HC Deb 16 December 1946 vol 431 cc1617-722

Order for Second Reading read

3.43 p.m.

The Minister of Transport (Mr. Barnes)

I beg to move, "That the Bill be now read a Second time."

We are about to enter upon keen, controversial Debates in connection with the future of British transport, and before these commence, I should like to take this opportunity, as His Majesty's Minister who took over this Department towards the end of the war, of expressing to all sections of British transport my appreciation of the magnificent job they did during the war. I am confident that all sections of the House would wish to be associated with that tribute. The stress and strain of the conflict fell with particular severity upon our transport services, and I have no doubt that during these Debates many of the scars left behind by the war will be disclosed and considered.

The Bill itself which I am presenting and commending to the House is, I should think, the largest and most extensive socialisation Measure ever presented to a free democratic Parliament. There have, of course, been much wider and more far-reaching economic changes and systems in the world hitherto, but they have usually been carried out with violence, and it speaks a good deal for the stability of our British institutions that we are able to consider a Measure of this magnitude in the circumstances and the atmosphere which prevail in the House at the present moment. Whether this calmness will continue through all the Bill's stages, I am unable to forecast at the moment. I do not think anyone would dispute that the financial transaction involved is a very considerable one. Immediately, a sum of £1,065 million is involved in the taking over of the railway companies and canals and the London Passenger Transport Board. The organisational and administrative task which the Commissioners will have to undertake, and upon which I propose to enlarge a little later, will, indeed, be a very formidable one, but fortunately there will be no break in continuity in this respect. During the war individuals in charge of large organisational efforts have undertaken and conducted much bigger tasks than is envisaged in this Measure. I readily recognise that to perform such duties and obligations is sometimes easier in time of war, than it is under peacetime conditions because in wartime, especially in the circumstances through which we have just passed, there is a general desire to cooperate, whereas under peacetime conditions, that cooperation is not always forthcoming. Nevertheless, the experience that we have gained during the war particularly at the Ministry of Transport, will come in very useful indeed in the task that lies ahead.

I have observed that in the expression of views of those who are opposed to this Measure, there is a widespread demand from the interests affected, particularly the railway companies and the road haulage organisations, that an inquiry should precede a Measure of this character. [HON. MEMBERS: "Hear, hear."] I note that that has some support, as I naturally expected, on the part of hon. Members sitting opposite—[HON. MEMBERS: "And the country."] I have no hesitation in rejecting this request when I consider the inquiries that have already taken place into this problem of the unification of transport between the two wars. There have been some five major Acts of Parliament dealing in some respect or another with this problem, and there have been about 20 important in quiries, many of them of a character which the opposition interests are not demanding. I consider that we are living in a period in which action is very desirable, and inquiries can be very-dangerous in their consequences—[HON MEMBERS: "Oh."]—and I see no evidence to support that demand. Further, the Labour Party, the Trades Union Congress, the Co-operative Congress— [Laughter.] After all, these three bodies represent the majority of the people of these islands and in any case they are en- titled to express their views like any other organisations. The point I was about to make was that these three great major organisations who have been speaking for the organised workers and consumers of this country for many years—[HON. MEMBERS: "Consumers?"]—Yes, consumers—have stated quite clearly in published documents, and in many other ways, their firm conviction that these transport services should come under national ownership. I am satisfied that every candidate of the Labour Party stated this issue at the last General Election. The Conservative Party have never laid their programme so clearly before the electorate as the Labour Party has been in the habit of doing. I do not consider that anybody can dispute that, as far as we are concerned, both the principle of nationalisation, and our clear intention, have been submitted to the electorate, and have received their endorsement.

Mr. Maclay (Montrose Burghs)

Would the right hon. Gentleman state whether at any time there was any mention made of port authorities in "Let Us Face the Future"?

Mr. Barnes

"Let Us Face the Future" is not the only document we have published, important as it is, and certainly docks and ports have figured in these pronouncements.

Mr. Maclay


Mr. Barnes

I have in my hand a document on the postwar organisation of British transport. [HON. MEMBERS: "Who wrote it?,''] The National Executive of the Labour Party. [HON. MEMBERS: "What date?"] I cannot give the actual date of the publication but I understand it was not too long before the General Election. Here I want to say that I have a very large Bill to submit to the House—for although many Acts of Parliament on transport have been passed, I cannot plead that this is a little one—and in view of the ground which I have to cover, much of which I cannot possibly cover adequately on this occasion, I would request that I should not have any undue interruption. I repeat that in the document to which I have referred ports and docks and harbours are all mentioned, and so I reject this demand for an inquiry.

Now I come to the urgency of the problem which, in my view, makes an inquiry unnecessary. I doubt whether the nation appreciates the legacy which the war has left us in regard to our transport. Although the transport services were worked as hard as any of the Armed Forces of the Crown, they did not rank with equal priority for supplies and equipment and in other classifications. Yet they were worked unmercifully under war time conditions, with consequent deterioration of the rolling stock of the railways, and that applies to our goods and passenger services by road as well. The whole of the rolling stock of transport today has not been kept up to scratch and is not in the position of being replaced easily. Many of our ports have been very severely damaged by enemy action. The result is that the nation is facing very large sums of capital expenditure, if our transport services are to be brought up to any standard of efficiency.

That being the case, I feel that I am here entitled to make a very important point on the use of our national resources, and offer in justification of this Measure the argument that now is the time when we should end the uncertainty of the past century, and make up our minds to complete the process of unification. Faced as the nation is today with the necessity to use its capital resources wisely, with the difficulty of materials and man power, I say that we cannot afford to allow these unequal and varied separate ownerships to compete for the capital resources that are needed. If we did, those resources would not be spread out equitably; they would not be directed where most needed, and in the process we should waste again a good deal of capital, as has been our experience in the past.

I take the London and North-Eastern Railway as an illustration. It is not to reflect in any way upon that railway that I am mentioning it, but because hon. Members are familiar with the present position and it illustrates the danger which Parliament must avoid. That line serves an area of heavy industries in this country. It was handicapped by the severe depressison which affected the whole coastal traffic after the last war. Its circumstances, therefore, were not so favourable as those of some of the other railways. All railway undertakings in between the war periods suffered in consequence of a new and intensive development of road transport, but the London and North-Eastern Railway suffered probably more than the others, with the result that the necessary capital was not expended, as it should have been, on keeping their capital equipment up to date. Then came the war, and while all railway companies, with other transport undertakings, had to take the strain, the London and North-Eastern—again because of the heavy goods traffic on its line, and the fact that practically the majority of the airfields were strewn along that coast—had to carry a strain almost beyond its capacity to endure. There has been no let-up after the war and again, with the revival of industry, the heavy traffics are most acute on that line. Its locomotives, on an average, are over 32 years old. That applies also to wagons and other elements in the rolling stock, and at a time when it is vital that transport should render an efficient service to British industry, we are having to impose widespread restrictions on all kinds of commercial traffic, in an area of that undertaking.

If we allowed these separate undertakings to continue after the war in the scramble for capital, that railway would probably be handicapped. We cannot afford a continuance of situations of that kind. Capital must go where it is most needed, and where it will best serve our national resources. That applies to material, and manpower as well. Before I conclude this part of my remarks, in which I reject the demand for an inquiry, I emphasise that transport is not, of itself, a productive service. It is an overhead cost on the whole of British trade and industry. Parliament, in my view, in looking at transport, should look at it as a major overhead cost, and its organisation should be directed entirely from that angle.

Lieut.-Colonel Dower (Penrith and Cockermouth)

And not of industry's?

Mr. Barnes

Let me give some idea of the extent of transfer involved in the Bill. Of the 18 million persons employed in British industry, 1¼ million are affected by this Bill. They are not immediately affected, but something like 750,000 persons will immediately pass into the service of the British Transport Commission, when Parliament approves of this Measure. What we are proposing to do, I emphasise, is not out of line with transport experience throughout the world. I do not say that, because of that, we should follow what other people do. Nevertheless I know that the party opposite rather pride themselves on being true Imperialists, and any tendency in the British Commonwealth of Nations ought to be studied at least with sympathy and understanding. I find that, in Canada, 55 per cent. of the railway mileage is already State-owned. In Australia and New Zealand, 95 per cent. is publicly-owned. In the Union of South Africa, 81 per cent. is State-owned. In Great Britain, so far, 100 per cent. is privately-owned. That is what we propose to change. If we take the situation throughout the world we find that 45 per -cent. of the world's rail transport is already publicly-owned or State owned.

Having dealt with the reasons for rejecting an inquiry, I submit that the real issue before the House is whether the Measure I am presenting is, in fact, a workable scheme. I shall certainly welcome critical examination of its provisions. I have been only too conscious of the fact that we are dealing here with an industry which affects the whole trade, the amenities, convenience and pleasure of all our citizens, and that because of the difficulty of discussion, and the disclosure of major matters of policy before they have been submitted to Parliament, a Minister in my position has not the opportunity of consulting freely and openly those who are responsible for operating this industry. In the various stages of these Debates, and in Committee I shall certainly welcome any constructive criticism or advice that can be given.

The first 11 Clauses of the Bill deal with the powers and duties of the British Transport Commission. They are very wide, as they are bound to be, and I cannot emphasise too much the importance which I place upon this instrument of the Commission to effect the process of unification. There are two specific limitations on its powers. It will not be able to manufacture chassis for road vehicles, and it will not be permitted to build ships, except lighters or barges not exceeding 175 tons. It will certainly be my intention not to depart from the general railway practice and that those firms engaged in the building and construction of locomotives and wagons for export should share in the Commission's business. Apart from this, the Commission will have very wide powers to carry through the complete unification of our British transport system. In Clause 3 is defined its general purpose: to provide or promote an efficient, adequate economical and properly integrated system of public inland transport and port facilities within Great Britain for passengers and goods; The Commissioners have to carry through the task of integrating all forms of transport covered by the Bill and— this I would particularly emphasise—to see that all parts of the country are adequately served. By that I mean the inclusion of rural and sparsely populated areas. These districts have never had the transport facilities they need. It is only by a unified system, in which the cost can be spread over the whole system, that we shall be able to overcome this problem. Further, I expect that for processes of integration and co-ordination, country bus services will be more synchronised with railway services than they have been in the past. By that means, the convenience of the travelling public will be met to an extent which has not prevailed hitherto

In regard to the capital expenditure on the railways, the Commission will have to face a good many important tasks. Many of our railway stations, and main line termini, occupy the most important sites in London, and great provincial cities. Very often they are depressing places to arrive at on a first visit. The Commission will have to carry out large-scale capital expenditure in rebuilding our railway stations to make them centres of transport. Travel in this country is becoming a disagreeable thing, something to be endured in order to get somewhere, rather than a pleasure, as it should be. I depend on this Commission, with its wide powers, radically to alter that state of affairs. I contend that, taking the distribution of population in this country, the small distances we have to travel compared with many other countries, arid the concentration and magnitude of its industries, there are no physical or financial reasons why we should not have the most efficient, comfortable, speedy and cheap system of transport in the world. The Commission, small, compact, with wide powers, I expect to be sufficiently dynamic in its energies to grapple with problems of that kind. After all, I think that if the structure of this Bill is examined—the Commission as a policy instrument, the Executives to carry out management—it will be seen, quite clearly, that a small body of persons with time to think and plan, and with the vast resources it will have behind it, will work a revolution in the efficiency of the transport system of this country

It has been alleged, I notice, in some of the criticisms in the Press, and in other directions, that the Executives which I propose to create as the instrument of management will be more powerful than the Commission. I do not consider that there is any ground for this assumption or fear, whichever it may be. The whole of the property will vest in the Commission. The Commission will have complete direction of the national transport finances; it will have complete control over policy, and provision is made, in Clause 5, for the delegation of management functions from the Commission to its respective Executives. By that process, I think I have completely safeguarded the authority and the supremacy of the Commission. In so far that the schemes of delegation are clearly defined, the Executives will not be able to exceed those provisions. The Executives, in fact, will be the agencies of the Commission, and the schemes are subject to modification from time to time.

I have visualised, to commence with, four main executive organisations—one for the railways, one for the ports and harbours and inland waterways, one for road goods and passenger services; and the London Passenger Transport Board, which is taken over with the four main line railways, will be renamed the London Transport Executive—[Laughter.]—I do not know why that should cause amusement to the hon. Member for Oxford (Mr. Hogg). The London Passenger Transport Board is the best example we have had between the two wars of the desirability of unification. It took over 14 local authority undertakings and some 70 private undertakings, and is anyone in this House today bold enough to say that, if we had left those 14 local authority and 70 separate undertakings, we should have had the London transport system of the moment? With all its difficulties and deficiencies the London transport system is the best in the world. Its bright stations, its com- fortable rolling stock, and its services, represent a fine example of unification. I would remind hon. Members opposite that the Act establishing it was passed by a Conservative Government in 1934, al though it was prepared by the Labour Government which preceded that Administration.

Before I leave the Commission, I should like to make a statement with regard to Scotland and Wales. In the part of the Bill dealing with the Commission it is provided, as I have endeavoured to explain that the Commission shall represent the policy instrument and the Executives the management function, I am also proposing in the Bill to establish Consultative Committees to enable the public adequately to represent their views. There will be a National Consultative Committee and Area Consultative Committees In regard to the application of the Consultative Committees to Scotland and Wales, I desire to state that in order to ensure that the Commission shall be fully informed on Scottish and Welsh opinion and requirements, there will be a Transport Users Consultative Committee for Scotland, both for passengers and goods traffic, and also one for Wales. It is also my intention to see that Scottish and Welsh interests are directly represented on the Central Consultative Committee. The existing licensing machinery in Scotland and Wales will be retained.

Close attention will be given to ensuring that organisations of the different Executives work intimately together at all levels, so that Scottish and Welsh transport services shall be truly integrated and interrelated. Apart from the formal application of the Bill to Scotland, contained in Clause 125, my right hon. Friend the Secretary of State for Scotland will nominate persons to the special panel to be created under the Eighth Schedule, from which persons may be selected to hear and determine proceedings within the jurisdiction of the Transport Tribunal. The Arbitration Tribunal under Part VIII of the Bill, will meet under a Scottish president when sitting in Scotland, and when dealing with questions as to the transfer of undertakings, or the assets of a concern whose headquarters are in Scotland will sit there, and Scottish law and practice will apply.

Mr. Stephen (Glasgow, Camlachie)

I would like to ask the Minister whether Scottish interests will not be represented also by a member on the Commission.

Mr. Barnes

Not in a special sense.

Mr. Boothby (Aberdeen and Kincardine, Eastern)

May we be quite clear that there is to be no separate Executive member for Scotland—that Scotland's own separate rights will be of a consultative character?

Mr. Barnes

There will be no breaking-up of the Commission into sections, either national or in any way representing interests, and the Executives will be responsible each for its own field of transport in the whole of Great Britain. But in that organisation, of course, there are divisional and area organisations, and machinery that will go on.

Clauses 12 to 30 deal with the acquisition of the railways, the London Passenger Transport Board and the canals. These represent, of course, the major part of our transport undertakings. In two wars, the strategic value of our railways has been demonstrated clearly to the whole nation, and I do not think we can permit, under any circumstances, any form of competition to undermine the stability and efficiency of the railway system of this country For that reason, and to make provision for that in the future, resources will be pooled for the purpose of seeing that they are safeguarded. The House is very familiar with the problem that arose between the two wars in the development of road and rail competition. My hon. Friend the Parliamentary Secretary will be dealing with this matter when he speaks to the House. Therefore, I do not propose to become involved in the details of the working out of that competition, and its consequences at this stage. As to the main criticisms against the acquisition of the railways, surely no one is surprised at the step we are taking in view of the experience of the past, and I think, to a very large extent, thoughtful and informed transport opinion realised that this Measure was coming along. The main criticism I find is directed not so much to the principle of nationalisation but to the compensation terms. Here again, I should like to state that my right hon. Friend the Chancellor of the Exchequer, after we have heard further views of hon. and right hon. Members, will deal fully and exhaustively with this matter.

I should, however, like to state briefly what influenced the Government to come down on this side of the market price for railway passenger traffic, passenger transport, and canal shares. In the first place, it covers adequately the securities that are involved. Sixty-nine of the quoted securities of Part I of the Fourth Schedule represent 98 per cent. of the nominal value of ail the securities involved. Therefore, this method which we have adopted, which is quick and easy in its assessment, covers, to all intents, the whole of the Securities that are affected. The dates from 1st to 8th November, 1946, represent very favourable quotation dates. The alternative of the middle-monthly quotations for the six months prior to the Election. February to July, 1945, gives an advantage in certain cases. Therefore, I feel that we have adopted a simple, easy, and fair method that gets equitable compensation and avoids considerable difficulties which we would have encountered if we had followed the other method.

The financial characteristics of the several groups of undertakings or assets to be acquired are more diverse in transport than in coal or cables The scheme of compensation which we propose, recognises, on the one hand, the rights of dispossessed owners to reasonable compensation and, on the other hand, the right of the State to benefit from the use of its own credit. I think this scheme meets fairly the compensation for capital invested. Under no circumstances can it be claimed, when the State is taking over a service of this kind, that we have to continue in perpetuity the interest income of the persons involved. A nationalised public service is quite entitled to have the advantage of public credit. Those terms have been created by the strength and capacity of the nation. Under no circumstances could it be argued that we are not entitled to take advantage of them.

Let me come to the purpose, which I think will prove to be fair. Compensation is to be satisfied in British Transport Stock issued by the Commission, and backed by a Government guarantee. Its terms are to be such as to make it worth, at the time of issue, the amount of the compensation. to be satisfied. I would emphasise this as it disposes of any suggestion that the terms of compensation impose loss of capital. Any such loss must have occurred before nationalisation had been announced, because the prices used are in no case less than those ruling shortly before the Election. In the Bill there are two main bases of compensation (a) market valuation of securities, and (b) the net value of the assets,plus compensation where justified, for losses caused by cessation of the business and severance.

What does this represent in the case of the railways? Taking the four main line railways, and assuming the total compensation on the basis of market prices to be, say, £900 million, it represents about 25 years' purchase of the average prewar net revenue during the three years, 1935, 1936 and 1937, or 22½ years' purchase of the net revenue enjoyed under the control agreement—£40 million. If the alternative suggested is arbitration, someone would have to guess what railway earnings might have been in circumstances of competition; and in all the uncertainties of the future, and then determine a global sum of compensation, and how to split it up, first, between the individual companies, and, second, between the many classes of stockholders according to their respective and varied rights. I do not believe that, in this case, any arbitrator would have been able to. find a better and more fair measure of compensation, than is provided by the market assessment of the values of the stock.

Mr. Osborne (Louth)

When the Minister says "net income," does he mean after taxation has been deducted at the standard rate? It is a very important point.

Mr. Barnes

No, certainly not. Having stated the compensation to the railways, I should like to say a few words about canals. Canals were the earliest form of transport in this country—[HON. MEMBERS: "No."]—one of the earliest forms of transport in this country, governed by Act of Parliament. The canals have suffered very severely from time to time in the different forms of competition which have developed They have persisted despite railway and road competition. I think there is a general desire in this country to see our waterways used to their fullest capacity. There has never been the opportunity to do so in the past, but under unification, and under the general directions of the Commission, there is the possibility that all forms of transport—rail, road and waterway—will have an opportunity of serving the community to the fullest extent of their possibilities.

The next point I want to emphasize is the taking over of the privately-owned wagons in this country. They have been an anachronism on our railways for many years. They are obsolete. Over 20 per cent. of them are obsolete and should be scrapped and 50 per cent. are over 35 years old. Again, in this direction, if we are to have an efficient transport service for goods on the railways, a considerable capital expenditure must be faced by the Commission in the replacement of our wagon rolling stock. In these circumstances, we cannot continue the position of having merchants of any type owning and running their own wagons on the railway system. The Commission will aim at being adequately served in this direction, and no trader need, of necessity, suffer.

With regard to the road haulage business, this has been the most controversial problem in rail and road matters since before the war, and it has proved to be a difficult, complex and controversial matter in connection with the preparation and the passing of this Measure. Again, I think it is essential that we should grapple with this problem. It represents a type of competition which I think Sir Eric Geddes, when introducing the 1921 Act, had in mind when he stated that there is a type of competition in transport matters that brings no advantage to the community, but represents an illusory type of advantage, and, in fact, represents a waste to both sections of the industry, and to the community generally. The rapid expansion of road transport has raised many problems in this country, and has been the subject of many detailed investigations, but what is not always appreciated is that the road haulier himself enjoys, to some extent, a monopoly right, and, on this problem of transport, one finds that the objection is not to the existence of monopoly rights, provided that a particular person or a particular group or a particular industry enjoys them.

Under our licensing system of "A" and "B" licences, no new persons, not even ex-Servicemen, can get into the industry unless they prove need, and, if the existing services are sufficient, the citizens of this country are, in fact, denied their right to run lorries on the road for reward.

Mr. Osborne

That makes it worse.

Mr. Barnes

No, it does not make it worse. That is the position that arose out of the Salter Committee. The right hon. Member the Senior Burgess for Oxford University (Sir A. Salter) undertook one of these inquiries, and that was a recommendation that was implemented as a result of that inquiry and that is the position today. That being the case, it is desirable that, if unification is needed to avoid this ruinous competition, this monopoly should be extended and eventually covered by the State. The limit that I propose to place on road hauliers that will bring them within the compulsory Clauses of the Bill is a mileage limit of 40 miles. Any road haulier whose business is predominantly that of the transport of goods over 40 miles is brought within the compulsory terms of the Bill. If I might give the figures to the House, there are "A" licensed vehicles to the number of 86,000, and there are roughly 19,000 holders. "B" licensed vehicles number 53,000 odd, and there are 27,000 holders. Of the "C" licensed vehicles, there are 306,000, and 149,000 holders. Under the compulsory acquisition terms, I anticipate that some 2,000 to 2,500 undertakings will be brought within the compulsory terms of the Bill, and the number of motor vehicles involved will be approximately 20,000. In addition, of course, the road motor vehicles of the railway companies will come over with the railway companies, and will number approximately 11,000, and there are 3,000 other vehicles in which the railways are financially interested. Altogether, between 30,000 and 35,000 road haulage vehicles will come over as a result of the compulsory acquisition.

Hon. Members will observe that there are special exemptions for bulk liquids in tanks, meat and livestock, furniture removals and similar specialised traffic. I must point out here that, while I provide that road hauliers are free to operate within a 25 miles' radius, beyond that 25 miles radius they will have to secure a permit from the Commission to carry general traffic.—[Interruption.] I am sorry to hear interjections of that kind, as I should have thought that the terms of the Bill here are very wise, very tolerant and very flexible with regard to the transport of goods by road. It covers the whole of the normal type of traffic carried out by the village haulier. The type of traffic brought within the terms of the Bill represents the type of traffic competition which has been ruinous between rail and road in the past. Therefore, the economic problem is dealt with adequately, and there has been no desire to carry it to an extent that will interfere with the general convenience of short-distance traffic in local centres.

Particularly is that enforced when one considers the measures proposed with regard to "C" licences in connection with this road transport problem. Again, a 40 miles' radius limit is taken for the "C" licences. They represent those traders who find it desirable to service the transport of their own goods in their own undertakings. This 40-mile limit will enable all retail trade, and the vast bulk of manufactured and merchanted commodities to be undertaken by "C" licensed traffic without any disturbance, but, over the 40 miles' limit, there must be no uncertainty as to what we aim to achieve. While there is no desire to interfere with the bona fide trader carrying his own goods, it must be made quite plain that it will not be used as an instrument to sabotage the main purpose of the Bill. As regards the purpose of protecting the main purpose of the Bill, I think every one who has handled this problem is quite clear on the matter to which I am now drawing the attention of the House. For the purpose of protecting the main purpose of the Bill, the trader who wishes to carry his goods over the 40-mile limit, with a "C" licence, will have to prove his case to the licensing authority, and will have to prove that it is a legitimate traffic for his own business. It is all set out in detail, but there are broad general directions, and no trader who is carrying his own goods for a bona fide purpose need have any anxiety. But any trader who seeks to use that opportunity to interfere with, undermine or sabotage the work of the Commission by means of this licence privilege, will be subject to the procedure, which will be used for the purpose of safeguarding that situation.

With regard to road passenger services, they are not provided for immediately in the Bill. The procedure to be adopted is for the policy Commissioners to promote area schemes, after consultation with the local authorities in their areas. Here again, it is the intention that ultimately they shall be brought completely into an integrated national transport service. The procedure to be followed under the Bill is set out in Clause 67. The Commission will promote schemes after consultation with the local authorities for the coordination of the pas6enger transport services serving the area. The assets and liabilities of undertakings in the area may be transferred to the body set up under the scheme, and if the objections are not finally disposed of, these area schemes become subject to the special Parliamentary procedure of this House. That applies also to ports, docks and harbours when they are brought within the provisions of this Bill. That being the case, it occurs to me that adequate safeguards are inserted there to see that local needs are not overlooked.

The question of docks and harbours not having been mentioned in our publication was raised earlier, and I think I have disposed of that point. Even if it had not been mentioned in any official publication, I should not be standing here to apologise for the docks and harbours being incorporated in the Bill. They represent important terminal points in our vast overseas shipping interests. In many directions new port equipment is needed for the efficient handling of cargo. We are faced with a necessity of de-casualising the dock labour system in our ports and harbours, and that being the case we must ensure that the equipment of our docks does not suffer in any way by competition, because of the variety of ownership, or for the lack of resources in the future. The purpose of bringing the ports and harbours into this scheme is to ensure that whatever capital resources are needed to increase their efficiency, will be at their disposal.

Mr. Henderson Stewart (Fife, East)

Does the scheme cover the fishing ports?

Mr. Barnes

The Commission does not cover fishing ports in the same effective and direct sense that it does our major trading ports. But many of these small fishing ports are important as recruiting centres for the Royal Navy and the Merchant Navy, and sometimes they serve other purposes. Therefore, the Commission will be expected to keep a watchful eye on the small ports, and to assist them as far as possible. [Interruption.] Has the hon. Gentleman any objection to that?

Mr. Henderson Stewart

As long as it does not mean ultimate nationalisation.

Mr. Barnes

As I say, the Bill at the moment covers the trading ports of the country primarily. I should have thought, however, that the hon. Gentleman, in his anxiety to help the fishing industry, would have been glad of assistance from whatever quarter is might have come.

May I now say a word or two about the Transport Tribunal? This is the Railway Rates Tribunal renamed. It will take over the powers of the Railway Rates Tribunal, the remaining jurisdiction of the Railway and Canal Commission, and the remaining jurisdiction of the High Court on transport matters. I think the more hon. Members study this Bill, the more they will see it cuts out useless and duplicating machinery, and brings it all into an efficient compact organisation, which will be able to get on with the job, and avoid unnecessary labour.

Mr. Quintin Hogg (Oxford)

The Germans had a word for it.

Mr. Barnes

As I indicated, this is being carried out through the normal Parliamentary procedure which prevails in this House, in a free democratic Parliament. With regard to the problem of charges, I do not think it is necessary for me to emphasise the importance of this aspect of the Bill. Charges in any system of transport are vital to trade and industry. I am informed that there are something like 40 to 50 million different rates prevailing at the present moment. I have endeavoured to get a clear, simplified machinery running through this Bill for the purpose of dealing with charges. One of the most beneficial results of this Bill will be, if we can simplify the jungle of rate charges, that now prevails in our railway and transport industry.

Sir Arnold Gridley (Stockport)

They will all go up.

Mr. Barnes

Perhaps I can best bring this home to the House if I quote from the Royal Commission on Transport, and then the comment of the London Chamber of Commerce. In paragraph 124 of their Final Report, the Royal Commission on Transport said this about railway rates: The railway companies have informed us"— I take it the House will observe that this Commission did not attempt to ascertain whether it was correct or not— that under the principles now guiding the fixing of railway rates, goods are classified on a system based principally on their value or ability to pay, but conditioned, to an extent which varies considerably with different goods, by their convenience of carriage. The present classification and system of rates and charges based thereon may be said to be a combination of value, packing and weight. This is what the London Chamber of Commerce had to say: The London Chamber of Commerce ex pressed dissatisfaction with the standard classification, and said that in practice it is hard to discover any guiding principle in the classification itself. They went on to say: Whatever the principles may have been upon which the standard rates were fixed, they have been nullified to a great extent by the system of exceptional rates, of which millions are in force at present. I have been informed that there are some 40 to 50 million different rates in existence. Whether that is so or not, I do not know.

Major Cecil Poole (Lichfield)


Mr. Barnes

The London Chamber of Commerce refers to them as "millions." I say it is perfectly farcical in a period such as that in which we are living, that those who have been responsible for our railway systems and transport charges should have been permitted to continue indefinitely this state of affairs. With regard to the machinery I am establishing, I agree I have simplified it, and I would welcome criticism and examination of this in Committee. If it can be strengthened, so much the better. But if the Commission, by the framing and simplification of its charging structure and the tribunal machinery after full inquiry in public, can simplify this matter, it will be of immense advantage to everybody concerned. I am afraid I have unduly occupied the time of the House……

Mr. Peter Thorneycroft (Monmouth)

Before the right hon. Gentleman leaves that point, which is most important, I would like to ask a question. We have been discussing the charges; he has quoted the Royal Commission, and has told us what the London Chamber of Commerce said about the Royal Commission—that they did not think there was any principle in that. Would the right hon. Gentleman tell us what principle he has in mind on this question of charges? What is the basis of his charges scheme, which does not seem to appear at all? Does he think it ought to be on the value; and if not will he give us some indication of what he has in 'mind?

Mr. Barnes

As a matter of fact, the Chamber of Commerce did not comment upon what the Commission said; they commented on what the railways said to the Commission. With regard to the proposals in this Bill, the hon. Member will observe that the Commission will be charged with this responsibility. I am not able to define all these matters in the Bill; the Commission is charged with the responsibility of submitting the whole of its proposals with regard to the simplification of rates to the tribunal machinery which is established to consider, examine and confirm. There is also the machinery of public examination through which interested parties can submit their case, and out of this we ought to get, as I have indicated, a considerable simplification.

Mr. Harold Macmillan (Bromley)

Will the right hon. Gentleman say how what he has just stated differs from the present position? These rates are statutory. The railway companies are not permitted to make them; they are compelled to make them by the Statute of 1921.

Mr. Barnes

That has been the difficulty in the past. The Commission is now to be charged, first, with the responsibility of paying its way, and then with the responsibility of submitting its rates structure to the Tribunal, while being responsible for the whole of the transport services of this country, no parts of it being able to compete in a way which makes nonsense of the term "statutory rate." The 1921 Act, which permitted the railways to obtain their standard revenue, left aside altogether the development of road competition, which made nonsense of the whole of the provisions of that Act. We are remedying that situation in the Bill. For the first time in the history of transport, the British Transport Commissioners will be able to tackle the charges problem on a commonsense basis. As I was saying, I am afraid I have already taken advantage of the House for too long in trying to explain this rather difficult and complex Measure.

Lieut.-Colonel Dower

Will the Minister make some statement on the totally inadequate compensation to be paid?

Mr. Barnes

As I have indicated, I am leaving the compensation Clauses to my right hon. Friend the Chancellor of the Exchequer, but the road haulage undertakings are not getting totally inadequate compensation; they are getting the cost of replacement of their vehicles.

Lieut.-Colonel Dower

On an average of 50 per cent.

Mr. Barnes

Not at all. They ought to have, in their own accounts, a depreciation fund equal to the other 50 per cent., if it represents half the life of the vehicle. Replacement cost is a very fair basis of compensation to road haulage undertakings.

I am afraid I must now draw my remarks to a close. During the Committee stage, we shall have a greater opportunity of examining the matter in detail. I can only conclude by stating that a process which has been going on in this country for over a century is reaching its conclusion and consummation in this Bill. Transport has been moving steadily towards a monopoly solution. The 1921 Act, again passed by a Conservative Government—[HON. MEMBERS: "No."]—if it was not passed by a Conservative Government, there was an overwhelming majority of Conservative Members in the House at the time, and they cannot divest themselves of responsibility for it. That Act compelled 123 separate companies to amalgamate into four companies. The London Passenger Transport Act is another indication, but hitherto we have always hesitated to grasp this problem in the only way in which it can be grasped. Whenever Parliament deals with any great basic service which represents an overhead charge on the whole of industry. Parliament establishes a monopoly. The fact that it is broken up into hundreds of thousands of monopolies does no' alter the fact that the whole of the legislation of this country has proceeded in the direction of establishing the principle of monopoly in the field of transport, but we have always denied the nation the advantages of co-ordination, unification and integration among all the forms of its transport services.

Road, rail and water transport services should not be mutually destructive elements; they should be complementary to each other, each serving the nation in its own way and in its own time. One should not destroy the capital and the livelihood of persons in another. This is essentially an industry in which finance, annual revenue, annual expenses and annual receipts, should be pooled. If there are unprofitable parts of the country which do not pay their way, and if citizens are living there performing some national purpose, they should still have the advantage of a modern nationalised system at their service, and that is impossible until all have been unified into one complete system. Therefore, we have seen the railways, the road haulage and other undertakings, afraid of the purpose of nationalisation, beginning to come to underground and other forms of agreement, in an attempt to overcome this problem. We on our side have never denied, and we have never withheld our view from the people of this country, that as services move in this direction, they must be publicly owned and publicly run,-with the whole of their accounts and the whole of their affairs subjected to Parliamentary and public examination.

Here we are, after this second great war, faced with enormous capital expenditure. As I have indicated, the railways of this country are out of date. Passengers who travel on our railways nave not today the comfort, either in matters of refreshment or of travel, which they ought to have. [HON. MEMBERS: "Why not?"] Because presumably there have not been the resources—I do not know why not. The fact, however, is that the railway companies have not provided these facilities. Take railway hotels. Railway hotels are first-class for first-class passengers, but there are no railway hotels to cater for the vast majority of persons using the railways. The refreshment rooms of railway hotels do not serve refreshment—meals and food—[Interruption.] These are very serious matters— to the majority of the people who travel on our railways. Give us five years. [Interruption.] That is what we have, five years of power. I was going to say, if hon. Members would listen to me: Give this Labour Government five years of power in this field of transport services, and the people of this country will see more progress than would be made in 500 years of Tory rule.

5 P.m.

Major Sir David Maxwell Fyfe (Liverpool, West Derby)

I beg to move, to leave out "now" and at the end of the Question to add "upon this day six months."

The Opposition recognise that the proposals put forward by the right hon. Gentleman have one element—that of size. We believe that the introduction of this Bill is the greatest disservice this Government have, so far, done to the trade and industry of the nation. We have, in this country, one great advantage which our competitors abroad do not possess. In this country, we have a short distance between the ports and the centres of industry, and that has given us, and could continue to give us, an advantage, which our competitors do not possess, in the relative proportion that transport costs bear to general costs. [HON. MEMBERS: "Oh."] I ask those who interrupt me to look at the father and mother of the Bill, the T.U.C. document, in which it will be found that these low costs are stressed; but we shall not have them under a monopoly which will be cumbrous and top-heavy, whose structural defects are as manifest as its powers are unlimited.

The right hon. Gentleman was remarkably restrained and remarkably modest in one section of his speech. He made only the shortest and most tenuous claims for any lessons which had to be learned from integration, Government control, or whatever term he chooses to use, of our transport services during the war, and he was very wise in his modesty and restraint. The right hon. Gentleman has given us one reason for this integration, with regard to railway services, and that was the difficulty of doing capital works on the railways. He knows as everyone knows that the railway companies had their plans ready for renewals, replacements and new works, and to take his own example, he knows it was planned and that everything was prepared to rebuild Euston Station, which is one of the examples he chose in this matter. He has not said one word, however, about the various claims which are made, and he has not supported even the parental and maternal document, in claiming that there would be any standardisation of equip- ment, improvement on handling costs, or anything of that kind. He knows very well the experience of Government control, with regard to the road services, during the war. When the Road Haulage Organisation attempted to exercise control, for the purpose of saving petrol and rubber, what was the result? Three weeks' delay before the return journey, and, that went on until the trade unions themselves complained about their members being kept away so much. Since that has been stopped, there has been an increase of 40 per cent. of usage of capacity of vehicles, and a reduction of 50 per cent. on empty journeys. Since that control and organisation were removed, we get five round trips a fortnight from London to Manchester, instead of one a week, which was all the organisation was able to perform.

It is interesting that the last word on that effort to have Government control was said, not by anyone in the Conservative Opposition, but by Sir Cyril Hurcomb, Director-General of the Ministry of Transport, who ought to know. He said during the war: Detailed allocation of traffic has not been practicable, nor indeed, has it been easy to find any fixed principles on which to allocate at all…. It must be confessed that wartime allocation of traffic has not been based on principles or methods likely to be applicable to ordinary conditions. After that, I was relieved and not surprised that the right hon. Gentleman could not quote any precedent on which to buttress the suggestions he is putting forward today. He did not spend five minutes in the one hour and twenty minutes which he took to make his speech—although I do not complain about the length of time of that, because I was glad to hear his views—in explaining how the integration will be reflected in economy of transport, which alone can give to industry the benefits it needs. The right hon. Gentleman has had great experience, and he must realise the complete self-contradiction of his own set-up. The whole basis of his structure, as he made clear during his speech, is a functional division of the Executives, which will perpetuate disintegration—the very thing he is claiming to do away with under this Bill. His structure fits neither the facts of industry, nor the theories of Socialism which he is putting forward.

I again found it interesting to note the very short period which the right hon. Gentleman devoted to the question of a public inquiry. He purported to demolish the arguments for a public inquiry. His first argument was that there had been a number of inquiries. The right hon. Gentleman is well aware that there has never been an inquiry into the technical merits of the various proposals for the industry as a whole, and that the form of nationalisation he is suggesting has not been the subject of any inquiry, except in the case of a survey by a committee, which is among the four T.U.C. documents to which I shall later refer. As the right hon. Gentleman said—and I entirely agree with him—inquiries can be dangerous, and it is because we on this side of the House are certain that a public and impartial inquiry would be completely dangerous to the half-baked proposals in this Bill, that we consider it is essential that it should take place, and that these proposals should be exposed to a public and impartial hearing.

I want the right hon. Gentleman to consider his own scheme from two points of view. First, there is the standpoint of practical help to industry. The right hon. Gentleman the Parliamentary Secretary and the Chancellor of the Exchequer have all paid lip service to the idea of an expansionist economy. They have all said that everyone should cooperate to secure the greatest production and the corresponding consumption which is necessary for its continuance. Yet the first herald of that expansionist scheme, based on greater production, is to be a scheme for transport about which 99 per cent. of all the comments that have been made have remarked on its restriction and its rigidity, instead of its power to serve the public. The right hon. Gentleman and his colleagues know that these proposals must take a decade to put into operation. He knows that it took eight to 10 years before amalgamations of the railway companies could be brought into being after the Act of 1921. Now, when we are enjoined almost daily, from the Government Front Bench to look at our trade recovery, we are having the wildly irresponsible course of all the attention of every operator engaged in transport deflected from his ordinary work of serving industry into looking at what will be, and must be, his position under these nationalisation proposals.

We on this side of the House maintain that there are four irreducible minima if transport is to be the true servant of industry. First, there must be freedom of user choice on the part of the user of transport; second, there must be unrestricted power of the trader to carry his goods in his own vehicles, as he does at present under the "C" licence; third, there must be the right and the opportunity of reward for efficient service and efficient running to be passed on to the user; fourth, in times of high production, such as we are looking to, there could afford to be greater elasticity of entry into the industry. What do the proposals in the Bill do? They take over the railways and long-distance haulage, and restrict all other haulage operators. They contain the power to make the consumer take the type of transport which the Commission or the Minister thinks right; and they take away the safeguard of the trader to carry his own goods in his own vehicles. We have seen that the right hon. Gentleman has got his Bill practically idea for idea —I will not say word for word—out of the T.U.C. document No. 2. We know that he is aiming at the position where it will be the responsibility of the national transport authority to ensure that traffic is carried by the form of transport which is most economical for the community. In other words, this will be achieved most simply and thoroughly by a completely coordinated service, in which the consumer does not specify the form of transport by which his goods are to be moved. The right hon. Gentleman's aim is that consumer choice of transport must disappear at the earliest possible moment. The Parliamentary Secretary need not look so depressed if, when the Minister has taken 90 per cent. of his Bill from this T.U.C. document, we form the opinion that he is likely to take the other 10 per cent. from it, too.

The right hon. Gentleman talked about the Central Transport Consultative Committees. They are only to be set up as he thinks fit. He can abolish them as he likes, and there is no requirement that their conclusions can be published. They are a useful camouflage of complete Ministerial control. I ask the right hon. Gentleman to consider the aspect of restriction which he desires to impose on "C" licence holders. I appreciate that the Minister and Members opposite do not believe in the study of the customers' con- venience, which results in greater orders for the transport operator who does so, but even if they do not believe in that I do object to their "stacking the pack," by removing the trumps by which alone the trader today can protect himself against bad transport, or conditions or prices which he does not like. The check, the safeguard which has existed, and which has always been in the hands of the trader, is hamstrung by the provisions of this Bill If I correctly appreciated the right hon. Gentleman's speech, he deliberately desires that that hamstringing should take place. Apart altogether from the check, the right hon. Gentleman should know that unrestricted power to run under a "C" licence is essential to a great variety of industries if they are to continue efficiently and, indeed, to go on with their work at all. In the 12 years in which I have had the honour to be a Member of this House, I have seen a great many rises of public dissatisfaction, some genuine and some inspired, as everyone who has been in this house as long must have seen. But I do say to the right hon. Gentleman—and I am not making any rhetorical point on this—that I cannot find one association of traders, or one responsible body of traders in the country which does not protest sincerely, and with a real sense of fear, about what will happen to their own businesses from the restrictions which the right hon. Gentleman is seeking to impose on "C" licence holders. I do not pursue the other point which is equally clear, that when the right hon. Gentleman has taken over the "A" and "B" licences the Commission, on his behalf, will be able to compete unfairly with those road hauliers who are left, because I want the House to consider for a few moments, the administrative weaknesses of the set-up in the Bill.

First, with regard to its excessive size, it has been a matter of common knowledge, and fairly general complaint, that the main-line railway companies have found, since the Act of 1921 was put into effective operation, that they have had rather more than enough on their plates in dealing with the companies at their present size. It is now proposed that the Railway Executive alone should have to deal with an organisation about three times the size of the L.M.S., or the L.N.E.R. The right hon. Gentleman does not lay down in his Bill—and he did not, in his speech, shed any light on it—the way in which the Commission will bring about the co-ordination between the different Executives and, as I say, we are left with that same functional division which he deplored in the more rhetorical parts of his address. I ask him to consider this point. He has been some 18 months in office and he knows that the number of subjects which he can deal with himself are severely limited. If we are to have this set up of Executives, a Commission and a Minister, with wide powers of interference by the Minister, which I shall mention in a moment, there must be tripulation of staffs if this thing is to work at all, even at the slowest possible pace. Ultimate control is in the staff of the Minister, but before we can get any subject passed up from the various disintegrated Executives of the Commission and passed to the Minister, there must, in fact, be these staffs in triplicate to deal with it, and the necessity for enlargement is increased by the functional disintegration which is the basis of the Bill.

The principal argument for integration, and the only argument which could justify it, would consist of three stages. It would say, first, that we have too much inland transport, too many people, and too much equipment used on inland transport today; second, integration would give economy in the amount of manpower and material which we should use; and, third, we could only get that integration by bringing them under one system of national ownership. If every one of the matters of fact which are assumed in that argument were as true as it is thought, and if the reasoning were as sound as it was thought, it would still be impossible to square that argument with this set-up which the Minister puts forward.

The Executives, under the terms of the Bill, are to be separated from the commencement; the demarcation of function is to be preserved until further notice, which, in the words of the song, means that "it may be for years and it may be for ever." It is beyond the wit of man and the power of exposition of the right hon. Gentleman to explain how the Commission will produce and help that demarkation and bring the Executives together. The only precedent which I can think of for this set-up was one which the wise men of Gotham suggested, when, in early summer, they built a fence with the avowed purpose of keeping inside that fence the first cuckoo and hearing its voice.

Let us consider the powers which the Minister takes to himself. The right hon. Gentleman the Lord President of the Council used the inspired words, "Let the argument be directed to the merits, and let the test be the public interest." Let us apply the test. It is proposed that the Commission shall consist of a chairman and four other members. The members will all be appointed by the Minister; they will hold office at his pleasure and be paid salaries determined by him. It will be subject to the direction of the Minister in the very wide sphere of "matters which appear to him to affect the national interest," on the reorganisation of development programmes, which involve "substantial outlay on capital account." That, one might think, would give the right hon. Gentleman considerable powers of interference, but, of course, his desires do not stop there, because he takes under the Bill power to direct the Commission "to discontinue any of their activities or dispose of any part of their undertaking."

In other words, there is complete control by the Minister, and that means that, in operation over the enormous field which I just outlined, he is to be subjected to all the political pressure—and one knows how susceptible this aspect of life is to political pressure—which can be brought upon him. The original idea of this form of nationalisation—of an independent statutory body which will have some chance and opportunity to run the industry and to have independence and to put into operation the results of independent thinking—is abandoned and it is inevitable that, if the Minister is to take these wide powers of interference, the Commission on which, according to his own argument, the pith of these proposals depends, can only be the retreat of the "Yes man" and the sycophant.

It does not stop there. When we come to the Executives, we get another undertaking. The members of the Executives are to be appointed by the Minister, who will approve of their salaries, and they are to receive functions delegated by the Commission, but nothing can be delegated by the Commission unless the Minister approves. The right hon. Gentleman comes to this House and emphasises, almost with tears in his voice, the im- portance of the Commission, and, then, in the very same Bill, deprives it of the power to command, which alone can give any chance of making this scheme work. The acme of these absurdities is when we reach the transport proposals. I have shown that the very set-up of the right hon. Gentleman is the opposite of integration, but one might expect that, at any rate, he would pretend that this set-up would bring about some reduction in charges to the consumer and user of transport. That must be, on any sane approach to this subject, one of the main reasons for the integration of transport.

But what are the proposals with regard to charges made under this Bill? Within two years, the Commission must submit a charges scheme to the transport tribunal, being either hindered or helped in so doing by the Minister, under Clause 79. There are to be no rules as to the charging scheme. The Commission may adopt such a scheme as seems desirable to them. The scheme may provide for fixed, minimum or standard charges, or maximum charges, which are to run the whole gamut and it may also, under Clause 80 (1, d) allow special terms, which is another name for exceptional rates on which the right hon. Gentleman descanted in his oration. So—and on this I should have thought that there would have been some word of explanation from the right hon. Gentleman—the tribunal may leave the charges or charging system to the Commission itself. In other words—as an hon. Friend behind me mentioned a moment or so ago—one of the great questions has always been, "What is to be the basis of charging? Are you continuing charging on what the traffic will bear, or switching over to a charging on operational cost or on value?" All these matters have been transport problems for years, shouting for considerátion, yet the Bill does not contain a word of guidance as to how the charges are to be arrived at, and the right hon. Gentleman spent 80 minutes in which he refused to accept the situation or to answer the question as to what line he will take. I should really have thought that if the Government are coming forward with proposals for the nationalisation of transport, the House is entitled to know the policy of the Government with regard to charges, the vital question which can help or hinder industry in its recovery at the present time.

Like the right hon. Gentleman, I do not consider it my function at this stage of the Bill to go into the question of compensation in any detail. The right hon. Gentleman urged the compensation proposals as a reason for assenting to nationalisation. I shall deal with them in even greater brevity, and I hope in a very short time to convince the House that they form an additional and obvious reason for rejecting the proposals. Let us look at the various kinds of compensation. The main objection is obvious, and was recognised as soon as the proposals were published. They amount to a confiscation of income and a confiscation of livelihood. But let us see how that works out. The selection of market values by a Government pledged to nationalisation is similar to a thief acting as counsel for the prosecution, judge, jury, court of appeal and executioner in a sort of crazy people's court. Of course, the Government's proposal is to select market values which their very pledge has knocked down in advance. The only thing on which I congratulate the right hon Gentleman is that in this essay at compensation he has, at any rate, departed from the teaching of the pink book of the T.U.C. because they say with commendable frankness and truth: Most stock exchange quotations are only indirectly connected with the real value of any undertaking to the community. The right hon. Gentleman has the double advantage of abandoning the T.U.C. and putting forward an obviously unfair proposal. As my hon. and gallant Friend the Member for Penrith and Cockermouth (Lieut.-Colonel Dower) pointed out, the basis for compensation under the road haulage proposals of two to five years' profits for anyone who is put out of business is, of course, inequitable—that goes without saying—and less than any arbitrator could possibly provide; but at any rate it is on an ascertainable basis, even if it is unsound. The passenger transport proposals, of course, reach the height of comedy—good clean fun in this case. In the case of the local authority which is running a transport operation, the better that transport undertaking has been managed, the less benefit will the local authority get out of the compensation proposals. That is just a little spice of high comedy to leaven a rather dingy loaf. Finally, the right hon. Gentleman himself gave the keynote to the question of privately owned railway wagons when he said that a number of them should be scrapped. For that reason, apparently— because he advanced no other—their owners are to be paid scrapheap prices for their wagons, with no question or consideration of their replacement I have promised to deal with these compensation proposals only in outline. If I were to go into them in any detail, I am afraid my language might be a trifle forceful.

I want, in summing up, to put to the House that all the classic arguments against nationalisation are illustrated ad nauseam in this Bill. There is the loss of enterprise and initiative which is shown by the attack on the road transport industry, whose great work the right hon Gentleman has praised, and whose constitution and the people who have come into it are known to us all, not only because they have had their measure of success, but because of the pluck and courage which they used in building up their businesses in that difficult period after the last war. That is attacked. With regard to the freedom of the worker, we shall see whether this structure can stand on its head for a sufficient length of time to come into any form of operation. We shall see, no doubt, in time the strongest trade union making the same claim as Mr. Will Lawther is now making for the mineworkers, that every one engaged in this industry should belong to that union. So, in time—it will take time, because these proposals have that merit or demerit of taking such a long time to work out—we shall get a closed shop suggested for this field of our life as for others.

The increased cost to the consumer is obvious. The consumer, under these proposals, is left with transport as his master instead of as his servant. Of course, there is the fourth argument, which again is classic, that this Bill gives an unexampled opportunity for political patronage and jobbery. When one considers these arguments, at least we on this side of the House are free from this charge. It is sometimes said that we are merely negative in our opposition to nationalisation. If we can free trade and industry from the harm and hindrance which these proposals are going to put upon them, we shall do something very far from negative. We shall do the greatest positive service that can be done.

5.38 p.m.

Mr. Ernest Davies (Enfield)

I should have thought that after the mass of paper opposition to which we have been subjected since the nationalisation of transport was first introduced into the Government programme, we would have had an opening speech from the Opposition which would have given us some forceful arguments against the Bill as presented by the Minister of Transport. In actual fact, the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) did not produce a single argument which undermined in any way the inspiring and strong speech which the Minister made in moving the Second Reading. The main gist of the right hon. and learned Gentleman's attack was that the Minister did not say he was going to bring about that integration of transport which was one of the main objectives of the Bill, but I should have thought that by implication, throughout my right hon. Friend's speech, it was clear that he had introduced this Bill as a Bill which had a complete conception of transport as a unity. It has a transport conception and not a conception of transport as divided into different transport forms.

Under Clause 3, which is, after all, the kernel of the Bill, it is provided that planning shall be such as to ensure an integration of transport in this country, and in the same Clause, that the transport of the country shall be operated as a single undertaking. That is one very important obligation on the Commission—that transport in the future shall be regarded as a single undertaking and not as railways, roads and so forth. That is where the various transport interests in this country have failed in the past. In the past the railways have not been transport minded in the full sense of that word. The rail-ways have failed to be enterprising, and, therefore, they have failed to be efficient. The railway companies never used the belated powers which they obtained in 1928 to go into road transport in such a way as would co-ordinate it with the operation of the railway services. They merely acquired a financial interest both in road haulage and road passenger transport and they regarded that financial interest as a profitable investment. Possible and adequate co-ordination was not brought into being, and the investment remained simply a financial interest.

It is quite clear that in the operation of the railways the companies have not regarded road transport on a functional basis; that is to say, the railway companies today still have, more or less, a horse and buggy mentality. The railway companies today still operate on the basis of a large number of small local stations which are so located that the goods are collected within a distance in which a horse and cart would still be able to operate. When the motor vehicle was introduced they did not change from the system of collecting goods in short hauls, putting them on pick up trains, running those trains to the marshalling yards where they are shunted and put on the long distance freight trains. They still operate on that basis and it is the basis on which they have operated for a great many years. Until they depart from that the efficiency of the railways will not be what it could be if there were complete coordination. It is obvious that with the motor vehicle the distances in which goods could be collected could be extended considerably. Then those goods would be brought to the rail heads and put on to the long distance freight train rather than have a large amount of unnecessary shunting and so forth.

The net result is that the average speed of the goods train in 1938 was just over nine miles an hour, which was an incredibly low speed. The official figure, published by the Ministry of Transport, regarding the net ton haul per engine hour, if we include shunting, amounts to 461, whereas if we exclude shunting it amounts to 968. In other words, if the railways were to enter a period of complete coordination with road transport, they would be able to double the effectiveness of the carriage of goods and that would substantially reduce the cost of transport. The right hon. and learned Gentleman the Member for the West Derby suggested that the cost of freight carriage in this country was comparatively low. It may be, although I would dispute it, but the fact remains that it could be substantially lower if there were an efficient and effective system of cooperation between road and rail.

Let us look for a moment at the passenger side of the railways. There I claim also that the railways have not been efficient in the past in the way they could have been had they been developed along modern and efficient lines. It is true that the long-distance passenger trains in this country are among the best in the world as regards speed and efficiency, but they have been built up at the expense of local traffic which is slow, inadequate and ill fitted out. I would say that it is time that we put an end to this policy of appeasing Scottish travellers at the expense of suburban season ticket holders. If anybody has any doubts as to the state of local traffic I invite them to travel to my constituency at Enfield on the London and North Eastern suburban service from Liverpool Street or King's Cross. They would travel in ill lit wooden boxes which are called railway coaches and they would soon imagine themselves back in the "Fanny by Gaslight" era. In the same way, on a similar journey to Potters Bar, also in my constituency, there is a bottle neck of two tunnels on the line and the local train is pulled into a siding while the express goes by. That bottle neck, which has existed since the L.N.E.R. first started operating, should have been eliminated years ago.

It is all very well for the right hon. and learned Gentleman the Member for West Derby to say that the railway companies are now ready to modernise and develop. They should have done it over 50 years ago. A result of the inefficiency of the passenger services is that the average train miles per hour is only 15. Surely, in this age of speed something could be done to increase the speed of the local traffic with the introduction of complete co-ordination between road passenger services and the railways. Obviously a lot of the small local train hauls could be eliminated, and the result would be greater speed on longer distance journeys.

It was only just before the war that the railway companies finally decided that something had to be done in order to eliminate road competition, not by buying it out as they attempted to do in the past, but by entering into agreement with road haulage. They put forward the Square Deal proposals which, I would remind the right hon. and learned Gentleman the Member for West Derby, actually proposed to eliminate that check which he referred to with approval as a useful check on the competition as between the two forms of transport. He accused the Minister of introducing restrictions through this Bill, whereas the actual restrictions were proposed by the Square Deal proposals.

Sir D. Maxwell Fyfe

I am sure the hon. Gentleman does not wish that there should be any misunderstanding on the matter. I am sure he will agree with me that in the ultimate agreement between road and railway interests the "C" licence holder was preserved without any restrictions of any kind. I have the agreement in my hand and the hon. Gentleman can look at it if he so desires.

Mr. Davies

It is perfectly true that the "C" licence holder was unrestricted under those proposals and that he is unrestricted today, but under the present Bill he also has a very large measure of flexibility. He can work within the 40 mile limit and over that may apply for permits. My criticism of the Square Deal proposals, which are practically the same as those which have since been put forward as the road hauliers alternative to nationalisation, applies to the "A" and "B" licences and their coordination with the railways with a restrictive purpose in view. Under those proposals there were to be agreed rates between road and rail. Since I see the right hon. and learned Gentleman misunderstands me, I would say that these rates would not be the same for each of the forms but were agreed for the two forms, and at the same time there would be a restriction on the number of licences issued through the normal process of the licensing system. The combination of those two things would mean the creation of a situation which would enable the larger road hauliers and the railway companies to control the operations of the small man because they would be in a position to object to his licence; and there would be no further entrants into the industry. This makes it much more difficult for the small man to compete with road and rail interests because once statutory rates are fixed, he cannot undercut the large hauliers. The small man would be put into the position of being subject immediately to absorption or being squeezed out by the larger interests.

As soon as decontrol took place earlier this year that situation practically arose in the relationship of road and rail. The Road Haulage Association set up regional sub-committees before which all applicants for "A" and "B" licences were invited to attend and they, being for the most part members of the Association and subject to certain relations with it, had to appear. When they did, the result of their application for a licence was pre- judged. The small man coming before such a sub-committee seeking his "A" licence and hearing that the Road Haulage Association intend to oppose his application before the licensing authorities, decides not to proceed with that application. It is no use his then going to a licensing authority and asking for his licence when he knows that the road and rail interests would produce counsel before the licensing authority and put in a series of objections. I know of cases in my own constituency where that happened, and where the applicants have been so discouraged by the objections that have been raised before these sub-committees that they have decided that it was no use going forward with their applications. What did they do? They took away the anti-nationalisation literature which was given out at these sub-committees and read that under nationalisation the small man would be squeezed out. The small man is being pretty successfully squeezed out today under these restrictions.

I should like to make one or two points on the proposals which the Minister put forward regarding "A" and "B" road hauliers. I think that it will be far better in the case of "C" licences if the factory or the warehouse and not the operating centre were taken as the vehicle base, because it seems to me that by the strategic location of the vehicle base the "C" licence holder will be in a strong position to evade certain Clauses of the Bill. My only criticism of the proposals regarding road haulage is that, far from sharing the views of hon. Members opposite, I think the Minister is a little too lenient not only with "A" and "B" but with "C" licences. Because the average distance of carrying goods in this country is so low —it is 44 miles on the London-North Eastern, and only 60 for the country as a whole—the proposed radius of 40 miles will enable a very large number of operators to contract out of the national system. By contracting out they will take away much of the profitable traffic and this will harm the nationalised undertaking. The Minister, as was shown by his speech, realises that there is such a strong measure of opposition to this Bill that there are a number of traders in this country who will contract out in an endeavour to undermine the nationalised system even though it costs them more to run their own vehicles. I therefore urge that great consideration be given to the details of these Clauses to ensure that there is not too much flexibility for the contracting-out of the private trader.

On the question of road passenger transport, I ask the Minister to give us an assurance that if necessary Clause 67 will be strengthened to make absolutely certain that road passenger transport in this country will be publicly owned. As the Clause reads, the Commission may make schemes, and it might appear from the Minister's speech that he fully intends that those schemes shall be formulated and implemented on the basis of public ownership. We should, however, like to see those provisions incorporated in the Bill so that there can be no doubt, and so that the Commission is definitely instructed to formulate the schemes and base them on public ownership. We remember the Blue Report for the handing over of the L.C C. trams to a private monopoly, and we do not want that kind of thing to occur in any of the regions of this country. If the Minister can strengthen Clause 67, and can insert in the Sixth Schedule the Regulations concerning the drawing up of these schemes, I think the Bill will be considerably strengthened.

I should like to deal at some length with the question of compensation, which has been referred to this afternoon, but I have already spoken rather longer than I should. However, I would just say that although in theory it may be that market value for purchasing the stock of the railway companies can be attacked, in practice, in the present case, it works out satisfactorily, and there is no alternative which can be put forward. We cannot possibly take the standard revenues of the railways as a basis because they have no relationship whatever to the earnings of the railways today. They were based on over-capitalisation and have never been earned. We cannot submit the assessment of compensation to an arbitration tribunal unless we have some basis of revenue on which to capitalise the total capital sum. How can we capitalise the unknown earnings of the railways at the present time?

It is absolutely impossible to hazard what would be the earnings of the railway companies if they remained under private enterprise, and that is the only basis on which we could arrive at a net maintainable revenue. We have to look at this question of compensation realistically. After all, the State is buying out the rail- way companies and is paying them a price which ensures that every person who is bought out will receive Government stock which he can turn into cash immediately. That Government stock is equal in value to the market price at a certain date. People who receive that stock will suffer a diminution in income, admitted, but as long as the capital price is there, it is no concern of the State whether the people who receive the equivalent of cash cannot get the cash they receive to produce as much income as they received in the past.

Mr. Osborne

Are they to go to the workhouse?

Mr. Davies

We have a Minister of Health who looks after the widows and orphans who, hon. Members on the other side have suddenly discovered, are in need. If the State is paying a fair price, it is no concern of the State what the people receiving the cash do with their money. Added to that—I consider this to be a very strong argument—the railway companies cannot afford to pay the interest under the Railway Control Agreement. The forty-odd million pounds which the railway stockholders are today receiving as interest the railway companies cannot continue to pay, because they cannot afford it. We cannot burden the nationalised undertaking with this very large amount of interest and handicap it from the outset. It would not be in the national interest if the Transport Commission started With this huge burden of capital debt, this huge interest burden, on its shoulders. That happened in the case of London Transport. Before the war, London Transport was virtually bankrupt. If the war had not come, an appeal would have been made for a receivership for London Transport.

Although, in the case of the London Passenger Transport Act, there is a provision for the payment of a high rate of interest, that high rate of interest was not paid. It is no good saying to stockholders today, "We will give you British Transport Stock equivalent to bring in the same income as you have been receiving in the past." The State would have to subsidise the railways in order to pay that amount of interest, because the nationalised transport industry would not be able to earn that amount. It is important that we do not handicap the State with an insupportable burden of interest charges.

I want to congratulate the Minister on the Bill that he has introduced. It is long overdue. All our political life, Members on this side of the House have advocated nationalisation of transport. It has been a basis of our programme ever since I started working within the Labour movement. Today we see our aim being fulfilled, as the Bill comes for ward for Second reading. I wish the Bill a safe journey through Committee. I am sure that it will come through the test, and will provide that unified, coordinated and integrated system which we on this side of the House are determined to establish.

6.3 p.m.

Mr. Clement Davies (Montgomery)

The Minister was quite right in stating that this Bill is the biggest venture of this Government, or indeed of any Government, in the field of nationalisation. The figures are stupendous All told, they come to about seven times the amount of the cost of taking over the coalmines. It is proposed to create one all-embracing industry of transport, which is a matter affecting the lives of every one of us. One naturally turns back to the test which was laid down, I think rightly so, by the Lord President of the Council, speaking in this House on 6th December, 1945. He rejected on behalf of the Government any dogmatic or doctrinaire approach, for or against nationalisation. I would like to remind the House of his actual words. Here they are: But we are going to nationalise certain industries, and if we take the series of industries with which this Government are dealing, either the case must be proved for them, or the case must be proved against them. I agree that, in the argument about nationalisation, there is the onus upon the party that is proceeding to nationalise, to prove that the nationalisation is in the public interest."—[OFFICIAL REPORT, 6th December, 1945; Vol. 416. c. 2637.] That obviously is the test. The Minister, again very rightly, said that the transport industry enters into the major overhead costs of everything. It adds to the cost of raw material, of production, of consumer goods of every kind. Any increase in the cost of transport affects the price of all consumer goods. Upon transport depends the prosperity of every trade and business in the country.

The question we have to put to ourselves, therefore, is, "Will this service—after all, transport is a service between producer and consumer—be cheaper under the Bill?" I do not necessarily mean cheaper in actual money. Shall I use another term, and say, "more efficient and more economical for the nation as a whole?" Will the cost be greater? The burden of proof rests, according to the Lord President, upon the Government who are proposing this tremendous change. I was surprised to hear the Minister say early in his speech that there had been a public inquiry—

Mr. Ellis Smith (Stoke)

There has been many a one—

Mr. Davies

—Into the taking over of the whole of transport, its coordination and nationalisation. I agree that there have been inquiries into the railways. One was conducted by the right hon. Gentleman the senior Burgess for Oxford University (Sir A. Salter). Even that finished, if I remember rightly, in 1932. Many things have happened since then. Tremendous improvements and changes have been continuously taking place in the internal combustion engine, and there have been other developments—

Sir Arthur Salter (Oxford University)

In the report to which the hon. and learned Member has referred there was a recommendation, towards the end, that there should be a special inquiry as to the point up to which, for different classes of goods, road traffic was more economical, and beyond which rail transport was more economical. That kind of inquiry has not been made, certainly not in public, either before or since that time.

Mr. C. Davies

I am much obliged to my right hon. Friend. I was coming to that. I was pointing out that not only have there been great changes since 1933 but that an inquiry into the actual matter of coordination and rationalisation—whether it could best be done by one, or by the other, or by both working together—has never, in fact, been made. I should therefore have thought that all the factors and all the figures upon which we could arrive at a proper judgment are not known to us. If the Government have made an inquiry of their own, surely the burden of proof lies on the Government and they should take this House into their confidence and tell us the result of their inquiry. According to the Lord President, this is the grand inquest of the nation at which the Government produce their evidence and prove their case that this is the right way to deal with the matter, and that it will lead to efficiency and economies and to the general benefit of the public at large. The question we have continually to put to ourselves is, "Will the consumer get a better service under this Bill than he would even in present circumstances, or under some different system from that which the Minister is proposing?"

I now come to the railways. I agree with what was said by the hon. Member for Enfield (Mr. Ernest Davies) with regard to railways. They began in an extraordinary way 100 years ago. It was a complete financial ramp—nearly as bad as the South Sea Bubble—and all kinds of schemes were put forward. Many of the better schemes never saw the light of day—in the sense that an Act of Parliament was never passed and the railway was never built. Some of the schemes which were less good were those which actually passed this House and were carried into effect. Considering the handicaps that existed, the wonder is that any progress was made at all. The railways were handicapped by watered capital and over-capitalisation; the tremendous amounts they had to pay to the landowners of that day although they were improving the values of the land through which they passed; all kinds of restraints and restrictions put on them by statute; and the fact that their business was done, not by the most businesslike boards of directors but by those who were put on the boards largely because—in the old days—of their landed interests. It is therefore amazing that the railways have done as well as they have done. There were very many small railway undertakings. Something like 275 Acts of Parliament were passed in order to create them. There were something like 113 companies still operating at the beginning of this century, and it was perfectly obvious that it was necessary to unify them.

It is rather interesting that Mr. Lloyd George—one cannot help referring to him all the time by the title under which he was best known—when President of the Board of Trade between 1906 and 1908 came to the same conclusion as the Committee which met in 1918 and reported upon the need for unification of the railways. It might be interesting for the Minister to look it up. I was told by Mr. Lloyd. George on many occasions that when he left the Board of Trade to become Chancellor of the Exchequer, there was, in fact, in the Board of Trade a complete Bill for the nationalisation of the railways, and that there was in his documents with that Bill a letter from every one, I suppose, of the 113 managers of those companies saying that it was the only thing to do. Nothing happened about that. There was a change in the Board of Trade. So we went on until the war of 1914–18, when, again, the railways were taken under one control. Towards the end of that war, a Select Committee of this House was appointed to inquire into the railways, and it recommended unification of the systems. The railways were not however unified—I will not inquire into the reasons why, but I think they are obvious when one considers the set-up of the 1918 Government—but, at any rate, the 113 companies were then reduced to the four big companies which operate now.

What happened after that? At once they began to pool everything, so that one can say that from that time—and even from 1914—there has been, so far as railway transport is concerned, a real monopoly. There can be no doubt about that. It was a monopoly not responsible to this House but exercised under restrictions placed upon it by this House in the past. I agree with the figures given by the hon. Member for Enfield. They are very familiar. Undoubtedly, the railway companies were not anxious to take up new ideas or put new ideas into effect. I have always thought that if they had been really alive to the fact that they were, in the main, the transport people of this country, the moment the internal combustion engine was invented, they would have said, "That is transport; that is ours, and we will put the whole of our weight behind it in order to develop it." They did not do so, however, and the internal combustion engine was allowed to be developed as best it could by small people, who did what they could to raise the money to produce the motor car and put it on the market. The full weight of the country was not put behind the development of the internal combustion engine until the 1914–18 war with the result that during the war there was tremendous development. Not until the lorry came on the roads after the war, did the railway companies wake up and realise that that was transport. In 1921 they put forward the proposal that they should also have their lorries on the road. The refusal to give the railway companies the right to come on the roads was one of the greatest mistakes made by any Government. The report of my right hon. Friend the Member for Oxford University followed.

Not until 1933 did the railways really begin to use lorries on the roads and that was the beginning of proper co-ordination. I have always felt that the right thing would have been to use the lorry to feed and empty the railways, and not to run parallel with and alongside them. But they did not do it. They just remained subject to their handicap, with the goods that they were carrying divided into 21 classes, and the charge they were allowed to make did not depend upon the cost of carriage but upon "what the goods could bear," as it was known, having a relationship not to the transport cost but to the value of the goods. Then, instead of coming to this House and asking that those restrictions should be removed, they came to this House and to the Government and said, "Put further restrictions upon this new invention which is doing us damage, and put restrictions on the roads so that the traffic will come back to us." What, therefore, is the position in regard to railways? They are a monopoly and they have been so for a considerable time. That being so, Liberals have, right up to the Election, said that so far as the railways are concerned, we are of opinion that the right thing to do is to bring them under public control.

Now I pass to the tragedy of the canal system of this country. There you have a wonderful system started very much better than the railway system was started. But just as soon as they really got going, there came the railways, which, more or less, took the traffic away from them. However, there is this always to be said, that, other things being equal, and if time and speed are not of vital importance, carriage by water is cheaper than any other form of carriage. But what has happened? There are roughly about 2,200 miles of canals and I think the railways own something like 35 per cent. The canals have really been allowed to fall into disuse. There was a time, at then-peak, when they carried as much as 40 million tons of goods. In 1938, if I remember rightly, that figure had dropped to about 13 million tons. Some of them are uneconomic and are too narrow—they will only take a seven-foot beam boat, which is today quite an uneconomic proposition. Something like £20 million is required to put those which have fallen into disuse into a proper state and widen those which need widening. I cannot imagine any private concern undertaking that great work; it can be done only by the Government. That being so, so far as the canals are concerned, again, I give the Bill my support.

A few words in regard to ports. Many of the ports are, of course, under public ownership already, a number are under the railways and, in taking over the railways, naturally one would be taking over the ports. In the old days, when I practised in the commercial court and at the Admiralty Bar, one often found difficulties caused by the fact that the facilities in the ports, and the charges, differed so very considerably. That used to lead to a considerable difficulty until they altered the charters and bills of lading because, when you gave to the charterer the alternative of one of three ports, the shipowner then had to calculate which was the most expensive port and charge accordingly, lest that should be the port chosen. So it is absolutely essential that there should be an overall supervision of the ports. Also charges should be put upon an equal basis, and proper facilities for loading and discharging should be supplied.

Mr. Maclay

The hon. and learned Member remarked that a large number of the ports were publicly owned. Would he agree that the number referred to are public trusts—a very different matter indeed from the proposals of the Government?

Mr. Davies

Certainly I will grant that, but that only strengthens the need for coordination. With regard to those matters, therefore, I agree, but now I come to the much more serious one of road transport. The hon. Member for Enfield very rightly pointed out what has been happening-restrictions put upon road transport What the Minister is proposing now, however, is to put on further restrictions [HON. MEMBERS: "Oh."] Certainly. Let us see what has been happening. The first restriction came in 1930 upon the carriage of passengers by road. What happened then? A "closed shop" for the carriage of passengers was created so that their offer was confined to the railways and to a few purely monopolistic companies working within certain prescribed areas, and nobody else was allowed to come in at all. Then came the Report to which I have already referred and the Act of Parliament of 1933, with the invention of the "A," "B" and "C" licences. The common carrier licence—the "A" licence, was almost a complete restriction as soon as the tribunals began to work. What happened? The small man went along and said, "I have two or three lorries," and tried to present his case to the Commission. He had never presented a case before, he did not know the kind of evidence that would impress the Commission but, in every instance, the railway companies opposed him, and they knew the kind of evidence that would impress the Commission. No wonder the number of "A" licences was strictly limited.

There was the same restriction with regard to "B" licences, and the only free one was the "C" licence. Now what does the Minister propose? To take over the "A" licence; to take over the "B" licence, except within a very small area; and to stop the "C" licence, again except within a very small area. What is that but restriction? The effect of it will be, first that you take away from the customer, the user, the producer, the choice of the vehicle which suits him best. It may be that one system is cheaper but that, for this particular business or that particular journey, speed is essential. It may be that he wants direct delivery because of the nature of the goods. Take, for example, the agricultural producer who is bringing fresh vegetables straight from his fields to the market. It is absolutely essential that he should use his own vehicles.

Mr. Barnes indicated assent.

Mr. Davies

The Minister nods his head—

Mr. Barnes

He can.

Mr. Davies

Can he? The Minister proposes to restrict him to 40 miles. Forty miles in London would be all right. because, if he was centered in London with his garage here in Westminster, he could supply one-fourth of the population and 11,000,000 would be within his ambit. But what is 40 miles in Montgomery or in North Wales? How many customers could he then reach? How far is he away from his best market? The idea is that he should be restricted within this narrow area but much more important than that is the right of the producer and the consumer to choose the one mode of transport that he, knowing his business, thinks is best for the purpose. That is to be taken away. In the name of what? In the name of public interest. How much loss may he incur by being restricted in this way? What has been the inquiry into ' that? What evidence is there with regard to it? It seems to me that, on this matter, the Minister is departing entirely from the rule laid down by the Lord President, and is following dogma and doctrine, rather than the facts.

I would like to put this position to him. I have suggested that there should be coordination between road and rail transport. If the national organisation works well, and provides road transport to feed the railways, it will have its return load, and ought therefore to work much more cheaply than private user. But, if that is so, why is the Minister afraid of allowing the private user to compete with him? Is he so afraid that his system may be shown up by the private user with his "A" licence, or "C" licence, running his own lorry? It looks to me as if the Minister were not so sure that the yardstick would not show up the uneconomical running of a road or railway undertaking in a particular instance.

The structure of this scheme provides the Commission at the top. The Minister says that they will be the policy makers, and that the management will be the Executives. But it is the Minister who will appoint the Executive, and it is that Executive which will be the management. They will bring all the facts, from their angle, up to this body, far removed from the public and its problems, and try to persuade the Commission that their view is the right one. If they fail, they say "We do not mind, we can go to the Minister." It may mean then that political considerations will come in, instead of the consideration of public interest which should come first in every case. I should have thought what was really needed was a system which would lead to co-ordination, and the working of road and rail together, which I think is essential, and, above everything—what I find no word about in the Bill—rationalisation. What I fear is that without proper co-ordination and rationalisation, instead of transport costing the people of this country less than it does today, it will cost more. That is why I think the whole structure of the scheme is wrong. I should have preferred a structure of regionalisation which would be nearer to the public, so that we could tell what they needed and someone would be near enough to hear complaints. The fact of the matter is that now the railway companies are too much centralised, and too far removed from the public.

I come to the question of compensation. Why is it that, here, for the first time, except in the case of the Bank of England—where I think the Government were certainly on the very generous side—the Government have fixed their own compensation? Why cannot they do the right thing by submitting the question of what is the right amount to be paid, to a proper tribunal? It is difficult to know what the proper figure is, because the railway companies are statutory companies. Rules in regard to their stock are laid down by Act of Parliament. What is more, they were told by this House that they could earn up to £51 million. They never earned it because this House maintained the restrictions upon them that for a number of years allowed the roads to compete freely. In the meantime, since 1939, they have been completely under Government control. I should imagine one of the most difficult questions that could be put before a tribunal is what is the proper amount to pay? Might I suggest to the Minister that though I am sure he does not want to confiscate, it looks very much like confiscation in this case? It was all very well for some hon. Members to sneer just now in regard to widows and orphans. May I point out to them that these railway stocks have been trustee securities, and that there has been a deep obligation on trustees? What are they to do now when the threat of this Bill comes forward? It would have been very much better if the Minister had—and I hope he will yet do so—reconsidered this Clause and said that he would not lay down an absolute rule, but would sub- mit the matter to a tribunal, to go into the facts and figures, and find out what is just and proper.

We are creating one vast all-embracing monopoly with regard to a matter which, as the Minister himself realises, touches every industry in this country, which may affect the price of goods, the cost of raw materials and every household. But there is no guarantee that the cost to the nation will not be increased, rather than decreased. That being so, I have to put to myself this question. I would nationalise the railways and canals and have proper supervision, but I must ask: Is this a Bill that will really benefit the country as a whole, reduce the costs for the country as a whole, and help the trade that badly needs help at the present time? Having given it the most careful consideration, my hon. Friends and I have come to the conclusion that the structure is bad. We have come to the conclusion that there is now no yardstick by which we can measure efficiency; we think that this is really a bad effort on the part of the Minister, that this is a bad Bill which he ought to reconsider.

6.37 p.m.

Mr. Mellish (Rotherhithe)

I would like to thank you, Mr. Speaker, for the early opportunity you have given me of making my maiden speech. It is rather like a visit to the dentist, in that the waiting period is its worst feature. I feel I am qualified to speak on this Bill by virtue of the fact that I have had nearly 20 years' experience of transport, and by virtue of the fact that I have a recent mandate to indicate the measure of my support for this Bill. I have been advised of the traditions of this House. One tradition is that one does not speak for too long in a maiden speech and another that one does not say anything which is controversial. But, I must indicate to the whole House that this Bill is indeed controversial, at least from the point of view of hon. Members of the Opposition, and anything I may say must, therefore, be regarded as controversial. It will be necessary for me to say many things in my controversial speech which, on an ordinary occasion, one could avoid saying.

I said that I have a mandate to support the Bill, and I wish to make this very clear to the Minister and to hon. Members opposite. I recently fought a by-election in a constituency in which 60 per cent. of the male population are engaged in transport. It is a rather noticeable feature that very seldom do we talk of the people who work in the industry. Usually we are only concerned with stockholders, or people who own various interests, but never of the people who work in the industry. They are a very important factor. In the Division I represent, more than 60 per cent. are actually employed in transport, in some form or another. I made it very clear to them in my election address, and in speeches on the platform, that I was in favour of the Government's proposals to nationalise transport, to nationalise their industry.

I was opposed in this by-election by a Conservative, a charming man who fought a clean fight. But he was batting on a sticky wicket. He made it equally clear that he was opposed to the nationalisation of transport in any way at all. To use his own words, he wanted the industry to be unfettered and free. The result we know. I was elected a Member of Parliament, and he lost his deposit, and was at the bottom of the poll. So that I have a right to say that I come here as a supporter of this Bill in its entirety, and with a mandate that gives me the right to go into the Lobby and indicate my support.

I said I had other reasons for indicating my approval of the Bill. One is the fact that I am now expressing the viewpoint of the people engaged in the road passenger transport services. They know that the old argument put up, that this Bill is just another issue of private enterprise on the one hand, and State control on the other, is a myth. The road transport passenger industry is definitely a monopoly in England and Wales. There is no question that the British Electric Traction Company and Thomas Tilling own almost 80 per cent. of the passenger vehicles in England and Wales, apart from the municipally owned undertakings. The people who work in the industry know the methods adopted by these monoplies in order to gain this measure of control. We know the instances that have occurred again and again in order to stamp out the "small man" about whom we hear so much. They knocked him out years ago, and they gave him very poor compensation in doing so. They called that "acquiring the business". But when the State offers fair compensation in following the same principle, that is, takes over the industry, it is called confiscation, which is quite unfair.

The people who work in this industry are aware that this is not a matter of the removal of private individuals, the "small men"; it is a question of a private monopoly as against State control. The issue before us is whether private monopoly is better qualified to run transport than is State control. I say there is no question that the State is far more qualified to run it than private monopoly, which is not concerned with the individual in the industry, but with the profit motive. We know something of the trials and tribulations of the workpeople in this industry.

I now turn to the commercial road transport industry. Here is an indication by means of figures of the sort of thing that people in this industry have had to tolerate. In 1039, just before the war, 146,000 people were engaged in the commercial road transport industry. The total unemployed was 18,000. In other words, one-eighth of the people were unemployed. A Royal Commission was set up on road transport, and its decisions were: That read transport haulage is operated by a number of independent firms and individuals who, whilst endeavouring to compete with other forms of transport, are at the same time engaged in bitter and uneconomic strife with each other in their own particular branch. We who work in the industry know the consequences of that uneconomic strife. I have just quoted the unemployment figures for the commercial road transport industry.

There is no question that the vast majority of the people engaged in that industry are anxious to see the State take control because they know that only through State control will they be guaranteed some measure of security, some measure of consideration by which they will have a job that is worth having, a job with a future to it. Private enterprise has never offered them that. It never concerns itself with the people who are employed by it. I feel most sincerely on that point. For me, it is not a question of kicking around the old argument of the small man against the big, vast horrible State, but a question of the people in the industry being secure in their jobs. Private enterprise cannot be blamed for its attitude. It is not in a position to offer security, because it is based on losses and profits.

There are a number of points which we in the industry do not favour and would like to see altered because as the Bill stands we feel there is danger in the wording. I would refer the Minister to Paragraph 12, of the Explanatory Memorandum, which says: The body established to provide passenger transport or port facilities under such a scheme may be the Commission or any other body. The words to which we object are "any other body." We feel there is a danger in those words being left in the Bill. We feel that it is the responsibility of the Commission, and the Commission alone, to establish schemes, and not that of any other body. I would like some explanation from the Minister or his Parliamentary Secretary why those words arc included. Another point I would like to bring to their notice is in Clause 67 dealing with passenger road transport. It states: The Commission may, for any area approved by the Minister, prepare and submit to the Minister a scheme as to the passenger road transport services serving the area … The word to which we object is that the Commission "may." We say that the word should be "shall." I am aware of the Minister's endeavour not to be tied down by too much statutory legislation and to be allowed some freedom of action. But we, the people in the industry, the people who really count, want the Commission to be the only people responsible for preparing these schemes, and we would like that word altered.

I wish again to refer to the Royal Commission on transport. Their findings were: That there could not be a complete coordination of transport without unification of ownership and control. They continued: It appears to as that without unification, however it may be accomplished, no attempt to bring about complete co-ordination would be successful The Royal Commission could not reach agreement because they considered the changes necessary would be of such a magnitude that we do not think that they could be carried out immediately. In other words, they knew the solution of the problem, but were overwhelmed by the magnitude of the problem. Here we have a Minister and a Government who have faced up to this problem with vision and courage. They know the solution of the problem. The introduction of this Bill is proof of this fact. I, like my former colleague, say on behalf of the people who work in the industry, the people who really count in this matter, that they are behind the Minister 100 per cent. in the introduction of this Bill. Provided that the Minister remembers those people upon whom he will depend for the success of this scheme, and indicates at an early stage that he is interested in their welfare—the man who drives the vehicle, the lorry man's mate—and intends to ensure that they shall have all the consideration they are entitled to expect, I am confident that they are prepared and willing to give that co-operation which will make transport something of which we can be really proud I would conclude by expressing my appreciation to the House for their kindness and courtesy.

6.50 p.m.

Lieut.-Colonel Sir Cuthbert Headlam (Newcastle-upon-Tyne, North)

It falls to me to congratulate the hon. Member for Rotherhithe (Mr. Mellish) on his maiden speech. I do not think he need have been in the least nervous about it. I have seldom heard a more easy flow of language from an hon. Member speaking for the first time in this House. I feel that he will contribute in the future to our Debates and that perhaps we shall be inclined to be a little more controversial than we were on this occasion.

I listened with great interest to the Minister when he was making his speech. I was extremely disappointed that he gave what I thought were no adequate reasons in defence of his Bill. He explained to us that he had a mandate for it—and so did the hon. Member for Rotherhithe who, I gather, fought the election largely upon this issue—but how many of those who voted at the last General Election or at Rotherhithe were thinking of the nationalisation of the transport of the country? I know one hon. Member on the opposite side of the House who certainly was not one who advocated that transport should be transferred to Government control—at least, not road transport. I heard him address a meeting composed largely of hauliers, and he assured them that there was no such intention on the part of the Government and he gave very good reasons why that was the case. I wonder what he will say now about this Bill?

The truth of the matter is that hon. Members opposite are obsessed with this fetish of public ownership. They have the anti-private profit complex developed to an extent which is almost ludicrous. How could we possibly conduct any kind of business without profit? I am one of those who have no hesitation in saying I am a believer in the profit motive. I believe it is one of the great motives which influence humanity and that without it there would be precious little enterprise or individual endeavour throughout the world. Hon. Members opposite tell us, too, that in economic planning lies our salvation. Economic planning, apparently, has a further interpretation which is rather different from the usual one—at least, if I understand correctly a remark made in a speech by the Minister of Fuel and Power, in what I should imagine was one of his less truculent moods, when he was ruminating a little upon the consequences of what he was doing. He said: Now we have gained power we recognise our limitations and shortcomings in the field of actual preparation. We had very little guidance in detail, so that when we come to legislation and detail we had to improvise. Improvisation is the word now; improvisation, apparently, is another term for economic planning. We could not have a better example of it than is afforded by this Bill. The Minister of Transport seems to be a complete believer in improvisation. He rejected with contempt any idea of an inquiry before he brought forward this Measure. I cannot understand why he should take that view. What the hon. and learned Member for Montgomery (Mr. C. Davies) said just now, is perfectly true. There has been no inquiry into the "integration" of transport. So far as I know, we have never really had any public inquiry since the Salter Report and, as the senior Burgess for Oxford University (Sir A. Salter) who was chairman of the Commission which made the inquiry himself explained in the House, they had not had time or the authority to deal with that subject, but had recommended that there should be such an inquiry.

It is obvious now when practically the whole of the transport of the country is to be coordinated, reviewed and reconstructed, that so great a change should not have been attempted unless there had been some definite inquiry as to the best method of doing it. It is perfectly absurd to suppose that this Bill has been properly thought out or is anything but a move in the dark. It does not promise the country the slightest evidence that what we want and need—cheaper and more efficient transport—will be the result. At this moment when trade and industry must be revived at all costs, it is a great mistake suddenly to change the whole of the administration of the transport services of the country.

What is the advantage of this type of public ownership? Really, so far as I can see, it makes the Minister of Transport a dictator. I should say that it makes him more powerful than any Minister has ever been in the history of this country. I intend to confine my remarks and criticisms of the Bill to this side of the question. It was dealt with by my right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe) in his speech, but I do not think it can be made too evident to the public at large what the powers of the Minister are to be under this Bill. I consider this is the gravest charge against the Measure as a whole. I will enumerate some of these powers. The Minister is to appoint the Commission, the Executives, the Central Transort Consultative Committees, and he may, if he so chooses, abolish any of these committees. He also appoints the Transport Tribunal. He may give directions to the Commission on matters affecting the "national interest" whatever that may mean. I cannot find any definition in the Bill which really explains what is meant by those words. Not only can the Minister do this, but the Commission must act on the lines laid down by him in framing programmes of reorganisation or development which involve substantial capital outlay, and must also obtain his consent to lend money, to give guarantees, or to acquire certain transport undertakings by agreement.

Major Poole

Would the right hon. and gallant Gentleman not agree that if the Minister has such wide powers this House, by virtue of its control over the Minister, retains unto itself a wider degree of control over this Measure of nationalisation than under any other previous one which has been before us?

Sir C. Headlam

I do not deny that the Minister is responsible to the House, but I have sufficient experience of public affairs to know that that does not necessarily prevent a Minister from using his powers to the full. Of course, he is responsible to Parliament, but if we give him in an Act of Parliament all these powers, I do not quite see—

Major Poole

To take it one stage further, we might make a comparison between the provisions in this Bill and those contained in the Coal Industry Nationalisation Act. This House has no power to challenge the Minister on any appointments which the National Coal Board may make. Therefore, I think the House is in a very weak position in that respect. Under this Bill, however, this House retains full powers to inquire why any man is appointed to any position.

Sir C. Headlam

I suppose the hon. and gallant Gentleman voted for the Act of which he disapproves. I disapprove of that Act entirely. I do not see that the point which he makes is an important one. Whether or not the National Coal Board is directly responsible to Parliament, it is obvious that if this House took exception to anything it did, the matter would be brought to the notice of the Minister of Fuel and Power. In this Bill, the ultimate position is the same, but we are definitely giving all these powers to the Minister and that is what I object to.

Let me give some more examples. The Minister may require the Commission to discontinue any of their activities or dispose of any part of their undertakings. The Minister has to approve all coordination schemes for passenger transport or for port facilities under Part IV of the Bill. The Minister may also direct the Commission to prepare charges for submission to the Transport Tribunal, and he can require the Tribunal to review such charges. Further, the Tribunal may not do anything inconsistent with the directions given by the Minister to the Commission. The Minister may also exempt the Commission from statutory provisions as respects undue preference. I do not know what that means, but it seems to me that there may be a rather sinister interpretation of that provision, which the Minister may like to explain later on. The Minister's consent is necessary, as well as that of the Treasury, for the exercise by the Commission of their borrowing powers, and the Minister may give the Commission specific directions regarding the form of their accounts. Indeed, there is hardly anything in which the Minister is not to have his say. We are to be entirely under the dead hand of Whitehall—or rather of Berkeley Square—

Several Hon. Members rose—

Mr. Sydney Silverman (Nelson and Colne)

Will the right hon. and gallant Gentleman allow me? I was wondering whether he will explain to the House, on the assumption that the railways are to be nationalised, which of the Minister's powers he would dispense with? Would he prefer the Commission not to be responsible to anyone?

Sir C. Headlam

I do not quite understand the question. Would the hon. Member like me to go through all these powers again and say which of them I think it is desirable should be reserved for the Minister?

Mr. Silverman

Surely, I am putting a perfectly plain question, and, I hope, a fair one. The right hon. and gallant Gentleman is reciting a list of the powers which the Minister is given under the Bill. I am asking him to say that, assuming that this House has decided in favour of nationalised transport, which of these powers would he think the Minister should not have?

Sir C. Headlam

I should have thought that, if the Commission is to run the transport of this country, it should not be entirely under the control of the Minister.

Mr. Silverman

Answerable to nobody?

Sir C. Headlam

The Commission should be a body able to judge its own business.

Mr. Silverman

Answerable to whom?

Sir C. Headlam

Answerable to public opinion and to Parliament.

I notice that, in the Press yesterday, we were told that the Government were getting particularly anxious about the number of officials and the growing bulk of the Civil Service, and that the Chancellor of the Exchequer was examining this increase with a view to reduction and that the Treasury was requiring the Departments to examine the number of their personnel with a view to cutting them down. Why this Government which, every day in the week, increases the number of the Civil Service, has suddenly decided that some of its personnel should come out, though perhaps to reappear in another place later, I do not know; but it is clear to me that, if this Bill passes into law, the present personnel of the Ministry of Transport will not be sufficient. There must be an increase in the administrative and technical personnel in that Department. When I had the honour of serving in that Department some years ago, I thought that we were under-staffed for the work we had to do. What the condition of things now must be I do not know, but, if this Bill passes into law, it is certain that the Department must be increased enormously, and there will, undoubtedly, be a great increase in personnel throughout the whole of the transport services.

I do not intend to detain the House any longer, because so many hon. Members wish to speak. I think each hon. Member would be well advised to direct his remarks to particular aspects of the Bill, and not to attempt to go through all its many failings; otherwise, there would be few, but very long, speeches. I shall vote against the Second Reading of this Bill because it is unjust and unfair, and because it is not calculated in any way to increase the trade, commerce and general well-being of this country. I am certain that it is grossly unfair to the haulage industry, and I am not at all convinced that it is right or proper to take the powers that the Minister is taking over the ports of this country. I shall vote against it with an intense desire that it may never pass into law.

7.6 p.m.

Mr. Wilkins (Bristol, South)

I am rather encouraged in my few observations of mild criticism of one or two Clauses of this Bill by the invitation which the Minister himself gave when presenting the Measure to the House. The right hon. Gentleman invited us to make any criticisms—if possible, constructive criticisms—and said he would be pleased to accept them. So, while welcoming in all its general principles and proposals, this comprehensive and somewhat intricate Transport Bill, I nevertheless desire to call the Minister's attention to the serious situation which may arise—I say "may"—under the provisions of Clauses 27 and 70 of the Bill as it now stands, in relation to the municipally-owned dock undertakings, especially where their position is brought into comparison with their hitherto formidable competitors—the railway-owned docks, which will, most certainly, come under public ownership under the terms of this Measure.

I am advised that there are only two major municipally-owned docks in the country—at Preston and Bristol. That is, of course, not bringing into review the Port of London Authority or the Mersey Docks and Harbour Board, and other similar trusts. I need hardly remind the House, and certainly not the Minister, who has visited our undertaking at Bristol, of the great part played in the war by our docks, and, even more important, by our dockworkers at Avonmouth and Portishead, who set up many records during the war for the rapid turn round of both inward and outward-bound troops and food convoys. Their importance, at the time, was due largely to the fact that they were situated on the Western seaboard, at a time when enemy bombing activities were seriously menacing the docks on the East coast, and, particularly the Port of London. Because of this, and even for reasons of strategy alone, the Transport Commission, through its Docks and Inland Waterways Executive, will most certainly be bringing the future of these docks under review, and I hope that, if the Minister is himself able to reveal what is likely to happen in this connection, he will do so during the course of the Debate or through my hon. Friend the Parliamentary Secretary, when he replies.

If we look at Clause 70 (4, d), we may readily discover the cause for the anxiety and apprehension in the minds of those responsible for the operation of municipal docks like Bristol, Preston and many other smaller local authority undertakings Subsection (3) of the Clause says: (3) The Commission may, in respect of any trade harbour or group of trade harbours, prepare and submit to the Minister a scheme for promoting, or facilitating the promotion of, the co-ordination of the provision of port facilities in or in connection with the harbour or group of harbours. Then Subsection (4, d)—and this is the important point which I want to make here—says: Any such scheme may provide for all or any of the following matters, that is to say—(d) for specifying the port facilities which are to be provided in or in connection with the harbour or group of harbours, and for prohibiting or restricting the provision of port facilities in or in connection with the harbour or group of harbours. … I listened attentively to the speech of the Minister, in the hope that some elucidation of this vague, and I think to some extent intriguing, proposal contained in Subsection (4, d) would be forthcoming. But we had no guidance or explanation of any sort. I know the Minister did explain to the House—and I accept the explanation —that the Bill was so long and complicated that he could not deal in detail with all such items as this. But I do ask him, or whoever is to reply, to say what these prohibitions and restrictions are to be.

On the Welsh side of the Severn estuary there is a formidable array of railway-owned docks—Cardiff, Barry, Newport, and Swansea; and farther up the river there are the Sharpness and Gloucester docks. It is clearly indicated in the Third and Fourth Schedules to the Bill that all those are to be taken over, and their securities are to be replaced by British Transport Stock. Now, in all probability these docks will form one of the groups of harbours envisaged in Clause 70 (4, a).

Any fears which I, or the Port of Bristol Authority, may have in this connection may be entirely unfounded. I sincerely hope they are unfounded, and perhaps the Minister will be good enough to say that that is so. But I hope he will indicate what will happen to us in Bristol—and probably in Preston. Are we to be brought completely into public ownership, or are the docks—and this is a rather important point—to operate as an independent undertaking in competition with, say, the harbour group which I have previously mentioned, but under the direction of the Docks and Inland Waterways Executive, with its powers for prohibiting or restricting the provision of port facilities?

This brings me to the question of the financial provisions of the Bill. Speaking in general terms, securities are to be replaced by British Transport Stock. Clause 27, however, sets out the provisions which arc to apply to local authorities. Now, I have tried to make it clear in my earlier remarks that, so far as I am aware, there are only two major municipally-owned docks in the country. There are, I think, about 70 very small municipal docks which merely amount to a small harbour or quay, or something of that sort. Therefore, these provisions will apply essentially to the two major undertakings which I have already mentioned. If the House will bear with me, I can quote only what will happen in the case of the Port of Bristol Authority, because I am very closely associated with that undertaking. The, compensation which is provided under Clause 27 is not a lump sum represented by British Transport Stock, but an annual consideration in lieu thereof equal to the present commitments under the sinking fund contribution, plus interest on outstanding loans, until such time as the sinking funds are sufficient to redeem the securities issued in respect of the stock of the dock undertaking.

This means, in effect, taking the period ending 31st March, 1946, that for assets which are worth £11,050,000 the compensation payable will be roughly £5,175,000. The Commission is, therefore, acquiring assets costing £5,875,000, in round figures, without recompense to the city for then-original outlay. I would remind my right hon. Friend that a large part of the land upon which the dock works are built is included in the debt already redeemed. If an Order were made under Clause 70 the Commission would, therefore, acquire valuable industrial land, some of which is not yet built upon, without any payment whatever. I would like to make this point, that in rates-in-aid which the city has contributed towards the docks there is a sum of something like £3,500,000, most of which has been a set-off against sinking fund obligations imposed under various Acts and Orders. The Transport Bill does not provide a means for compensating the city for their outlay in providing capital assets.

There is one other point on the financial aspect of the matter so far as a city owning its dock is concerned. The financial terms which are proposed in respect of undertakings taken over from local authorities are based on outstanding debt. It appears, therefore, that the Bristol Docks could be acquired much more cheaply than any of the others. I think the same position would actually apply to Preston, according to the figures which I have had given to me. But in Bristol there are assets to the value of £11,050,000, and the outstanding debt is £5,175,000, which means that the percentage of compensation to the value of the assets is only 46.8. In the case of the Port of London Authority, where there are capital assets of something like £42,471,000, with an outstanding debt of £36,673,000, the percentage of compensation to the value of the assets would be roughly 86.4. The same applies very largely to the Mersey Dock and Harbour Board. The adverse effect on Bristol is due to the more onerous sinking fund obligations imposed on local authorities for the redemption of debt. I appeal to the Minister to look again at Clause 27 before the Bill goes to a Standing Committee, with a view to its amendment to make some slightly more generous provision for local authorities. I do not think local authorities have it in their minds that they should be recompensed to the full amount of the expenditure that they have made upon their dock undertakings through their rates. But they definitely have it in their minds that the Minister could partially meet obligations which they have entered into in the past, or which the ratepayers have been called upon to finance in the past.

There is only one other point, which I will deal with very briefly. I want to ask the Minister whether he will consider amending the second paragraph in Clause 40 (2)—which relates to goods which are to be exempt and the distance that they may be carried—to make provision for the carriage of perishable farm produce. It may be that under the provisions of the Bill it will be easily possible for produce-brokers who have been accustomed to collecting their farm produce from certain farms outside a 40-mile radius to obtain a special licence, but I would like to quote this one example. Practically all the produce brokers in Bristol go to the surrounding countryside, Evesham and Bedfordshire, to collect farm produce. I am informed, reliably I think, that Bedfordshire is rather difficult from the point of view of rail transport into Bristol. What it means is, that the broker can normally go out overnight, leaving in the afternoon, collect produce which has been cut on the farms the same afternoon, and bring it into the city so that it is actually on the housewives' tables, fresh, within 24 hours of being cut on the farm. As I say, it may be that provision is already in the Bill for an extension in the licences which may be granted for the radius of operation, but I would like the Minister to be rather more explicit on this point—a request which I have been asked by other hon. Members to make. Could we therefore have a more explicit statement when the reply to the Debate is made?

7.22 p.m.

Viscountess Davidson (Hemel Hempstead)

I have no desire to detain the House long but I feel it essential to express very strongly my disapproval of the Government's action in bringing in a Bill to nationalise transport, particularly at this moment when we are passing through a very anxious transitional stage in which the extension of our trade must not be hampered, and industry must not be asked to carry unnecessary burdens. It is impossible to touch on all the aspects of this Bill, and I must content myself by saying that I look on this Bill as a thoroughly bad Bill, which will create chaos in industry and retard our recovery.

We all realise that the Socialist Party believes implicitly in nationalisation. But the test of any such scheme is first, will it work, and secondly, will the public receive the best service under it? Thirdly, will it create efficiency or inefficiency? That is what really matters at the present moment. Those of us who had the opportunity of examining transport questions during the war, know that much chaos resulted from the central direction of our war transport. Had it not been for the war, I think many scandals would have been apparent. There were cases of lorries sent empty from the North of England to the South, of men kept hanging about for hours—a waste of time and of manpower—and I can see in the future many ships being kept waiting for goods which should have gone in them, because transport will not be available for the firms who wish to send those goods abroad.

The efficient running of an industry means prosperity for that industry, therefore individual firms cannot afford to be inefficient, particularly when they know they are up against sharp competition and that, if they do not do the job they are asked to do, some other firm will be asked to do it instead. Waste of money cannot be allowed by an individual firm or by an individual owner, but what is the position under central control? The expenditure of public funds (out of the pockets of the individual taxpayers) is very often far distant from the minds of those who are running the organisation at the centre, and though those men may have the very best intentions, it is not the same as if they were dealing with their own money, or the money of their own shareholders. One has only to listen to the Debates in this House to realise how apparently easily and lightly the present Government spends other people's money. How is our export trade to succeed, if manufacturers have to obtain licences for transport and have to wait in queues for those licences for a very long period? I cannot see how we are going to compete against foreign countries and get back our export trade. Yet at this moment we are being pressed by different Departments to expand our production and our export trade with as little delay as possible, and on our being successful in so doing depends the livelihood of the bulk of the people of our country.

With regard to the question of compensation, it is tragic to have to admit that we have reached the position where the Government bring in legislation which will cause unnecessary suffering to thousands of people. Many of these people have been themselves employees of the railway companies, they are living on small pensions, and have invested their money in the companies because of the high standard of the security. They are people who are suffering very greatly already because their pensions or their small incomes have not increased, while the expenses of living have greatly increased. Under this Bill their position will be far more serious than it was before. I very much hope that the Minister may be able to reconsider the question of compensation. Otherwise it will certainly appear that neither the Minister nor the Government is interested in a very un-vocal but large section of the population who, through no fault of their own, live on small incomes from investments.

I am very glad that the hon. Member for South Bristol (Mr. Wilkins) brought up the matter of the carriage of farm produce because I want to say a few words about the men who hold "C" licences. These men carry goods, very often perishable goods, from farms and other outlying productive centres to the towns where the goods are sold I cannot understand who, in the Ministry of Transport, decided on the 40-mile radius; whoever made that decision cannot have had any personal experience of how these goods are handled. The 40-mile limit will make it impossible for these perishable goods to be carried. Hardly any of these men who hold "C" licences have any idea of when they will be called upon to collect the goods, or how far they will have to take them. I do not suppose there are many hon. Members who have not received a very large number of letters from individual drivers who hold "C" licences. I wonder if I may be allowed to quote one extract, which could be multiplied a hundred times? This writer—it is a letter I received only this morning—expresses the view that the 40-mile limit will seriously hamper him in carrying on his business, and cause immense inconvenience to the public. I speak as one representing an agricultural constituency, where the bulk of these people live, but may I say that hon. Members who represent the towns will feel this a great deal more seriously in the near future, because it is they who will get the repercussions from the public when these goods are not as easily available as they have been in the past? The writer of the letter states: You will realise that the perishable nature of the goods I handle makes it imperative that they be transported from the farms on which they are grown to my premises with the least delay possible. If this is not done it means that the vegetables reaching the shops in the area are in a stale and unattractive state. As this district is not a market garden centre, I am forced to draw a very large percentage of my produce from Bedfordshire, Cambridgeshire and Northamptonshire. If my limit is reduced to 40 miles, it will mean that I shall be barred from making journeys to the latter two counties. As things are at present, I can always ring up my supplier when I find myself running short of anything and can arrange to fetch further supplies almost immediately. If, however, I am compelled to rely on other transport, it is obvious that I must make my arrangements several days in advance, and as it is quite impossible to tell my exact requirements for any given period, I cannot but be continually either short of these goods or over-stocked. As every wholesaler in this constituency will be similarly placed, I urge you to do all in your power to see that this trade is added to the present list of exemptions from the 40-mile limit. I very much hope that the Minister will be able to reconsider this question, because it will affect vitally not only these men who hold "C" licences, but a very large section of the population. I believe that before very long, the public will look back on this day as the day on which the Government made one of their greatest mistakes. We cannot, alas, prevent that mistake; we cannot defeat the Government; we cannot prevent the damage being done, but we shall be able to comfort ourselves with the knowledge that we have warned the country, that we have worked against this Bill, and spoken against it, and I am glad to say that I shall also be voting against it.

7.31 p.m.

Mr.. Monslow (Barrow-in-Furness)

I am glad that I have caught your eye, Mr. Speaker, in this Debate, as I have been closely associated with the railway industry for a number of years, and I am vitally interested in this problem of transport. I listened to the arguments which have been adduced by right hon. and hon. Members opposite, and I have heard so far no constructive or concrete proposals as an alternative to the Measure which has been submitted to the House by the Government. I suggest that right hon. and hon. Members opposite might take the opportunity of mixing with the staffs of rail and road transport undertakings and discussing the problem with them. They would then find that the average employee, whatever his position, sincerely believes that the time has come when the nationalisation of railways and road transport should become an accomplished fact, within a State-transport organisation. Some may ask why consideration should be given only to employees. They are vitally interested in this fundamental change, and I would beg the Minister to take into account, when dealing with this Measure in its later stages, the views of those engaged in these vital industries. But what of the public point of view? By the will of the people, a Government, pledged to a policy of nationalisation, are in power with a great majority, and what is more important, are giving effect to their policy. I want to say a word on another aspect of the matter. Countries, which at a given moment are not masters of their transport, will be condemned to ruin in the economic struggles of the future. So said John Stuart Mill, and I endorse the sentiments he expressed. Those who have been in close contact with the railway industry, have become weary of the lip service paid by capitalist politicians. In times past, railway nationalisation has been recognised as essential. May I refer to the statement made by the right hon. Gentleman the Member for Woodford (Mr. Churchill)—which I do not need to reiterate—and to the reply of the Lord President of the Council in the Debate on the Address? It was then shown that the right hon. Gentleman the Member for Woodford had given nationalisation his 'blessing. May I also remind hon. Members that that illustrious Welshman, Mr. David Lloyd George, as he then was, also gave his blessing to nationalisation in days gone by, as did Sir Eric Geddes? All of them have betrayed the nation's trust in this and other matters of extreme gravity. In 1918, Mr. Lloyd George, then Prime Minister, told a deputation of the British Trades Union Congress Parliamentary Committee that he was in complete sympathy with the projects for railway and canal nationalisation. He said that the State's superior credit would create economies, permitting the payment of better wages to the workers, and the provision of better facilities for the trading and travelling public. He complained of the waste which took place under private enterprise. May I recall another memorable speech, delivered in this House, on 17th March, 1919, by a former very distinguished Member, Sir Eric Geddes? On the Second Reading of the Ministry of Ways and Communications Bill, he said: Except in the one bright instance of the municipal tramways, the transportation systems of this country today are not prosperous. But the system of transportation is the creation of the community. It has been developed, he said, under legislation which was "illogical" and "almost incomprehensible." Private enterprise, he said, "makes for colossal waste" and he continued: The transportation agencies will be comparatively barren and sterile in economy and development until this unified control is brought in. … This will come as a shock to some who believe in individualist effort. … The railway interest is a community interest. Agriculture has got to be developed. … The State must come in and make economies possible … If you cannot get efficiency by means of private management, then nationalise. … We must not commit the folly of our predecessors and allow the development of every system on its own principles, and of every system according to the whims and notions of those who introduce it. … Transportation is the greatest power that we have for bringing prosperity to the community. … We must eliminate wasteful haulage; we must standardise. … One of the first acts which the Government will take, will be to acquire on lair terms the private wagons of the country."—[OFFICIAL REPORT, 17th March, 1919; Vol. 113, c. 1761–84.] Surely, strong language from a non-Socialist. Lord Leathers, who was Minister of War Transport, has said that what is needed is a transport system so co-ordinated and run that -it can provide the best possible service for the least real cost to the community as a whole.

The present railway position is governed by the Railways Act, 1921, which has simplified the problem of nationalisation. Hitherto there were 125 companies, with all their managers, and 700 directors. Now there are only four companies, with their general managers, and 102 directors. I presume that that was done in the interest of efficiency, and I suggest that if it was done in the interest of efficiency, the argument for further amalgamation, unification and nationalisation, into one system, is complete. The inevitability of complete unification and nationalisation was admitted as early as 1844, when an Act was passed enabling the State to purchase all railways constructed after that date, at 25 years purchase upon three months notice. Under the Regulations of the Forces Act, 1871, the Government took control of the railways at the outbreak of war in 1914. The Defence of the Realm Act and Regulations of 1914, and similar previous Acts, have enunciated the principle that in times of public necessity, the Crown was always entitled to take over private undertakings. We on this side of the House maintain that in the interests of efficiency, and in view of the universally recognised principle of the supremacy of public need over all other considerations in wartime, that same philosophy shall apply also in peacetime.

May I briefly refer to main line railways and road haulage associations? Adversity makes strange bedfellows. I remember vividly that, a short time ago, the main line railway companies were appealing for a "square deal" against their road competitors. The Road Haulage Association were fighting to hold a privileged position whereby they could accept or refuse traffic. Each was endeavouring to secure and maintain their undertakings on the highest profit-earning basis. Now that the Government have decided to give effect to the will of the people these former competitors in the industry have decided to forgo their differences—or at least to marry then-interests—in the hope that they might work together to defeat the Government, and perhaps delay the inevitable nationalisation of the industry. That is most audacious effrontery. But the days of capitalist exploitation are drawing to a close.

I want to say a word or two about the problem of compensation, on which I shall probably have something more to say during the Committee stage. The suggestion has been made, through the medium of the yellow Press, that those associated with the trade unions will lose income as a result of the payment of compensation under this Bill. May I say, on behalf of the great bulk of railway workers, that we are not prepared to examine the Bill solely from the point of view of monetary considerations. We are primarily concerned that this Bill will, for the first time, make for improved conditions, and the economic security of the railway workers, which are more important considerations. But I warn the Minister that we shall not stand for procrastination and delay. There has been too much procrastination and delay under private enterprise. There will be no such delay, I hope, in the creation of the necessary machinery to effect a definite improvement in the economic life of the workers engaged in this vital industry.

Unless there is a fundamental change, nationalisation will have no meaning for those in the industry. We expect a Socialist Government to be model employers, and I warn even this Government that if they fail in that direction, the results will be catastrophic, and nationalisation will not be the factor it should be in promoting the wellbeing of our people. I congratulate the Minister on having introduced this Bill. The great bulk of those associated with the railway industry have longed for such a Measure for many years past, and they will wish to see it placed on the Statute Book.

743 p.m.

Mr. Glossop (Howdenshire)

I should have liked to follow my hon. Friend the Member for Hemel Hempstead (Viscountess Davidson) in what she said about "C" licences, because I can assure her that while her postbag is large, mine is much larger on the same subject. I appreciate and support what my hon. Friend said, but as there are so many Members who wish to take part in this Debate I want to confine myself to one aspect of this Bill. I should like to say something about the road passenger transport industry which, after all, affects not only the towns, but also the countryside. Along our country lanes, for many years past, private passenger services have been provided to enable our people to go to market. I have some small knowledge of this industry, because I happen to be a director of a bus company in Yorkshire [HON. MEMBERS: "Hear, hear."] I hear, from the other side of the House, some ironical applause, which would seem to suggest that I am talking from the point of view of a vested interest.

In 1919, where I lived, a man was left £200 by a local doctor, who had employed him as his coachman. That man came to my father and said that he wanted to start a bus service with a charabanc, which, would be open in the summer time and would have a glass roof in the winter. My father said, "I have known you for 40 years. You are a hard working and thrifty man, but I will not lend you the £200 to put into a charabanc because you will lose your money. If you wish to put it into an ironmonger's business, or a farm, or a smallholding, you can have it." My father may not have realised what passenger transport might become. The man got his money, and started with his charabanc. Then he got two or three buses, and provided a service where nobody else did so. Eventually, his undertaking was taken over and became the East Yorkshire Motor Bus Company. That is private enterprise for you. It is all very well for Members opposite to slang people for their private enterprise, but had it not been for private enterprise and the wealth which it creates, none of these wildcat theories of nationalisation could have been put into effect by the Socialist Party.

I want to assure the House that under the present system of management of privately owned bus companies it is the policy that the local manager shall be given the maximum amount of authority and power. When you are dealing with a bus undertaking 200 miles from London circumstances change from day to day. The requirements of a particular route vary at frequent intervals and, therefore, it is essential that the general manager shall be given the right to decide upon, and provide for, the services that are required. We have heard from people who support the Government that transport should not be a private monopoly. Is that really true of the industry? I hope, in a moment or two, to show that that monopoly does not, in fact, exist. Our present passenger transport system is indeed unique. It is efficient; it is cheap; it is coordinated; it is effectively controlled; the interests of the travelling public are protected from exploitation. Its sufficiency has on many occasions been praised by those who support the Government, and by many Members of this House who now hold high office in the Government. Even such an august body as the National Executive of the Socialist Party has paid tribute to the efficiency of the country's passenger transport services.

It is an undisputed fact that there is no form of mechanical transport which is cheaper than an omnibus. If Members think that that is a sweeping statement I would reply that there are several passenger transport undertakings which offer travel at a cost of less than a halfpenny per passenger mile. If anybody doubts that he should inquire of the fares of the Merseyside services of the Ribble Motor Company. It is true to say that the fares throughout the country as a whole are about one penny per passenger per mile. There has been already, without a Socialist Government in office, widespread co-ordination of services between both companies and municipalities. For example, in my own constituency, which bounds on the ancient and important city of Hull, there has been for many years a joint committee of the bus company and the corporation with regard to the inter-running of their two services I can say, without hesitation, that where it is necessary in the interests of the travelling public—and, after all, this Bill, or any other Measure, should be in the interests of the public—that there should be coordination, then co-ordination has been achieved.

The Minister, in moving the Second Reading of this Bill—and I should like to make it clear that I have only my notes of what he said, and I do not wish to put into his mouth anything which he did not say—said that if the buses of the country were brought under national control, the country bus services would synchronise with the railway services at the rail head. Where geographically possible, that is already being done. There has been great road and rail coordination. It may interest hon. Members opposite to know the extent of the coordination between road and rail at the present time. The main line railway companies have been for many years large shareholders in the large bus companies, and there is a very close working between them. If I may give an example, it is an extremely difficult railway journey between Doncaster and Barnsley. It is necessary to change on the way, and there are only about two passenger trains a day. There is, however, a bus service every half-hour. That is coordination without the compulsion of nationalisation. There is most effective control at the present time with regard to fares, routes and frequencies.

Mr. Ernest Davies

May I ask the hon. Gentleman if he, therefore, disagrees with the statement of the Chairman of Tilling who, at the last annual general meeting of Tilling's, stated that there was no coordination on the scale that there should be between road and rail passenger transport?

Mr. Glossop

I am much more interested in the views of the travelling public than I am of any individual man, and if the hon. Gentleman will come with me during the Christmas Recess to Doncaster, and ask, outside the station, what transport facilities there are between Doncaster and Barnsley, everyone will tell him that since there has been coordination between the bus company and the railway company it is much easier to travel between those two important coalmining towns. There is at the present time most effective control with regard to fares, routes, frequencies of services, conditions of vehicles and even labour conditions. This is exercised by the Traffic Commission under the Road Traffic Act, 1930.

There has been plenty of control, and the Road Traffic Commissioners can exercise that control over the whole omnibus system of the country. Under the Road Traffic Act. every road operator has to obtain a licence to operate on a given route. There may be some hon. Members who think that when once a licence has been granted its renewal is automatic. That is not so. Every licence comes up for renewal within a period of one year and three years, and even during the continuance of a licence it may be reviewed by the Commissioners, who may direct other operators to run on that particular route.

Mr. David Jones (The Hartlepools)

A moment ago, the hon. Gentleman said that it was necessary to have local managers on the spot, because the services changed from day to day, and they could meet the changed situation. How does that come about if a bus cannot be put on the road without a licence from the Traffic Commissioner who has to post a notice of proceedings for at least 14 days before he can hear an application?

Mr. Glossop

The answer is that we have very good Traffic Commissioners in this country, and some very sensible managers of bus companies. When we get two sensible men in a particular area discussing problems we get satisfaction for the travelling public, which we will never get if the Commissioners are sitting in London and have civil servants controlling the bus services in Yorkshire or Lancashire. Under the Road Traffic Act, 1930, there is in fact no real monopoly in the way that hon. Gentlemen opposite would like to suggest. When an application is made for a licence to operate a service there is an inquiry by the Traffic Commissioners, which is held in public, and any member of the general public has a right to make his voice heard when the licences are granted. The hon. Gentleman opposite has suggested that I am trying to suggest that this system does not work at the present time, but the fact remains that the Traffic Commissioners have no difficulty in securing all the services which they think are necessary to be provided by the existing operators.

The Minister suggested that under the present system there were many people in the countryside who had no bus facilities, because it did not pay to run a bus service, but once we nationalise the thing—the word "nationalise" to some hon. Gentlemen is almost like holding out a piece of candy to a child—once we nationalise the bus industry of the country, then the country districts would automatically get a service. [AN HON. MEMBER: "Why not?"] It may interest the hon. Gentleman to know that at the present time a large number of operators run a substantial proportion of their services at a loss. They continue to do so, because if they did not provide a service on an unremunerative route, the Traffic Commissioners would say, "If you. will not operate from A to B—we know it is not an economic route—we shall take away from your existing licence a section of your economic route."

Mr. Sparks (Acton)

Will the hon. Gentleman say how long it would be possible for a person to operate a bus service at a loss?

Mr. Glossop

I am interested that the hon. Gentleman opposite suggests that the bus companies are not making money. I thought that one object of nationalisation was to take over something that was profitable. I will give him two instances. Forty-eight per cent. of the services operated by the Birmingham and Midland Omnibus Company, and 64 per cent. of the services run by the Southern National Omnibus Company are actually run at a loss.

Mr. Mitchison (Kettering)

Is the hon. Gentleman aware that the Birmingham and Midland Motor Omnibus Company is indirectly a subsidiary of the British Electric Traction Company, and that that company has by no means done badly in this industry, since its ordinary shares are standing at 10 or 12 times their nominal value?

Mr. Glossop

I am prepared to admit that the company to which the hon. and learned Member refers is a subsidiary of the British Electric Traction Company. The only bus company of which I am a director is also a subsidiary of the British Electric Traction Company, but the accounts are kept separately. I am not suggesting, because a company runs on certain routes which are uneconomic, that, taking all the routes and fares, it will lose money. What I suggest is that with the power of the Traffic Commissioners in the background, private enterprise has been prepared to run uneconomic services, but that if the Traffic Commissioners had not been there, people being what they are might merely have operated the more profitable routes.

I want now to deal with the proposals in the Bill regarding the omnibus services. Power is taken in Part IV for the Commission to put forward schemes for the Minister to operate services in any particular area and to provide for the passenger road transport needs of that area. It may well be that a scheme will appear out of the hat without the existing operators even being consulted The autocracy of a future Minister of Transport—not, I admit, the present Minister, but Ministers of Transport come and go—might be such that he could make a scheme effective by Order. Furthermore, the Minister may initiate a scheme by directing the Commissioners to proffer one. The Minister is to be both prosecuted and judge, and even a little more. Under these schemes there is to be no provision whatever for an independent inquiry into the merits of the schemes. Under the present Road Traffic Act, public inquiries, have to be held by the Commission, but under this Bill no requirement is placed on the Minister to hold such an inquiry. I suggest that a greater departure from the traditional standards of fairness and justice of this country could hardly be imagined than that which is made by this Bill. An equally unfair effect of Part IV, which deals with the passenger transport industry, is that the mighty British Transport Commission, and any bodies which they may set up under the scheme to provide a bus service, will presumably be exempt from the Road Traffic Act, 1930, relating to the licensing of services. The fares and the frequency of services will be removed from the local knowledge which the very excellent and knowledgeable Traffic Commissioners have at the present time. It may be possible, under the piecemeal arrangements of Part IV, that there will be an operator running under the direction of the Traffic Commissioners and a State-owned bus running under the direction of the Commission. Omnibus fares, which a large majority of the people of this country pay daily, will be removed from the august atmosphere of the Transport Tribunal.

With regard to compensation, we have often heard that, under the nationalisation proposals, the Government intend to deal fairly with the people who have their money invested in industries which are to nationalized. Under Part II of the Bill, which deals with how railway shareholdings are to be nationalized, the Minister has power to compensate. If he does not like that part of the Bill, he has an alternative under Part III, which deals with the road haulage industry. If he does not like either of those two methods, under Paragraph (I, c) of the Sixth Schedule he can do exactly what he likes. In other words, compensation is to be at the entire discretion of the Minister. He may award it under Part II or Part III, or on any other basis that he thinks fit. This matter might even be so handled as to give only token compensation for nationalisation.

What really is the case for the nationalisation of the road passenger transport industry? I say, in all humility, that the result of this Bill if it becomes law, will be bureaucracy run riot. Criticism of the Commissioners who are to provide us with transport will be very difficult, because there will be such a veil of secrecy with regard to their accounts that it will be almost impossible to extract any information from the Minister of Transport. There is one thing that I think may have more influence on hon. Members opposite than anything else I have said. Like hon. Members on this side of the House, they will have received a letter from the Public Transport Association, Inc. That body represents no fewer than 42,000 passenger vehicles of all kinds—not taxis and private hire cars, but buses, trams and the like. The organisation is not a company organisation, but is a body that is equally supported by the municipalities. At a recent meeting, as the letter tells us, the council of that body unanimously decided that the proposals contained in the Bill are ill considered and unfair, and they urged hon. Members that the Bill should not be given a Second Reading.

It is the opinion, not of politically biased people, but of people who have spent their lives in running the road passenger transport industry, that under nationalisation bus fares will increase. We have already had the illustration of London Transport which, after all, is almost a nationalised system of transport. Under any system of nationalised transport there must be increasing fares, because the more profitable and cheaper routes have to subsidise the less profitable ones. I have already pointed out that there is no cheaper means of transport than the ordinary passenger motor bus. If this Bill becomes law we shall be saddled in this country with an impersonal and soulless body which is inevitable when the State is the director of the activities of industry. I would say to the Minister of Transport and to his successors, whoever they may be, that never perhaps in the history of Parliament has it been proposed to place so much patronage in the hands of any one man as will rest on the Minister of Transport if this House is so stupid as to give this Bill a Second Reading.

8.11 p.m.

Mr. Frank McLeavy (Bradford, East)

The House is indebted to my right hon. Friend the Minister of Transport for the very lucid and comprehensive statement which he made at the beginning of this Debate. I was interested in the remark of the hon. and learned Member for Montgomery (Mr. C. Davies) who referred to the misgivings he had in connection with the structure of this Bill. Looking at the general structure, one feels that a very sound basis has been laid by the Minister, which will provide an efficient national transport service. The provision in the Bill for the appointment of a small Transport Commission to decide questions of general policy will, i believe, be welcomed as a wise decision on the part of the Minister. If the Minister selects the right type of person with the qualifications laid down in the Bill I am satisfied in my own mind that he will have a Commission capable of producing the type of organisation which is necessary if this industry is to be brought within a system of unification.

The question of the appointment of the Executives representing the various sections of the industry appears to me to be an important step in the right direction. I am also interested in the proposal to appoint a Central Transport Consultative Committee, and also a Transport Users Consultative Committee for passenger and goods traffic. I believe that the Central Transport Consultative Committee will be a very useful body for examining the important points raised by the various Transport Users Consultative Committee and for keeping under constant review the many problems which will arise in connection with this vital industry. What I particularly welcome is the fact that the users, whether they be ordinary passengers or industrial concerns interested in goods traffic, will, through the appropriate Users Consultative Committee, have an effective channel through which they can make their representations. It is worthy of note that for the first time in the history of British transport, users are to be given special recognition.

May I make a suggestion to the Minister in respect of the setting up of these Committees? It is that as far as possible they should be of a local character, so that the local problems can find effective expression. To my mind it would be an advantage if one of the district officers were attached to each of these local advisory committees for the purpose of keeping correct the view of the committee and advising the committee upon the position of the undertaking in the particular area affected.

The history of British transport has not been very happy. The motive of profit played the greater part in its development. Public needs were subservient to profit. We have had a large number of Acts of Parliament dealing with one aspect or another of the transport problem arising from the growth of road transport. Railway companies have complained of unfair competition in the past. Taxation was increased upon road transport. The Road Traffic Act, 1934, was passed to ensure greater safety on the roads and to effect improvements in the law for the benefit of the general public. If we look at the state of our railway undertakings today, no one can dispute that they still leave much to be desired even if we make allowances for the intervening war years. It cannot be claimed that they have made progress in keeping with other industries. The House will be aware that the failure to modernise our railway system has caused great concern in many large and small local authorities throughout the country. Many local authorities, often yielding to the pressure of local industries, have passed unanimous resolutions supported by Labour, Conservative and Liberal members, protesting in the strongest terms against inadequate railway facilities.

Let me cite for a moment my own constituency, the great industrial city of Bradford—Bradford with its large industrial population, its world-wide trade, its municipal and cultural reputation, a city with a proud past and a very great future. The city council and the industrial concerns there are strongly critical of the lack of main line railway facilities and are pressing their claim with force and vigour. They have been repeatedly turned down by the railway companies, yet they feel that the importance of the city warrants main line facilities. I suggest that the case of Bradford is a clear case in which private profit has been placed before public need. As a nation we cannot afford to allow this state of affairs to continue. Our transport system must be a live and vigorous partner in the industrial life of the nation.

Mr. Osborne

Before the hon. Gentleman leaves Bradford may I ask him, Is there not the danger of political logrolling in the instance he gives of pressure being brought to bear on the Minister of Transport to give these facilities to Bradford, irrespective of its needs?

Mr. McLeavy

I think that the hon. Gentleman has rather misunderstood the point I was making. The point I made very clearly was that owing to the fact that the railway companies were more concerned about profit than about services, Bradford and many other industrial cities in the country had been woefully neglected, and had not been provided with the type of service that industry thought was suitable for that particular area.

I should like to refer to the leaflet which has been issued jointly by the railways and the Road Haulage Association and which is entitled, "Why nationalize transport?" I found the following opening phrases extremely interesting. The leaflet says: Transport is of the greatest importance to every man, woman, and child in the country. Even if you do not travel regularly by rail or road you still depend on transport for your food, fuel, clothing and all the amenities of life. Transport is a vital factor in the nation's industrial prosperity. May I suggest that it is for these very reasons that the Government feel it necessary to place this vital industry in the safe keeping of the State? During the two wars we found that it was necessary to subordinate profit to national need. The Government took over control of railways, docks, canals and shipping companies, and extended their powers over road transport. I suggest that without such control, it would not have been possible to have won either the first or the last war. It was essential, therefore, as a necessity of war that our transport system throughout the country should be mobilised in the interests of the war effort. Today, the nation is confronted with great problems of social and industrial reconstruction. It is a war on the home front to recover our prewar prosperity, to prevent vast unemployment arising from industrial depression, to rebuild our shat- tered homes, to clear our slums, to improve our general social services, to spread our industries over a wider field, to build new towns, to house people on the outskirts of the large industrial cities and towns, to give transport services to the countryside, and to provide the best possible services at the least cost to the travelling public.

Having regard to all these national needs it is really unreasonable to suggest that the transport industry should return to the position of 1939—a period of foolish and unrestrained competition—particularly at a time when the manpower problem will be so difficult and when so much will depend upon the existence of reasonable rates. Transport charges enter into the price of every commodity and they affect the standard of life of the people. Even if we co-ordinated transport under private ownership, it would not be effective without unification of ownership, and in our opinion unification under private ownership is socially undesirable. It is sound public policy that State ownership should be applied.

I should like to say a few words now about the road passenger transport position. Before coming to this House, I spent some 25 years in this section of transport, so that I can at least claim to have some knowledge on the subject. Road transport has become probably the most vital service so far as the communal life of the nation is concerned. We have had two types of ownership—municipal and private So far as the latter is concerned, the travelling public has had little or no influence upon the policy which has been applied Those engaged in the industry—and this is a very important point—have not had the wages and conditions of employment which have been provided by the municipal services It is of course, true to say that the Traffic Commissioners, taking over the licensing powers of the local authorities, have exercised some influence and that there did exist some channel through which complaints could be made. It was a step in the right direction, but it left, and indeed strengthened, the monopoly of the private companies. It gave the private companies valuable running rights—what hon. Members opposite would call a "closed shop"—and local authorities wishing to embark upon their own passenger transport under- takings found that they could do so only if they bought up one of the existing private companies. The spirit of free enterprise and competition, about which we hear so much, has given place to private monopoly. No company is permitted to trespass upon the preserves of another unless the Commission is satisfied that the existing company is unable to. cater for the traffic.

I could cite to the House cases within my own knowledge where adequate transport facilities were denied. I could tell the House of the reluctance of the Traffic Commissioners to grant running powers to transport undertakings in order to provide urgent services to hospitals, of nurses having to walk home to the hospitals at night along dark country roads, and even being stopped by undesirable individuals, and of the strong protests of local authorities and hospital authorities in consequence. I could also tell of the delay of years in getting the Commissioners to agree—for no other reason than that it would be an encroachment upon the preserves of a private bus company. Another public scandal which applies to all parts of the country in connection with road passenger transport is the private agreement between two or more companies not to pick up passengers in a defined area. I have seen, even on very wet days, men and women factory workers standing in long queues waiting to board an omnibus while another company's bus has passed half empty.

Sir William Darling (Edinburgh, South)

Municipal buses?

Mr. McLeavy

No, not municipal buses, but private company buses.

Sir W. Darling

Am I not right in saying that in certain municipal areas the private companies do not take up municipal passengers, and the municipal buses do not take up the private passengers? I could even tell the hon. Member which city it is.

Mr. McLeavy

I am not suggesting that private arrangements may not be made, subject to the approval of the Commissioner, but any arrangement, whether for municipal or for private bus services, which denies the travelling public an adequate service is wrong, and cannot be defended. The facts that I have been citing are very serious from the point of view of the travelling public. I have seen these things over a long period of years. [Laughter.] It is not a laughing matter to find workpeople drenched to the skin, waiting for buses, and not being able to get on, while they find other buses passing by only half full and not stopping.

I ask the House to consider these points It is not merely a question of the rights of vested interests. There are vested interests in the transport world. [HON. MEMBERS: "On both sides."] It is a question of a fair and equitable service for the community. I conscientiously believe that the proposals of the Ministry of Transport in the Bill will provide not only an adequate transport service for this country, but a service which will be a credit to the British nation.

8.33 p.m.

Mr. Basil Nield (City of Chester)

The hon. Member for East Bradford (Mr. McLeavy) will, I hope, forgive me if I do not pursue the points which he has raised. He will appreciate that it is necessary, in speaking upon a complicated Measure like this, to select special subjects with which to deal. I, therefore, hope tonight, in a brief speech, to ask the attention of the House to two separate and widely differing aspects of the major problem.

In the first place, would the House be good enough to consider the position of the dock and harbour authorities under the Bill? I will seek here to follow, and in some measure to approve, the observations of the hon. Member for South Bristol (Mr. Wilkins), who criticised the proposals of the right hon. Gentleman. I believe that representations have been made to the Minister by the Dock and Harbour Authorities Association in this regard. This body includes in its membership no fewer than 82 dock and harbour authorities up and down the country, as well as docks and harbours which are at present owned by the four amalgamated railway companies. For the information of hon. Members I will ask the House to consider docks and harbours as divided into two groups. There are those which are now owned by the railway companies and which will be taken over by the State, and there are the independent ports. As a result of Clauses 70 and 71, the position will be that the Commission will take over and operate, as commercial undertakings, the ports at present owned by the railway companies. In regard to the independent ports, the Commission will have the duty imposed upon it by Clause 70 (2) to keep them under continuous review. They will have the widest possible powers to direct the policy of the independent ports, to group them, and even to take them over or transfer them if they think fit so to do.

My submission to the House is that it is fundamentally wrong that the Commission, in one capacity, should operate commercial undertakings, and in another capacity, should have the right to investigate the affairs of its competitors and direct their policy. The Commission will be in competition with the independent ports. The association which I have mentioned put forward a recommendation in February of last year, at the request of the then Minister of War Transport, to the effect that an advisory council should be set up to advise and to assist the Ministry, and that it should be composed of representatives of all the interests concerned. The suggestion I make is that, if this part of the Bill is passed, there should be an advisory council which would have the task imposed upon it of keeping the ports under continuous review. I hope that the right hon. Gentleman will be good enough to deal with this aspect of the matter and, if need be, to receive further and more detailed representations.

I turn to the second subject which I wish to discuss. I am anxious to add my appeal for those wide sections of the community who genuinely fear that their interests will be adversely affected by the Bill. My suggestion is that the great majority of transport users do not want this change. They desire to retain the present flexibility in the industry, and, above all, the right to choose, in regard to the use of transport. I am certain they feel that it is a great misfortune and a great mistake to depart from a system under which they are able to select exactly what they want, and whom they will employ. Then there are other categories of persons who will suffer. One in particular has been mentioned, those who are at present holders of "C" licences. I support with the utmost conviction the appeal made by my right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe). At a time when the Government are asking for increased production and when a policy of expansion is essential, I submit that it is wrong to interfere with the conditions of the "C" licence holders, and to say that a man cannot carry his own goods on his own vehicle save under the strictest limitations and conditions.

Mr. Harrison (Nottingham, East)

Will the hon. and learned Member say from what part of the Bill he assumes that the customers will not have a choice of the transport available?

Mr. Nield

I should have thought that that had been answered by the Minister—[HON. MEMBERS: "No."]—It has been made clear to the House that there is to be a central pool from which will be provided the transport which is thought by the authorities to be necessary. —[HON. MEMBERS: "NO."]—Hon. Members opposite dispute that. This much they cannot dispute, that at the present time the trader can choose from the resources available to him exactly what he wants, and what he knows he wants—

Mr. Barnes

The hon. and learned Member has put the word "thought" into my mouth. I did not say that.

Mr. Nield

I beg the right hon. Gentleman's pardon. I must apologise to him if I have misquoted him—

Mr. Barnes

It is not the case that traders or anybody else will have to take the form of transport the Commission think they ought to have. Facilities will be there, and they will have the choice.

Mr. Nield

That will be some sort of assurance to those who feel that this is a wrong scheme. I must say that I strongly query the point which the right hon. Gentleman has just mentioned. One would like to know that traders are allowed to select their own transport—[AN HON. MEMBER: "Where does it say they cannot?"]—If hon. Gentlemen opposite will allow me, I was dealing in particular with the question of "C" licence holders as well as ordinary transport users. No one can deny that limitations are placed upon these traders, and what we, and the traders say is that this is a wrong limitation and that it will retard or indeed frustrate the industrial revival which we all wish to see.

I would add, in another regard, that I feel that road hauliers also are almost unanimously against this change. It has been said that under the 1933 Act many people are being kept out of the industry. That may be true, but that is not a very good argument for making the position worse. I am well aware of the situation under the 1933 Act, having been in the traffic courts a good deal before the war, and occasionally since the war. Under that system there have been many hard cases. There are men—perhaps ex-Servicemen—with one lorry, who are prevented from entering the industry because they cannot point to past service in a particular direction or to a long queue of customers waiting, and they are, therefore, kept out by the big battalions. But the position will be infinitely worse under this Measure, and those who seek to advance their own initiative and enterprise, will be prevented from doing so.

Finally, there is the tragic lot of the railway stockholders to which, although this matter may be dealt with more fully tomorrow, I feel I must refer. Perhaps right hon. Gentlemen on the Government bench have not that opportunity to examine quite as closely as back benchers the correspondence from their constituents, but I ask the Minister of Transport—I am sure he takes the greatest care of his—to take a look at it over the last few days, and see if it is not the case that there are many people living on slender incomes derived from their savings who will be grievously harmed by these proposals. That is a matter which no Government ought to overlook, and if the Government would make a change in these matters, there would be immense gratitude, and the Government would also be applauded for being strong enough to change their plans. If not, I feel that the country will take the view that their motives in this matter are political rather than in the public interest.

8.45 p.m.

Mr. Mitchison (Kettering)

I feel some difficulty over such a description as the "tragic lot of the railway stockholders." It seems to be a very remarkable form of tragedy that they are receiving the full market value of their shares, and an appeal that they should receive more than the market value seems very difficult to follow when others who have had to accept compensation for lost or requisitioned property, under legislation passed not by this Government but previously, have had to accept it at the prewar market value or, in one particular case, at a percentage increase only. I do not want to anticipate at any great length what may be said tomorrow, but I am bound to point out that the railway shareholders before the war were in a very different position from that which they have reached by dint of an extremely favourable agreement with the Government during the war. I happen to live in a part of Scotland where there are some of the small men about whom we hear so much from the benches opposite. Some of these small men had their fishing boats requisitioned, and some of these fishing boats were lost during the war. These small men are unable to get any more than the prewar value of their boats —[HON. MEMBERS: "Shame."] That is not enough to buy new boats. When I am told that tragedy has come upon railway shareholders, I am bound to say that if I were a share fisherman I should regard it as simply absurd.

That such is the case one can see easily enough by looking at the position of the railway marginal stocks immediately before the war. Take the year 1938 and take the marginal stocks upon which, after all, we can judge the amount of security in the stocks ranking in front of them. I think I am right in saying that in that year the Great Western Railway paid ½ per cent. on its ordinary stock, and that on what are the marginal stocks of the other three main line railways no dividends at all were paid. As a result of the somewhat profitable agreement with the Government, the Great Western Railway is now paying 5 per cent. on its marginal stock, the Southern 2 per cent., the London, Midland and Scottish Railway 4 per cent., and the London North Eastern Railway 3½ per cent. What the are receiving is compensation based on the present dividends and on the present market value of the stocks—

Mr. Molson (The High Peak)

The hon. and learned Member has chosen the year 1938, which is not a very favourable year for the railways. [Laughter.] I do not know why the hon. Gentleman laughs—

Mr. Hobson (Wembley, North)

The industry was beginning to pick up then.

Mr. Molson

Actually the revenue that year was £29 million, and the compensation which the Government are now proposing to pay is £25,500,000.

Mr. Mitchison

I am very much obliged for that interruption. Let me take the hon. Member a little further. Let us take one of those stocks and follow it through the prewar years and see what happens. Take the Southern Railway, one of the more prosperous ones. In 1935 it was getting nothing; in 1936 it was getting ½ per cent.; in 1937 1½ per cent., and in 1938 nothing; and ever since the dividend on that marginal stock has risen as a result of the agreement. I could not give the House any clearer case of the risks inherent in all these railway stocks, and marginal stocks of this kind are only an indication of the risk inherent in the senior stocks. To treat these stocks as if they were Government securities is entirely contrary to reality, and that could not be better shown than by looking at the market value. After all we are told about the virtues of free competition, free enterprise and the rest of it, are we now to be told that a market value which is reached by the free enterprise of dealers in stocks and shares is no indication of reality? Are we to be told—

Mr. Molson rose

Mr. Mitchison

May I finish my sentence?—that it is tragic injustice to receive the market value and no more?

Mr. Molson

Has the hon. and learned Member read the report of the General Council of the Trades Union Congress in 1945, in which they went into this question as to whether a market value is a just and sound basis of compensation, and they came to the conclusion that it was not?

Mr. Mitchison

I take leave to form my own opinion as to whether a market value is, or is not, a fair value for something which I propose to buy. If I were seeking to buy something, I would do so at the market value, and if the seller told me that he was suffering a tragic loss by receiving not more than the market value, I would tell him not to be so silly. That is the short answer in this case. The matter is made even simpler when you come to look at what the effect would be if you tried to give the railway stockholders the same income that they are now receiving instead of paying them the market value, for you would pay about 80 per cent. in excess of the market value. Why, when other persons who have had their property requisitioned or destroyed during the war have to take compensation at prewar values, railway stockholders should be entitled to the special preferen- tial treatment that is suggested in their case, I entirely fail to understand. Why it should be a tragic injustice, why it should be grossly unfair not to pay somebody more than the market value of what you are taking from him, passes my simple comprehension, though it may be clear to hon. Members opposite.

Mr. P. Thorneycroft

The hon. and learned Gentleman is prepared to tell the railway stockholders not to be so silly when they complain, but can be give any one year before the war in which the total dividends on those railway stocks fell as low as the £25½ million which they are now preparing to pay?

Mr. Mitchison

The hon. Member for Monmouth (Mr. Thorneycroft), I see, is one of those who thinks it unfair not to give people something more than the market value of that which is being taken from them.

Mr. P. Thorneycroft

I only asked for one year.

Mr. Mitchison

His argument is, therefore, that they should receive the income they are now receiving from railway stocks, or at any rate something—

Mr. P. Thorneycroft

In one year?

Mr. Mitchison

—more than they will receive from the Government stock they will get. In fact his argument amounts to this, that it is unfair to give the railway stockholders the market value and no more because they are suffering a reduction of income. Of course they are suffering a reduction of income, and they are doing so because they are exchanging comparative risks for the absolute security of a Government stock.

Mr. Thorneycroft

What about that year?

Mr. Mitchison

Supposing the railway stock holders had been taken over before the war, they would then have got, on any showing, less than they are now getting. They would then have failed to get during the war the benefit of a highly profitable agreement made with the Government. They would, in fact, have been put into the position into which many other people were whose property was taken from them at a fair market value at the beginning of the war or early in the war. These people have done remarkably well. I do not happen to be a railway stockholder myself but I happen to hold some of that stock as a trustee, and I repeat the opinion that they are doing extremely well, not only out of what is happening now but out of what has happened during the war.

Mr. Osborne

If these stocks had been taken over before the war and the holders received less money in payment for them, surely the hon. and learned Member will agree that the money they received would have been worth more than it is today, and that the problem of reinvestment might not have been so difficult as it is today?

Mr. Mitchison

I think the hon. Gentleman must revise his opinions of time. The money they would have received before the war, supposing that it had been put into Government stock or invested in any other way—let us assume they would put some, at any rate, into national savings—would still be money at the end of the war and they would, during that time, have received the interest on it. That is all there is to it. If people are now to be compensated by twice as much as the market value, on the ground that the market value is in one form of money, and their compensation is in another form of money, I do not know into what financial unrealities of time and space we shall shortly be getting.

Mr. Molson

Neither do we.

Mr. Mitchison

I want to say one or two things on another part of the Bill which deals with passenger transport. I heard an hon. Member for one of the Yorkshire Divisions making some statements about omnibus services in Yorkshire which were so far removed from my own experience that I feel some correction ought to be made. There is no subject upon which I have had more complaints and more indignant correspondence, than on the inefficiency of the local omnibus service in Northamptonshire, and I welcome most cordially, the provisions in this Bill enabling the Ministry to form an appropriate body for dealing with that question in rural districts such as that. The deficiencies arise from one or two things. First, in the area I represent, at any rate, there is no coordination between the railway and road services; that is to say, there is no arrangement whatever as to timing between the two. Secondly, the omnibus services there are, in effect, a complete monopoly of one of the subsidiary companies of Thomas Tillings, and whatever the Traffic Commissioner may be able to do, and he does a good deal in the way of trying to control the bus services, in the last resort the initiative about starting them rests, or is supposed to rest, on that particular form of private enterprise.

I can only say that, although I have heard the representative of that company admit, first, that there was no serious difficulty in the way of omnibuses, secondly, that there was no serious difficulty in the way of labour, and thirdly, that he could, if need be, provide adequate transport services in the area, the fact remains that the services are completely inadequate and, since there is a monopoly, there is no competition of any sort between that company and any other. If we are to have a public body controlling these services, we should have firstly coordination between rail services and 'bus services, and secondly we should treat the obligation to get passengers to and from the remote villages of this countryside as what it ought to be, a public service, and not something which is merely undertaken if it happens to pay the bus company.

Sir C. Headlam

Has the hon. and learned Member taken this matter up with the traffic commissioner in his area? That seems a rather pertinent point.

Mr. Mitchison

I am grateful to the right hon. and gallant Member for his suggestion. I have taken it up with the Minister and the traffic commissioner. I have made every possible representation, and at the end of it, I am driven back to the belief that it is unrestricted, or more or less restricted, lack of private enterprise by this particular bus company which, for some reason or other, entirely fails to provide adequate services in that area. I speak with feeling on behalf of numbers of people living in these small villages, who say that they hope what ought to be a public responsibility will be recognised as such and what has hitherto been a method of filling the coffers of one of Thomas Tilling's subsidiaries, will become a public service, and with it a public responsibility.

On the vexed question of "C" licences, it has struck me that many hon. Members who are making comments from the opposite benches have failed to examine the Bill itself. The Bill does in fact give the Minister power to allow traffic on "C," or, indeed, other licences, but particularly "C" licences, beyond the 40 mile limit. I should have thought it was obvious that in the carriage of agricultural produce, and in general in cases of carriage of one's own goods, beyond the 40 miles, there is no reason why a licence should not be granted. But I should also have thought it necessary to give the Minister power to restrict "C" licences in a great many cases. Otherwise, there will be ill coordination. We would have long-distance "C" licence holders many of whom would not be small people, but would be large people giving a form of service which would have slipped outside the national scheme which it is the object of this Bill to set up. In that respect, this Bill seems to be another piece of streamlined legislation, but this time it is very appropriately a streamlined lorry.

When we are dealing with anything as varied and complicated as transport in this country, I should expect two things: First, that if we did nothing about it, we would get what we get at present in spite of numerous legislative attempts to put it right, a form of struggle between road and rail, and between other interests such as rail and canals which lead to no proper use of their respective facilities, and fail to produce what we want, a coordinated system providing for those who use it, the best possible service. Similarly, I would expect when we came to deal with such a complicated matter that we would have to leave full powers to the Minister, or some central authority. When I hear hon. Members opposite saying that this, that, and the other should be laid down as directions which in some case or the other the Minister should give the Control Commission, it seems to me that to attempt to do that would be bound to lead to failure, and would fail to give this Bill the flexibility it must have because of its subject matter.

9.5 p.m.

Colonel J. R. H. Hutchison (Glasgow, Central)

I know that the hon. and learned Member for Kettering (Mr. Mitehison) will excuse me if I do not follow him in his remarks on the particular case of Northamptonshire buses and on the general case of road transport in this country, and will also excuse me if I do not follow him in the discussion of compensation. This gives me an opportunity of declaring to the House that I am, to a limited extent, a shareholder in railway debenture stocks. I hope, however, that as I shall not mention compensation, that will not be held to have biased my view. I do not presume to imagine that anything I can say will alter predetermined views or biased opinions and decisions in the passage of this great Bill of hon. Members opposite, for, as Mark Antony said: I have neither action nor utterance, nor the power of speech To stir men's blood: But that does not deprive me of the right, indeed the duty, of warning the House of the chaos and suffering which this Bill is likely to bring upon the whole of the country.

On this side of the House we have never minced our words as to our dislike of nationalisation, because we see it, and have seen it, when tried elsewhere, to be costly when economy will be the life blood of the nation, to be slow when quick decisions and actions are essential to commerce, and to be rigid when flexibility is demanded in all our dealings. If we look at the two examples with which this country is already suffering at the hands of hon. and right hon. Gentlemen opposite, we do not find ourselves in any way consoled or reassured. We turn our eyes to coal. We see the light going out, we see the wheels of industry slowing up, and we see that valuable export trade of other years now a dream of the past. If we turn our eyes to civil aviation—

Mr. Shurmer (Birmingham, Sparkbrook)

Is the hon. and gallant Member making an election speech?

Colonel Hutchison

We find that the Tudor machines hoped for in 1945 are still to be in the promised land in 1947, we find that in every type of aircraft required for the operation of our services, the Americans are months or years ahead of us. In my country we find one British aircraft flying out while six Dominion or foreign aircraft are flying in. Is it surprising then that we have little confidence in this new effort to nationalise an industry of the country? While these undigested efforts from which the country is still suffering remain undigested, we see the Government plunging ever more deeply into the mire and the slough.

Those hon. Members opposite who have a nodding acquaintance with that noble and almost extinct form of transport, the horse, will know that when that animal finds itself upon unreliable and soft ground, in a wild-eyed and panic stricken effort to get to safe ground on the other side it plunges ever more deeply in. It never turns and gets back to the ground it once knew to be safe. And so the Government, bearing upon their backs all the destinies, hopes and welfare of this country, are themselves plunging ever more deeply into the same mire. To industry this Bill is the unkindest cut of all. In the other Bills we certainly dealt with large areas, and great numbers of the population were affected, but here every individual in the country is touched. Formerly we were dealing in paltry hundreds of millions of pounds: now our ideas have grown and it is with thousands of millions of pounds that His Majesty's Government are about to play. Here we have more victims and less compensation. The complexities of the situation are even more grave and disturbing than those which were handed out to the Coal Boards and, in civil aviation, to the Corporations. On the top of this pyramid we are to see the unlikely figure of the Minister, like some brooding and distracted Zeus; handing out his patronages and no doubt dispersing exhortations, like his colleague on Mount Olympus, the Minister of Fuel and Power, and occasionally hurling his thunderbolts Is it surprising that we on this side of the House have no confidence in such a one-man brains trust?

All over the world there are precedents for the failure of nationalisation in rail transport. I do not intend to waste the time of the House in the examination of these. Hon. Members only need look at the records and they will see instances of its failure in Australia, France. Canada and elsewhere.

Mr. Shurmer

In America?

Colonel Hutchison

I wish to draw the attention of the House to one outstanding example of failure in the nationalisation of road transport. Road transport was one of the first of the industries tackled by the Germans when the Nazi system came into force. The parallel is extraordinarily complete. Therefore, I would like the House to follow a little bit of history. This will be a salutary lesson for hon. Members opposite. What happened in Germany under the Nazi system when they nationalised road transport? In 1935, the German railways were owned by the State, along with certain bus companies. A very similar situation will arise in this country as a result of this Bill. Then Germany forced all its road transport into associations controlled by a Minister, and, in order to be able to divide and segregate long-distance transport—notice the parallel—and short-distance transport, it took as a yardstick 31.5 miles. Here we are pleased to take 25 and 40 miles. Having forced all transport into trade associations, the Ministry then proceeded to mobilise and take complete control of the longdistance transport and insisted upon them having a licence before they could trade at all. The only difference in what we are to do is that in our country the longdistance transport is to be State owned. Both were, or will be, controlled.

In 1936, Germany saw that it was not possible to have an efficient system unless they controlled the whole of the road transport and so they treated short-distance transport in exactly the same way as they had treated the long-distance transport. Is that also to come here? They found they could not stand up to the competition of those left free. Will the Minister be able to stand up to the competition of those whom he proposes to leave free? There is nothing that inefficiency so abhors as efficiency. Then, the next step was to force the long-distance transport road rates up to the railway rates. Is that the Minister's intention here? Thereupon, Germany drew up an intricate system of rates, which was so intricate that, 10 years later, those very officials who were supposed to operate and understand it, had not yet properly learned and understood it.

In order to be able to support this system that they had inaugurated, they thought unwisely that all that they would need would be a few police to examine the inevitable log books. That, of course, was soon found to be quite insufficient, and so they set up 18 regional transport commissioners, and very shortly, it was found that 18 regional transport commissioners were far too remote from contact with the wheels that were turning, and they proceeded to set up 80 district road transport officers, which, even with their staffs, were not enough; and, finally, they appointed 1,500 local road transport officers. The staff that was found to be necessary for all these busybodies numbered 7,000. If hon. Gentlemen opposite will calculate the sort of remuneration for officials of that type, I think they will find that a conservative estimate will bring them out in the neighbourhood of £4 million per annum. That is, £4 million per annum to control the road transport system of this country, which needs no control and which even hon. Members opposite have never impugned with inefficiency.

Mr. Mitchison rose

Colonel Hutchison

So began the next phase—the struggle for priority, and, if hon. Members opposite want to do so, they can read all the evidence at first hand if they will only turn to the evidence of Minister Speer. The situation was so chaotic that even local transport offices broke down, traffic was held up and permits held up while they hunted for return loads, and so the Government then proceeded to pile upon this enormous mass of officialdom an equal number of what they, called traffic expediters. Is it surprising that, in the City of Berlin, an order was issued that no lorry should move more than two miles without first telephoning the traffic expediter if the vehicle was anything less than 75 per cent. full in volume or weight? Even the Germans, docile and regimented creatures though they were and are, rebelled, and so they found "permanent cargoes" and filled their lorries with empty cases so that, to the traffic expediter, they always looked full.

The inevitable happened. Queues of hauliers were to be seen waiting outside the transport offices for permission to be able to move. The estimate of waste space was something between 25 and 50 per cent. It took from one to six hours to get permission to move a vehicle at all, and from 7 to 30 days to get permission to have even the smallest repairs carried out. I admit that the last part of this chaos came about in the war, but one might imagine that war was a spur to organisation and one knows that nobody ever accused the Germans of being poor organisers. [Laughter.] This appalling welter of chaos seems to threaten us here. I am always rather flattered when I hear hon. Members opposite laugh, because I notice that it happens when something goes home.

Mr. Rogers (Kensington, North)

Would the hon. and gallant Gentleman, who is very stern, wild and Caledonian tonight, forgive me if I interrupt to ask him to leave Nazi Germany for a time and to treat, in the same detail, the experiment of the London Passenger Transport Board?

Colonel Hutchison

It time permitted I would certainly like to do what the hon. Gentleman—whom I know well, and with whom I served in the war—wants, but time obviously does not permit. All I would like to say is, hon. Gentlemen opposite have two methods of defence when we succeed in striking home: either to try to laugh out of court and ridicule what is being said, or else to get very angry. I am glad to see them do either.

The same chaos undoubtedly threatens us here; the same ultimate steps will have to be taken by the Minister. The Minister knows full well—indeed, he has said so today—that competition has got to be, in a measure, eliminated At any rate, he used words to that effect. What will happen to our coastal shipping, which has a semblance of some life left free in this Bill, but for whom certain schemes may be devised, and for whom certain advisory committees are, in fact to be set up? Will the Minister be able to afford to allow the short distance men to show up the inefficiency of the long distance State organisation, or to allow coastal shipping to show up the inefficiency of either? Of course not Sooner or later everything must be dragged into the net of nationalisation. If this 25 to 40 miles limit is unfair to the ordinary community in this country, it is even more vicious so far as my own country is concerned. Draw a circle with a radius of 25 miles or 40 miles almost anywhere in Scotland and see what is found within it.

When it comes to the Committee stage of this Bill we propose to press for those limits to be extended in areas of that kind. We further propose to press that that valuable and important traffic to Scotland of the carriage of fresh fish shall be treated in the same way as is provided for meat. We are glad to know that the Minister proposes to allow us to have a separate Transport Users Consultative Committee, and we will ask him to see that that is a permanency. We will further ask that there shall be three separate executive for Scotland—for road, for rail and for harbours—because already centralisation has run riot and gone mad. We have not had the experience in the civil aviation treatment of our country to allow us to have any confidence whatever in the treatment we will have from centralised executives.

Finally, there is nothing more destructive to the industry of this country than uncertainty, and the measures proposed in Clauses 70 and 71 in regard to all the activities in the ports of the country will bring about such a condition of uncertainty that it will stay their hands, and they will be unable to make or take any decision in the future. We shall also move that so far as we in Scotland are concerned those two Clauses shall be eliminated.

9.24 p.m.

Mr. McAdam (Salford, North)

I welcome the opportunity of taking part in the Debate on the Second Reading of this Bill, because for over 40 years I have been employed by a railway company, having passed through the grades, passenger porter, shunter, goods and passenger guard, to the position which I still occupy on the books of a railway company, that of foreman in the traffic operating department of one of our Glasgow docks. In addition to that, I have also served a term on the National Executive Committee of the National Union of Railwaymen; I was a member of its Road Transport Committee and a representative of that Road Transport Committee on the Industrial Court; a member of its National Executive Committee, its Irish Negotiating Committee, and a representative of the National and Negotiating Committee on the Negotiating Committee of the London Passenger Transport Board. Having indicated my interest in and my experience of transport, I now want to give my support to the Second Reading of this Bill by saying a few words in regard to the inception and development of transport, because I claim that that inception and development have been anything but efficient, and because I also claim that future development ought to take into account what has retarded past progress.

In the early days of the railways it was the practice to form companies to lay down railways over certain sections of country, and, when they were completed and ready for traffic, first to lease them and then ultimately to sell them to an adjoining railway company. That practice led to many abuses. Railway shares were overstated in value, and projects which were of no actual importance were sold and resold at extravagant prices. Quite a different story might have been told if the advice of that once great Liberal leader, the late William Ewart Gladstone, had been accepted, because in 1844 he introduced a proposal in this House that the Government should take over the organising of a nationally owned railway transport system. That proposal was turned down by the then Tory Government. One of its most bitter opponents was the Tory Member for Sunderland, at that time George Hudson. Hudson was popularly known as the railway king because he had been responsible for promoting companies over 1,000 miles of railway track. Today, however, Hudson is mainly recognised as one of the biggest financial frauds in the history of railway promoting.

Financiers have always been only drawbacks to an efficiently organised railway transport system, and land and property owners, to put it mildly, were also a considerable handicap. For example, when the old G. and S.W. Company was extending its line to Dumfries it became necessary to pass through the land of the then Duke of Buccleuch. The only piece of land the Duke would part with was a piece which necessitated a tunnel being bored through a quarter of a mile of solid rock. For that quarter of a mile of solid rock, the then Duke of Buccleuch charged the G. and S.W. Company the sum of £20,000. Then a company was formed called the City Union Railway Company, for the purpose of linking up the North and South sides of the City of Glasgow by a railway seven miles in extent. By the time that railway had been completed, £2,375,000 of borrowed money had been spent in meeting the claims of land and property owners. The money was obtained by borrowing on a preference share basis carrying a dividend of 7 per cent.

Is it to be wondered at that our railways, carrying such heavy financial burdens as those right from their early days, have always been at the head of the hard-up queue? Is it to be wondered at that railway workers have been called upon to work long hours under rotten conditions for miserable rates of wages? For example, when I started out in the railway service at the age of 23 as a porter at an Ayrshire mining village, I was paid 18s. for a 74-hour week. When the first world war broke out, I was being paid 29s. per week as a goods guard on express freight trains operating between Glasgow and Carlisle. When the first world war was completed, my wage had been raised to £3 5s. per week, because of the fact that on the outbreak of the war, there were 132 different main line companies which were taken over by the Government, and for the first time in the history of the railway trade union movement, our trade union officials were granted the right to conduct negotiations direct on our behalf by a committee of general managers. That committee, was also responsible for operating tactics, and so efficient did this method of operation prove to be, that the right hon. Gentleman the Member for Woodford (Mr. Churchill), then seeking re-election as a Liberal Member of Parliament for Dundee in 1918, intimated that the Government had made up their mind to nationalise the railways. Unfortunately, as a result of the 1918 General Election, vested interests were returned insuch overwhelming strength to this House, that they immediately set about decontrolling all those industries which had been taken over during the war years, with the result that instead of the railways being nationalised, we had the Railways Act of 1921. That Act provided for the linking up of 132 companies into four main line groups.

Then came another stage in transport development. During the war years, the Government had made extensive use of motor transport, and speculators, seeing in the roads a means of earning profits, decided to set up an alternate transport system to that operated by the railway companies. Road transport concerns sprang up in practically every important city and town in the country, and owing to the long hours the employees had to work, and the lower rates of wages they were paid, road transport concerns were in a position to offer cheaper passenger and goods rates than those of the railways. The result of 'this was that a large percentage of goods and passenger traffic left the rail- ways for the roads, and that in turn resulted in thousands of railway workers being dismissed the service, thousands being placed on short-time working, covering a period of years, and thousands of others being reduced in status, suffering a reduction in wages from 22s. to 20s. per week.

The railway workers were not the only workers who were affected as a result of the road and transport war. Other workers in other industries were also called upon to feel the pinch. The railways were the largest users of such national commodities as coal, iron and steel, textiles and other materials, running from tracks to the steamer locomotives. Expenditure on all these materials was cut to the bone, creating unemployment in other industries, particularly in the case of the coal, iron and steel, engineering and textile industries. This unregulated scramble for profits out of the country's transport needs was allowed to continue until 1930

In 1929, a Labour Government assumed office as the result of the General Election of that year. The Lord President of the Council was appointed Minister of Transport, and he had had some experience of the chaotic conditions which existed in the areas covered by the London County Council. He immediately set about having drafted and passed through the House the Road Transport Act of 1930. That Act provided for the linking up of competing transport concerns, and also provided for dividing up the country into 13 different transport districts. It provided machinery for dealing with hours, wages, and conditions of service. That allowed the trade unions to get in, with a result that when the second world war broke out, while competition still remained between road and rail transport, more effective organisation had been obtained inside the road transport organisation. From the start of that war the Government leased the railways, and exercised control over road haulage companies, but, speaking as one who worked on the railways during the whole of the war, I can say that there was little or no co-operation between road and rail transport.

We have now reached the stage when the future of all forms of inland transport must be decided. That decision should be based on a policy which will provide efficiently equipped and co-ordinated transport by road, rail, and canal. If there is to be an efficient and co-ordinated transport system I recognise that millions of pounds must be spent. Take, for example, the position of the railway companies. There are, in operation on our main lines, locomotives and plant which were built over 30 years ago. Before and during the war I worked on brake vans which were built in 1886, and there are in operation today brake vans which were built over 50 years ago. There is also old plant in our passenger stations and goods depots. The railway companies have said that they would spend millions of pounds to bring their systems up to date but, as one who has had lengthy experience of local and national negotiations, I am entitled to ask: "Where do they expect to get the money? "especially having in mind their oft-repeated prewar argument that they could not afford the expense of more than modest improvements.

I have vivid memories of their oft-repeated stories of their inability to pay poor widows the money due to them as interest on their shares. Between the wars, the railway companies were never able to earn the standard revenue laid down by the 1921 Act. They took from reserves, and the wages and salaries of their staffs, the money necessary to pay dividends on debenture stock. Having all these things in mind, I suggest that we ought to give a Second Reading to this Bill because it will abolish all that has been responsible for the position of the railway companies in the past the position which has prevented them from providing our people with the up-to-date transport service that they were entitled to expect.

9.35 p.m.

Mr. Turton (Thirsk and Malton)

The hon. Member for North Salford (Mr. McAdam) has been in reminiscent mood; I want to get back to the Bill. In introducing it, the Minister pleaded in aid that Canada was the example on which he drafted this great experiment.

Mr. Barnes indicated dissent.

Mr. Turton

The Minister shakes his head. I may be getting deaf in my old age, but I distinctly heard him say that. What are the facts in Canada? In Canada not all the railways have been nationalised, but it is quite true that the Canadian National Railways were nationalised. Some nine years afterwards, a Royal Commission was appointed to examine the working of this railway. The report states: It is impossible to avoid the conclusion that the Board of Directors and the Management of National Railways were amenable to political influence and pressure which it would have been in the public interest to have withstood. The real analogy with this Bill is one which was so very ably given earlier in the Debate by the hon. and gallant Member for Central Glasgow (Colonel Hutchison). I challenge the Minister, the Parliamentary Secretary when he replies, or any other Minister, to give an illustration of any country where there is a complete monopoly of all transport, except Germany and Russia. Those are the only two. This country, if this Bill becomes law, will become the third. We have here a clear-cut issue between personal initiative and State monopoly.

I would like to state what the position will be in the areas in which I was born and which I represent—the rural areas. Let us try to see the picture of what will happen in the County of Yorkshire if this Bill goes through. First, hon. Members must realise that there are three factors concerning transport in rural areas, which are rather different from some of the examples given today. There is, first of all, the question of flexibility. We never know what the weather will be, or what crop it will be possible to harvest on any particular day, and, therefore, the needs of transport for agriculture and its ancillary industries are continually changing.

Mr. Scollan (Renfrew, Western)

That happens now.

Mr. Turton

As a result, the producer and haulier have to get in touch at the last moment. Then there is the question of perishability. Soft fruits and vegetables have to be got quickly to their destination or they are of no value. Thirdly, there is the question of distance. It is all very well to talk of 25 miles around London, with its large consuming centre. Twenty-five miles is an entirely different matter in my constituency where the dales stretch for 10 to 12 miles, and the consuming centre is some 60 miles away.

Bearing that in mind, let us see what is going to happen in the rural districts, first of all to goods transport, under this Bill. Let me take as an illustration a typical road haulier in the North Riding of Yorkshire. I will tell the House the story of that business, so that it may get a picture of it. Just after the last war, a man from up the Dales bought a secondhand lorry and started business as a village carrier. He had two sons who helped to build up the business. Today they have a fleet of 20 lorries covering the whole area of the North Riding, and they do the following jobs. They do the milk haulage for the whole area for 33 miles, to the "Glaxo" factory. They do the milk haulage for the Co-operative to York, which is 43 miles. Those two items are both cut out by the Bill. They carry the whole of the manures and fertilisers for all of the farmers in that area of the North Riding from Goole, which is 56 miles. They bring the manure from South Bank to that area, which is 60 miles, and they carry the manure from the Malton Minerals Company, if necessary going 60 or 80 miles. They have the job of collecting the farmers' grain and taking the corn to the mills, and that is a job which is subject to whether the mills are full at a particular time. The area is so scattered that the hauls are normally from 40 to 60 miles. Finally, they are helping; in the constituency of my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman), in building some of the few houses that are being built. Some 96 houses are being built with sand and aggregate brought by hat haulage company to Whitby, a distance of something like 46 miles—again outside the limit.

Under the Clauses of this Bill, those two men will have their business wiped out by a State monopoly. I ask the Parliamentary Secretary to answer one question, a question which I think the people of this country are asking today. What wrong have those two men and their father done to the community that you take away their job from them by this Bill? All my constituents, when they want goods moved, ring up those men day and night. At 7 o'clock on a Saturday night those men will be rung up for the haul on Monday morning. Are we to be told that an official, under the system of this Bill, will be up ready to work at 7 o'clock on a Saturday evening. [Laughter.] It is all very well for hon. Gentlemen to laugh.

Mr. Shurmer

We were laughing because we were wondering whether the goods mentioned by the hon. Member were carried together.

Mr. Turton

I forgot that the hon. Member for Sparkbrook (Mr. Shurmer) is not very quick in the uptake; I said that they had 20 lorries in the fleet.

Mr. Shurmer

According to what the hon. Member has said, they must have 100 lorries.

Mr. Turton

The reason small firms are able to do so much is because of the system of return loads. It is in the private business that one can manage to work out how to get long and short hauls fixed up for return journeys. It was found that under Government control and regulation during the war one did not get those return journeys. That may have been due to some failing of Government control. It may be that when the Minister nationalises the industry, he will say that he will be able to get return loads. If so, from where will he get his man on the spot, with a telephone, who will work at all hours of the night dealing with farmers' demands for perishable goods?

Let me next turn to the "C" licence holder. In addition to the road haulage driver we have the farmer who uses his "C" licence for carrying his own goods for certain jobs. Let us take a very common haul in my constituency—sugar beet. Many of the farmers are taking sugar beet for longer distances than 40 miles. It is quite true, that all they have to do is to apply to the licensing authority for a permit and eventually, if they prove their case, they would be granted exemption for a particular load of sugar beet. But that is the very trouble we have been having in farming during the war. It is the red tape of having to apply for a particular permit to carry more goods that has made for wastage in the war. The agricultural merchants are at the same time with their "C" licences carrying wheat and grain to the mills which usually are over 40 miles distant. Why? Because the nearest mills in harvest time get filled up and agricultural merchants, knowing the state of the market, have to go to the further mills which are further away. If a farmer who has to do this has got to wait to get permission to go more than 40 miles it will be found certainly in a harvest like the last one that we are going to spoil the grain and have more cuts in our bread ration than would otherwise be the case. Damp grain will wait for no man and no official.

These agricultural merchants must have complete freedom as to where they will carry their perishable commodities, otherwise the country's food will suffer. Let me give one illustration of a constituent of mine. He writes: I sent peas to Newcastle by rail because I was not allowed to send that distance by road. Those peas failed to get the early market the following morning and when they arrived they had deteriorated to such an extent that they were worthless. That is why in the rural areas this proposal first of all of nationalisation of the long haulier and then the restrictions on the "C" licences is going to cause dislocation and higher distribution margins. There has been an example of this nationalisation of all transport within our own Empire of which we know. What was the effect in Northern Ireland of this nationalisation of road transport charges? The fact was that charges there went up very considerably. Before nationalisation came to Northern Ireland to carry a 14 lb. parcel a distance of under 10 miles cost 3d.; in 1937 under nationalisation it cost 6d. and today it costs 11d. That is a rise in charges of 266 per cent. Even allowing for that the nationalised board there has not made any profits; it has made a loss. We in the country districts fear that under this system of nationalisation we are going to have red tape; we are going to have interference and we are going to have higher charges.

Let me say just one word on compensation. The hon. Member for North Salford (Mr. McAdam) talked a good deal about railways, and the hon. and learned Member for Kettering (Mr. Mitchison) made many abstruse arguments on the value of railway securities. I only want to give one illustration which is happening to a constituent of mine. This man owns 356 London Midland and Scottish ordinary shares. That is quite an ordinary holding for men who have worked in the railways, have made their savings and have put them back into railway equities. Today, that man gets £14 3s. 2d. interest. Under the Minister's scheme—the Government's boasted plan of fair compensation—that man will get only 14s. 9d. per cent. a year. It is shameful.

Mr. Douglas Jay (Battersea, North)

Does the hon. Gentleman really suggest that one should get from a Government guaranteed stock an income equal to that from a very risky and ordinary investment?

Mr. Turton

Let the hon. Gentleman find every justification in his conscience for that treatment. It is a fact. Let me take now the owners of lorries. Most of those lorries today are, on the average three years old; their secondhand price is £400 and the replacement value of a lorry is £500. Under the Government's scheme an owner will get £256 for each lorry, which is £144 under market price. [An HON. MEMBER: "What about depreciation? "] He receives £500, less depreciation of three years at 20 per cent., and that comes to £256 as the hon. Gentleman will find if he works it out. Why are such owners to receive £144 under the market price? I have heard hon. Gentlemen opposite saying that the fair thing is to give a man the market price. These are men who have built up the whole of their business and livelihood, and the party opposite is taking it away and robbing them. The right hon. Gentleman opposite stands as the new "gentleman of the road" for the present day. He is a highwayman who is robbing—[Laughter.] The right hon. Gentleman may laugh. He is, no doubt, priding himself upon looking like Dick Turpin, but I would remind him that Dick Turpin, after a very glonous career, was duly hanged on the gallows at York near my constituency. They are waiting for him any time now.

What is the alternative to this Bill? That is what we really have to get down to. [Interruption.] I cannot help it if hon. Members apposite will interrupt. The real answer is that we should have today an expanding economy, with more competition. I am not attempting to justify bus companies that will not allow small village carriers to run buses, but if the Government had the interests of the country-people at heart, they would allow the small man, the man who has served the country in the Forces in motor transport, to come in and compete against the big bus companies, and have more competition in this country. If we are to have full employment, surely we are going to need that? On Wednesday night this House will take the decision, and I know we shall be defeated. There are no foreign rebels m the Government on this matter. I am not talking of Members who now have a different nationality or anything else like that. I am talking now of rebels on foreign policy. Whatever happens here, I am sure that in the country, the people of England will rise and fight in their farms, in their fields and on the roads against the attempt by this Government to deprive them of their personal initiative and to throttle them with this State monopoly.

It being Ten o'Clock, the Debate stood adjourned.

Debate to be resumed Tomorrow.