HC Deb 15 August 1940 vol 364 cc1086-94

Motion made, and Question proposed, "That this House do now Adjourn."—[Major Sir James Edmondson.]

9.42 p.m.

Mr. Benson (Chesterfield)

I wish to raise a matter which has been brought to my attention by the Chesterfield Town Council, relating to the prices being paid by the Northern Command for requisitioned buses. When I met a deputation at Chesterfield, of the town clerk, the transport manager, and one of the aldermen, I thought that I had seldom seen a more indignant deputation. I girded my loins together, expecting to have to defend the Government on the grounds that one must be economical in war-time, and that they should not expect too much for their buses. But I was astonished to find that what they were bitterly complaining about was not that they got too little, but that they got a great deal too much. They complained, broadly, that the price paid for a requisitioned 32-seater, single-decker bus was just about twice what it ought to be. The price paid by the Northern Command, including wages, is £2 10s. a day for a bus when standing, and £5 a day for a bus when running, the War Office to find the petrol and to make certain small payments which would cover insurance, etc., and the Corporation to maintain the bus.

On 12th July three buses of the Corporation were requisitioned, and they were held until 16th July. For that, the Corporation received £55. I asked the deputation what they ought to have received. The transport manager told me that he would have been well paid had he received half that figure; that if he had received £27 10s., that would have been all that he could reasonably have expected. I said, suppose that he had been paid on a mileage basis, for what could he have run the buses? He said, "Excluding petrol, which the Government find, we could run our buses at 10d. a mile—or, to be on the safe side, let us say 1s. Those three buses have run 468 miles and, taking the higher rate, that would have worked out at £23 8s." The payment was £55. A reasonable lump sum payment on a day basis, the transport manager suggested, would have been £27 10s.; and, on a mileage basis, a reasonable payment would have been £23 8s.

He is a very able man, and I have a great respect for him, but I thought that on this occasion he must have slipped up with his figures. I could not believe that the War Office were paying twice as much as the hirers thought was necessary. So I took the trouble to check his figures. First, I asked the Manchester Corporation what they thought was a reasonable charge. I found that one could hire a 32-seater 49-horse-power Manchester Corporation bus, including the cost of petrol and driver, at 1s. 3d. a mile, with a minimum payment of £1. They do that as a normal commercial proposition. That checks up very closely with what the Chesterfield transport manager told me. I made further inquiries, and I found that not only the War Office but other Government Departments requisition or take over these large 32-seater single-deck buses. The Ministry of Health and the Admiralty require them, and they have worked out a scale, which they have considered and agreed with the Municipal Passenger Transport Association.

I will compare that scale with the scale paid by the Northern Command. The Ministry of Health and the Admiralty have slightly different scales, although in actual practice they are really the same. I propose to take the Admiralty scale, because it is rather simpler to comprehend, but in actual practice it works out almost to a penny to the same amount as the Ministry of Health scale of payment. For the same buses the War Office make daily payments, with some small payment also to cover insurance and third-party risks. Instead of paying £2 10s. and £5 according to the conditions under which the buses are running—the sliding scale depends upon the age of the bus, and they pay this scale whether the buses run or not—if it is a new bus, they pay 26s. a day, and, if it is an old bus, 18s. a day. They also pay for the petrol and wages and pay 1d. per mile for general running expenses. Supposing the Admiralty instead of the War Office had taken the Chesterfield buses, what would have been the payment that they would have made? If it had been a brand new bus, that is, within the first three years of life, they would have paid £26 19s., and if it had been a very old bus—and you can be sure that when buses are requisitioned corporations do not hand over new buses but very old ones—they would have paid £20 4s., and the average payment on these two figures would be £23 11s.

I think I am in a position to sum up. When the Northern Command and the War Office requisitioned three buses for four days, the Chesterfield Corporation would have been delighted with a payment of £27 10s., and had it been on a mileage basis they would have been amply repaid, according to their own calculation, if they had received £23 8s. Had they been paid upon the Admiralty basis, they would have received £23 11s. But the War Office paid them £55. That is a small amount, as it was not a very-big matter; it was only a small requisition. But during the same period buses were requisitioned from a large transport company which received a cheque for nearly £2,000, and buses have been requisitioned continuously from various transport companies as well as from corporations. A very larger number of buses are likely to be requisitioned if there is any trouble, and it is essential that the War Office should not be allowed to splash money about in this fantastic way, which even makes the recipients of the money ashamed to take it. Since I saw the deputation and they put these figures before me, I have received a letter from the Town Clerk of Chesterfield in which he states that there has been a variation in the price paid for buses. That variation is an increase of half-a-crown a day on the ground that the War Office were not paying enough. I hope that we shall get an explanation from the Financial Secretary of the fantastic and indefensible extravagance of the War Office.

9.50 p.m.

Sir Stanley Reed (Aylesbury)

May I make a very urgent appeal to the Financial Secretary not to treat this matter in a cavalier manner? I hope he will not just ride off on the statement that the War Office had to have the buses quickly, because that we entirely accept. We can all appreciate the reasons which made the War Office demand the buses speedily. Not many minutes ago we listened to a very urgent declaration of policy from the Chancellor of the Exchequer in which he said it was the first business of the Treasury to secure that in war expenditure there should be the elimination of waste. He went on to assure the House that the Treasury would ensure that the State got value for money. The case which has been put by the hon. Member for Chesterfield (Mr. Benson) is perhaps more conclusive evidence than has ever been put before this House, that in this particular matter there has neither been elimination of waste nor has the State received value for money.

I know a little about motor transport and buses, and I say that the figure given by the hon. Member—is. a mile for 32-seater buses—is, if anything, on the liberal side. I know of transport companies which would be very glad to run buses of this character at that price. If you take the total figures, and assume these buses were of average age, at this rate the Government would pay the total cost of the vehicle, plus running expenses, about once a year. It is quite clear that there has been extraordinary carelessness in making arrangements for hiring these buses, and while making every allowance for the exigencies of the situation, which we appreciate, this slackness should not be tolerated. I ask the Financial Secretary not to treat this question as a small routine matter, because the effect of these extravagances is, to my mind, most disastrous to our war effort. It is completely demoralising and does induce the widespread feeling that while we are accepting higher taxation on every hand, there is no care in some Government Departments to secure that we get a reasonable return for the money which is being spent and which, indeed, the community is being hard pressed to provide.

9.53 p.m.

The Financial Secretary to the War Office (Mr. Richard Law)

My hon. Friend the Member for Aylesbury (Sir S. Reed) need have no fear that I shall treat this matter in a cavalier or offhand manner. I quite agree that it is of the first im- portance that there should be due economy in the spending of public money; otherwise it is extraordinarily difficult to justify the penal taxation which we have to endure at the present time. The hon. Member for Chesterfield (Mr. Benson) said that we had had a deputation from his borough council and that they were horrified by the charges which the War Office had insisted on paying. Well, I have not had the opportunity of examining this particular case, but I will certainly do so. But from what I have heard from my hon. Friend it is quite clear they have been charged by somebody something in excess of the rates which have been laid down by the Northern Command and I hope I shall be able to tell my hon. Friend what these rates are and convince him of that. However, if his local authority really do feel so strongly about it, I am quite certain that if they are brought into touch with me, there will be no difficulty at all about paying back some of the overcharge that has apparently been made.

I should like to explain the kind of difficulties that we have been up against. At the beginning of the war there was an arrangement in the Northern Command, and I think in other Commands, whereby an adequate number of motor coaches for our needs, as we thought, were car-marked for War Office use at 12 hours' notice. A register was compiled, and every vehicle on the register was available at 12 hours' notice at no cost to the War Office or the taxpayer except that of compiling the register. In May two things happened. In the first place, the B.E.F. returned from France and left a considerable amount—I need not be more specific—of motor transport behind. That meant that the Northern Command, and other Commands, needed a far greater number of motor coaches, and the system of earmarking was not sufficient, because they needed more coaches than were available in the Northern Command, and they had to get them from a distance. The other thing that happened was that we were faced with a threat of imminent invasion, and when I say imminent invasion I mean just that. It was not possible after the B.E.F. returned just to have the troops there and leave the motor coaches at the end of a telephone 10, 20 or 100 miles away. You could not count upon having 12 hours' notice to get them. You could not wait to get the coaches until the invasion took place. You had to have them on the spot with the troops. It is true, broadly speaking, that they were lying idle, eating their bonnets off, with nothing to do, but that was not extravagance on the part of the War Office; it was not the fault of the War Office. The only reason why they were lying idle is that the invasion has not in fact taken place. But that does not mean, when the mobility of troop movements was the prime consideration, that the War Office was foolish or extravagant to have the motor coaches there. It had to have them.

Mr. Benson

I was not complaining that the buses were requisitioned or were lying idle, but that the rate paid for them was twice the Admiralty scale and twice the normal hire scale, and that the rate when buses are lying idle is nothing like so great as when they are running.

Mr. Law

I was just giving my hon. Friends some idea of the background against which we had to work. I will now endeavour to satisfy my hon. Friends as to the rates that we were paying. Under the arrangements I have described we were to pay a flat rate of £5 a day. We assumed that they would be running hard every day they would be working, and we thought that in those conditions £5 a day was not an unfair rate, and I do not think it was. When it became a question of buses for standing by, that £5 a day was reduced to 30s., which again is not unreasonable if you consider that one of the largest coach operators in the country calculates that a single decker has to earn 26s. 3d. a day to cover depreciation and overheads while standing in the garage. In addition to that, we made a charge of £4 a day when the coach was running—not in addition to the 30s., but including it. It was very difficult in the abstract to know what kind of use these buses would be put to. Recently we have again modified the rates. We have the 30s. a day standing-by charge, 10s. for the first 10 miles and 7d. a mile after that. My hon. Friend said that 1s. a mile was a fair charge, so I do not think he can complain that 7d. a mile is such a very high charge.

My hon. Friend also said that our scale compared unfavourably with the scales adopted by the Admiralty, and I think he said by the Ministry of Health. He quoted the Admiralty scales, and he said that for new buses it was 26s. a day and for old buses 18s. a day. But he did not point out that the 26s. a day was for buses, one, two and three years old, and that the 18s. was for buses 11, 12, 13 and 14 years old. That, however, is the position. I can assure my hon. Friend that the War Office have not taken so many buses of 11, 12 and 13 years old. In fact, I doubt whether they have many older than three years. In the circumstances, considering the speed with which these buses had to be hired, the administrative complications of having a sliding scale for buses for an Army that might be called upon to move at any time were very great, and the saving would be small compared with the administrative work that would be involved.

The hon. Member for Aylesbury (Sir S. Reed) said it would have been much cheaper to buy the buses outright. Of course, it would have been very much better to have bought them outright as things turned out, and we would have done so had it been possible. We had power to buy the buses, but we had no power to buy drivers, and the position was that when the British Expeditionary Force came back from France, we wanted the buses, but we could not get drivers until the organisation of the B.E.F. was completed, and we had sorted out the various units, tradesmen, and so on. Therefore, in the meantime, we had to hire the buses by negotiation, and to have buses and drivers together. It was no use having the buses and not getting the drivers. I think we did it without unfairness to the taxpayers or to the owners of the buses, although I ought to tell the House that we have had many more complaints from the owners of the buses as to the lowness of the rates paid than we have had as to the highness of the rates. Eventually, the B.E.F. was sorted out and the drivers were available, and when that happened we immediately began purchasing these coaches according to the procedure laid down by the House. We have already purchased outright two-thirds of the coaches which we requisitioned, and that process is being completed as rapidly as possible. I hope that in view of what I have said the hon. Member will feel at any rate that the War Office have taken thought on this matter. I will gladly look into the instance which the hon. Member has given, although it seems to be extremely odd in view of the rates complained of; but I hope I have convinced hon. Members that we have taken this matter seriously and that these widespread allegations of waste of public money are not justified.

Mr. James Griffiths (Llanelly)

Will the hon. Gentleman explain to us the tremendous discrepancy between the rates paid by the Admiralty, the Ministry of Health, and the War Office? All these Government Departments have to requisition buses and similar vehicles for essential work. Has there been any consultation as to what would be a fair rate? No doubt the Ministries often requisition buses from the same firms, and those firms may get different rates from different Ministries, and in that case they must get a very bad impression of the business efficiency of the Government. Is there any co-ordination of any kind? There is a further point I want to raise. I gather that the War Office are now, very sensibly, purchasing these buses. Is the purchase price fixed by the War Office on the basis of the extravagant rate paid for hiring? If so, it may not be of much advantage to the State to purchase these vehicles.

Mr. Law

With regard to the hon. Member's first point, I cannot speak for the other Departments, but we arrange our rates of hiring in consultation with the Regional Traffic Commissioners of the Ministry of Transport. I assume that the other Departments do so, too. Certainly, it is very important that the different Ministries should not pay different prices. I would, however, point out that it is extraordinarily difficult to have a uniform hiring rate throughout the country for a variety of reasons, partly because the tactical purposes for which the buses are needed vary from one place to another, and partly because of the normal use to which the buses are put. In some places the buses may be laid up for all but two or three months in the year, whereas in other places they may be busy every day of the year. With regard to the rates of purchase, the rates are fixed at the War Office valuation, and if there is a dispute it goes to arbitration. I think the hon. Member can rest assured that the rates that are being paid are not extravagant. They are paid in consultation with the Regional Traffic Commissioners. There is a good number of disputes on the part of the people from whom we are purchasing because they think the rate is too low. There is every evidence that the rate we are paying in making purchases is a reasonable one.

Question, "That this House do now adjourn," put, and agreed to.

Adjourned accordingly at Eleven Minutes after Ten o'Clock until Tuesday next, pursuant to the Resolution of the House this day.