HC Deb 29 May 1946 vol 423 cc1168-74
The Minister of Transport (Mr. Barnes)

In spite of an average increase of about 70 per cent. in railway costs, railway charges have been increased by only 16f per cent. generally and by 10 per cent. in the case of workmen's fares, season ticket rates, and the fares of the London Passenger Transport Board. This has been possible mainly because of the large volume of war-time traffic, much of it on Government account. Government traffic is now decreasing rapidly and there is a sharp fall in railway receipts. It is estimated that the surplus of £19 million earned last year over the fixed annual sums payable to the controlled undertakings will this year be transformed into a deficit of some £40 million. The Government have therefore decided, as a first and urgent step, to make as from 1st July, certain increases in the additions made to charges during the war. The principal items are increases of passenger fares from 16f per cent. to 33$ per cent. over prewar level, of workmen's fares and season ticket rates from 10 per cent. to 25 per cent. over prewar level, and of charges for goods train traffic from 16⅔ per cent. to 25 per cent. over prewar level. The increases of passenger fares will apply to the Green Line Services of the London Passenger Transport Board, but not to their other services. Fuller details will be circulated in the OFFICIAL REPORT.

It is estimated that these increases will produce additional revenue of about £30 million in a full year. The Exchequer will therefore bear not only the full deficit up to the time when the increased charges bring in the additional revenue but also what remains of the deficit thereafter. I propose, accordingly, as a second step, to request the permanent members of the Railway Rates Tribunal, to act as they did in 1940 as a Consultative Committee, and to advise me as to the best method of adjusting charges so that, for the year 1947, the aggregate of the net revenues paid into the Pool will approximate to the aggregate of the fixed annual sums paid out. The Committee will be asked to deal with the fares of the London Passenger Transport Board separately, and to hold public inquiries at which local authorities and representative bodies will have an opportunity of being heard. The proposed terms of reference to the Committee will be circulated in the OFFICIAL REPORT.

Mr. R. S. Hudson

May I ask the right hon. Gentleman what effect this increase in charges will have on the cost of food and of other elements that enter into the cost of living; and also whether it will not have a serious effect on the cost of our exports?

Mr. Barnes

With regard to the increase of 8 per cent. on goods train traffic, we have reason to believe that it will not appreciably affect the cost of production. With regard to the increase in passenger fares, that will not, in our view, substantially affect the general cost of living. With regard to the effect on food supplies, that will be adjusted by the present Treasury arrangement.

Mr. Hudson

May we take it that this is the first of many further increases that will take place in transport costs, as the Government increase their control over transport?

Mr. Barnes

The right hon. Gentleman should bear in mind that the increases in transport costs have been relatively small compared with the general rise of prices in the community—the general increases of prices of goods and commodities. [An HON. MEMBER: "And wages."] That has been operating because of the very large sums paid into railway accounts as a result of Government traffic during the war. I think it is obvious to everybody that there has been a substantial cessation of Government traffic. It is desirable that as soon as possible transport, as an industry, should be able to pay its way, and be adjusted to normal conditions.

Mr. Leslie Hale

Is the Minister aware that there has been not merely an alteration in the distribution of traffic, but -a diminution of service given by the railway companies? Does he think that having to travel standing on one foot in the passage between two carriages of a main line train that stops only at four or five stations instead of going straight through, can go on much longer in peace time? Is he aware that the increases will cause great disquiet? Finally, will the House have an opportunity of debating the matter before the increases come into operation?

Mr. Barnes

The question of debating the increases should be directed to the Leader of the House. I am not respon- sible for determining the timetable of the House. On the question of general traffic facilities, overcrowding has been one of the factors obscuring the general economic position of railways during the war. A rapid transformation is taking place just now, and that is one of.the matters taken into consideration.

Captain John Crowder

In view of the very large increases in passenger fares, will the Minister now be able to restore the cheap day tickets?

Mr. Barnes

The House will remember that from time to time I have been asked Questions about cheap day fares and I have indicated that the matter will come under review. I think the House can now see that I was facing this problem, and that it would have been inopportune to deal with matters of that kind until the general rate structure had been brought more into conformity with postwar prices.

Mr. Stephen

In view of the statement about the increased charges that the public will have to pay, may I ask whether the Minister will arrange with the London and North Eastern Railway to increase the rate of travel on their suburban lines from what is evidently their present maximum, 15 miles an hour, to 20 miles an hour?

Mr. Barnes

That is a matter on which a Question can be put down for answer in the ordinary way.

Viscount Hinchingbrooke

Is the Minister aware that the effect of the decision that he has announced will be far more adverse, from the inflationary point of view, than the aggregate of the tax concessions refused by the Chancellor in his recent Budget?

Mr. Barnes

The Noble Lord is quite wrong in assuming that there has been any refusal of tax concessions. The situation that we are facing in this proposed adjustment would have to be met either by the taxpayers or by the users of the railways. I do not think anyone could justify a policy of subsidising an industry like transport which, normally, should be able to meet its own expenses.

Mr. Warbey

Is the Minister not aware that many people in this country have not had a holiday for seven years and that pensioners and people in the lower income ranges have been saving up for many months for the holiday season in order to visit relatives living at a distance whom they have not seen for years? Would he not consider postponing the increase in passenger fares, for, say, three months, until after the holiday sėason?

Mr. Barnes

No, Sir. I regret that cannot adopt that policy. Every month more would make the situation increasingly difficult to grapple with. Railway accounts date from 1st January to 31st December. These increases will come into operation on 1st July. I am already in a deficiency of six months on these accounts, and the deficiency.will be met by the Exchequer. I cannot possibly delay the operation of this policy any longer.

Mr. Percy Morris

Do the new rates bear any reference to the financial arrangements now in existence between His Majesty's Government and the railways? Does the question of standard revenue enter into the discussion? Is additional money being raised for greater payment to the railway companies?

Mr. Barnes

Not for a greater payment, but to meet the sum of £43 million which is the Government's obligation to the railway pool account.

Mr. P. Morris

The standard arrangement is not being varied at all?

Mr. Barnes

Certainly not. I cannot vary the standard arrangement while it is under a Government controlled account.

Wing-Commander Hulbert

May I ask the Minister whether the policy of increased railway fares was included in the Government's mandate?

Mr. Barnes

The policy that the services should economically pay their way has always been a part of our Socialist philosophy.

Mr. G. Lang

Does the Minister realise that there are many thousands of ex-Servicemen, without whose sacrifice the railways would not matter at all, who will this year be taking their families away for the first time for years? Are they not to be considered?

Mr. Barnes

All these matters have been considered, but ultimately we have to face the question of whether we are going to run an industry of this kind on its own strength and stability, or whether we are going to subsidise it. The policy of subsidising transport cannot possibly be continued.

Mr. Manningham-Buller

In view of the answers the Minister has just given, may I ask whether we can take it that a policy of subsidising the railways will not be followed in future, whether or not they are nationalised?

Mr. Barnes

I think the position that the Government are adopting at this moment—when it is quite clear what policy sentiment in all parts of the House would wish us to follow—is a clear indication that we shall follow sound economic rules.

Sir Frank Sanderson

Is it not a fact that the price increase in the rate charges is incomparably less than the increase paid to the men and in other costs of running the railways? Is it not essential that the railways should be run on an economic basis?

Mr. Barnes

That is the reason why I am submitting these proposals. The average overall increase of materials—

Mr. Speaker

That question is really hypothetical and has nothing to do with the subject.

Mr. Boyd-Carpenter

In view of the fact that the Minister justifies this decision on the ground of the decrease of traffic, does he not consider that this increase in rates will lead to a further decrease in the volume of traffic?

Mr. Barnes

I have stated that the transformation of the account is due to the withdrawal of Government wartime traffic which, while I am unable to give accurate figures, has certainly been over £100 million a year. The industry is not yet able to replace that traffic, and I have had to deal with the situation as I have found it.

Sir Waldron Smithers rose—

Mr. Speaker

I think we should proceed to the next Business.

Sir W. Smithers

Am I allowed to say, Mr. Speaker, that in view of the unsatisfactory nature of the statement, I propose to raise the subject on the Motion for the Adjournment?

Mr. Speaker

The hon. Member is certainly allowed to say that. I am now about to call the next Business.

Controlled Railway Companies. Existing addition. Substituted addition.
Fares (other than workmen's and seasons) 16⅔% 33⅓%
Charges for parcels and miscellaneous traffic by passenger train
Workmen's fares and season ticket rates 10% 25%
Charges for goods train traffic 16⅔% 25%
Charges on railway-owned canals 16⅔% 25%
Charges at railway-owned docks 20%* 40%†
London Passenger
Transport Board.
Green Lines Fares 16⅔% 33⅓%
Charges for merchandise traffic as Railway for Companies.
* Certain coastwise traffic 7½ per cent.
† Certain coastwise traffic 15 per cent.

Following are the proposed terms of reference to the Charges Consultative Committee:

(a) London Passenger Transport Board.

I am directed by the Minister of Transport to request the Committee to advise him as to the best method of adjusting the fares on the railways and road services of the London Passenger Transport Board, and on such other railways as are covered by the definition of Railways of the Transport Board in paragraph 2 of S.R. & O. 1940, No. 2037, so that, for the year 1947, the balance of the net revenue account, prepared by the Board under Article 1 of the Railway Control Agreement, together with the appropriate proportion of the balances of the net revenue accounts of Joint Committees, will approximate to the fixed annual sum £4835.705) payable by His Majesty's Government to the Board under that Agreement. The Minister wishes the Committee to hold a public inquiry and to hear thereat the representations of the Board and of any local authority of body representing the interests of passengers in the London Passenger Transport Area which may give notice of desire to be heard in such manner and within such time as the Committee may prescribe.

(b) Railway Companies.

I am directed by the Minister of Transport to request the Committee to advise him as to the best method of adjusting the charges made by the controlled Railway Companies and Joint Lines, considered as a whole, in connection with their railways (excepting such as are covered by the definition of Railways of the Transport Board in paragraph 2 of S.R. & O. 1940, No. 2037). dock and canal undertakings and collection and delivery services, so that, for the year 1947, the aggregate of the balances of the net revenue accounts prepared by the controlled Railway Companies under Article 1 of the Railway Control Agreement, together with the appropriate proportion of the balances of the net revenue accounts of Joint Committees, will approximate to the aggregate of the fixed annual sums (£38,633,000) payable by His Majesty's Government to the controlled Railway Companies under that Agreement.

In considering such adjustments the Committee are asked to take into account all relevant considerations and, while aiming at an equitable distribution of charges between the various classes or groups of classes of traffic, to have regard to the Government's policy of full employment and to the importance of maintaining adequate coastwise shipping services. The Minister wishes the Committee to hold a public inquiry and to hear thereat the representations of the Railway Companies, and of any local authority or body representing the interests of passengers or traders or other forms of transport which may give notice of desire to be heard in such manner and within such time as the Committee may prescribe.