HC Deb 28 June 1944 vol 401 cc707-8
26. Sir J. Mellor

asked the Parliamentary Secretary to the Ministry of War Transport whether he has considered the recent representations from the railway companies on behalf of their junior stockholders that the financial provisions of the existing Control Agreement should be revised; and whether he will make a statement.

The Parliamentary Secretary to the Ministry of War Transport (Mr. Noel-Baker)

Yes, Sir. My noble Friend has met *the Chairmen of the four railway companies. They presented to him the views expressed by their proprietors in favour of a review of the financial terms of the Railway Control Agreement, and they suggested that the extension of the area of the war at the end of 1941 constituted a case far revision. They asked for an increase in the guaranteed annual payment and for some adjustment to cover intensified user of maintainable assets. In reply my noble Friend has pointed out that the revised arrangement made in 1941 relieved the railways of uncertainty as to the effects of the war upon their net revenues and he has stated that the Government are unable to regard the extension of the war area as a reason for revision or to agree to any increase in the amount of the fixed annual payments. The Control Agreement itself enables an allowance, over and above the basic figure for maintenance, to be made for abnormal wear and tear of maintainable assets, if such allowance is shown to be justified, and my noble Friend has offered to examine this matter.

Sir J. Mellor

As the Control Agreement deprives some of the junior stockholders of all possibility of dividends for the duration of the war and for one year thereafter, is it fair to insist upon this financial arrangement continuing indefinitely?

Sir Irving Albery

Will His Majesty's Government, in view of the very important war services rendered by the railway companies—[HON. MEMBERS: "And by the men."]—and by the men, treat them as fairly as other war industries which, in many cases, are allowed to earn profits of 10 to 12 per cent.?

Mr. Noel-Baker

I cannot now argue the merits of the revised Control Agreement but the Government have always held that it was fair and just.

Mr. Watkins

Is not the trouble mentioned in the Question due to the overcapitalisation of the railways. If their capital structure was reformed, is it not a fact that this trouble would not arise?