairman could have enlightened us after hearing all those experts, but I am going to press definitely that we should be told exactly what the position is.

Sir H. JACKSON

I will do so.

Mr. GARDNER

Before I close I would like to ask whether the Combine is going to reserve the right to keep the common pool for their own personal shareholders? If any tubes are developed by subsidiary companies and these bring increased earnings, are they going to the subsidiary companies only, although the capital for those companies will be raised upon the reserves of the London County Council undertakings and the county rate?

Sir H. JACKSON

I will try to explain the common fund in its relation to this Amendment. As my hon. Friend the Member for South-West Bethnal Green (Mr. Harris) has said, in 1915 these associated companies were allowed to enter into a combine. Each company has its individual receipts. From those individual receipts the ordinary working expenses are first taken, and then the prior charges, such as debenture stock charges. That policy is adopted by each one of the constituent members of the present combine. After those charges have been paid—overhead charges, working expenses and debenture charges—the balance is then put into the common fund. From that common fund the interest on ordinary stock in each of these individual components of the combine is paid. The rate at which that interest, is paid is a matter for common agreement. It varies from a fairly large percentage in the case of the omnibuses to a comparatively very modest percentage indeed on the tubes. That is the present common fund, and that is how it operates.

I will now show what is going to happen under this Amendment, and why this Amendment should be rejected. That common fund will still remain as an entity. The balance which at the present time is paid into the common fund by these different component parts is—at least it has been for the last few years—in the neighbourhood of £1,000,000. That £1,000,000 is ultimately divided in agreed percentages among the ordinary stockholders of the various companies. But, as has already been pointed out, that common fund has certain very definite obligations upon it. Something like £19,000,000 has been raised on the security of that common fund. Of that £19,000,000 no less than £12,500,000 was raised as debenture stock and under Government guarantee in order to build the Morden tube. It is vitally important to keep faith with those who have lent their money on that security, and obviously it is quite proper that the existing common fund should remain as an entity. That entity should not get less unless something gravely disastrous occurs—which is not contemplated, and, certainly, after the speeches I have heard about monopoly, should not occur. That £1,000,000—or some figure of that kind—will be transferred from the present fund into the larger common fund of which the London County Council tramways or, indeed, any undertaking that comes into this organisation, will take a part.

Therefore, I assure hon. Members opposite that there is no interference with the great scheme of the Blue Report. There is still a big common fund, of which the present common fund of the combine remains an entity, but in no way will it interfere with the benefits which any other component member of the larger common fund should have. My hon. Friend raised the question of the possi- bility of a tube being built by some subsidiary company. I do not know what he means by that, because I think it is admitted that any tube project for London must obviously be based upon this common fund and made by this common management, unless the common management is unwilling to undertake that responsibility, and if that should be the case, then, obviously, the Minister will be empowered under the Act to give the powers to somebody else. I hope that has made the position clear. To accept this Amendment would obviously be to destroy the common fund of the present Underground group, which be a grave breach of faith towards those people who have lent their money.

Mr. GARDNER

Is the common fund to remain intact to guarantee the money to the persons who have advanced it, or is it to be merged into the other, and if so on what terms?

Sir H. JACKSON

I am so sorry that I was not clear. What the present common fund of the combine will continue to do as an entity will be to guarantee the preferred charges on the debenture stock—the prior claims.

Mr. THURTLE

I would like to know whether we are to understand from the explanation that the present constituent members of the combine will not pay into the combine common fund any more now than is necessary to meet those prior charges?

Sir H. JACKSON

That is right.

Mr. THURTLE

There will be nothing more paid in beyond that?

Sir H. CAUTLEY

It will come out again.

Mr. THURTLE

If that is the case, it seems to me that it is a distinction without a difference.

Sir H. CAUTLEY

That is right.

Mr. THURTLE

In effect, there is no separate common fund so far as the combine is concerned if they are merely reserving the entire surplus after meeting the management expenses, debenture charges and so forth to meet these other prior charges which are raised by means of arrangements with the Treasury. If they are merely arranging to reserve that surplus for that purpose and nothing more, I confess that I do not see that there is any particular point in making the distinction.

Sir H. CAUTLEY

There is no difference unless some catastrophe arises where the fund does not provide for the existing charges, including the charges of the Treasury. If a catastrophe did arise,

then the original common fund would come into operation. Otherwise, it would be just the same.

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

The House divided: Ayes, 143: Noes, 77.

Division No. 288.] AYES. [9.43 p.m.
Acland-Troyte, Lieut.-Colonel Greaves-Lord, Sir Walter Pownall, Sir Assheton
Ainsworth, Lieut.-Col. Charles Greene, W. P. Crawford Price, Major C. W. M.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Grotrian, H. Brent Radford, E. A.
Atkinson, C. Gunston, Captain D. W. Raine, Sir Walter
Balfour, George (Hampstead) Hall, Lieut.-Col. Sir F. (Dulwich) Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Beamish, Rear-Admiral T. P. H. Hamilton, Sir George Robinson, Sir T. (Lancs., Stretford)
Benn, Sir A. S. (Plymouth, Drake) Harvey, G. (Lambeth, Kennington) Rodd, Rt. Hon. Sir James Rennell
Bevan, S. J. Haslam, Henry C. Ropner, Major L.
Blundell, F. N. Headlam, Lieut.-Colonel C. M. Ross, R. D.
Bourne, Captain Robert Croft Henderson, Capt. R. R. (Oxf'd, Henley) Salmon, Major I.
Bowater, Colonel Sir T. Vansittart Henderson, Lieut.-Col. Sir Vivian Samuel, A. M. (Surrey, Farnham)
Bowyer, Capt. G. E. W. Henn, Sir Sydney H. Samuel, Samuel (W'dsworth, Putney)
Brass, Captain W. Hennessy, Major Sir G. R. J. Sandeman, N. Stewart
Brassey, Sir Leonard Hills, Major John Waller Sanders, Sir Robert A.
Brocklebank, C. E. R. Hilton, Cecil Sanderson, Sir Frank
Broun-Lindsay, Major H. Hope, Capt. A. O. J. (Warw'k, Nun.) Sandon, Lord
Brown, Col. D. C. (N'th'l'd., Hexham) Hopkins, J. W. W. Shepperson, E. W.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Hume, Sir G. H. Sinclair, Col. T. (Queen's Univ., Belfst.)
Bull, Rt. Hon. Sir William James Iliffe, Sir Edward M. Southby, Commander A. R. J.
Burman, J. B. James, Lieut.-Colonel Hon. Cuthbert Spender-Clay, Colonel H.
Campbell, E. T. Kinloch-Cooke, Sir Clement Stanley, Lord (Fylde)
Carver, Major W. H. Knox, Sir Alfred Steel, Major Samuel Strang
Cassels, J. D. Lamb, J. O. Storry-Deans, R.
Cautley, Sir Henry S. Leigh, Sir John (Clapham) Stott, Lieut.-Colonel W. H.
Cecil, Rt. Hon. Sir Evelyn (Aston) Lister, Cunliffe, Rt. Hon. Sir Philip Sugden, Sir Wilfrid
Christie, J. A. Little, Dr. E. Graham Tasker, R. Inigo.
Clayton, G. C. Lougher, Sir Lewis Templeton, W. P.
Cockerill, Brig.-General Sir George Lucas-Tooth, Sir Hugh Vere Thompson, Luke (Sunderland)
Colman, N. C. D. Luce, Maj.-Gen. Sir Richard Harman Tinne, J. A.
Conway, Sir W. Martin Lumley, L. R. Vaughan-Morgan, Sir Kenyon
Cope, Major Sir William Macdonald, R. (Glasgow, Cathcart) Waddington, R.
Culverwell, C. T. (Bristol, West) Macdonnell, Colonel Hon. Angus Wallace, Captain D. E.
Cunliffe, Sir Herbert McLean, Major A. Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Davidson, Rt. Hon. J. (Hertford) Macquisten, F. A. Warner, Brigadier-General W. W.
Davidson, Major-General Sir John H. Maitland, A. (Kent, Faversham) Warrender, Sir Victor
Davies, Maj. Geo. F. (Somerset, Yeovil) Maitland, Sir Arthur D. Steel Watts, Sir Thomas
Davies, Dr. Vernon Makins, Brigadier-General E. Wayland, Sir William A.
Ellis, R. G. Marriott, Sir J. A. R. Wells, S. R.
England, Colonel A. Mason, Colonel Glyn K. Williams, Com. C. (Devon, Torquay)
Everard, W. Lindsay Merriman, Sir F. Boyd Williams, Herbert G. (Reading)
Fielden, E. B. Mitchell, Sir W, Lane (Streatham) Winterton. Rt. Hon. Earl
Ford, Sir P. J. Monsell, Eyres, Com. Rt. Hon. B. M. Withers, John James
Forestler-Walker, Sir L. O'Connor, T. J. (Bedford, Luton) Wood, B. C. (Somerset, Bridgwater)
Foster, Sir Harry S. Oman, Sir Charles William C. Wood, Rt. Hon. Sir Kingsley
Fraser, Captain Ian Pennefather, Sir John Wragg, Herbert
Fremantle, Lieut.-Colonel Francis E. Penny, Frederick George Yerburgh, Major Robert D. T.
Gadle, Lieut.-Col. Anthony Percy, Lord Eustace (Hastings)
Ganzonl, Sir John Perkins, Colonel E. K. TELLERS FOR THE AYES.—
Gates, Percy Philipson, Mabel Sir Henry Jackson and Sir Cyril Cobb.
NOES.
Adamson, Rt. Hon. W. (Fife, West) Clarke, A. B. Grenfell, D. R. (Glamorgan)
Alexander, A. V. (Sheffield, Hillsbro') Cluse, W. S. Griffith, F. Kingsley
Baker, J. (Wolverhampton, Bilston) Connolly, M. Griffiths, T. (Monmouth, Pontypool)
Barker, G. (Monmouth, Abertillery) Cowan, D. M. (Scottish Universities) Hardie, George D.
Barnes, A. Crawfurd, H. E. Harris, Percy A.
Barr, J. Dalton, Hugh Henderson, T. (Glasgow)
Batey, Joseph Dalton, Ruth (Bishop Auckland) Jenkins, W. (Glamorgan, Neath)
Bellamy, A. Day, Harry Kelly, W. T.
Bennett, William (Battersea, South) Dunnico, H. Kennedy, T.
Blindell, James Fenby, T. D. Kenworthy, Lt.-Com. Hon. Joseph M.
Bowerman, Rt. Hon. Charles W. Gillett, George M. Lawrence, Susan
Broad, F. A. Graham, D. M. (Lanark, Hamilton) Lawson, John James
Brown, Ernest (Leith) Graham, Rt. Hon. Wm. (Edin., Cent.) Lowth, T.
Buchanan, G. Greenall, T. Lunn, William
Maclean, Nell (Glasgow, Govan) Potts, John S. Thorne, W. (West Ham, Plaistow)
March, S. Richardson, R. (Houghton-le-Spring) Thurtle, Ernest
Maxton, James Riley, Ben Tomlinson, R. P.
Montague, Frederick Robinson, W. C. (Yorks, W. R., Elland) Watson, W. M. (Dunfermline)
Murnin, H. Shaw, Rt. Hon. Thomas (Preston) Wellock, Wilfred
Naylor, T. E. Shepherd, Arthur Lewis Whiteley, W.
Oliver, George Harold Shield, G. W. Wiggins, William Martin
Owen, Major G. Slesser, Sir Henry H. Williams, C. P. (Denbigh, Wrexham
Palin, John Henry Smith, Rennie (Penistone) Williams, T. (York, Don Valley)
Paling, W. Stephen, Campbell Wilson, R. J. (Jarrow)
Parkinson, John Allen (Wigan) Strauss, E. A.
Pethick-Lawrence, F. W. Sullivan, Joseph TELLERS FOR THE NOES—
Mr. Gardner and Mr. Scurr.
Mr. SCURR

I beg to move, in page 6, line 5, at the end, to insert the words: Provided that under every such agreement the council shall receive out or the common fund (after payment of its prior charges) sufficient to enable the council to make the proper payments of capital without application to the Treasury for an extension of the periods of such repayments. I move this Amendment in order to secure that the Council shall receive out of the common fund sufficient to enable them to make the proper payment of capital without application to the Treasury for an extension of the period of repayments. It does not seem to me that under the Bill sufficient money will be provided to meet these charges. According to the revised estimates of the County Council which have recently been issued, the surplus of revenue after payment of interest will fall short of the sum necessary for these repayments by £30,626. In the year 1929–1930, it is estimated that there will be a surplus after payment of interest and other charges of £40,889. The Council may find as time goes on that by the operation of causes which we cannot foresee at the moment its rails may become obsolescent, that a newer form of traffic will have to take the place of the old system of fixed rails, and trolley vehicles may have to be put in their place. If, out of the common fund, the Council is not raising sufficient to pay the amount of the sinking fund, it will mean either that there will be, as I have said, a charge on the rates, or that the Treasury will have to give permission to postpone payment, and we shall then find the Council with an accumulated debt for the repayment of which it is liable, and with its asset obsolescent. On the present basis of repayment, the tramways will be practically free from debt in 20 years' time, and even if at the end of that period the tramway system were more or less obsolete, it would not matter, because the capital liability of the undertaking would have been got rid of. But if, as seems highly probable under this system, sufficient money does not come in to make provision for that repayment, it will involve a heavier charge on the ratepayers of London, and the object of this Amendment is to avoid that.

Mr. NAYLOR

I bog to second the Amendment.

Sir H. JACKSON

This Amendment postulates the impossible position that a municipal tramway undertaking shall receive both its capital charges—that is to say, its loan interest—and its payment for reduction of capital, as a preferred charge.

Mr. BROAD

Why not?

Sir H. JACKSON

I will tell the hon. Member why. The Amendment would set up a complete difference of policy as between the municipally-owned tramway and the company-owned tramway. In the case of a company-owned tramway, the ordinary stock must take its dividend after the preferred charges have been met, and this Amendment suggests that both the debt redemption and the loan charges should be preferred charges. As hon. Members will gather from the Amendments on the Paper, the opponents of this Bill are most anxious that, at any rate, company-owned tramways should not have that privilege. It is obvious that any undertaking coming into this scheme, whether it be municipal or whether it be company-owned, must at least come in on an equitable basis, and a distinction of this kind is quite impossible. The suggestion that municipal capital should be granted certain payments, whether it has earned them or not, is quite unworkable. A moment's consideration will show that this Amendment would be absolutely unjust, and that it is quite impossible to accept it.

Mr. GILLETT

Surely we cannot be satisfied with the case that has been put forward by the hon. Member for Central Wandsworth (Sir H. Jackson). He has ignored the difference between municipal finance and company finance. Under this scheme, if the London County Council tramway service had been a private, concern, the millions of money which during past years have been devoted to the paying off of capital would probably have been put to reserve, and that reserve fund would by now have amounted to £17,000,000. In that case, I presume, the hon. Member would pay that £17,000,000 into the common pool, and interest would have to be paid upon it. All that I can gather from him now is that he is going to put in £8,000,000. If he is asking that the original capital of £17,000,000 shall rank for interest now, he would have an

income which would allow him to go on paying off the claims which would have to be paid off by a municipality. From the explanation which the hon. Member has given, I do not see what would be the position of the London County Council with regard to the capital repayment which is imposed upon them by law, unless, of course, it be that they are going to get exemption from the Treasury, or permission to postpone payment. We have had no explanation at all of the position due to the great difference between municipal and private finance.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 78; Noes, 140.

Division No. 289.] AYES. [10.0 p.m.
Adamson, Rt. Hon. W. (Fife, West) Graham, D. M. (Lanark, Hamliton) Parkinson, John Allen (Wigan)
Alexander, A. V. (Sheffield, Hillsbro') Greenall, T. Pethick-Lawrence, F. W.
Ammon, Charles George Grenfell, D. R. (Glamorgan) Potts, John S.
Baker, J. (Wolverhampton, Bliston) Griffith, F. Kingsley Richardson, R. (Houghton-le-Spring)
Barker, G. (Monmouth, Abertillery) Griffiths, T. (Monmouth, Pontypool) Riley, Be[...]
Barnes, A. Hardie, George D. Robinson, W. C. (Yorks, W. R., Elland)
Barr, J. Harris, Percy A. Shaw, Rt. Hon. Thomas (Preston)
Batey, Joseph Henderson, T. (Glasgow) Shepherd, Arthur Lewis
Beckett, John (Gateshead) Jenkins, W. (Glamorgan, Neath) Shield, G. W.
Bellamy, A. Kelly, W. T. Slesser, Sir Henry H.
Bennett, William (Battersea, South) Kennedy, T. Smith, Rennie (Penistone)
Bowerman, Rt. Hon. Charles W. Kenworthy, Lt.-Com. Hon. Joseph M. Stephen, Campbell
Broad, F. A. Lawrence, Susan Strauss, E. A.
Bromley, J. Lawson, John James Sullivan, Joseph
Brown, Ernest (Leith) Lowth, T. Thorne, W. (West Ham, Plaistow)
Buchanan, G. Lunn, William Thurtle, Ernest
Clarke, A. B. Maclean, Nell (Glasgow, Govan) Viant, S. P.
Cluse, W. S. March, S. Watson, W. M. (Dunfermline)
Connolly, M. Maxton, James Wellock, Wilfred
Cowan, D. M. (Scottish Universities) Montague, Frederick Whiteley, W.
Crawfurd, H. E. Mosley, Sir Oswald Wiggins, William Martin
Dalton, Hugh Murnin, H. Williams, C. P. (Denbigh. Wrexham)
Dalton, Ruth (Bishop Auckland) Naylor, T. E. Williams, T. (York, Don Valley)
Day, Harry Oliver, George Harold Wilson, R. J. (Jarrow)
Dunnico, H. Owen, Major G.
Fenby, T. D. Palin, John Henry TELLERS FOR THE AYES.—
Gillett, George M. Paling, W. Mr. Gardner and Mr. Scurr.
NOES.
Acland-Troyte, Lieut.-Colonel Carver, Major W. H. Fremantle, Lieut.-Colonel Francis E.
Ainsworth, Lieut.-Col. Charles Cassels, J. D. Gadle, Lieut.-Col. Anthony
Amery, Rt. Hon. Leopold C. M. S. Cautley, Sir Henry S. Ganzonl, Sir John
Apsley, Lord Cecil, Rt. Hon. Sir Evelyn (Aston) Gates, Percy
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Christie, J. A. Greaves-Lord, Sir Walter
Balfour, George (Hampstead) Clayton, G. C. Greene, W. P. Crawford
Beamish, Rear-Admiral T. P. H. Cockerill, Brig.-General Sir George Grotrian, H. Brent
Benn, Sir A. S. (Plymouth, Drake) Colman, N. C. D. Gunston, Captain D. W.
Bentinck, Lord Henry Cavendish- Conway, Sir W. Martin Hall, Lieut.-Col. Sir F. (Dulwich)
Bevan, S. J. Cope, Major Sir William Hamilton, Sir George
Blundell, F. N. Culverwell, C. T. (Bristol, West) Hartington, Marquess of
Bourne, Captain Robert Croft Davidson, Major-General Sir J. H. Harvey, G. (Lambeth, Kennington)
Bowater, Col. Sir T. Vansittart Davies, Maj. Geo. F. (Somerset, Yeovil) Haslam, Henry C.
Bowyer, Capt. G. E. W. Davies, Dr. Vernon Headlam, Lieut.-Colonel C. M.
Brass, Captain W. Ellis, R. G. Henderson, Capt. R. R. (Oxf'd, Henley)
Brassey, Sir Leonard England, Colonel A. Henderson, Lieut.-Col. Sir Vivian
Brocklebank, C. E. R. Everard, W. Lindsay Heneage, Lieut.-Col. Arthur P.
Broun-Lindsay, Major H. Fielden, E. B. Henn, Sir Sydney H.
Brown, Col. D. C. (N'th'l'd., Hexham) Ford, Sir P. J. Hennessy, Major Sir G. R. J.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Forestier-Walker, Sir L. Hilton, Cecil
Burman, J. B. Foster, Sir Harry S. Hope, Capt. A. O. J. (Warw'k, Nun.)
Campbell, E. T. Fraser, Captain Ian Hopkins, J. W. W.
Hume, Sir G. H. Pennefather, Sir John Stott, Lieut.-Colonel W. H.
Iliffe, Sir Edward M. Penny, Frederick George Sugden, Sir Wilfrid
James, Lieut.-Colonel Hon. Cuthbert Percy, Lord Eustace (Hastings) Tasker, R. Inigo.
Kinloch-Cooke, Sir Clement Perkins, Colonel E. K. Templeton, W. P.
Knox, Sir Alfred Philipson, Mabel Thompson, Luke (Sunderland)
Lamb, J. Q. Pownall, Sir Assheton Thomson, Rt. Hon. Sir W. Mitchell-
Leigh, Sir John (Clapham) Price, Major C. W. M. Tinne, J. A.
Little, Dr. E. Graham Radford, E. A. Vaughan-Morgan, Sir Kenyon
Loder, J. de V. Raine, Sir Walter Waddington, H.
Lougher, Sir Lewis Richardson, Sir P. W. (Sur'y, Ch'ts'y) Wallace, Captain D. E.
Lucas Tooth, Sir Hugh Vere Rodd, Rt. Hon. Sir James Rennell Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Luce, Major-Gen. Sir Richard Herman Ropner, Major L. Warner, Brigadier-General W. W.
Lumley, L. R. Salmon, Major I. Warrender, Sir Victor
Macdonald, R. (Glasgow, Cathcart) Samuel, A. M. (Surrey, Farnham) Watts, Sir Thomas
McDonnell, Colonel Hon. Angus Samuel, Samuel (W'dsworth, Putney) Wayland, Sir William A.
McLean, Major A. Sandeman, N. Stewart Wells, S. R.
Maitland, A. (Kent, Faversham) Sanders, Sir Robert A. Williams, Com. C. (Devon, Torquay)
Maitland, Sir Arthur D. Steel Sanderson, Sir Frank Williams, Herbert G. (Reading)
Makins, Brigadier-General E. Sandon, Lord Winterton Rt. Hon. Earl
Marriott, Sir J. A. R. Shepperson, E. W. Withers, John James
Mason, Colonel Glyn K. Sinclair, Col. T. (Queen's Univ., Belfast) Wood, B. C. (Somerset, Bridgwater)
Merriman, Sir F. Boyd Southby, Commander A. R. J. Wragg, Herbert
Mitchell, S. (Lanark, Lanark) Spender-Clay, Colonel H.
Mitchell, Sir W. Lane (Streatham) Stanley, Lord (Fylde) TELLERS FOR THE NOES.—
O'Connor, T. J. (Bedford, Luton) Steel, Major Samuel Strang Sir Henry Jackson and Sir Cyril Cobb.
Oman, Sir Charles William C. Storry-Deans, R.
Mr. THURTLE

I beg to move, "That further Consideration of the Bill, as amended, be now adjourned."

I make this Motion in view of the continued absence of the Minister of Transport, and the studied discourtesy he is thus exhibiting to the House when an important traffic matter is under consideration.

Mr. NAYLOR

I do not think a Motion of this kind should be allowed to be put without a further protest at the absence of the Minister. When we bad these Bills before us on the Second Reading, he was in his seat taking a paternal interest in the discussion. To-night, when we are endeavouring to improve the Bills by means of these important Amendments, he is no longer with us. It is not merely a slight upon the House, it is a slight upon the high office he holds that he is not here when important measures of this kind are before the House, interesting the whole of London without distinction of class whatever. I do not want to appear discourteous to him. I have always found him lenient and courteous to Members of the Opposition, but really the House is entitled to ask what keeps him away on such an important occasion. I do not know whether the representatives of the Government present can offer any explanation or apology for his absence. If they can, they will have respectful attention from us. What are we here for if it is not to bring our knowledge and intelligence to bear upon Bills of this description? [Interruption.] I hope that little conversation means that the Minister is on his way. If he is not, and my voice does not reach him, I hope a messenger may be sent in order that he may return before the Motion is put to the House. We are not moving it merely to cause another Division. We do net desire to waste time. We merely desire to have the best possible attention given to the Bills. We want the guidance of the Minister if we can have it. If his absence is an indication that he is incapable of giving us that guidance, we should feel bound to accept that excuse if it is given by his representatives. I see that both hon. Gentlemen are looking, one to the left and one to the right, in the hope that he may make an appearance. I feel strongly tempted to go on talking until he does appear, not because I want to detain the House but because I want to save his honour. When it becomes known in London that he was not present during the Debate, London will want to know why. Now that the right hon. Gentleman has returned, may I be permitted to thank the representatives of the Government for reminding him that an important Debate was proceeding and that it was necessary for him, in view of the criticism that was being made of his absence, to be here. The compliments I have just paid him in his absence might, I think, be repeated in his presence. I said he was always courteous to us and it is a great pity that we should be without his guidance. I sincerely regret if I have caused him any inconvenience by recalling him if not to sense of duty at least to the post of duty, and I have no doubt my hon. Friend will now withdraw his Motion.

Mr. THURTLE

In view of the fact that our protest, made in due Parliamentary form, has had such a happy result, I ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Mr. THURTLE

I beg to move, in page 6, line 9, after the word "capital," to insert the words and such formula or formulae or the amount so specified shall be so constituted that no capital of any associated undertaking shall be admissible as ranking capital for an amount in excess of a sum equivalent to the mean between the highest and lowest Stock Exchange quotation for such capital in the year nineteen hundred and twenty-six, and that no capital of any associated undertaking shall be admissible as ranking capital unless the undertaking shall have earned a return upon such capital over the five years next preceding the year nineteen hundred and twenty-seven. This is another attempt to safeguard London from the rapacity of the Traffic Combine. Having failed to do it by restricting the rate of dividend they could pay on their ordinary shares, we want to try to limit the amount to be brought in as ranking capital. It is quite in accordance with human nature that those who control the Combine should seek to squeeze just as much into this term "ranking capital" as they possibly can. We know that Lord Ashfield himself is human—I think I might say that in this matter he is all too human—because it is notorious that Lord Ashfield's capacious maw—I think that that is the term—has succeeded in extracting tremendous profits from all sorts of sources, and I am sure he is anxious to get just as much as he possibly can out of the people who have to use the London traffic facilities. We have a safeguard, or it is alleged that we have a safeguard, in the Minister of Transport. He is the man who is going to protect us from the Combine blunderers. He is the Horatius who is going to guard the bridge, and I say to him with great respect but with equal frankness that I do not exactly fancy him for the post.

If we had an ideal Minister of Transport—and I hope that the right hon. and gallant Gentleman will not think that this applies entirely to him, for I am thinking of possible future Ministers of Transport—whose sole criterion was the public good, who would stand up firmly against any pressure from either the directors of the Combine or their shareholders, who would seek to protect at all costs the interests of the travelling public in London, I think that we should be prepared to allow him to undertake this very heavy responsibility of deciding what shall be the ranking capital. I do not think that we have such a Minister at the present time, and it is conceivable, for one never knows, that in the future we shall not have such a Minister, and so we want in the House of Commons now to make safeguards. We want to make this question of the amount of ranking capital foolproof if we can, and, we might also say that we want to make it knave proof. Of course, I do not apply that to the right hon. and gallant Gentleman. The reason we are concerned about the amount of ranking capital is that it is obvious, there being no restriction on the dividends which are to be paid, what the amount of capital which is admitted to rank for dividend will govern the amount of profits necessary to be made by the Combine. It is perfectly obvious in that event that the amount of profit which has to be made by the Combine must necessarily and inevitably react upon the question of the fares charged and the facilities which are going to be provided for the people of London. There are certain uneconomic facilities which the travelling public in London will want—workmen's fares and the travelling on omnibuses and tramways at fares which are not really economic. If the Combine has to make a very much larger amount of profit than we think they ought to have, to make it will have a very serious reaction upon these questions. Therefore we want to have the amount cut down to the lowest possible figure.

There are many companies coming into this combine which for many years have been earning no dividends, and not even any profits. A great deal of capital connected with those companies might, without any exaggeration of language, be described as dead capital. I will cite one or two cases in point. The London United Tramways Company, which is coming into the combine, has an ordinary capital of over £656,000, in 5s. shares. The middle price of 1926 is the price which we have selected as the equitable price at which this capital should rank in the new combine. According to the Stock Exchange Year Book for 1926 the price of these shares, in the supplementary list, was 2d.—the price of a cup of tea. In other words, the market value of these shares was only one-thirtieth of their nominal price. We want to safeguard the value at which such capital is to rank for dividend in the future. The company has nearly a million 5 per cent. cumulative preference shares of £l each, and the price of those shares in the official list in 1926 was 3s. To indicate how dead this capital was at that time, I would recall the fact that the last dividend paid on the ordinary share capital was one-half per cent. in the year 1914. The market value in this case, as compared with £962,000, was only £144,000. Here again, we want to know whether there is to be some safeguard to the public as to the price at which this capital is to rank for dividend in the new combine.

Another company which is coming into the combine is the Metropolitan Electric Tramways Company, which has an ordinary capital of £474,000 in £l shares. The price in the Stock Exchange Supplementary List in 1926 was 3d., and the last dividend paid on these shares was 1 per cent. in 1915. I dare say that some people with inside knowledge have bought many of these shares at the price of 3d. and made a handsome profit since. There are 500,000 5 per cent. cumulative preference shares of £1 each, and their price in 1926 was 2s. 9d. I do not know when the last dividend was paid on these shares. Hon. Members may ask why we have selected the datum of 1926, and the middle price in that year as our criterion of value. In 1926, according to the best of our information, the first preliminary conference took place as to the possibility of carrying out such a scheme as this, and it was after that, as more and more people got in the know and got inside information, that these shares gradually began to creep up, with the result that their market value at the present time is probably a great deal more than it was in 1926. We say that it would be fair to take the period just after the negotiations had begun as the time when the real value of the shares, as determined by their intrinsic merits, ought to be assessed.

I cite two other illustrations; the Metropolitan District Ordinary Stock, and the London Electric Railway Ordinary Stock. They are in a different category to the stocks I have already quoted, but in 1926 they stood at little more than 50 per cent. of their nominal value; one was 56½, and the other 57½. I submit that it is unreasonable the public should be asked to pay an indefinite percentage on the full nominal value of these stocks. We should either take the middle price in 1926, which we contend will be a fair price, or apply this test: that any single stock upon which no dividend has been paid in the last five years should be regarded as dead capital and should not rank for dividend. If no interest has been paid upon stock for five years it is of little real value in the market, and there is nothing unreasonable in asking that such stock should not rank for dividend. That is the point we wish to establish in this Amendment. It is another safeguard to prevent the public of London being plundered. If we could have got a definite limitation of dividend inserted in the Bill it would be unnecessary to press this particular Amendment, but having failed in that respect we feel that this safeguard should be introduced and for that reason, in the interests of the citizens of London, I hope the House will accept it.

Mr. BARNES

I beg to second the Amendment.

Sir C. COBB

I only want to say one word on this Amendment. It will be extremely bad for the London County Council undertaking if it is; carried. The result will be, as far as these financial arrangements are concerned, that we shall be considering the London County Council undertaking for the five years when they were in their worst position. It is rather remarkable that hon. Members opposite, who profess such a great interest in municipal undertakings, should take the line they are proposing to take to-night. In order to get a little of their own back on private companies they are doing everything they can to injure the London County Council tramway system. I should hardly expect it from hon. Members opposite.

Mr. CRAWFURD

Might we have a word or two from the Minister of Transport on this very important point. The hon. Member for Shoreditch (Mr. Thurtle) in his very interesting speech pointed out that there are undertakings which have paid no return on their capital, and we are, therefore, surely entitled to ask from the Minister, in view of the magnitude of the change which is contemplated, the view of the Government on the point as to whether undertakings which have for years past resulted in a loss, which has meant a capital depreciation as measured by Stock Exchange quotations, are to rank at their full nominal value for payment of dividend out of profits which presumably will be made by other undertakings which have been run at greater profits for the last five, six or seven years.

Colonel ASHLEY

I am always willing to accede to the requests of hon. Members opposite that I should express the views of the Government on such matters as this; but I must point out that this is a private Bill and that I am here holding only what I might call a watching brief in order to intervene if it be necessary.

Mr. CRAWFURD

I do not want to interrupt, but is it not a fact that the machinery of the House has been suspended to-day in order that these Bills may pass?

Colonel ASHLEY

And the House has expressed its willingness that the machinery of the House should be suspended. I should have thought that the principle of this Amendment had really been decided on the first Amendment, which was defeated by a majority of 60. I can only repeat what I have said, that the Committee upstairs which investigated this Bill recommended that the question of ranking capital should be left to the decision of the Minister of Transport of the day. It is not an easy duty to perform, but as it has been put upon him by a Committee, after very prolonged investigation, I personally, as Minister of Transport, am perfectly willing to take that responsibility, and I am sure that any subsequent Minister will follow my example. The House has absolute control over the decision of the Minister, because he is obliged, in Clause 5, Sub-section (6), of the Bill, to submit every agreement to the House, and the House, if it so wishes, or either House, can reject his decision. If it so rejects it a new agreement has to be entered into and has to be approved by the Minister of Transport. All I can say is that if the House desires to sustain the suggestion of the Committee, I shall be very pleased to undertake that duty.

Mr. HARRIS

I do not think that the Minister's statement is satisfactory. We are being put off constantly by being assured that the House has absolute security, because these agreements are subject to the approval of the House. The right hon. Gentleman knows that there are many Acts of Parliament, such as Gas Acts, which make provision of that kind, that agreements are to be subject to the approval of the House. We know what happens. All Governments are very much alike. They have difficulty in getting through the public business with which they are mainly concerned, and when it comes to private business that is put down for eleven o'clock at night, and is put through anyhow, so that the ordinary Member of Parliament has very little chance to criticise it. This particular Clause is most important to the ratepayers of London. It is quite different from the first Clause. The Minister has been at a Cabinet meeting or sending telegrams to his electors, perhaps? At any rate he has not heard the Debate, and really he is not very interested, I imagine. If he had been present he would have remembered that the first Amendment dealt with the fixing of the rate of interest.

This is quite another matter. This is a question of what capital shall rank as having first call on the pool. Everything depends on the particular shares which are held to be entitled to priority when it comes to making out the schedule. The finance of the Combine is extremely complicated. There are many different categories for shares—omnibus companies, tube companies, underground companies, new capital, obsolete capital, capital raised before the War, capital raised after the War, capital guaranteed by the State, capital not guaranteed by the State, debentures, preferences shares, ordinary shares and so forth. If everything is to be treated alike, we cannot be sure that some of this obsolete capital is not going to be brought into the category of having a right to call on the pool. When we come to pay out from the common fund all the money to which these various interests are entitled, there will be very little left for the London County Council and on behalf of the ratepayers of London we ought to be assured that their property is not going to be used to bolster up a lot of out-of-date financial organisations that are now of very little value in the share market.

The Minister says that the Committee has entrusted him with the guardianship of the public interest in these matters. We have had two Ministers of Transport in recent years. Both are charming gentlemen personally, and I do not suppose any right hon. Gentleman wears a flower more artistically or becomingly than the present Minister. It is the symbol of a perfectly blameless life. I have no quarrel with the right hon. Gentleman's deportment, but I have a quarrel with his Department. I am sorry that his predecessor, the hon. Member for Whitechapel (Mr. Gosling), is not here. He is an equally lovable man, and we have a great respect and affection for him. But I am afraid that I would not trust the wellbeing of London in this matter to these two gentlemen, even if they occupied the office of Minister of Transport jointly. What security can they afford to the public interest against the skill, the ingenuity, the financial ability of Lord Ashfield and the financiers who operate with him? I frankly confess I should not like to be up against those financiers myself. I have been in their

parlour once or twice and have been impressed by their capacity, and I fear the right hon. Gentleman would find himself a child in these matters when it came to deciding as against them as to what is live and what is dead capital. The House at this stage ought to go warily in this matter. This is not a Bill which gives details. It is an enabling Bill. It enables the London County Council and various financial interests to come to an agreement, and before parting with it we ought to be sure that the foundations of those agreements are firmly laid.

Mr. GILLETT

The answer given by the hon. Member for Fulham (Sir C. Cobb) seemed exceedingly unconvincing. I understand that the hon. Member for Wandsworth (Sir H. Jackson) is going to put the capital of the London County Council in the new Combine at a figure of about £8,000,000 at which it stands to-day. If it were to be done on the figure of 1926, that would have to be rather larger. Presumably the hon. Member for Fulham had in mind some idea of value, and £17,000,000 of public money has been sunk in the London County Council tramways. If it were valued the figure would certainly have to be more than £8,000,000. Therefore, the suggestion of the hon. Member that our proposal would be prejudicial to the London County Council is incorrect.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 79; Noes, 137.

Division No. 290.] AYES. [10.41 p.m.
Adamson, Rt. Hon. W. (Fife, West) Day, Harry Murnin, H.
Alexander, A. V. (Sheffield, Hillsbro') Dunnico, H. Naylor, T. E.
Ammon, Charles George Fenby, T. D. Oliver, George Harold
Attlee, Clement Richard Gillett, George M. Owen, Major G.
Baker, J. (Wolverhampton, Bliston) Graham, D. M. (Lanark, Hamilton) Palin, John Henry
Barker, G. (Monmouth, Abertillery) Greenall, T. Paling, W.
Barnes, A. Greenwood, A. (Nelson and Colne) Parkinson, John Allen (Wigan)
Barr, J. Grenfell, D. R. (Glamorgan) Pethick-Lawrence, F. W.
Batey, Joseph Griffith, F. Kingsley Ponsonby, Arthur
Beckett, John (Gateshead) Griffiths, T. (Monmouth, Pontypool) Potts, John S.
Bellamy, A. Hardie, George D. Richardson, R. (Houghton-le-Spring)
Bennett, William (Battersea, South) Harris, Percy A. Riley, Ben
Blindell, James Henderson, T. (Glasgow) Robinson, W. C. (Yorks, W. R., Elland)
Bowerman, Rt. Hon. Charles W. Jenkins, W. (Glamorgan, Neath) Salter, Dr. Alfred
Briant, Frank Kelly, W. T. Shaw, Rt. Hon. Thomas (Preston)
Broad, F. A. Kennedy, T. Shepherd, Arthur Lewis
Bromley, J. Lawrence, Susan Shield, G. W.
Brown, Ernest (Leith) Lawson, John James Slesser, Sir Henry H.
Clarke, A. B. Lowth, T. Smith, Rennie (Penistons)
Cluse, W. S. Lunn, William Strauss, E. A.
Connolly, M. Maclean, Nell (Glasgow, Govan) Sullivan, Joseph
Crawfurd, H. E. March, S. Thorne, W. (West Ham, Plaistow)
Dalton, Hugh Montague, Frederick Thurtle, Ernest
Dalton, Ruth (Bishop Auckland) Mosley, Sir Oswald Viant, S. P.
Watson, W. M. (Dunfermline) Wiggins, William Martin Wilson, R. J. (Jarrow)
Wellock, Wilfred Williams, C. P. (Denbigh, Wrexham)
Whiteley, W. Williams, T. (York, Don Valley) TELLERS FOR THE AYES.—
Mr. Gardner and Mr. Scurr.
NOES.
Acland-Troyte, Lieut.-Colonel Gates, Percy Price, Major C. W. M.
Ainsworth, Lieut.-Col. Charles Greaves-Lord, Sir Walter Radford, E. A.
Amery, Rt. Hon. Leopold C. M. S. Greene, W. P. Crawford Raine, Sir Walter
Applin, Colonel R. V. K. Grotrian, H. Brent Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Apsley, Lord Gunston, Captain D. W. Robinson, Sir T. (Lanc, Stretford)
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Hall, Lieut.-Col. Sir F. (Dulwich) Rodd, Rt. Hon. Sir James Rennell
Balfour, George (Hampstead) Hamilton, Sir George Salmon, Major I.
Beamish, Rear-Admiral T. P. H. Hartington, Marquess of Samuel, A. M. (Surrey, Farnham)
Benn, Sir A. S. (Plymouth, Drake) Harvey, G. (Lambeth, Kennington) Samuel, Samuel (W'dsworth, Putney)
Bentinck, Lord Henry Cavendish Haslam, Henry C. Sandeman, N. Stewart
Bevan, S. J. Headlam, Lieut.-Colonel C. M. Sanders, Sir Robert A.
Blundell, F. N. Henderson, Capt. R. R. (Oxf'd, Henley) Sanderson, Sir Frank
Bourne, Captain Robert Croft Heneage, Lieut.-Colonel Arthur P. Sandon, Lord
Bowater, Colonel Sir T. Vansittart Henn, Sir Sydney H. Shepperson, E. W.
Bowyer, Captain G. E. W. Hennessy, Major Sir G. R. J. Sinclair, Col. T. (Queen's Univ., Belfst)
Brass, Captain W. Hilton, Cecil Southby, Commander A. R. J.
Brassey, Sir Leonard Hope, Capt. A. O. J. (Warw'k, Nun.) Spender-Clay, Colonel H.
Brocklebank, C. E. R. Hume, Sir G. H. Stanley, Lord (Fylde)
Broun-Lindsay, Major H. Iliffe, Sir Edward M. Steel, Major Samuel Strang
Brown, Brig.-Gen. H. C. (Berks, Newb'y) James, Lieut.-Colonel Hon. Cuthbert Storry-Deans, R.
Bull, Rt. Hon. Sir William James Kinloch-Cooke, Sir Clement Sugden, Sir Wilfrid
Burman, J. B. Knox, Sir Alfred Tasker, R. Inigo.
Campbell, E. T. Lamb, J. Q. Templeton, W. P.
Carver, Major W. H. Lelqh, Sir John (Clapham) Thompson, Luke (Sunderland)
Cautley, Sir Henry S. Lister, Cunliffe, Rt. Hon. Sir Philip Thomson, Sir Frederick
Cecil, Rt. Hon. Sir Evelyn (Aston) Little, Dr. E. Graham Thomson, Rt. Hon. Sir W. Mitchell-
Christie, J. A. Lougher, Sir Lewis Tinne, J. A.
Clayton, G. C. Lucas-Tooth, Sir Hugh Vere Vaughan-Morgan, Sir Kenyon
Cockerill, Brig.-General Sir George Luce, Major-Gen. Sir Richard Harman Waddington, R.
Colman, N. C. D. Lumley, L. R. Wallace, Captain D. E.
Conway, Sir W. Martin Macdonald, R. (Glasgow, Cathcart) Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Cope, Major Sir William McLean, Major A. Warner, Brigadier-General W. W.
Culverwell, C. T. (Bristol, West) Maitland, A. (Kent, Faversham) Warrender, Sir Victor
Davidson, Major-General Sir John H. Maitland, Sir Arthur D. Steel Watts, Sir Thomas
Davies, Maj. Geo. F. (Somerset, Yeovil) Makins, Brigadier-General E. Wayland, Sir William A.
Davies, Dr. Vernon Marriott, Sir J. A. R. Wells, S. R.
Davison, Sir W. H. (Kensington, S.) Mason, Colonel Glyn K. Williams, Com. C. (Devon, Torquay)
Ellis, R. G. Merriman, Sir F. Boyd Williams, Herbert G. (Reading)
England, Colonel A. Mitchell, Sir W. Lane (Streatham) Winterton, Rt. Hon. Earl
Everard, W. Lindsay Nall, Colonel Sir Joseph Withers, John James
Fielden, E. B. O'Connor, T. J. (Bedford, Luton) Wood, B. C. (Somerset, Bridgwater)
Ford, Sir P. J. Oman, Sir Charles William C. Wood, Rt. Hon. Sir Kingsley
Forestler-Walker, Sir L. Pennefather, Sir John Wragg, Herbert
Fraser, Captain Ian Penny, Frederick George
Fremantle, Lt.-Col. Francis E. Percy, Lord Eustace (Hastings) TELLERS FOR THE NOES.—
Gadle, Lieut.-Col- Anthony Perkins, Colonel E. K. Sir Henry Jackson and Sir Cyril
Ganzonl, Sir John Pownall, Sir Assheton Cobb
Mr. BARNES

I beg to move, in page 6, line 25, at the end, to insert the words: (4) Every such agreement, providing for the appointment of any board of directors, joint committee, advisory board, or other body, shall provide that the combined representatives of the Council and of local authorities parties to the agreement shall constitute a majority of the members of each such body. This Amendment is designed to bring the House back to the problem of public control. The, hon. Member for Central Wandsworth (Sir H. Jackson) has been anxious to quote the Blue Report from time to time, and I would now ask him to consider that Report to which he has so far attached his faith. I notice that in the Blue Report, on page 1, the Committee, in dealing with the problem of the co-ordination of London traffic and the establishment of a common fund, emphasises that the scheme provides for the consolidation of the passenger transport services of London with such public control as is required to protect the interest of the community in the various matters that the Committee refer to. On page 8 of the Blue Report, under a paragraph headed "Public Control," the Committee states: With the establishment of a common fund and common management, an effective public control body must be set up to ensure a programme of expansion and development, proper scales of fares, adequate services capable of meeting the needs of the public, and sound financial arrangements for raising additional capital. In all the proposals embodied in this report the necessity for public control is very strongly emphasised, but when we read the Private Bills that are now before the House, while they take full advantage of the general desire for co-ordination of the London traffic services, all the safeguards that were considered to be desirable are dropped, and we are left here with nothing but the complete management of the whole of the London traffic authority by the Combine. How subsidiary the public services are made to appear can be seen from the scheme of control. Out of 20 directors the London County Council—which is, of course, the largest municipal authority, and one to which it can legitimately be said that the whole of the 8,000,000 people who are compelled to use the London Traffic facilities look as the major municipal authority—are provided with only two effective representatives on this board of management and control. We contend that in view of the large public interest—because this subject must not be measured merely from the standpoint of the size of the London County Council traffic department, the amount of capital which they have invested and the number of passengers carried—they are entitled to a larger representation than two out of 20. In addition to the financial interests of the London County Council and the number of passengers carried by their services the London County Council is a public authority and have the public interest to safeguard in addition.

Therefore, we claim that a representation of two is totally inadequate to voice the public interest in the problem of transport. I do not think that my figures can really be contested, but, if they can, I should like some hon. Member or the Minister, or anyone on the other side, to controvert them. I have here a document that was circulated at the conference of the local authorities representing the tramway undertakings outside the London County Council area, when the London County Council called this gathering of Metropolitan boroughs tgether to lay before them the scheme. In that scheme the London County Council representatives themselves admitted that the actual management would be under the control of the board of directors of the Underground Electric Railway Companies of London, to which the London County Council would appoint two representatives. That means, of course, that if authorities like West Ham, East Ham, Croydon, Ilford, Barking and other tramway authorities eventually come into the scheme, as far as I can see, there are no provisions for the number of municipal representatives being added to on this Control Board. Our contention, which is a very simple but very important one, is that the majority of the Board should be composed of municipal representatives.

When Parliament was establishing the London Traffic Advisory Committee, from which all this development really comes, all parties joined together in Committee to emphasise that the control of policy should be vested in the hands of those who came from the publicly elected authorities. So insistent were we upon that principle that we defined the duties of the ordinary members of the Advisory Committee and we limited the powers of the additional representatives. Members may argue that the Advisory Committee is one body and the Board of Control is another body, and that is so, but by the passing of these private Bills the whole weight of responsibility and reaction upon public policy is shifted very largely from the Advisory Committee to those who manage these London traffic services, and who will undoubtedly have the London traffic services entirely, or almost entirely, in their own hands. Therefore, if this House is to be consistent, in view of the principle it laid down as regards the Advisory Committee, it ought to secure that the majority of the board of directors should be drawn from the municipal and public side, instead of there being only two out of twenty. This Amendment is designed to transform that minority into a majority.

Mr. NAYLOR

I beg to second the Amendment.

It may seem unreasonable to suggest that public representatives should form a majority of this Board, seeing that the majority of the capital is in the hands of private companies, but when this Transport Department was first set up and this Bill came before the representatives of that Transport Department, we endeavoured to persuade the Ministry so to constitute this Board that the public bodies had a decisive vote upon the Board. After all, who will be made responsible under these Bills to the people of London except the representatives of the London County Council and of the other local bodies on the outer fringe of London. While we cannot hope that the Minister will support this Amendment, the proposal in the Bill that the London County Council should be satisfied with two representatives among 18 other representatives is, to my mind, a travesty of legislation. We do not pretend that London is different from any other town in the kingdom; we do not suggest that private companies have no rights of management, but we do say that the interests of the public come before the interest of the companies, and we can only secure the interests of the public by providing that the Board of Management

shall contain a majority of public representatives. In this county the London County Council is second only in importance to this Parliament, and it is a slight upon the London County Council to expect it to hand over this great tramway undertaking in return for only two representatives on the Board. The terms of this Amendment are perfectly reasonable, and if London is not to be neglected, hon. Members ought to vote for the Amendment.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 75; Noes, 132.

Division No. 291.] AYES. [11.0 p.m.
Adamson, Rt. Hon. W. (Fife, West) Fenby, T. D. Paling, W.
Alexander, A. V. (Sheffield, Hillsbro') Gillett, George M. Parkinson, John Allan (Wigan)
Ammon, Charles George Graham, D. M. (Lanark, Hamilton) Pethick-Lawrence, F. W.
Attlee, Clement Richard Greenall, T. Ponsonby, Arthur
Baker, J. (Wolverhampton, Bliston) Greenwood, A. (Nelson and Colne) Potts, John S.
Barker, G. (Monmouth, Abertillery) Grenfell, D. R. (Glamorgan) Richardson, R. (Houghton-le-Spring)
Barnes, A. Griffith, F. Kingsley Riley Ben
Barr, J. Griffiths, T. (Monmouth, Pontypool) Robinson, W. C. (Yorks, W. R., Elland)
Batey, Joseph Hardie, George D. Salter, Dr. Alfred
Beckett, John (Gateshead) Harris, Percy A. Shaw, Rt. Hon. Thomas (Preston)
Bellamy, A. Henderson, T. (Glasgow) Shepherd, Arthur Lewis
Bennett, William (Battersea, South) Jenkins, W. (Glamorgan, Neath) Shield, G. W.
Blindell, James Kelly, W. T. Slesser, Sir Henry H.
Bowerman, Rt. Hon. Charles W. Kennedy, T. Smith, Rennie (Penistone)
Briant, Frank Lawrence, Susan Strauss, E. A.
Broad, F. A. Lawson, John James Sullivan, Joseph
Bromley, J. Lowth, T. Thurtle, Ernest
Brown, Ernest (Leith) Lunn, William Viant, S. P.
Clarke, A. B. Maclean, Nell (Glasgow, Govan) Watson, W. M. (Dunfermline)
Cluse, W. S. March, S. Wellock, Wilfred
Connolly, M. Montague, Frederick Whiteley, W.
Crawfurd, H. E. Mosley, Sir Oswald Williams, T. (York, Don Valley)
Dalton, Hugh Murnin, H. Wilson, R. J. (Jarrow)
Dalton, Ruth (Bishop Auckland) Naylor, T. E.
Day, Harry Oliver, George Harold TELLERS FOR THE AYES.—
Dunnico, H. Palln, John Henry Mr. Gardner and Mr. Scurr.
NOES.
Acland-Troyte, Lieut.-Colonel Clayton, G. C. Hall, Lieut.-Col. Sir F. (Dulwich)
Ainsworth, Lieut.-Col. Charles Cochrane, Commander Hon. A. D. Hamilton, Sir George
Amery, Rt. Hon. Leopold C. M. S. Cockerill, Brig,-General Sir George Hartington, Marquess of
Applin, Colonel R. V. K. Colman, N. C. D. Harvey, G. (Lambeth, Kennington)
Apsley, Lord Conway, Sir W. Martin Headlam, Lieut.-Colonel C. M.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Cope, Major Sir William Henderson, Capt. R. R. (Oxf'd, Henley)
Balfour, George (Hampstead) Crookshank. Cpt. H. (Lindsey, Galnsbro) Heneage, Lieut.-Colonel Arthur P.
Beamish, Rear-Admiral T. P. H. Davidson, Major-General Sir J. H. Henn, Sir Sydney H.
Bann, Sir A. S. (Plymouth, Drake) Davies, Maj. Geo. F. (Somerset, Yeovil) Hennessy, Major Sir G. R. J.
Bevan, S. J. Davies, Dr. Vernon Hilton, Cecil
Blundell, F. N. Davison, Sir W. H. (Kensington, S.) Hope, Capt. A. O. J. (Warw'k, Nun.)
Bourne, Captain Robert Croft Ellis, R. G. Hume, Sir G. H.
Bowater, Col. Sir T. Vansittart England, Colonel A. Iliffe, Sir Edward M.
Bowyer, Captain G. E. W. Everard, W. Lindsay Knox, Sir Alfred
Brass, Captain W. Fielden, E. B. Lamb, J. O.
Brassey, Sir Leonard Ford, Sir P. J. Lougher, Sir Lewis
Briscoe, Richard George Forestler-Walker, Sir L. Lucas-Tooth, Sir Hugh Vere
Brocklebank, C. E. R. Fraser, Captain Ian Luce, Major-Gen. Sir Richard Harman
Broun-Lindsay, Major H. Fremantle, Lieut.-Colonel Francis E. Lumley, L. R.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Gadle, Lieut.-Col. Anthony McLean, Major A.
Burman, J. B. Ganzonl, Sir John Maitland, A. (Kent, Faversham)
Campbell, E. T. Gates, Percy Maitland, Sir Arthur D. Steel
Carver, Major W. H. Greaves-Lord, Sir Walter Makins, Brigadier-General E.
Cautley, Sir Henry S. Greene, W. P. Crawford Margesson, Captain D.
Cecil, Rt. Hon. Sir Evelyn (Aston) Grotrian, H. Brent Marriott, Sir J. A. R.
Christie, J. A. Gunston, Captain D. W. Mason, Colonel Glyn K.
Merriman, Sir F. Boyd Samuel, A. M. (Surrey, Farnham) Tinne, J. A.
Mitchell, Sir W. Lane (Streatham) Samuel, Samuel (W'dsworth, Putney) Vaughan-Morgan, Sir Kenyon
Monsell, Eyres, Com. Rt. Hon. B. M. Sandeman, N. Stewart Waddington, R.
Nail, Colonel Sir Joseph Sanders, Sir Robert A. Wallace, Captain D. E.
O'Connor, T. J. (Bedford, Luton) Sanderson, Sir Frank Ward, Lt. Col. A. L. (Kingston-on-Hull)
Oman, Sir Charles William C. Sandon, Lord Warner, Brigadier-General W. W.
Pennefather, Sir John Shepperson, E. W. Warrender, Sir Victor
Penny, Frederick George Sinclair, Col. T. (Queen's Univ., Belf'st.) Watts, Sir Thomas
Percy, Lord Eustace (Hastings) Southby, Commander A. R. J. Wayland, Sir William A.
Perkins, Colonel E. K. Spender-Clay, Colonel H. Wells, S. R.
Pilcher, G. Stanley, Lord (Fylde) Williams, Herbert G. (Reading)
Pownall, Sir Assheton Steel, Major Samuel Strang Winterton, Rt. Hon. Earr
Price, Major C. W. M. Storry- Deans, R. Withers, John James.
Radford, E. A. Sugden, Sir Wilfrid Wood, B. C. (Somerset, Bridgwater)
Raine, Sir Walter Tasker, R. Inigo. Wood, Rt. Hon. Sir Kingsley
Richardson, Sir P. W. (Sur'y, Ch'ts'y) Templeton, W. P. Wragg, Herbert
Robinson, Sir T. (Lancs, Stratford) Thompson, Luke (Sunderland)
Rodd, Rt. Hon. Sir James Rennell Thomson, Sir Frederick TELLERS FOR THE NOES.—
Salmon, Major I. Thomson, Ht. Hon. Sir W. Mitchell- Sir Henry Jackson and Sir Cyril Cobb.

Question put, and agreed to.

Ordered, "That further Consideration of the Bill, as amended, be now adjourned."—[Sir C. Cobb.]

Bill as amended, to be further considered To-morrow, at half-past Seven of the clock.

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