CLAUSE 2.—(Incorporation, proceedings and officers of Board.) (Hansard, 5 December 1932)

§ Dr. O'DONOVAN
I beg to move, in page 3, line 10, after the word "remuneration," to insert the words: not exceeding the sum of fifteen hundred pounds per annum for new appointments. 3.33 p.m.
I think this Amendment is called for by the sudden, great enlargement of the ambit of those who may aspire to be public servants acting under a public authority. We are erecting a new and large sheltered industry, and those engaged in it will be entirely free from the anxieites and hazards to which those who are not in sheltered industries are exposed. It will be difficult to foretell what will be the future prosperity of the Bill unless the House has some information as to the scale of salaries that is likely to prevail in the new hierarchy of controllers, deputy-controllers and assistant deputy-controllers who will be created. The prosperity of the undertaking and the comfort of the travelling public depend upon the good will and the daily happy service of the very humble men who will be collecting pennies in all weathers from those to whom pennies are essential and, if the administrators become a caste apart, with salaries of which we have no conception, those who will be administering the Act will inevitably suffer from the disease of all administrators, and that is the loss of the common touch with those who are doing the daily work of bringing in the pence, on which the whole prosperity of the undertaking depends. I move the Amendment for the sake of information.

§ The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Lieut.-Colonel Headlam)
I do not think there is any precedent for a proposal to restrict in this way the salaries of any 1248 public authority or, as far as I know, of any local authority. It would be a great drawback to the Board to be thus fettered because it might prevent them from getting the best type of men for their technical and professional work. I do not think it is possible for us to accept the Amendment.

§ Mr. CHARLES WILLIAMS
We quite understand that the Board, naturally, wishes to have the best type of men it can possibly get. Many of us would not go quite so far as my hon. Friend and limit them to £1,500 a year. I am not at all sure that you could get the best type of man for that salary—very likely you could not—but I think the Committee might be granted a rather fuller explanation as to the type of man who will fill the position of secretary. I wonder whether the Ministry would hold that an ex-civil servant would be the type of man who would best fill the job. It seems to be almost the only occasion, apart from the Motion that the Clause stand part, on which we shall have an opportunity of extracting any advice from the Minister as to how the staff is to be formed. We ought to have more information upon the question of the payment of salaries than we have received at the present time. Can the Minister, in refusing the Amendment, say whether he expects there will be many persons upon this staff who will have more than £1,500 a year? If necessary, information as to the size of the staff could be given later, but we should like to know whether there will be a large number of expensive appointments? I feel sure that the Minister before bringing the Bill to its present stage must have obtained a clear idea as to the number of persons who will be suitable for a staff of this kind. I notice that my right hon. and learned Friend the Attorney-General is taking a deeper interest in my remarks than the Minister. Perhaps he intends to answer these points. I do not mind who answers them, but the Committee are entitled to some knowledge of the type of persons who are to hold these important positions. It is no use under-paying them. If you do, you will not get the best men and those who are capable of undertaking a job of this kind. Therefore, I think the Committee are entitled to a fuller explanation as to why the Amendment is 1249 being turned down, not by a mere negative, but because of the fact that it might be too limiting to put it into the Bill at the present time.

§ Mr. HERBERT WILLIAMS
Before we lose possession of the Clause we ought to appreciate the some what curious constitutional position which will arise. Under Clause 1 we set up the procedure whereby the board is to be brought into being, but we in no sense defined the rights and powers the board are to possess. Under Clause 2 we make that board into a corporate body of a rather unusual kind. This corporate body will be brought into being by the somewhat strange procedure of Clause 1. Individual members of the corporate body, if they fail to do their duties properly, become liable to the application of those two words "inability" or "misbehaviour" and are capable of dismissal by somebody else, the Minister. Lastly, these people are employed by whom? Not by the people who appoint them and not by the persons who can dismiss them, but by the board. In other words, the members of the board are employés of the board in their individual capacity, and they are servants of themselves in their collective capacity. This is the most novel constitutional form which has yet been invented for carrying on a business. But because a thing is novel is no reason why it should not be adopted. I am in favour of novelty when I am satisfied that novelty is justified. I wish the Committee to realise the curious and strange novelty set up in Clauses 1 and 2.
Some four years ago I had a measure of responsibility for helping to conduct through this House, both in Committee upstairs and downstairs here, the present law affecting limited companies. I remember the long discussions which we had, both in Committee and on Report stage, as to the responsibility of directors and the penalties which directors might incur. But as far as I can see in this Bill tike members of the board, who are equivalent to the directors of a limited company, are to be freed from the normal penalties to which the individual members of a board of directors 1250 are liable. It may be that in this matter I am wrong. I suffer from the disability of not being a lawyer, and I would lay how much we appreciate the fact that the learned Attorney-General is present constantly throughout these Debates. We all trust his legal advice and admire immensely his patience and courtesy. I say that because one or two of my hon. Friends hinted on Thursday that I was a little lacking in courtesy to him on a certain Amendment. It was entirely unintentional on my part, and I am glad of this opportunity of saying so. I hope that the Attorney-General will give us an exposition of this curious procedure of the control of a business. This is the most appropriate time to discuss it, and I hope that we shall have a rather fuller exposition than was possible on the Amendment.

The ATTORNEY - GENERAL (Sir Thomas lnskip)
My hon. Friend has spoken so kindly of me that I rise at once to give what he calls an exposition. I only hope that he will reward what he calls my "patience and courtesy" by not overstraining it. There is nothing which would give me more pleasure than an exposition of this subject, which is reasonably plain to everybody. I part company with my hon. Friend when he thinks that it is a novelty. I could show half-a-dozen cases where precisely the same procedure has been adopted. It is possible to recall two—the Port of London Authority and the Metropolitan Water Board. In both those cases the body created was made a body corporate. Everybody will admit that it is convenient that you should have a body corporate, quite apart from questions connected with the holding of land in perpetuity, in order that everybody may know the easy way of proceeding against them if they should have any claim in a court of law. Clause 2 is merely the customary method of carrying out a proposal of this sort, and I hope that the Committee will see fit to approve of it.

§ Mr. SMITHERS
Is the constitution of the proposed new board to be on all fours with the Metropolitan Water Board and the Port of London Authority? Speaking from memory, I do not think that the constitution is on all fours with the bodies I have mentioned, and I should like an 1251 explanation of the point before we part with the Clause. I realise that the board proposed to be set up under the Clause is to be a responsible body, but it will also take over a vast number of other occupations. Will the new board give special consideration to the old officials of existing undertakings, who have, perhaps, been brought up in the business and have an intimate knowledge of it? What will be the cost of the officials who are to be taken on, as the Clause also deals with the secretarial and managerial side of the new board? What method will be adopted to fill vacancies when the new board starts or at any future time when vacancies occur Will the method be adopted of advertising in the public Press? Both the Minister and the Parliamentary Secretary seem to differ from me on this point, but I think it is very important, because we are setting up a body to control an enormous mass of traffic and, as the hon. Member for South Croydon (Mr. H. Williams) has pointed out, it is not subject to that healthy kind of restriction which affects the board of a company. The board of a company has to appear half yearly or yearly before the shareholders, and strong and pertinent questions are put to them. I want some method by which this business can be kept up-to-date and clean—I am not using the word "clean" in any wrong sense. I want the business to be kept efficient and up-to-date, and I want to know how these employés of the board will be appointed and how the vacancies will be made known to those who desire to make application for them.

§ Mr. WRAGG
Is there any provision for the payment of the salaries of the chairman and members of the board and, if so, what are those amounts likely to be?

§ Dr. O'DONOVAN
Has the Minister considered whether it is advisable for the board to set up a complete medical service to deal with the many problems that it must handle, to which no reference is made in the Bill?

§ Mr. C. WILLIAMS
Although I appreciate what my hon. Friend opposite said about the appointment of former members of the staff, I hope this will not be made the occasion simply for appointing 1252 elderly gentlemen who have given long and efficient service, but that the Minister will give an assurance that the best possible people will be appointed. I am in favour of looking after the interests of efficient servants but I hope that in the setting up of this institution—which I have not liked from the beginning—it will not be made an opportunity simply for filling positions with people who are not quite as efficient as they might be, simply because they have given excellent service in the past. Is it under this Clause, or some other Clause, that the legal adviser of the board is appointed? I notice that under Sub-section (3)— The Board may act notwithstanding a vacancy in their number so long as that number is not reduced below three. That provision raises the question of a vacancy on the board, which may be a very vital one, and I want an assurance from the Government that the filling A vacancies will not be unduly delayed.

§ The CHAIRMAN
That does not come under this Clause.

§ Mr. WILLIAMS
If it does not come under this Clause, of course, I accept your Ruling, but I would point out that Sub-section (3) says: The Board may act notwithstanding a vacancy in their number. That shows clearly that the board is given special power to deal with special circumstances. We shall have to deal with that in due time. With regard to Sub-section (6), we are entitled to some information from the Government as to the size of the staff of the proposed board. The board must have a considerable staff, because it will absorb the businesses of various companies, and it is conceivable that it will have large headquarters. I should like to know whether the board have any authority to build or to buy large headquarters.

§ The CHAIRMAN
That, again, does not come under this Clause.

§ Mr. WILLIAMS
That, again, will have to be dealt with on the proper occasion. We are, however, entitled to know about the size of the staff. In the interests of the board some considered plan might be given by the Minister as to the size of the staff that he expects the board to have. If the Minister would do that it would give the board some basis on which to go and it would be important coming 1253 from the Minister as representing the Government. Of course, the number must expand or contract from time to time, but the Minister might lay down the basis of the sound economic staff which he thinks would be the best staff for the board to have.

§ Sir KENYON VAUGHAN-MORGAN
Sub-section (6) deals with the salaries of the Secretary and other officers and servants of the board. What is the relation between officers so appointed and the board, whose salaries are dealt with in Clause 4? Is it possible that a member of the board may at the same time be a servant of the board and come under Clause 2 as well as Clause 4?

§ Mr. LYONS
I should like to put two questions. The first is in relation to Subsection (2) which says: The quorum of the board shall be three. 3.59 p.m.
The numbers forming the board have been raised from five to seven. It was originally considered that five would be the constitution of the board. Now that the number has been increased to seven, I should like to know whether the Minister considers that for a concern of this gigantic size a quorum of three is adequate. It occurs to some of us that the vast powers they will have to wield are too great to be used by three people in a board of this nature, which is of an experimental kind.
There is one other question, and that is in reference to Sub-section (3), which says that three shall be a quorum. Reference has been made to the Metropolitan Water Board as offering an assembly of a somewhat similar nature to the institution under this Bill. Looking at the Act of 1902 which constituted the Water Board, it seems that 40 gentlemen formed that board, of which two only, I think, were paid. I do not know whether it has been altered since 1902, but, in my opinion, it is a very different thing to constitute a board of this gigantic nature for the first time, and to have seven highly-paid gentlemen getting salaries about which this House is given no information, and which it cannot assess or control, whereas in the case of the Metropolitan Water Board, I think, only the chairman and the vice-chairman, out of the 40 members constituting that assembly, are paid salaries.

§ The CHAIRMAN
That is a question which arises more on Clause 4.

§ Mr. LYONS
I am sorry if I have gone outside the province of this Clause, but I desired to make the point and for the Minister to deal with it at the same time as he dealt with my other question.

§ Sir WILLIAM DAVISON
Sub-section (3) definitely lays down that action may be taken by the board provided that three of the members are present. Considering that this Bill destroys private enterprise and private initiative in the whole transport system of London, and considering that the Committee has now decided that it is desirable that the board should be increased from the original proposal of five members to seven, surely we should not pass this Clause with Sub-section (3) in it to enable three gentlemen to come to an irrevocable decision on the transport conditions of London. It seems a very high-handed proceeding. We think that the risks are very grave in handing over the transport system of London to seven gentlemen, and that if three only—less than a majority—are present they can come to an irrevocable decision with regard to the transport affairs of London. I venture to press the Government carefully to consider this Sub-section and to let us know whether it will be amended at a later date. I hope the Committee will not part with it unless they have some satisfactory assurance from the Government that this quorum and this power to act will be only on technical matters, such as the sealing of documents which have been previously approved by, at any rate, a majority of the board.

§ The ATTORNEY-GENERAL
I apologise to the Committee for not having risen before, but I understood some of my hon. Friends wanted to ask further questions. I have been asked a number of questions. My hon. Friend the Member for Chislehurst (Mr. Smithers) asked how the staff would be appointed, who would be taken over, and what arrangments would be made as to the services of the present staff. If my hon. Friend will turn to Part VII, Clause 71, and the following Clauses, he will find some provisions which deal with superannuation, and so on. So far as the question of appointment is concerned, I cannot say 1255 whether the board will advertise. I should think that for the higher-paid posts the board will propably advertise, but if the board are proper persons to conduct an undertaking of this sort, they will proceed in accordance with the best business methods, and, in my submission, it would be impossible to put in an Act of Parliament arrangements for the engagement of the large staff which will be necessary.
Then my hon. Friend the Member for Torquay (Mr. C. Williams) asked what would be the size of the staff. That manifestly, is a question which I cannot answer unless he will define what he meant by "staff." If it went down to omnibus drivers and conductors, really there are some thousands of people, and even if my hon. Friend draws the line higher than that, I could not say what the staff will be. The existing staff will be taken over. Their future is safeguarded by the provisions to which I referred, in Part 7 of the Bill, that is to say, they will not be treated unfairly. Those provisions are in accordance with the constant practice in this House in all such Bills as this one.

§ Mr. H. WILLIAMS
Does that statement about the taking over of the staff apply to the directors of the companies?

§ The ATTORNEY-GENERAL
It does not apply to directors, but only to what is called the staff—the servants of the different undertakings. Clause 71 deals with that point. Then my hon. Friend the Member for Torquay asked something about a legal adviser. That would be one of the staff which the Board employed if necessary, and I suppose that it is likely to be necessary. Then a number of hon. Members asked questions about vacancies. It is quite true that Subsection (3) retains the same figure as when the Board was composed of five persons instead of seven, but, as my hon. Friend the Member for South Kensington (Sir W. Davison) pointed out, it is not the least likely that they will act when there are only three persons present, except to do what is called routine business. It would be very inconvenient to require five or six persons for what my hon. Friend described as signing documents and matters of that sort. Then my hon. Friend opposite asked me 1256 whether there was to be a medical staff. No arrangements are contained in the Bill, but no doubt a medical officer would be appointed if it were thought necessary, it might be in connection with the welfare of the staff or not, as the Board thought fit.
Then I was asked by my hon. Friend the Member for East Fulham (Sir K. Vaughan-Morgan) whether any person could be both a member of the Board and a member of the staff. It is quite clear, I think, that he could not. Lastly, although I am not sure whether I have left out any of the numerous questions, my hon. Friend the hon. Member for East Leicester (Mr. Lyons) made some observations about salaries. He said that we refused an Amendment about the salaries of the staff. He seems to think that had something to do with the salaries of the Board. The salaries of the Board are fixed by the Minister, and have nothing to do with the last Amendment we rejected. This House will have control over the salaries of the Board, because they will be fixed by the Minister, who will, of course, be answerable to this House. An observation was made by some hon. Member, whose identity I forget for a moment, that a board of directors had to meet the shareholders. Let is be understood that this Board will have to answer all and every question, however searching, which the Minister sees fit to ask under the Bill. There is a special Clause in the Bill which requires the Board to make its report annually in any form and to answer any questions which the Minister thinks fit.

§ Mr. SMITHERS
There is one question which I asked the learned Attorney General to which, I think, he has not replied. All I ask is, what would be the estimated annual cost of the salaries of the officers of the Board appointed under this Clause?

§ The ATTORNEY-GENERAL
I am afraid I cannot give my hon. Friend that information. The salaries of the board are to be fixed by the Minister.

§ Mr. SMITHERS
Here we are instituting a board to control this enormous system of transport and the Government cannot even give us a rough estimate of what the salaries of that board shall be.

§ The CHAIRMAN
The hon. Member is referring to the salaries of the board. I must remind him that they do not come under this Clause.

§ Mr. SMITHERS
With great respect, made a mistake. I mean the officers of the board under this Clause. What will be the cost of the officers who are to be appointed under Clause 2? It seems to me a kind of question that ought to be asked, because I, for one, think that the expenses will be increased under this Bill, and I am surprised that no answer can be given.

§ The ATTORNEY-GENERAL
It is not quite fair of my hon. Friend, because Sub-section (6) of this Clause speaks of the secretary, officers and servants. He now wants me to tell him what is to be the total cost of the staff, and I suppose he means secretary, officers and servants. I say that I cannot tell him the number of the staff, and I cannot say what the remuneration will be.

Mr. SMITH ERS
All I want to know is whether the Government have not some estimate of the cost of the appointments under Clause 2?

§ The ATTORNEY-GENERAL
Appointments of whom?

§ Mr. C. WILLIAMS
There does seem to be a. strong feeling on this point. I do not think anyone could have given a more polite and kindly answer on the whole question of the staff than the Attorney-General, but, after all, we in Parliament are directly concerned. The Attorney-General, said that the Minister would always have power to ask these important questions. We are dealing now only with the staff which the board set up, and we are giving power to the board to set up the staff. We have absolutely no information of the size that this staff may be. Surely when constructing a Measure of this kind, giving powers to a board of this sort to set up a staff, the House of Commons has some right to be informed of the kind and type of staff to be set up. Nor do we know whether they will have a doctor or not, or a lawyer or not. Naturally, the Attorney-General said that he could not state the precise form of staff they will have. That is the whole difficulty. He cannot say that for ever and ever, but 1258 he can give some guidance in the House of Commons, and I say quite frankly that we should be very ill-advised to give the board this power to set up the staff without some clear definition of what size it may ultimately reach.

§ Sir W. DAVISON
I think that the Attorney-General was rather unfair to complain of my hon. Friend the Member for Chislehurst (Mr. Smithers). Of course, it is evident that he did not mean his question to apply to conductors and drivers of omnibuses. It is clear that Subsection (6) applies to incidental officers and staff in connection with the administration of this vast system of transport. My hon. Friend did not mean omnibus conductors and drivers of tube trains, of course, but I do think the Government must have in mind, before recommending to the House the adoption of this monopolistic scheme, some idea of what the main administration will cost. We do not suggest that if they put on another fleet of omnibuses between Muswell Hill and Saffron-Malden we should know the cost of that, but we are entitled to some estimate from the Government as to the cost of the board, the secretary and the incidental officers—what they think within a reasonable period of time will be the cost of this administration in lieu of the cost of the administration of those now responsible for London traffic? I do think the Committee has reason to ask that we should have some rough estimate of the cost involved.

§ Mr. SMITHERS
May I say that I had no intention of being unfair—

§ The ATTORNEY-GENERAL
I quite agree.

§ Mr. SMITHERS
Let me draw the attention of the Attorney-General to Subsection (6), which says: The board shall appoint a secretary and such other officers and servants as the board may determine, and.…there shall be paid to the secretary, officers and servants of the board such salaries and remuneration, and, on retirement or death, there shall be paid to them or their representatives such pensions and gratuities, as the board may determine. I want to know the expenditure for which the Board may be liable under this Sub-section.

§ Sir STAFFORD CRIPPS
I find it somewhat difficult to understand the argument of hon. Members behind the Government. I understood that they were most anxious that the Government should have nothing to do with this matter and that in their view it would be better to take it right away from the political atmosphere. Now they are complaining because Parliament is not given control over the expenditure of the board.

§ Sir W. DAVISON
We want to know what we are doing.

§ Sir S. CRIPPS
I should have thought it is obvious that the expenditure of the board will be on somewhat the same scale as it is at present, with the economies made by amalgamation. Anybody can ascertain what that is by inquiry. It is not quite fair to tell the Minister of Transport that he must have nothing to do with these matters and then expect him to produce an estimate of the expenditure that may be incurred.

§ Mr. REMER
I have been listening to all the questions that have been put. to the Government in connection with these salaries, but there is one point which has not yet been mentioned, and it is a point of considerable moment. A good many of the officials of the Underground group, who are to be taken over, will be paid salaries under this Clause, and they also hold positions in subsidiary companies, like the Associated Equipment Company, which are not going to be taken over. Will the officials who are to be taken over under this Clause and paid salaries be allowed to occupy positions of directors of companies, subsidiary companies, which are not to be taken over? In my view, that is a point of considerable importance upon which I think the Committee is entitled to some reply from the Government.

§ Mr. C. WILLIAMS
The hon. and learned Member for East Bristol (Sir S. Cripps) has accused some hon. Friends of mine of being a little inconsistent. He does not seem to appreciate our point. Once you have the position that the Minister has power to ask questions of the board it is obvious that in a Bill of this sort it is the duty of individual Members of the House to ascertain the 1260 actual position. I should be much better pleased if the Minister had nothing whatever to do with it, but it is not quite worthy of the hon. and learned Member to bring forward the particular argument of inconsistency. It is very provocative, and I hope will not be brought forward again. I dislike very much the provocative speech. It is difficult to get on with such a serious measure as this if we have provocative speeches, and I hope that the hon. and learned Member will realise that we are not in the least inconsistent in asking that before we pass this Clause we should have some idea of what it really means.

§ Mr. SMITHERS
Sub-section (6) applies to the officers and servants of the board; that is, the general headquarters, the management of this concern. If the learned Attorney will look at Clause 65 he will find that it refers to employés of the board. I still think it is extraordinary that the Government should set up this board and give it certain powers in regard to salaries and remuneration and yet have no estimate as to cost. I should like to have an answer as to the cost.

§ The ATTORNEY-GENERAL
The cost of what?

§ Mr. SMITHERS
Of the appointments under Sub-section (6).

§ The ATTORNEY-GENERAL
Really I am very 10th to have to repeat what I have already said. The hon. Member must take it from me that. Sub-section (6) includes everybody who is employed by the board down to the humblest omnibus cleaner, and Clause 65 deals with a certain limited class of people who are there called employés, but Who in other Clauses are called servants.

§ Mr. REMER
Will the Attorney-General answer my question as to whether they can take over other directorships?

§ The ATTORNEY-GENERAL
They will be whole-time servants of the board.
Question, "That the Clause stand part of the Bill," put, and agreed to.