BRITISH TRANSPORT COMMISSION (ANNUAL REPORT)

HC Deb 01 December 1949 vol 470 cc1343-456

4,12 p.m.

The Minister of Transport (Mr. Barnes)

I beg to move, That this House takes note of the First Annual Report, Statement of Accounts and Statistics of the British Transport Commission for 1948. I have had experience of two forms of Ministerial accountability to this House in connection with inland public transport. During the war, and in the postwar period up to 1947, the Minister of Transport was directly responsible to this House. During the war itself this presented no particular difficulty because, naturally, everyone was concerned with the prosecution of the war, but hon. and right hon. Members will recall, that when peace-time conditions began to re-establish themselves the type of question that was directed to the Minister concerned itself more and more with details of management with which the Minister was not competent to deal.

With the passage of the Transport Act, Parliament created statutory bodies and defined the responsibility of the Minister and of those organisations. I must say that I have found the present arrangement much more practical than that which prevailed before. Further, as far as hon. Members of this House are concerned, the annual report which we are considering this afternoon will give hon. Members all the information upon which they can form a proper judgment as to whether the Minister and the British Transport Commission have discharged the responsibility Parliament has placed upon them, taking into consideration the circumstances under which they have had to conduct their operations.

As I understand the situation, no party in this House is pledged to denationalise the railways. That is not very surprising when we consider the legislative history surrounding this problem. In 1921 a Conservative-dominated Parliament consolidated 120 different railways into the four main line railway groups. Then we had the Road Traffic Act, 1930, the Royal Commission on Co-ordination, in 1930, the Salter Committee of 1932, the Road and Rail Traffic Act, 1933, and the London Passenger Transport Act of 1933.

It is an interesting comment on the matters we are considering today that the only piece of legislation which was a substantial contribution to this problem was the Conservative London Passenger Transport Act of 1933. That represented a solution in the case of London Transport which was very similar to that embodied in the Transport Act of 1947. In the period of 16 years which has elapsed since the passing of the London Passenger Transport Act—taking account of the fact that the war years could be more or less extracted from the point of view of operational or development effectiveness—that Act has shown remarkable results. But, or course, the report which we are considering is dominated by the finances of the railway undertakings of the Commission.

In discussing this report the House should bear in mind that the problem of railway finances is not peculiar to this country. It is in fact a world-wide problem. There are few, if any, railway systems of importance in the world that are making a profit today. In the United States, Canada, France and other parts of Europe as well as in Britain, it is the same story—rising expenses and declining receipts.

That presents almost every Government with a problem. They must decide whether the difficulty is to be met either by a subsidy or by the process of integration. This Government, as we are all aware, decided that we should seek a solution along the lines of integration. The purpose of the Transport Act was that, taking inland public transport as a whole, it should not need a subsidy; that the expansion of its services should be determined by the needs and the desires of the community, and they should be made without waste of resources through unnecessary duplication of services. I contend that if the report and accounts of the British Transport Commission are examined fairly it will be seen that this process is becoming possible.

I consider that the B.T.C. and its executives have done a very good job of work in the year 1948. I observe that the "Manchester Guardian" in its leader today expresses the hope that the Minister would not appear today in the rô le of "the apologist of the British Transport Commission." I do not consider that it is necessary for a Minister to be in that position, but I would submit that at least the Minister of the Department must accept the responsibility of interpreting the report here today and, with his knowledge, he must defend it if any unfair or unreasonable criticism is levelled against it.

May I take this opportunity of saying, and I think it is generally admitted, that this report is a very fine piece of work indeed? I have seen very little public criticism as to the way in which this report has been presented and the information which it contains. No problem has been evaded, but all possible information to enable all people, both public and Parliament, to form a proper judgment is contained within it. I think Sir Cyril Hurcomb and his colleagues are entitled to commendation.

I should like to take this opportunity also of expressing what I feel is the general regret of the House that, so early in the period of working of the British Transport Commission, it should have lost the services of Lord Ashfield by his untimely death. It was a really serious blow to transport, particularly at this time and juncture. I know of no person in this country who did more to show the way of building up an efficient and integrated system of transport. The House will observe that I have not yet filled the vacancy. The development of road transport is a long and protracted process, and Lord Ashfield represented very special and exceptional knowledge in this direction. It is my desire that this post should be filled by some one with road transport knowledge and experience.

Mr. Henderson Stewart (Fife, East)

Will the right hon. Gentleman consider filling another vacancy by ensuring that at least one Scottish Minister is on the Front Bench when a matter of such importance to Scotland is being discussed?

Mr. Barnes

I do not know that that is a valid point, because the British Transport Commission covers the whole of the country; it represents the direct responsibility of the Minister of Transport, and no other Minister is involved.

I want to draw the attention of the House to pages 1 to 10 of the report of the Commission, from which hon. Members will observe that the Commission has not created a large headquarters staff. I mention that because it is one of those common assertions—whether they can be supported by evidence or not—that, this type of nationalised undertaking leads to an unnecessarily top-heavy bureaucracy.

In paragraph 17 of the report, on page 9. Sir Cyril Hurcomb refers to the considerable correspondence from hon. Members of this House which he answers personally. I do not know whether every one is familiar with the fact, but, prior to taking his present position, Sir Cyril Hurcomb was the Permanent Secretary of the Ministry of Transport and was experienced in framing my replies to hon. Members. He has all the necessary experience to deal with hon. Members as Chairman of the British Transport Commission. I think that is a very good thing, and I have heard and have received very few complaints from hon. Members with regard to that procedure.

Obviously, at the commencement of the year, the necessity to create the schemes of delegation for the various Executives represented a very onerous and difficult task, but it was carried through. There is one aspect of the Transport Act which it was incumbent upon the Commission to implement, and that deals with the problem of the disclaimer of agreements. It gives the right to the British Transport Commission to disclaim any agreement entered into by the previous managements if they were imprudent or not reasonably-necessary. I think it is only right and proper that I should draw the attention of hon. Members to the statement in the Commission's report that over the vast and different undertakings represented by the transferred railways, canals and London Transport no case has arisen which has necessitated the British Transport Commission availing itself of that provision.

I think I am entitled to say, and, indeed, it is my responsibility to say, that that indicates what a very high standard of administrative conduct prevailed in these organisations, and though in our party warfare hon. Members sometimes attack, as I consider unfairly, collective undertakings, and possibly at other times they consider that we attack private undertakings unfairly, it is to our common interest at times to recognise that, behind it all, the standard of business conduct in this country is very often very high indeed.

By the end of 1948, the British Transport stock had been issued for taking over resources to the value of £1,132 million. I mention this because, when we consider that these securities were held in about 1,250,000 separate holdings, we can appreciate the tremendous task with which the Commission was faced in carrying out this conversion. I should also like to acknowledge that in this very considerable and intricate task they received the assistance of the banks and of the Bank of England.

Now, I should like to turn to staff matters, because in the railways alone, as the Commission's report indicates, the staff represents the very considerable number of 648,000 persons, one of the largest aggregations of employed personnel in this country. It is a matter of great interest and importance, in view of the efficient conduct of these operations, that they should feel that they are a very vital part in the nationalised transport system. Section 95 of the Act requires the Commission, in consultation with the trade unions, to establish adequate machinery for the negotiation of all matters in which they are interested.

In the case of the railways and London Transport, the Commission inherited negotiating machinery that had been built up by experience over a long period, but I should like to inform the House that the Commission have fully interpreted the spirit and intention of that Section of the Act, and, on their own initiative, have considerably added to and widened the machinery of consultation between themselves, their Executives and the trade unions concerned. The machinery at the centre now consists of a joint consultative council, representative of the Commission, the Executives and the principal trade unions. The value of this machinery, I would emphasise, is much more important than possibly its title would convey.

This represents a piece of machinery which enables the main officials of the transport unions to meet periodically the Chairman of the Commission and the chairmen of all the Executives in an atmosphere in which the whole concern of British transport can be discussed freely and informally and the fullest exchange of views can take place. In addition, for the railways there is a Joint Welfare Advisory Council of 10 members representing the Executive and the railway unions. There has been further established the Railways Joint Training, Education and Advisory Council, again composed of representatives from both sides.

This, as I have already indicated, represents machinery of consultation between the head offices of the unions, the Commission and the Executives. The problem of carrying the same function and the same facilities down to the other levels of railway and transport administration has proved to be a little more difficult, but this was tackled very early in the establishment of the British Transport Commission, and the Railway Executive opened discussions with the trade unions on the machinery of consultation at all levels as early as January, 1948. But in July, 1948, the annual general meeting of the National Union of Railwaymen carried a resolution demanding equal rights of decision with the management, and that delayed for some time the development of this consultative machinery. But I am pleased to state that these differences have now been adjusted and that agreement has been reached between the Railway Executive and the four trade unions, namely, the N.U.R., the Railway Clerks' Association, the Associated Society of Locomotive Engineers and Firemen and the Confederation which is based upon the following plan.

The Railway Executive have undertaken (a) to give prior indication to the staff of their contemplated lines of action; (b) to arrange for discussion of such proposals with the staff representatives at the appropriate level; (c) to give careful consideration to representations of the staff in regard to such proposals; and (d) to notify the staff of the decision reached by the management with explanations in any instance where it is not practicable or desirable to give effect to the representations of the staff. In my view, this constitutes a significant step forward, and I should like to quote the concluding words in which the Railway Executive and the unions jointly will announce this to the staff of British Railways. They state: The Railway Executive and the trade unions desire the procedure agreed for consultation to be a ' constructive feature in the efficient operation of British Railways and urge all members of the staff to enter into the scheme with full appreciation of the opportunities which it affords to their elected representatives to assist the Railway Executive to fulfil the requirements of the Transport Act by making railway transport unrivalled for speed, efficiency, economy, and safety. At this stage I should like to say a word or two upon compensation. Section 101 of the Act required me to make regulations requiring the Commission to pay compensation in appropriate cases to officers and servants of undertakings transferred to the Commission. In the case of the railways, which have a history of compensation in this matter, this, of course, represented no difficulty, but the regulations to deal with the employees of the transferred road haulage undertakings have presented a different type of problem. However, these regulations have now been framed, we are in consultation with the interests concerned, and I am hoping that before very long this matter will be regulated.

From time to time, hon. Members are naturally interested in one of the main features of the British Transport Commission, namely, the development of their charges schemes. Of course, provision was made that these charges schemes should be produced within a period of two years from the passing of the Act, but as I have already stated to the House, the Commission did not find that possible, and I do not think that anyone with a knowledge of this type of railway problem was surprised, and, therefore, the period had to be extended.

Sir Arthur Salter (Oxford University)

Can the Minister give any idea of how long it will be before the charges schemes are produced?

Mr. Barnes

I have extended it for a period of two years. If the right hon. Gentleman will wait a few more moments, I propose to develop this a little farther, and he will then be able to judge what is the situation to date. At the moment, what I want to emphasise is that Sir William Wood has been placed in charge of this very intricate and difficult task, and I doubt whether there is anybody in this country more suitable to handle it than Sir William Wood.

Whilst I am on this Section, I think it would be for the convenience of the House if I dealt with the statement I made on Monday about the proposed increase in freight charges and if I developed a little more fully the reply I then gave to the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) when he asked me whether this proposed increase was related in any way to the principles upon which future charges schemes would be based. I stated in reply that they were in no way related to the principles upon which a charges scheme would be based, but that we were continuing the flat rate percentage increase which has been a feature of the system during the period of control.

I am not in any way modifying or altering that statement today but I am now in the position to give a little more information on the point, because the Commission have informed me that they shortly intend to make available to all trading bodies an outline of the principles on which it is proposed to found the actual scheme of charges, including conditions of carriage, methods of measuring distances and other matters, which ought to be settled before the actual classification of goods or the rates of charges are elaborated.

The Commission intend to consult trading bodies at the earliest possible stage on these matters, and they go on to state that in the next few months we should see considerable progress in this direction. Meanwhile, of course, all the preparatory details necessary to the preparation of a full scheme are being carried out.

Mr. McLeod (Ross and Cromarty)

Could the Minister say whether the Secretary of State for Scotland was fully consulted before he made this arrangement?

Mr. Barnes

I would emphasise once again that any charges scheme that is made will be applied to goods and fares, and will, more or less, be general throughout the country. Everybody has the same interest in these matters whether they live in Scotland, Wales, or England, or wherever it may be.

The next group of questions which were put to me when I announced the application of the Commission on Monday related to whether we had considered the impact of further increased charges on the export trade of this country and on industry generally. Of course, no one denies that any increase in the charges of transport will find its way to the costs of British products, like any other increase that may come along, but I find that it is very difficult indeed to be able to assess the incidence of an increased charge of this kind should it be imposed. Again I want to emphasise that it will have to go before the permanent members of the Tribunal.

It is difficult to ascertain the incidence of any increased charge of this kind and its effect on the export goods of this country, especially when we consider the American market. Most of those goods, however, are of a consumer character and, generally speaking, represent high quality and fairly high prices; they do not represent commodities in bulk. I think that the main weight of this increase will fall upon the heavy industrial products that represent the main traffic of the railways. In the case of coal, as far as I can ascertain, the increased cost is likely to vary from 1s. to 4s. a ton according to the length of the haul, and in the case of steel from 8s. to 10s. a ton, the price of steel ranging from £17 to £21 a ton.

This brings us to the question whether, if we are not to proceed on these lines, we should turn towards a subsidy as a temporary way out of the difficulty. Of course, it is not for me to anticipate the decision of the Government, but I think that it rests upon me to remind the House that it would be unwise within two years to go back on the main responsibility which Parliament placed upon the British Transport Commission when it was created, to make its undertakings pay, and certainly before the purpose of the Act, namely the integration of services, has had time to be decided. Anyone who reads through this report will see that with the exception of the undertakings which were vested on 31st January, all the other aspects of the integration of transport are a slow and steady process.

Further I do not consider that this House should influence the industry to assume that its problems can be transferred from the industry to the taxpayer. If the Commission's report is examined it will be found that they refer from time to time to the different traditions, wages, customs, negotiating machinery and matters of that description that cover the varied elements of transport that are being absorbed into their administration. In one section of the report it will be observed that the Railway Executive estimated that an over-all reduction of staff by 26,000 is essential. That is in paragraph 210 of the report.

Again, the report discloses that the Commission is involved in the problem of closing unremunerative branch lines and the substitution of railway services of that character by adequate road passenger services. On the other hand, the Commission and its Executives are engaged in the problem of integrating these services, and in some instances the long distance haul of goods by road will be trunked on the railways. There is the development of a zonal system of collection and deliveries, and I think hon. Members will appreciate that when adjustments of this description are being made in various branches of an industry there are bound to be stresses and strains and difficulties.

In my view, it would be very undesirable that we should in any way encourage the management and men to believe that these problems can be transferred from their industry to the taxpayer. I do not myself find that transport men themselves look in this direction for any relief. What I find they want is time to carry out this task and an understanding by Parliament of the very formidable job which we have imposed upon them. Everyone recognises that if the services become publicly owned, their conduct, administration, cost and management must be a matter of very direct vital concern to the British House of Commons. But I do suggest that we can discharge that responsibility in every way that is necessary without unduly distracting administrations of this kind and making their task more difficult.

In this period—and I think it will continue for a year or two to come, for reasons which I may disclose later—the whole of the finances of the British Transport Commission are bound to be dominated by railway finance, but I do not think that we should necessarily assume from this that the prospects of the railways of this country necessarily are permanently to be of a gloomy character. I myself and other Members have seen in relatively recent years the transformation that has been made in transport systems, provided the proper lines were followed.

I can remember that in 1930 the conditions in London transport were chaotic and exceedingly grave. Bodies then like the Tubes, the London General Omnibus Company and the municipal undertakings were heading straight for the bankruptcy court, but following the decision of this House in 1933 that the whole of the transport services of London were to be integrated, the change that has taken place in the intervening years is amazing. The expansion of the London Transport system in that period has been remarkable and phenomenal, and it is recognised today all over the world that the London Transport system is the finest metropolitan transport system that the world knows.

I would emphasise that lesson when we are considering this report, because a good many Members are aware of the seriousness of the situation with which we were confronted in 1933. The problem then appeared to be absolutely hopeless of solution, but by the wise legislation of this House, providing facilities for pooling capital and receipts, the transformation has been remarkable. We also had in that same period the experience of the Southern Railway when it changed over from steam to electricity.

Given the necessary capita] resources, and enabling the railways of this country to adjust themselves to modern conditions, so arranging matters with the road services nationally as we did in London, that they are not mutually ruinous but mutually complementary, who in Parliament today is going to be so bold as to say that in a few years' time we may not change the whole problem of railway finance? I am convinced that we can, provided we give them time and understanding.

I want to bring to the notice of hon. Members, in support of these views, the very effective lesson which is disclosed in some of the statistics of the London Transport Section, in paragraphs 124–128 of the B.T.C. report. Hon. Members will observe that the profits on the Tubes were 1.8d. per mile. I want hon. Members to digest figures of this description. The profits on the 'buses were 3.4d. per car mile, whereas on the trams there was a loss of 7.5d. per mile. There we have a clear indication of how the finance of a form of transport is completely revolutionised according to whether it is an obsolete form or whether it is a modern form, whether it is meeting the needs of the community or whether it is not; and the trams, of course, as every one knows, are obsolete on the London streets and will very shortly be replaced by 'buses. Their being replaced by 'buses will add to the earnings of London transport.

I must turn to the Opposition Amendment, which says: but regrets the loss sustained in 1948, the further marked deterioration disclosed in 1949, the mounting costs and the increased fares and rates so detrimental to the public.

Colonel Dower (Penrith and Cockermouth)

Cannot the right hon. Gentleman support it?

Mr. Barnes

I suggest to the hon. and gallant Member that before he intervenes to ascertain whether I am supporting it he should listen to some of the things I am going to say about it. I trust that at the end of what I have to say, instead of myself being uncertain he will wonder why he is associated with an Amendment of this character. It was not my intention this afternoon, to apportion blame for the present situation, but if we have to apportion blame, my view is that the primary responsibility for the present situation rests fairly and squarely on right hon. and hon. Members opposite, because they failed to deal with this developing problem between 1918 and 1938—and I read out the legislative lists on this matter in the early part of my speech. The war-time Government exploited the railways and made no provision for their post-war difficulties.

The second part of the Opposition Amendment states: the further marked deterioration disclosed in 1949, the mounting costs and the increased fares and rates so detrimental to the public. The deterioration in 1949 is due in the main, of course, to the mounting costs of railway expenses. Certainly it is not due to inefficient management, and almost every test that can be applied to the Railway Executive in particular, in my view proves that right up to the hilt. On page 125, in paragraph 291, is a list of the trend of prices of commodities used by the railways, most of which, I would remind hon. Members opposite, were produced and distributed in the field of private enterprise.

My second point is this: the staff costs have increased by approximately 100 per cent. and represent 62 per cent. of the operating costs. I am entitled to put to right hon. Gentlemen opposite two direct questions on this matter. Could the Conservative Party—and it does not matter what form of management or conduct they may have favoured—could they have insulated the railways of this country from the general price level prevailing; and if they could, will they please state how they could have managed an affair of this description? Secondly, would they deny the railway staffs wages and salaries similar to other industries in this country? Railwaymen have never been overpaid; they have never represented the higher level of wages in the community.

Thirdly, I would point out that control—that is, war-time control—imposed by the war-time administration was to last to the end of 1947. In the period between 1945 and 1947 the finances of the railway were a Government responsibility. The Government had to pay the rent of £43½ million up to December, 1947. How would hon. Members opposite have met this annual rent, which represented interest to the stock holders?

Let me look at the last sentence of the Opposition Amendment. It says: the increased fares and rates so detrimental to the public. Is it only increased railway charges that are detrimental to the public? What about the whole field of price increases, the general level of price increases in the community? I notice in the Press today that an important firm which manufactures motor cars in this country have increased the prices of their cars from £20 onwards, taking the range of cars. Is that increase due to increased railway charges or transport charges? Not a bit of it. Why should hon. Members opposite deplore an increase in railway charges brought about directly, and influenced directly, by the increasing level of prices in the community?

Mr. David Renton (Huntingdon)

Will the right hon. Gentleman permit me to intervene? Does he not recollect that the Chancellor of the Exchequer has paid tribute to both sides of the industry for the restraint which they have used in the last three years in the matter of both prices and wages, and that the fact that the value of money has gone down and prices have risen has been mainly due to Government budgetary policy?

Mr. Barnes

I do not consider that that is in any way relevant to the point I am making, which is that prior to an increase in railway charges the general level of prices, right throughout the community, was steadily rising and has steadily risen during the war and in the post-war period.

Facing a general economic situation of this kind, I ask, what justification is there for an Amendment of this description on the annual report of the British Transport Commission, which took over on 1st January, 1948, when, from 1st January, 1948, to the consideration of this Report, there has not been a single increased charge put on by the railways or the transport services? That is the point I make and it is a perfectly legitimate point.

The validity of my argument does not rest upon that alone. I must ask the House to compare what has happened during the period of control from 1945 to 1947 with what happened under similar circumstances in this country when the railways were controlled after the 1914–18 war. Let us compare the two situations.

During this war the freight and passenger charges were raised 16f in 1940, and remained at that figure right through to the end of the war, and it was not until 1946 and 1947 we had to consider any increase in charges. Now let us look at the position that prevailed in the previous war. In 1917 passenger fares were increased by 50 per cent. because of the war, whereas during the past war they increased only 10 per cent. Therefore there is all that leeway to make up through the rising prices that occurred generally because of the war. In January, 1920, freight rates were increased by 50 per cent., and that took place when Parliament was dominated by the Conservatives handling a similar situation. It is quite clear that the course they followed was the same the present Government have had to follow, because, as I have indicated all the way through, we have either to meet our expenses by increased charges or else impose the cost upon the taxpayers.

We are entitled to ask the Opposition, when they put forward an Amendment of this description, what they would have done in face of this rising level of prices with no increase in fares and rates to meet the post-war situation. Would they have imposed this upon the taxpayers, or would they have allowed the railways, and the railwaymen and the salaried grades, to have felt the full brunt of the situation?

Sir A. Salter

Will the right hon. Gentleman allow me? He said there had been no increase in post-war conditions. It is quite true increases had not been made since 1st January, 1940, till the end of the war, but there have been very considerable increases since then.

Mr. Barnes

I stated that it was not until 1946 and 1947 that the Government had to correct the position that the war left behind. During the war, the wartime Administration had not moved up the general level of railway charges to keep pace with a rising level of prices in the community as a whole. They allowed that situation to be obscured by means of war traffic. The war-time Government, besides paying a rent of £43,500,000, besides meeting the increases in wages and working conditions and expenses in that period, took into their annual budget a surplus of something like £190 million made on the railways.

My contention is that instead of leveling the charge now against the British Transport Commission, which has inherited this position, or against the present Government, who have inherited this position, those who do so should realise that the responsibility rests upon those who conducted the affairs of the railways—who were the Government and not the railway companies—from 1939 to 1945—at least, for not keeping that surplus in a pool to meet the impact of war and postwar conditions. That is the point I am making here today. I do not want to make any party point. This is an important basic service and administration, and a number of experienced public administrators are involved here; and in our Debates on these annual reports we should at least be clear and fair about the facts of the situation.

So all that I am endeavouring to do here is to point out that the circumstances in 1914 and 1918 and in the post-war period up to 1923, except in degree, basically were the same as those we have had to face in this war—which were worse in this sense, that during this war the channelling of enormous traffic along the railways enabled a big surplus to be created which was frittered away and not kept for a situation of this kind So far as the price level is concerned, and the raising of fares and rates, which are referred to in the last part of the Opposition's Amendment, if we look at the record of hon. and right hon. Gentlemen opposite from 1918 to 1921, when the railways were de-controlled, we find that they followed exactly the same course. I am afraid that in these political disputations I have occupied probably as much time as I ought in this Debate.

I want to say that as far as the Road Executive is concerned, it has made very considerable progress. The Report of the B.T.C. states that up to the end of 1948 the Executive had acquired by voluntary agreement 8,208 vehicles and 1,717 trailers. I am now able to bring those figures up to date. The total fleet of the British Haulage Executive now is 28,469 vehicles and 3,256 trailers. When this process is complete, it estimates that it will have a fleet of something like 42,000 vehicles.

To conclude, I should like to emphasise that at this stage, in my view, it is far too early to judge the relative importance of this section or that section of the British Transport undertakings. I know that this House and the country have neglected for practically half a century facing this problem of road and rail conflict. For the first time in that period we have a Government that has grappled with this problem, and brought all the systems of transport into one form of administration. One can see very clearly from this report that the steps that have been taken through 1948 will progressively produce the solution to this problem. I am satisfied that when the road haulage process is complete, and when the rest of the country follows the same plan, through the area schemes, that we applied in London in 1933, we shall get that balance between the receipts and expenditure of road and rail transport which will enable the Commission on the whole to pay its way.

Most people at the present moment think in terms always of restricting railway development in the interests of the roads. My early remarks suggest that we should not too hastily form that conclusion. The railways of this country, as will be seen from the Commission's statistics, have an enormous capital. Steadily those factors that represent charges, in so far as they are obsolescent. will have to be reduced. Secondly, by the process of new forms of traction, which we have seen produce remarkable results in many directions, by the pooling of capital, and the replacing of, let us say, steam by electric traction, I am confident that the appeal of the railways will once more renew its force.

Therefore, in presenting this first report to the House, I say that it is one of the most informative business documents that one can find anywhere in this country. I do not know of any private company that has disclosed so much information to the public, to its shareholders, as is disclosed in this report. As the years pass, the public and Parliament will have for the first time all the material upon which to base transport policy. No one recognises more than I do, from the experience of the few years during which I have been associated with this problem—the enormous percentage of the resources of this country which is used for these transport services. Because of the personnel involved, the amount of physical assets absorbed and the large financial resources that have to be directed into our transport services, I am convinced that we could never really grapple with these vast sums and resources while they remain under separate and individual administrations. Only by a process of integration, by bringing them into one administration, can they eventually be streamlined, thus giving a much more efficient service to the community, eventually at a much less cost.

The problems that we are considering today are not the problems of the administration of the British Transport Commission, nor the problems of management. That is only one of the post-war problems which we see in so many other directions, and which preoccupy us at the moment. In my view, in this field we stand a better chance of solving the problem, because when the British Transport Commission complete their task, when rail, road and water are under one administration, and when capital can be pooled and directed to where it will get the greatest return, I am confident that before long whoever is responsible will present to this House a different balance sheet, and we shall once more recognise, as we did in the London Passenger Transport Act, 1933, that only by integration and a pooling of resources can we solve the transport problem in this country.

5.12 p.m.

Major Sir David Maxwell Fyfe (Liverpool, West Derby)

I beg to move, at the end of the Question, to add: but regrets the loss sustained in 1948, the further marked deterioration disclosed in 1949, the mounting costs and the increased fares and rates so detrimental to the public. There is at any rate one point on which the Minister and I will be in full agreement, and that is the vital importance of the matter we are discussing today. We both realise that transport comes into production in this country at every stage, and when we are in the midst of a crisis, which is very largely soluble or insoluble according to our production, our responsibility in discussing transport is correspondingly greater.

We know that the advantage this country has had in the past over her competitors has been that the ports have been near the centres of industry; and because the cost of transport between these places has been small relative to our competitors, and also small in proportion to the cost of production, we have had an advantage. The position today is, that having been our advantage, the whole benefit of it may be thrown away in a season of the year if our transport is run by a body which is prepared to accept a high cost system and to face us with the difficulties that that must mean for our export trade. That is the problem.

I join with the right hon. Gentleman in saying that the Commission have given us a voluminous report with a wealth of material. We are most grateful for the information placed in front of us. But that again places another responsibility on us to master that information, to select what is important, and to express our judgment upon it fearlessly.

First, I want to take up what the right hon. Gentleman said about the general aims of the Commission, and especially the problem of integration. The general aims are to provide an efficient, adequate, economical and properly integrated system of inland transport. Lest we go on the wrong lines on a matter of definition, the Commission have been good enough to interpret "integration" as being "to combine parts into a single whole." I therefore think we must consider what has been done in the way of integration. The right hon. Gentleman admitted that that in turn depended on a charges policy, and he said with complete frankness that the Commission had only been able to make a beginning; that the two years, which was the period under Section 76 of the Act, had been extended by him for another two years. I do not think it would be unfair for anyone to draw the conclusion that five years is the minimum period within which we shall see a charges scheme. Now, I think that is a terrifying position to face.

Mr. Barnes

Does the right hon. and learned Gentleman mean a charges scheme covering the whole of the country, or any charges scheme?

Sir D. Maxwell Fyfe

I meant a national charges scheme, which alone can be the basis of integration. I remind the right hon. Gentleman of what I am sure he has in mind, that this is as far as they go in paragraph 42, that after two years all we know is that progress with the preliminary principles involved has been made. The right hon. Gentleman has said that we shall hear a bit more in a period of a few months. We do know this—and here is the touchstone and criterion on which to judge the progress—that when these increases were announced a few days ago the right hon. Gentleman said—again with that frankness which, I say at once, never deserts him; I give him that at once—that it had nothing to do with the principles which had been evolved up to now. So the position in which we are at the moment is that, if progress is made in a period of a few months, we have not the slightest idea whether these increases will cut right across the principles which are evolved or their logical application in the territory to which they belong.

I have tried to find some principles, at any rate adumbrated or foreshadowed, in this report. Merely raising the rates is neither a principle nor a policy, especially when traffic trends indicate that traffic cannot bear a further rise. One principle which might be elicited is whether there should be subsidies between services.

There, again, I do not get much help. The Commission say that a bold application of the principle of subsidies between services may be necessary; but that is where we are left on that point: we are still left in doubt and indecision.

Then one comes to the principle of direction of traffic or freedom of choice. I have read paragraphs 38 and 39 as carefully as one can. They show a conflict between these two ideas, so we cannot elicit any principle there. Paragraph 44 seems to hesitate between the economical use of staff and the fear of redundancy. We are again left in doubt. What it amounts to is that all these conflicting remarks to which I have drawn attention show that the British Transport Commission has not been able to form any very clear idea of even a general policy for the main problems of transport.

Let hon. Members hold their formation of opinion until they see how I attribute the blame, because I do not want them to think that I am being unfair. I say that if nationalisation, and particularly centralised nationalisation, is to have any justification, it must provide a scheme which is a definite answer to the problem of integration, and if we do not find that answer given we come back to what we on these benches said again and again nearly three years ago. The answer is that it is impossible and that our national transport is too large and complicated to be controlled entirely from Whitehall or Broadway House.

I shall deal first with the position of the Commission and then pass to the most important Executives. I shall not spend much time on the question of devolution from the Commission to the Executives, but I think that the right hon. Gentleman might have a look at the decisions as to policy on devolution—I do not put it higher than that—and also as to the amount of freedom of expenditure. These are matters which might be worthy of an examination, but they are not worthy of time being spent on them in a Debate of this kind.

Mr. Collick (Birkenhead, West)

The right hon. and learned Gentleman is, if I have followed his argument, dealing with railway charges and is complaining that the Commission, according to their report, have no clear idea on the matter. Has he any clearer ideas?

Sir D. Maxwell Fyfe

I hope so. When I deal with the Railway Executive, I hope that I shall be able to indicate my ideas with what is clarity to me. The hon. Member will appreciate that I am not avoiding his argument, but I was dealing with the relations between the Commission and the Executives, and was saying that although there might be some points worthy of consideration, there were not any worthy of detailed examination in this Debate.

I now turn to the question of staffs. The right hon. Gentleman referred to the fact that the staff of the Commission itself was only a matter of 200. But that is only part of the story. One has to consider the staffs of the Executives, and I view with some dismay the fact that no separate information is given on the numbers of the staffs of those Executives. I have, however, endeavoured to find out, and to the best of my information and belief the staffs of the Executives amount to about 1,000. No separate assessment is given of the cost of the staffs and the buildings and other items, and again the best estimate I can make is that the addition to administrative costs has probably amounted to an increase of £1 million a year.

Mr. Harrison (Nottingham, East)

How has the right hon. and learned Gentleman separated the old administrative staffs of the railway companies from the new, or on what does he base his assertion that an additional £1 million a year is involved?

Sir D. Maxwell Fyfe

I have compared the position with that of running the railway companies during the war, during the period of control, when there had to be additional staff. I believe that that is a fair comparison, and I believe that my figures both as to numbers of staff and the increased cost of £1 million per year will be very difficult to shake as time goes on.

I do not stop there. I will deal with the question of administrative areas. I ask hon. Members opposite to accept my facts. I am trying to argue on facts that are given, and if hon. Members do not like my conclusions from those facts they will draw their own. I will say what I consider are the conclusions. There are six railway regions, eight road haulage divisions, and four waterway sections.

There has been no attempt to bring these administrative areas into any form of co-ordination, and when it is said that there are to be periodic meetings between the lower level officials of the areas, I ask how that low level co-operation which is so necessary can be secured if there is that muddle as to different areas for different functions?

I pause only for a moment to say that I find the question of long-distance road services difficult to follow. Some have been taken off and the transport has been transferred to the railways, while at the same time services competing with the railways have been extended. Again one finds this absence of clearly defined policy. Until these matters are straightened out and thought out, we shall not really be in a position to compare properly the profitability of the two services because under such organisation as this neither of them is given a chance.

The Minister was very good in telling us when he was going to fire his broadside at the Amendment. I shall try to answer his broadside with one which, if it is not as good, at any rate fires every gun I possess. I will first take up his point about the war-time position and its effect on post-war accounts. The Minister drew attention quite frankly to the fact that for the whole period the total sum received from the railways was £190 million. From that has to be deducted the loss of approximately £70 million for the first two years, but on the contract the Government was £124 million in hand. That was the position under the control agreement during the war. Let us now take the position in 1947. I want hon. Members to follow this point because there has been a lot of loose talk about changing a loss of £60 million in 1947 into a loss of £4,500,000. Let us see what the position was.

In 1947, after the Government had got their profits out of the control agreement, ' there were two things that had to be settled. One was the outstanding claims by the controlled undertakings arising from the whole period of control from the beginning of the war; and these were taken together and brought in as expenses of the year 1947. The same was done as regards the cost appertaining to the wartime work done at the expense of the Ministry of Transport. I am not complaining about that. The reason was in order to let the Commission start clear. Hon. Gentlemen opposite, who, I am sure, desire to maintain the fairness of controversy, are not going to compare a year in which these matters, extending over the whole of the war, had to be paid for with another year when they had not. Let us carry that argument further.

The Minister did not refer to it—I thought that he might, but I know how difficult it is to deal with all these matters—but he said that there had been no increase in rates since nationalisation. Really, that cock will not fight. On 1st October, 1947—that is, three months before nationalisation—there was an increase in rates which was designed to bring in £65 million to cover the £60 million lost on the previous year, although then war-time factors did not come into it. Having had three months before nationalisation something which was going to bring in £65 million, I think the argument that there has been no increase since nationalisation is one that does not appeal to the fair-minded controversialist.

Mr. Ivor Owen Thomas (The Wrekin)

If the transport undertakings had not been nationalised and the same position in regard to rates and expenses had faced a Government of the Opposition party in similar circumstances, what would have been their policy in solving it?

Sir D. Maxwell Fyfe

I have spent a great deal of time at the three meetings a week which I have addressed in the country in answering that point. The answer is that if His Majesty's Government had first applied our general policy of removing the top-heavy load of Government expenditure which weighs on the people, and, secondly, had streamlined nationalised industry so as to improve our production, they would not have been in the position in which they had to take that action.

Mr. Cecil Poole (Lichfield)

I am sure that the right hon. and learned Gentleman would like the House to have a clear picture on this question of rates. Surely, he must have regard to the fact that the bulk of the carryings during the war period was not carried at cash rates at all, but at agreed carriage figures which were very much higher than those which the traffic would normally have carried.

Sir D. Maxwell Fyfe

The hon. Gentleman may have something there, but I have only taken the figures which the right hon. Gentleman has taken, and therefore, so far as my argument is concerned, it is quite a fair one. I hope that the hon. Gentleman will not think that I was chary in giving way to him. It was only because I did not want to go on for too long, although I am always ready to answer any point put by an hon. Gentleman opposite if it is an essential one.

The point that I want to make is this. First, in getting the increase to bring in £65 million, the Transport Commission were getting it presumably on the pre-nationalisation basis. They were in a far more favourable position. They had £13 million less interest charges to meet than the railways before nationalisation. That is £13 million to start with. There are one or two things in the accounts which want consideration in this way. One is the matter of depreciation. The right hon. Gentleman knows that if the depreciation had been done in the way which the railway companies did it before nationalisation, there would have been a further charge of £8,500,000. I am not going to argue for the moment as to the accountancy correctness. I only pause for a second to make a point which seems to me to be unanswerable, that the new method of depreciating means that it is necessary to call on capital for maintenance and not for improvement, and it is only when one calls on new capital for improvement that it is being used helpfully.

The point I am making here is that obviously that £65 million was given on the basis that there would be the same method of depreciation and not one that saved £8,500,000. If we take the £3.9 million payable on the freight rebates fund, that is a charge against the whole undertaking and not only against the railways. There has been £2 million added to railway revenue as interest on abnormal maintenance funds, and the collection and delivery losses of £3.9 million ought to be taken into account on the railways. I am trying again to deal with the point objectively. Taking a rough but fair apportionment of interest charges to the railways, the loss on the railway portion of this undertaking is estimated by "The Economist" at £7 million and by the "Manchester Guardian" at £14 million. Other people have put it as high as £19 million on the railway undertakings. I see that the Commission have made no attempt to disguise the seriousness of the position which they are in. They draw attention to and emphasise how serious is their financial position, but I do say that the method of producing accounts of nationalised industries whereby the financial results of each undertaking and form of transport is not shown separately conceals the true position and conceals the fact, in regard to the railways, that there is a very serious loss indeed. I should like the right hon. Gentleman to consider paragraph 82, where the Commission hold out hopes of regional results, because I think it is of the greatest importance that we should have them.

I have dealt with the position with regard to the railways. I want to say only this: At least £10,500,000 of the items I have mentioned are items which anyone could reasonably anticipate would have formed an additional loss on the whole undertaking. The fact that the loss is £4.7 million and not at least £15 million—and if there is taken into account income from non-recurring items it might fairly be put on an accountancy basis at even higher—is entirely due to the methods of accountancy which, if not incorrect, are greatly unexpected.

The right hon. Gentleman referred to the fact that the Amendment speaks of the further deterioration in 1949, but he gave us that tale. He told us a few days ago that it appears likely that the net revenue deficiency for the current year will exceed £20 million. If there is decreasing traffic on the railways, and costs are more than they can bear, and if we add to that the increasing costs of coal and labour, then I say that we are in a very serious position indeed and that there must be some reduction in operating costs. The right hon. Gentleman has asked how this reduction should be made, and whether it should fall on the wages of those employed in the industry.

Let us take the position of the staff, which is now 100,000 more than pre-war. I will concede at once it is envisaged that there will be a reduction of 26,000 in the next three months, although my information is that a reduction of only half of that figure has been achieved up to September—what the reduction has been since, I do not know, because I have not the detailed figures. There is, then, no dispute there, and we cannot throw down the old battle gage of creating unemployment. The fact is that we have 100,000 more than pre-war, and it is the definite, accepted and approved policy of the Government to make some reduction.

Let us turn now to coal, and in this connection I would draw attention to what the Commission have to say: That cost of coal per ton reached an increase of about 175 per cent. over pre-war levels; that is, the cost has almost trebled, without making any allowances for poor quality, unsuitable size and inconvenient deliveries. The report is spattered with comments on the high cost and bad quality of coal. I say that until we get decentralisation, with a chance for those in the areas to deal with the problems that arise in their areas, we shall not improve the efficiency of our nationalised industries, whether it be coal or transport, which alone will reduce costs.

Mr. Ivor Owen Thomas

Does not the right hon. and learned Gentleman agree, that, so far as management in the coal and transport industries are concerned, there is a principle of area decentralisation for day-to-day administration?

Sir D. Maxwell Fyfe

I am sorry, but I do not agree. I hope the hon. Member will listen while I elaborate my criticisms in regard to the railways, and if he answers them later on I, in my turn, promise to listen to him.

The right hon. Gentleman referred to the high prices of materials produced by private enterprise. Let us take coal and steel. We find that coal has increased by 175 per cent. and steel, which is still produced under private enterprise, has increased by only 80 per cent. I think that is a fair answer to the right hon. Gentleman. I will now submit three items in regard to which there could be a reduction in costs. I refer to organisation, the position of labour and the position of stocks.

On organisation, we have these functional Executives who are in a position to give their orders to the officers in the various regions over the heads of the chief regional officers. It is as if a brigadier gave his orders to company commanders and disregarded the CO. of the battalion. In the case of the chief regional officers, they go up in the hierarchy to the chairman of the Railway Executive, and he in his turn goes up to the British Transport Commission. I do not think anyone in a madhouse would have considered such over-centralisation as we have here. I made some prophecies during the passing of the nationalisation Measure which Members opposite said were extreme, but I am sure I could never have prophesied over-centralisation on that scale.

Mr. Collick

Surely the right hon. and learned Member could find a parallel to that in a dozen cases in industries under private enterprise?

Sir D. Maxwell Fyfe

All I can say is, if I do find a parallel, I shall condemn it.

Mr. David Jones (The Hartlepools)

What about I.C.I.?

Sir D. Maxwell Fyfe

The point I am making is that there is no excuse for this top-heavy weight of administration. In addition, we must remember that there are two extra Executives in the case of hotels and docks, which are doing only what the railway company boards did before nationalisation.

Mr. Harrison

That is not true.

Sir D. Maxwell Fyfe

If hon. Members opposite ask what I should do, my answer is perfectly clear. My answer is: Stop it, and give power and responsibility to the regional officers to manage the job in their areas. If that were done, all that would be necessary would be for them to meet in a committee to coordinate their work, and we should not need this top-heavy administration.

I shall now deal with labour. I shall not put my criticisms in my own words, because that would be invidious, but shall use the words of the N.U.R., as contained in their journal, "The Railway Review," some three weeks ago. The journal says: Never was there a time when discontent was so rampant as it is today on British Railways. It is with the utmost difficulty that staff can be retained in the service and, when it can be kept, delinquency rears its ugly head in so many ways as to be a nightmare to very many of the supervisory staff; it has become a problem never experienced in days gone by.

Mr. D. Jones

Who wrote that article?

Sir D. Maxwell Fyfe

The hon. Member ought to know, because it is a trade union magazine. The journal continues: Lack of interest in the work was never so rife, and bad timekeeping becomes so prevalent that supervisors are worried to death about the problem of keeping the job going…. The first and most important thing that is wrong is the gradual development of a soulless, dehumanising and individuality-killing atmosphere that prevails all over the railway system in these days. … Men—good honest and trustworthy men—are leaving the railways every week in large numbers, all because of this soul-destroying system of remote control; a control that means nothing to them but a voice giving orders from out of the mouth of a telephone receiver.

Mr. John Hynd (Sheffield, Attercliffe)

Since the right hon. and learned Gentleman has made such a point of this article, has he also read the denunciation of this article by serving railwaymen—and this is not one—as representing nothing that is happening on the railways?

Sir D. Maxwell Fyfe

The hon. Gentleman will no doubt quote from the same paper. It is the official paper of the union. Let me take up with the right hon. Gentleman what was said by the Chairman of the Railway Executive, Sir Eustace Missenden. In dealing with that article, he said: 'Rover'"— that is the nom de plume of the writer of the article— says that there is discontent, lack of interest, bad time-keeping and delinquency. Of course there is, but it is a question of degree.

Mr. Ivor Owen Thomas

rose—

Sir D. Maxwell Fyfe

What "Rover" said about people leaving the service is borne out by the figures.

Mr. Sparks (Acton)

rose —

Sir D. Maxwell Fyfe

The hon. Gentleman must not stop me when I am about to quote figures. Taking the last nine periods for wastage, finishing a week or two ago, the figure was 10,000 for the first week, 11,000 for the second week, and an average of 8,000 for each of the other weeks. I suggest that those figures bear out fully what was said in that article, and I ask the country to believe that the official organ of the National Union of Railwaymen would not have published that article if they had not thought that it was well based in fact.

Several Hon. Members rose

—

Sir D. Maxwell Fyfe

Hon. Members opposite will have plenty of chances to answer me.

Now I come to the question of rolling stock. In view of the lack of time I shall not trouble about carriages, but I should like the Parliamentary Secretary to deal with the serious position of wagons, to which reference is made in Table VII (1) and paragraph 147 of the Commission's report. It is stated that at the end of 1948 there were 1,179,404 wagons, which was 44,230 fewer than in 1947. Up to 11th September there was a further decrease of 45,378. It is stated that there would be a surplus of 85,000 mineral wagons in 1950 over the number in 1948, which number are to be broken up between 1949 and 1951. That, I take it, is the estimated surplus over requirements. I also take it that there will, at the end of that time, be 129,000 fewer wagons than in 1947. There is, at the moment, a decrease of 90,000. Further, if the Parliamentary Secretary will consider the repair figures, he will see that they were 9.8 of the book stock at the end of 1948, that it was anticipated that that figure would be reduced to 5.5 but that it has, in fact, gone up to 11.5—an increase of about 15,000 over the original figure. That was in September.

The Parliamentary Secretary to the Ministry of Transport (Mr. James Callaghan)

The estimate is for the end of December.

Sir D. Maxwell Fyfe

Yes, but what is worrying me is that there is an estimated decrease of 129,000. In 1947, at the time of the fuel crisis, which lost us £200 million worth of production of exportable goods, the shortage of wagons was a most important element in that crisis. I am worried that the Commission think it is right to tackle future bad winters with 129,000 fewer wagons than in 1947. The repair figures speak for themselves. I do not want to rub anything in, but perhaps the Parliamentary Secretary will tell us whether the figure of 11.5 has been improved. It should have been. I find that the absence of any plan by the Executive to deal with branch lines is rather disquieting. Losses can be increased as a result of that, and we ought to know definitely what their policy is.

I should now like to deal with the question of goods traffic coming under the Road Haulage Executive. I regret having taken so long, but I have had to deal with a number of interruptions and it is difficult to speak on so large a subject in a short time. There is the question of provisional payments for those whose business is acquired, the question of what is normal vehicle condition, fleet discounts and compensation for loss of office. I could give the Minister examples of the way in which people are worried about these matters. I should be grateful if he would look into the question of original permits, because there has been the feeling that the Executive has been too strict in anticipating what was original business. If a firm has become a company, or a man has died and his business has become his widow's, they ought not to lose their benefits. If the right hon. Gentleman thinks that a short Parliamentary Bill is necessary to deal with this matter we shall not hinder its progress.

Mr. Barnes

We recognise that that is a difficulty.

Sir D. Maxwell Fyfe

I am very glad to hear the right hon. Gentleman say that.

On the question of short distance and excluded traffics, when the Transport Act was going through the House the Minister of Supply said in effect, "You need not worry about the Commission going into the field of excluded traffics." He used the words that it was a work which the Commission would be wholly incapable of doing with all the other functions placed upon them."—[OFFICIAL REPORT, Standing Committee B, 11th February, 1947; c. 1227.] We find that the Road Transport Executive are filing applications in regard to excluded traffics, and it is very unfair that they should compete in that field when the private enterprise haulier is limited to his 25 mile radius. We also feel that the short-range haulier should not have been excluded from railway collection and delivery work. There have been many complaints that the Executive are undertaking jobs in which the private enterprise haulier would demand a return load. They are doing it without getting a return load, and there is an excess use of vehicles to the figure of some 25 per cent.

There is the same complaint of centralisation and of the hierarchy in administration. A short time ago the Road Passenger Executive was hived off the Road Executive. I am only going to make one point on that, because it is the central point. I do not see in the report, nor have I seen anywhere else any reasons for the suggested North-East Area Scheme. We cannot get any reason for this scheme from the local authorities, even Socialist local authorities, on the North-East Coast. It has been condemned by West Hartlepool, Darlington and Newcastle-on-Tyne. It was strongly condemned in the "Municipal Journal" in May of this year in these words: It has become difficult to see how the Executive can even hope to carry the suggestions through the next necessary stage. I had hoped to read—hon. Members opposite will appreciate how much pleasure it would have given me—that burning passage in the book by the Lord President of the Council, "How London is Governed," which begins: Never do I see the transfer of functions from local authorities to the State without a feeling of sorrow. I deprive the House and myself of the pleasure of hearing once again that noble purple passage of English prose. I hope I have read enough, however, to show that for once I can claim the right hon. Gentleman the Lord President of the Council—[HON. MEMBERS: "Here he comes"]. Here comes the right hon. Gentleman himself. [HON. MEMBERS: "Read it again."] I was saying a moment ago that I had deprived myself and the House of the pleasure of reading out one of the great purple passages of English prose—a passage from the book by the Lord President of the Council, "How London is Governed," which starts: Never do I see the transfer of functions from local authorities to the State without a feeling of sorrow. Not for the first time in these Debates I am glad to summon to my assistance that quotation from the Lord President of the Council in order, I hope, to put "paid" once and for all to the North-East Area Scheme.

The Lord President of the Council (Mr. Herbert Morrison)

That is a "fair cop," but the right hon. and learned Gentleman will agree that in the preface to the book I was scrupulously careful to say that all views in that book are my own opinions, and in no way do they commit His Majesty's Government.

Sir D. Maxwell Fyfe

As I have said before, if I can get the right hon. Gentleman on my side then I am half way home with the rest of the Government. I do not think I have left any doubt about my position. I believe that 'bus undertakings ought to be left to the municipalities and the companies which were running them before nationalisation. I do not see how it will improve things to give these assets to the Transport Commission and running these services by a board under a Commission.

I had intended to develop a few points on C licences. Knowing how fond right hon. Gentlemen opposite are of the reports of independent bodies, I wanted to submit parts of the report entitled, "The Ministry of Labour Conciliation Board on Railway Wages and Conditions." At paragraph 167 they use much more trenchant language than I ever used and I leave this paragraph with the Parliamentary Secretary to the Ministry of Transport to digest: A restriction, therefore, on the issue of C licences in advance of the time when, as the result of integration or other circumstances, the Transport Commission can provide services at less expense to the user than he incurs by carrying his own goods, would, it seems to us, increase his existing transport costs, and such an increase would, at the present time, in view of the national economic position, be contrary to the public interests. If the Commission waver between paragraphs 38 and 39 in the future, I hope the Parliamentary Secretary will take that passage and read it to them not merely once but several times.

I am conscious of the great patience which the House has shown to me in what has been a much longer speech than was intended. As I said at the start, this is a most important subject. I disagree with the Minister of Transport. We have argued about it on many occasions, but we always tried to formulate from our own point of view as fairly as we can, the issue between us. What we on this side of the House believe in is regional responsibility and decentralisation for the railways, so that we will get local power, responsibility and attention when dealing with local problems. The problem must be there, and the way that we would deal with it is by decentralisation.

With regard to road goods transport, I am completely unaltered in my view that if there is to be local consideration for goods and transport then we must have a small unit. Local application of services cannot be got with a large unit. The buses should be run by the municipality or by the bus companies which have worked in with the municipalities and the railway companies for a period of 20 years, because in that way we can provide the best services that can be given.

All these things would militate, first of all, against the difficulties which I have tried to indicate; and, secondly, against the difficulties of high costs. Those are the only ways by which this country can get the transport services that it needs. Such services are essential for production and for our economic recovery. It is because I feel that the proposals of the Commission towards over-centralisation militate against efficiency and the reduction of costs, that I am moving the Amendment, and I urge that these principles be carried into effect.

6.10 p.m.

Mr. Percy Morris (Swansea, West)

It I may say so without being thought presumptuous, I always listen to the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) with a great deal of interest, appreciating his courtesy and good will. I find him a most disarming critic but, frankly, in listening to him this afternoon one would imagine that financial difficulties were a new feature of the railway industry. During 41 years' service I have never known the industry do other than plead poverty.

In 1938, with many other colleagues, I responded to the appeal of the directors, joined in a national campaign, addressed meetings in all parts of the country and pleaded for a square deal for the railways. There were two complaints. The first was of unfair competition. The second was of the almost unrestricted right of the road transport undertakings to pick and choose the most remunerative traffic. Not unnaturally they did so, and their foresight is standing them in good stead today when submitting their claims to compensation. At that time the railways were asking permission to make their own rates and charges without having to conform to so many statutory rules and regulations. In 1939, the Transport Advisory Council said: The financial position of the railways, which has for some time been very unsatisfactory, has recently deteriorated to such an extent as to give rise to an acute concern for the future stability of the companies. That was many years before the Labour Government had anything like power. The Government, realising that the railways are the backbone of the transport system of the country, took them over and guaranteed the railways and London Transport £43½ million per annum.

The heaviest burden revealed in the Commission's report is the payment of interest. According to the figures, the interest is £33,094,196 per annum in respect of transport stock. I am not suggesting that the payment should not be made, but it is unfair that the whole of that burden should rest upon the industry during a time of reconstruction and readjustment. The right hon. and learned Gentleman quoted figures indicating that many people are leaving the railway industry just now. The reasons given to those of us who are most interested in the subject is that they keenly resent the failure to grant them improved conditions of service and are very weary of uncongenial turns of duty. I hesitate to correct the right hon. and learned Gentleman in another respect, but I think it must be said. If he will examine the returns of the Ministry of Labour, as shown in the "Gazette," he will find that the percentage of people leaving the railway industry is barely half the percentage of people changing their occupations in other productive industry. Pro rata, the railway industry has been able to hold its own very well.

The next problem relates to "C" licences, but as I understand that that matter will be dealt with by other hon. Members following me, I shall content myself with reminding the Minister of his undertaking in Committee that if the "C" licences were to develop in an unfortunate way he would seek further authority. The next point relates to the urgent need for expediting the working of the Rates and Charges Tribunal.

That is a much vaster task than hon. Members or members of the public realise. I am not at all surprised that the time had to be extended, because literally millions of figures are involved. I sincerely hope that the Tribunal will evolve order out of chaos. If the Minister can do anything to expedite the work it will be of material assistance to the transport services.

The delay in acquiring road passenger transport is due to the over-generous provision in the Act for the tabling of Amendments or the forthright rejection of the schemes suggested by the Road Passenger Transport Executive. Something will have to be done to short-circuit the present arrangement. The right hon. and learned Gentleman who opened the Debate for the Opposition acknowledged that there has been a considerable reduction in the number of staff since the war, although he acknowledged, too, that the staff of the British Transport Commission was only 200. He asked how many men were involved in regard to the Railway Executive. I suggest to him that many of them have been transferred from the old managerial offices, and that the figures are nothing like so great as he tried to persuade the House.

We are working under very serious difficulties. The figures presented in the report ought to be given great publicity. Materials used in railway work have increased in cost enormously. These are examples: canvas 221 per cent.; coal 174 per cent.; iron and steel 80 per cent.; general timber 225 per cent.; sleepers 344 per cent.; linseed oil 633 per cent.; lubricating oil 215 per cent.; rope 333 per cent. No fewer than 23,000 passenger carriages are more than 35 years old. I am glad to learn that it is hoped to build 2,000 of them this year. Despite the increased costs and the lack of materials much work has been completed. For instance, the pre-war average of track renewed was 1,300 miles per annum. Last year it was 1,632, and in 1949 the total should be 2,000 miles. If I may quote from the Minister of Transport, that is equal to a straight line from London to Cairo. We ought to be very appreciative indeed of the very difficult and hard work performed by the men who are relaying the track in all sorts of weather.

I have just completed some very general observations. May I now refer to four other features that are a great credit to the B.T.C., and indeed to His Majesty's Government? For the first time in our history the railway employees of every grade are being encouraged to take an intelligent interest in the work they are called upon to perform. They are being freely invited to make their suggestions on how best the industry can be improved. The consultative council, composed of representatives of the trade unions and of the B.T.C., have met three times, and those initial meetings were very encouraging indeed. We appreciate the candour with which the Chairman offers all the information that we desire and his readiness to listen at all times to comments and criticism on our part. Opportunities of that kind never occurred to us under private management. If. the meetings continue as they have started they will be of tremendous value to the industry.

The Railway Executive Joint Welfare Advisory Council has only been in existence for about 12 months, but it has already produced a document dealing with accommodation standards. The document lays down the standards that the council are prepared to observe in providing accommodation for all sections of the staff in the coming years. Whenever possible, when modernising existing buildings, they will try to conform to those standards. Hon. Members who have taken the trouble while travelling to and fro to examine the conditions, under which railwaymen are working, will realise that standards of this kind are very much overdue, and it is infinitely to the credit of the Railway Executive that so soon in their career they have recognised the need to provide decent conditions for the men and that they have adopted such a splendid standard, which, in many respects, is an improvement on the Gowers Report. I have seen one or two of the buildings erected to these specifications, and they offer great encouragement to the staff.

We are now dealing with training and education schemes, management and consultation. I want to make it perfectly clear that my constituents do not ask me to press for such a thing as workers' control; neither am I pleading for it this afternoon. Neither does the union of which I have the privilege to be a member seek that. All we desire is every opportunity to take an intelligent interest and to make our contribution in the management and direction of the industry, and the signs up to now are that the Railway Executive and the B.T.C. are encouraging us to work on those lines. I hope it will prove to be to the advantage of the country.

I would remind hon. Members opposite that the change has not been so drastic as they imagined and that from our point of view many of the people holding high executive office are the same people who worked for the former railway companies. If we criticise them at all it is because of a tendency on their part to interpret negotiated agreements in the old restricted, niggardly fashion, whereas I am conscious that the British Transport Commission end the Minister of Transport agreed that once a settlement had been reached upon contentious points, the interpretation should be on the most generous and helpful lines.

Railway employees are a little critical sometimes and they say, "The old gang are still there and until they are removed we shall never enter into our own." However, I say from personal experience that whatever the views of those gentlemen were before, in the B.T.C. and the Railway Executive they are applying themselves with diligence and ability to the task of making a great success of nationalised transport. They are seeking and obtaining the goodwill and cooperation of all sections of the staff.

I confess that when I first heard the announcement that Sir Cyril Hurcombe was to be Chairman of this body I had some misgiving of an indefinable character and wondered how he would fare, but I am happy to acknowledge that if by his own efforts any one man could have made this industry a successful one under nationalisation, the Chairman would have done so by now. We acknowledge very readily the encouragement which has been given to those of us who speak on behalf of the railway employees.

The subject of the interest is causing us a good deal of difficulty. I recently presided over a conference of 600 delegates, one of whom referred to it as "the burden upon our backs." As long ago as 1945 the Trades Union Congress made a suggestion. I quote from their Report: Capitalisation of the new Authority should be computed apart from what has been paid in compensation, and should be fixed at a figure which is reasonable bearing in mind that the industry is now being operated as a public service and not, as in the past, as a group of private undertakings exploiting for maximum profits the traffic possibilities of their own particular areas of operations. The difference between purchase price and the separately agreed capitalisation figure should be a separate charge on the national finances. Over-capitalisation might make it impossible, in spite of considerable economies in operation, for the publicly acquired industry to show successful financial results from an operational policy necessary on broader grounds of national policy. I commend this suggestion to the Minister; it is worthy of his examination. I commend the report, I thank those concerned for the information which they have given, and I appeal to the House to deal with this as a matter of grave public interest, and not one of a political character, and thus make the public transport service the greatest asset in Great Britain's industry.

6.25 p.m.

Sir Ralph Glyn (Abingdon)

I do not want to detain the House long, but I wish to make one or two comments on the Debate as far as it has gone. I trust the House will forgive me if I say something of a personal kind. I have devoted 30 years of my life to serving on the board of a railway company and the whole interests of the railway industry and the men who serve in it have always been my first consideration. I believe that in the transport industry we had not only the finest body of workers that any industry has had, but also the best conciliation machinery. That machinery was built up over a great many years and the Transport Commission, by establishing this joint conference, have improved the contacts which we used to have in the old days.

Previously, when we had four main railway companies it was very difficult to get agreement on certain aspects of staff policy, and those of us who were concerned in that matter often thought it would be very much easier if we could act alone instead of having to get the agreement of the other three. By and large I believe that the position of the staff is one of such prime importance that it is absolutely necessary for the trade unions which are interested in the concilation grades of the railways, the A.E.U. and the dock labour unions, to see if quicker decisions can be obtained under the present system than at present appears probable. My right hon. and learned Friend who opened from the Opposition side spoke about the advantages of decentralisation. I believe that there must be decentralisation with control, but I also believe that in these days it is absolutely vital for managements and unions to work out a system whereby small grievances in a locality can be settled quickly so that men shall not be left in doubt as to what is to happen.

It has been publicly stated that it is the policy of the Opposition not to attempt to unscramble the omelette of transport nationalisation. Therefore, I look upon this matter objectively, and I believe that all of us have to try to see how the present system of the nationalisation of transport can be improved. Sir Josiah Stamp, who was my chairman for many years, was a man of great ability and was entirely removed from party politics, and I remember that he always told us that the efficient management of any concern really rested upon what could be supervised by the brain of one competent person. I believe that to be generally true. In Sir Cyril Hurcombe we have an ideal man with great experience and great sympathy, who is doing everything that any man could do with this vast organisation.

I may be the only remaining Member who was in the House when we carried through the Railway Act of 1921. That brought 28 different companies down to four units. [An HON. MEMBER: "It was 120 companies."] It was 28 main companies. In doing that we came up against every sort of difficulty which paved the way for unification. The hon. Member for West Swansea (Mr. P. Morris) did very great service for the industry when we were trying to get co-ordination between road and rail, and we are all very grateful to him, but Parliament refused us power. I am rather sorry that the hon. Member emphasised the matter of the interest burden. Earlier on he said that he did not suggest that there should be confiscation and that he recognised that interest should be paid to the original shareholder. It is not a small matter. The report of the Transport Commission shows that the total assets taken over amounted to £1,666 million. That is a great deal of money and it must carry a fair rate of interest.

Of the two points to which I wish to address myself besides the treatment of staff, the first is the great problem of how we shall operate a railway service with a system which is 100 years old. We have to put up with the disadvantage that our forefathers were the leaders and the promoters of railways. It is no use saying that we ought to modernise a station at Euston, or somewhere else, because that station was a good one when built—right in the country at the time when railways were started. Therefore, as pioneers we have to recognise the fact that we cannot have something like Pennsylvania Station in the United States. At this time, when we are taking over this new service, everything is against us from the point of view of commodities, not only labour but materials, and it has been physically impossible for the Executive to carry through the revisions which are so necessary.

Under nationalisation it ought to be a great deal easier to carry through things of vision than it was in the old days, and I look forward to the time when we shall no longer hang on to the old termini of London but will recognise that the population has spread westward. Why have we deserted Addison Road where there is an enormous area much more central to London? Instead of spending millions in a congested area on existing termini, we should try to build a great through terminus there. Incidentally, it is the only place in London where traffic from the north to the south can go without changing. It is extraordinary that that decision has never been made. Why should it be assumed that somebody who wants to do business abroad has to come to London, drive across it to another station, and change his train? Why should he not have a sleeper to Dover and, if Dover, why not cross the Channel on a ferry service? We ought to consider these ideas when there is no difference between one concern and another.

There is one other matter on which I feel acutely. All the years I have been in the House, in connection with railways I have often heard hon. Members say, "Oh, you are the people who smashed the canals." Certainly we had something to do with canals over a number of years, but I hope that hon. Members have seen what the Commission have said about the canals today. It is no use trying to operate a commercial service on idealistic lines; one must be practical and deal with things as they are, and canals do not pay.

Now I shall touch on something which I am sure my hon. Friends in the railway industry will understand. It has caused me great distress for many years, as I came in direct contact with it, and it is something which can only be eradicated by the complete co-operation of management and the unions. I refer to pilfering on the railways. It is a great blot on a service of which we were all so proud. When I was young, a member of the public who put anything in the van knew that it would get to the other end. Now how many people do that? We must restore the confidence of the public in the carrying of goods of every sort on rail without loss and without risk. I know that the larger number of the railway employees, as indeed those employed in the docks, feel that this is a blot which somehow or other must be removed. The loss due to this cause is no less than £3 million in the present accounts, and what it will be in 1949 I do not know.

Mr. J. Hynd

Is it not the case that there has been a reduction in the last year of £1 million?

Sir R. Glyn

I hope so, but I should like to see it removed entirely. When I first went on to the old L.M.S. our total loss per year in that direction was under £200,000 and that had mostly nothing to do with the railway servants; it was due to outside people. I beg the hon. Gentleman to realise that he has himself served the railways, and he ought not to be satisfied with anything but the best service to the public. Therefore, I beg him not to try to excuse that—

Mr. Hynd

No.

Sir R. Glyn

—because even if as he says, it is reduced by £1 million, it still amounts to £2 million.

Mr. Hynd

I interjected because, although the hon. Baronet was quite rightly objecting to this situation, he was fearing that it might be increasing. He hesitated to say what it might be next year. That was why I pointed out that it has been on the downgrade since 1948.

Sir R. Glyn

Well let us hope it will be wiped out, because it is a bad thing.

My next point, on the new set-up of the Report which I think is wholly good, is in regard to assessing the work of the Transport Commission by its activities. Its activities are separated in the different branches which in the old days the railway companies had under their supervision, but I beg the Minister to consider the difference. Those who were on the boards of railway companies frequently used to be scoffed at and there were even cartoons of people with large "bow windows" and spats who were supposed to be representative of railway directors. Yet the real point about a board of a railway company was that the bulk of the people serving on it were interested in some form of trade or industry, so that there was a direct contact in the different areas of the country with all the different trades and industries. Thus they could discuss with the offices intimately the trends of trade.

I believe that the transport system today is inclined to look inside itself and not as much outside as it ought to do. I am not sure how we shall achieve that, but I am quite sure that if we can decentralise into areas and somehow get into better touch with the traders and the commercial people in those areas, it will be of the greatest assistance, not only in fixing special rates but general rates, and will bring the transport service into more intimate touch with the users and the general commercial interests whom it should serve.

One of the things which used to worry us towards the end of our time, concerned the enormous sections of the railway which cannot possibly pay in peace time but which are absolutely essential from a strategic point of view. Certain systems which were heavily used during the war and are very little used in peace time are really part of our defensive organisation and should be so looked at. There may be certain terms and conditions which necessitate operating a certain number of trains over the system but, if it were considered again, much of the services so far as passengers and goods are concerned, at any rate in the remote Highland districts, could well be taken care of by road services properly controlled. It is also true of certain dock installations which ought to be eliminated and kept on a care and maintenance basis simply and solely to be used in a time of emergency. There is an admirable table in the report of the Commission, Table IV—1, which sets out in great detail the paying side of the railways.

Do not let us forget another thing. In the old days the L.M.S. took the lead in research, which is one of the most important aspects of commercial work. I hope that following the advice which Dr. Merritt and others like him have given to the Transport Commission, a great many things will be done.

Let me mention a curious thing. Has anybody ever realised the amount of money which has to be spent in painting "British Railways "on every locomotive? In their day, the old railway boards did have to think about these matters. The railways in England today must, surely, be British railways, although I know that abroad one may wonder at the nationality of a locomotive if it happens to stray into another country. I am all for the lion or whatever is the crest which is used, but why should it be emphasised by the words "British Railways"?

Then there is the painting of "First class" and "Third class." A lot of people say that they do not like "first" class. In some of the countries on the other side of the Iron Curtain, I believe, the two classes are known as "soft" and "hard." The Commission, after all, are selling transport, and they need not bother about painting "3" and "1." For those who want to travel "soft," let merely the "S" be marked and, thereby, save a lot of time and paint, and a certain amount of labour. Things of this sort are not ridiculous; they are all little points which have to be considered.

The hotels and refreshment rooms at present show a small profit, but I am one of those—I admit it—who voted for the Catering Wages Act because I thought there were conditions in the catering industry which were bad and must be put right. I am horrified, however, by the results of that Act and the way it is working out. It is bad for the country and for those engaged in the industry, and the regulations which have been passed under it are reacting against the interests of employees in the industry and are certainly not good for the country.

I beg the Minister to consider with the Transport Commission and the Hotels Executive what can be done to bring about an improvement, for under the conditions laid down by the Catering Board and the regulations it will be quite impossible to operate the hotel and refreshment rooms services for the benefit of the public and at the same time bring in any revenue to the Railway Executive. The time has arrived for a thorough review of the whole situation.

I do not know why hon. Members on the Government side cannot vote for the Amendment which the Opposition have moved. Surely there is nothing in it with which they do not agree? Are we not all disappointed that the report shows a loss and hopeful that it will not do so in future; and are we not all determined to see that by every action we can take we make the transport industry, which has now come to stay in its present form, worthy of the country and helpful to trade and industry? It would be to the benefit of the House and for the confidence of the country if every hon. Member opposite, including the Minister, came into our Lobby tonight.

6.44 p.m.

Mr. Ernest Davies (Enfield)

But for the last few remarks of the hon. Baronet the Member for Abingdon (Sir R. Glyn), I think that the whole House would have shared his views. If all railway directors had been as humane and had as much vision as the hon. Baronet, we would have inherited a far better bag of assets and a far more contented team when rail transport was nationalised. I think the hon. Baronet will agree that in the Amendment is an implied condemnation of the operation of the British Transport Commission, to which he paid a compliment, and that he will not really expect hon. Members on this side to keep company with the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe), who opened the Debate for the Opposition and whose speech was of a very different tone from that of the hon. Baronet.

The right hon. and learned Gentleman largely apportioned the blame for the present difficulties facing the nationalised transport industry to the organisation itself, to the mere fact of nationalisation and to the taking over of road transport, centralisation and various other factors. My right hon. Friend the Minister attributed the blame largely to the condition in which the assets we took over were left by private enterprise.

I apportion blame, if there be blame, for the difficulties now facing our nationalised transport system to the fact that nationalisation is not yet comprehensive and is being brought about too slowly. That is to say, the fulfilment of the objective of Section 3 of the Act—the provision of a properly integrated system of public inland transport—requires the complete nationalisation of long distance road haulage where goods are carried for hire or for reward. It requires the fulfilment of the area schemes which the Act proposes; and integration to be brought about through the implementation of the charges schemes.

Instead, these objects of nationalisation, some of which are at present inefficient, are being achieved very slowly. I am not blaming necessarily the Commission or the Government for this by saying that the mere fact that these aims cannot be achieved quickly is responsible for the difficulties which face the nationalised transport system, particularly regarding inadequate revenues.

Sir A. Salter

In his comprehensive scheme which he thinks necessary does the hon. Member include also the "C" licence?

Mr. Davies

If the right hon. Gentleman will let me make my speech in my own way he will find I shall not ignore that aspect, of which I have spoken on other occasions.

The delay in effecting complete nationalisation is proving costly to the Transport Commission because, first, it slows up the process of integration; and secondly, it enables traders to contract out of the nationalised service until complete nationalisation is achieved. In this connection I will refer to "C" licences, about which the right hon. Gentleman asked.

There has unquestionably been a considerable increase in the amount of goods being carried by traders in their own vehicles—that is, a contracting out of the publicly-owned system—and in the number of hauliers who continue under private enterprise. The figures show that for the 12 months beginning in June, 1937, the increase in the number of "C" licences in England was only 2,645, or an average of 220 a month. In the post-war period, however, we find that from January, 1946, to September, 1947, the average monthly increase was between 7,000 and 8,000. Admittedly, during the war there was a falling off, but, even so, the net increase from June, 1937, to September, 1949, was practically 300,000. The total rose from 365,025 to 659,755, the actual increase being 294,730. That increase, particularly when compared with the pre-war period, cannot possibly be a natural increase, especially if we take into account the present-day petrol restrictions which did not exist before the war.

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

Has the hon. Member also calculated that all these applications for "C" licences come about because the traders of the country find they can carry their own goods so much more cheaply than by public transport?

Mr. Davies

In that case, it would be interesting to know why the increase in "C" licences started immediately after the war, before the transport industry had been nationalised. I shall analyse these figures a little further. In the report the British Transport Commission state that two-thirds of the "C" licence vehicles are the lighter type of vehicle but the actual position is that the number under 30 cwt. unladen at present is not so high as two-thirds. In fact, 359,000 were up to 1½ tons and 293,000 exceeded 1½ tons, and the important section of the "C" licenced vehicles, which are those over 2 tons, exceeded 200,000 in August and are now somewhere round about 250,000.

The increase in "C" licences must have an effect on the freight receipts of British Railways. That is fully shown in the figures for merchandise carried by the railways. For the 44 weeks to 6th November this year the total freight receipts were up by practically £500,000. but minerals, coal, coke, etc., were up very considerably and general merchandise was down. The carriage of minerals, etc., was up, but general merchandise was down, in fact, by more than £2,275,000, roughly about 3 per cent. It is interesting to note that where it can be broken down for an earlier period, to the beginning of October, although merchandise receipts were down substantially, the actual traffic originating on the railways was up by 260,000 tons.

That means that the expensive freights merchandise was decreasing while at the same time there was an overall rise in the volume of merchandise going on the railways. That is convincing proof that private enterprise is carrying the more costly type of merchandise and putting on the railways merchandise and freight for which the freight costs are lower. In other words, there is happening precisely what we suggested would happen when this matter was debated on the Committee stage, the skimming off of the cream of the traffic to the "C" licences and the uneconomic freight being put on the nationalised concerns.

This continued increase in "C" licences is bound to prove uneconomic to the transport system of this country. It is uneconomic because the profitable traffics are diverted from a system which is not carrying to capacity, whether they be the "A" and "B" licensed vehicles on the roads, or the railways themselves. It leads to duplication, waste, empty running, capital and dollar expenditure, and the diversion of vehicles which might be employed in the export trade, or used to better purpose. The expenditure of manpower in this connection is quite unjustifiable at the present time. It is also uneconomic because as long as there is unused capacity the overall costs of the transport industry are bound to increase. We have to spread our overall costs over a reduced volume of traffic and over reduced receipts and, consequently, total revenue is less and charges might have to be increased.

It is not suggested that one should interfere with existing "C" licences at present, but what I have previously suggested, and still maintain, should be done in order to protect the transport system of the country as a whole, is now to take steps to introduce amending legislation, so that the applicant for a new "C" licence has to prove his need to carry his own goods in his own vehicle and that it is advantageous to him to do so and that he would suffer if he did not so carry them. At the same time, representations from other interested parties, including the Commission, should be taken into account. During the passage of the Bill through the House and on the Committee stage the Minister undertook to review the position if there was an abuse of the issue of "C" licences. So far he has refused to do so and I suggest that the time has come to institute an inquiry into the continued issue of "C" licences.

Mr. Proctor (Eccles)

Would my lion. Friend lay down a condition as to the size of the vehicle?

Mr. Davies

That would be a matter to be taken into account when a review was taking place. I suggest that the Minister should appoint a working party to review the whole question of procedure of licensing "C" vehicles and its effect on transport economics, including the publicly-owned system, and to recommend whether any action is called for, including amending legislation.

Mr. Renton

Following the point put by the hon. Member for Eccles (Mr. Proctor), would the hon. Member for Enfield (Mr. Ernest Davies) be good enough to say what size of vehicle he considers is dangerous from the point of view of drawing off traffic from the railways?

Mr. Ernest Davies

It is not only a question of size. That is a very relevant factor, but a retailer might use a 2-ton or 3-ton vehicle, or a 30-cwt. vehicle. One cannot generalise that any particular vehicle is dangerous, but the fact remains that the bulk of vehicles carrying goods over long distances would be those in excess of 2 tons.

One of the delays to integration was the complete taking over of road haulage. That is now being proceeded with and 1st February becomes the vesting day. A second delay which is handicapping the British Transport Commission in bringing about complete integration is the failure to proceed more rapidly with the road passenger area schemes. During the Third Reading Debate I and other hon. Members suggested that it would have been better if the Bill had included taking over the large road passenger concerns in the same way as it took over the railways and canals. Unfortunately, that was not found possible, but I think events are showing, owing to the opposition of certain of the large interests, including British Electric Traction, which the Commission have failed to acquire by negotiation, that we are going through a very long process before road passenger transport comes under nationalisation in this country—[HON. MEMBERS: "Hear, hear."]

That is welcomed by hon. Members opposite, but I suggest to them that the economies which they suggest can be achieved in transport cannot be brought about until there is integration of road passenger transport with rail transport in the same way as there is developing an increased amount of integration between road and rail haulage. The delay only defers the economies which can be achieved through the closing of uneconomic branch lines, which were referred to by the hon. Member for Abingdon (Sir R. Glyn), and the closing of intermediate stations, which would also effect some saving. Considerable savings have been effected so far as goods carriage is concerned. I was going to deal with them, but I do not want to take up too much time.

The third delay to integration, which was inevitable, is the formulation of a charges scheme. It was too ambitious to put it into the Act that this should be brought about in two years, and it has been extended for a further two years. Let us hope that this further two years will not be necessary and that we shall have proposals put before us before long because, quite clearly, new charges schemes are essential to unification as they can influence the flow of traffic to the most economic form.

The final handicap to unification with which we are faced at present is the restriction on capital expenditure. Unfortunately, in view of the latest cuts, I should imagine that the railways will have only sufficient capital expenditure to maintain their undertakings and to do the very necessary reconstruction, the minimum amount of reconstruction. That is most unfortunate, because it will be quite impossible to attract people to travel by rail until the railways have been modernised to a considerable extent. That includes electrification. We shall not be able to get people to travel by train for short distances in densely populated areas, such as the suburban areas of London, so long as old-fashioned equipment is used, as it is at the present time.

Something has already been done to attract people back to the railways The policy of cheap fares and excursions is certainly paying, as is shown in the transport statistics from month to month. But I think there are more things which could be done in order to attract people to the railways. I notice that B.O.A.C. has recently introduced family tickets. Why cannot British Railways introduce a holiday ticket for families in the coming summer, in order that families can travel far more cheaply, if there are two, three, four, or five, than if each of the five had to take the normal return ticket? It seems to me that in such a way we can attract to the railways more people who now make uncomfortably long holiday journeys by coach because they cannot afford the railway fares.

I wish to deal with the question of the proposed increase in charges. I have referred to delays in bringing into effect the complete unification, and integration of the industry. Those delays must continue because we are still in the period of transition from the unco-ordinated transport systems which prevailed before and during the war to the integrated, publicly-owned system towards which we are working. Until Parts III and IV, that is, road haulage and road passenger transport, are brought in, I think that the transport system is bound to operate at a loss. Losses are inevitable, as is being shown by the report for the first year, although very considerable achievements on the financial side were revealed, in spite of the remarks of the right hon. and learned Member for West Derby.

It is impossible at the present time to predict what economies will finally be brought about through the unification of the transport system. It is impossible to predict exactly how the traffic will go when this unification has been brought about. Because of the delay in the charges scheme and the slowness of achieving comprehensive nationalisation, I regret the Minister's decision to raise charges at this juncture. I would ask him, when he receives the report of the Transport Tribunal, most seriously to consider whether he should not defer any change in tariffs until this transition period has been surmounted and the charges schemes have been put before him.

It seems to me that a rise in charges at the present time is unnecessary, that it is premature and that it can be harmful. Further, it would prejudice the success of the nationalisation of the transport system. I say it is unnecessary, because in my view the suggested loss is not excessive. It is estimated to amount to £20 million and it could certainly be met temporarily out of reserves and a further deferment of certain capital redemption charges made in the current report. It is premature, because the industry is still in this period of transition and it is too early yet to judge the full results of unification. It is harmful for a reason already mentioned, the effect on the cost of production, which particularly affects the export trade.

In this connection it prejudices the success of the nationalised system by diverting traffic from rail to road and from public to private carriers, and thereby increases the overall transport costs. But in preference to burdening the Transport Commission with accumulating deficits by drawing on reserves, I would propose that there should be a subsidy to the Commission during a definite period and of a definite amount. I know it is argued that subsidies destroy incentives, the incentives to economy and to efficiency; and that they open the way for wage demands and improved working conditions, and so on, which are difficult to resist, because there is no normal commercial standard which has to be abided by, that is, balancing expenditure with revenue. So far as wage demands and working conditions are concerned, we can trust the unions in the industry to act in a responsible way.

With regard to the lack of incentive to economy and efficiency, I would suggest that that could be met by fixing a definite amount of subsidy and limiting the period for which it will be paid; and finally by fixing a target date for the transport industry to achieve financial self-support, that is, for balancing its accounts. I would say clearly that a subsidy would be required for the next three years. It would be required for 1949, which is the period during which we are still acquiring various sections of the transport industry. I hope that by the end of 1950 several area schemes will have come in and we will thereby acquire a considerable proportion of the road passenger transport. That would mean that 1952 should be the first year of full operation of the transport industry as a comprehensive nationalised concern; by 1952 we would be benefiting from the results of unification.

If a subsidy is required for those three years from 1949 to 1951, the question is, what should that subsidy be, what should the amount be? The Minister has referred to the Transport Tribunal the application of the Transport Commission for an increase in charges. They will therefore have to determine what is the estimated loss of the Transport Commission over the next year or so. It would be on the basis of their estimate that this subsidy should be fixed. It might easily be in the neighbourhood of £20 million a year for three years. After all that would not be an excessive amount when compared with the subsidies which had to be paid for 1946 and 1947—as referred to by the right hon. and learned Member for West Derby—or the subsidies which were paid after the 1914–18 war. I suggest that in order to avoid an increase in charges at the present time serious consideration should be given to the possibility of subsidising the British Transport Commission until the full benefits of nationalisation can be achieved.

I know that nobody on this side of the House would be tempted to vote for the Amendment put down by the Opposition. In my view that Amendment was hypocritically conceived and not very realistically presented. The Opposition have put forward no real alternative to nationalisation. They have not answered the question put by the Minister as to what policy they would propose as an alternative, or how they would save costs. A few minor points were made regarding costs but no overall saving of costs was suggested by the right hon. and learned Gentleman. In order to show that we are satisfied that the British Transport Commission, in face of considerable difficulties, has achieved considerable results, and in order to encourage it to continue along the same lines perhaps—and I hope—at an increasing speed, we should vote for the Government Motion.

7.10 p.m.

Sir Arthur Salter (Oxford University)

I want to devote the greater part of what I have to say to answering the hon. Member for Enfield (Mr. Ernest Davies) in what he said about "C" Licences and about a subsidy, but I should like to discuss a few other points first. I propose to comment adversely on some of the facts disclosed in this report. In doing so I say at once that I should not like it to be thought that I am necessarily thereby implying blame upon the personnel of the Transport Commission or the Executives. The chairman of the Transport Commission, apart from happening to be a life-long friend, has been a very close colleague of mine in two wars, and I know and appreciate his qualities very highly.

I agree with the Minister that this report is on the whole comprehensive, informative and candid, though I agree with my right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe) in regretting that it has not made it rather easier at some points to ascribe the proper measure of loss or profit to different parts of the whole service. I would add that if I have any comment it is not that there is not enough information given, but that the most significant facts are to some extent hidden under the immense weight of other facts, and that the figures which are given greatest prominence—such as, for example, the net revenue loss—do not reflect adequately the reality of the situation.

The real fact, of course, is that the present unsatisfactory condition of our transport finances is due in part to causes anterior to the arrival of this Government or otherwise outside the control. It is also due in part to the actual provisions and structure of the Transport Act, and it is only in part, therefore, that it is due to the action or inaction of the Transport Commission within the powers allotted to them under the Act. I say frankly at once that, having had some experience of the railways' finances as chairman of the Railway Staff Tribunal for four years immediately before the war, I did not expect that it would be possible for the Transport Commission to make ends meet in the year 1949.

When the Transport Bill was before this House, while I criticised it in many respects, I never associated myself either in speech or in vote with those of my hon. Friends who said that they thought that the total compensation given to the previous owners of the railways was inadequate. Having some knowledge of the finances of the railways just before the war, I thought that people had been greatly misled by the quite abnormal earnings and profits during the war, and that in fact railway shareholders would not have done at all well if there had been neither war nor nationalisation. But, for the same reason, I did not agree with the Minister today when he said that the very great profits, in excess of the guaranteed payments to the companies, made during the war should have been handed back and used as a kind of subsidy for the railways in this post-war period. In the main the difficulties of the railways now are not due to what happened in the war, but to causes that were developing before the war and which have been accelerated and aggravated since the war. It would have been misleading to hand over what were the obviously excessive profits made during the war as a subsidy for this post-war period.

Having said that, however, and realising as I did that some loss this year was probably inevitable, I must draw the attention of the House to the very serious gravity of the loss which has been disclosed and to the disappointment not only of our hopes but obviously of the hopes of the Transport Commission. I notice that in paragraph 68, the report says: With fares, rates and charges at the levels fixed by the Minister of Transport before nationalisation "… That, of course, was the increase in 1947 designed to give £65 million of extra revenue which, I think, was brought into force about three months before the Commission took over: … it was reasonable to expect that it would be possible during 1948 to earn sufficient to put on one side both a contribution towards enhanced replacement costs and an allocation to General Reserve. The additional sum required at mid-1948 prices to replace the wasting assets … would have been some £ 8½ million for the year 1948 over and above the charge for depreciation…. It is essential, also, that the Commission should make a beginning with building up the General Reserve required by the Act…. The Commission would have liked, accordingly, to be in a position to provide sums of £5 million per annum until a reasonable total for General Reserve had been reached. What that really means is that the Commission apparently expected that the results for 1948 would not only have been better than they were to the extent of £4.7 million but also to the further extent of some £8 million for the replacement of wasting assets, and another £5 million as a contribution to General Reserve. That is to say, the real loss on the kind of financial accounting that the Commission would have liked for the year 1948 was not £4.7 million but over £18 million.

Mr. Mitchison (Kettering)

The right hon. Gentleman refers to the kind of accounting which the Commission would have liked, but at considerable length the Commission have given their reasons for adopting and preferring the system which they have adopted. I observed that in reading out the quotation the right hon. Gentleman omitted the rather significant words about "the extreme view," as the Commission call it, which is involved in the figure of £8½ million.

Sir A. Salter

It is true that I did not read out those words, for the simple reason that though it may be that not quite the whole of the £8½ million will be required to replace those particular assets, to the extent to which they are not, clearly it would be reasonable to allocate the money saved to the extensions that will be required in other respects. When I spoke of the system of accounting which the Commission would have liked, perhaps I should have said the allocation which not only would they have liked but which they would have expected, as is shown from the wording of the paragraph which I have read. They expected, with the increased charges which they had secured late in 1947, that they would have been able to do these three things. The situation in 1948 was therefore something like £18 million worse than they expected.

That is not the worst. The worst is this: the Minister of Transport told us on Monday that he expected that the results for 1949, and we are in the last month now, would show a loss exceeding £20 million—not "amounting to," I note in passing, but "exceeding" £20 million. I presume that when he made that estimate he was giving a figure that in its basis compared with the £4.7 million and that, therefore, we have to make similar additions to get the real loss for this year. If so, that true loss is over £33 million.

To put this in its proper perspective, I will relate it to another sphere of Government policy. We have just been given the programme of the new economy cuts to counter inflation. When they were announced, I asked the Chancellor of the Exchequer whether he had any hopes that in this financial year the economies realised would be equal to, or half or even a quarter of, the new increases in Departmental expenditure not yet declared to us in Supplementary Estimates. One thing is quite certain. It is that these cuts cannot give us an economy of anything like £30 million in this year, and here, in only one sphere of public activities, we have a loss which, under a proper system of accounting, is probably in excess of £33 million for this year, and we are told that, but for the increased charges, the effect on finances of which we cannot yet foresee, the situation would have been still worse in 1950.

Mr. Callaghan

Will the right hon. Gentleman allow me? He keeps on saying "if a proper system of accounting were adopted." Will he perhaps look at the comment in the report that the Commission are using a commercial system of accounting and a system which is followed by all commercial enterprises?

Sir A. Salter

I corrected my phrase to "a proper system of accounting." If they had made the allocation of funds which they contemplated when they made the original scheme, they had expected to be able to do these three things. The situation is, as I say, for this year apparently over £30 million worse than they expected, and there seems to be a chance that it would be much worse next year but for these new charges which have now been announced.

Mr. Mitchison

There is not a word about expectations in this report, and yet the right hon. Gentleman has used the word five or six times. All they say is that they would have liked it.

Sir A. Salter

I will read again the part that I quoted from the report: With fares, rates and charges at the levels fixed by the Minister of Transport before nationalisation, it was reasonable to expect"— which is synonymous with "expected."

Mr. Mitchison

I do not agree.

Sir A. Salter

Now I come to comment upon the policy of the hon. Member for Enfield with regard to "C" licences. He has given us quite fairly the variations in the number of "C" vehicle licences. In January, 1938, they showed an increase of 2,000; in January, 1946—that is, for the year 1945—they showed a fall of 58,000; in December, 1946, when the shadow of coming events was over them, an increase of 77,000; in December, 1947, an increase of 103,000; and in December, 1948, again an increase of 103,000. That is to say, the number of "C" vehicle licences has approximately doubled in three years. The hon. Member spoke of this as if it were an abuse, but I think we should ask what is the significance of this increase. It means perfectly clearly that, although the nationalised system has the great advantage of being able to use its transport for return hauls, which the "C" licence men do not, and although they are able to offer all the co-ordination benefits that they have been able to arrange between road and rail transport and so on—

Mr. Ernest Davies

Not yet.

Sir A. Salter

Well, all that they have been able to secure in two years' working. In spite of all that, the private trader, looking to see whether he can get the service he wants at the cost he wants better by using the nationalised service or by running his own vehicles, has in the last three years decided to make the latter choice, and therefore the number of "C" licence vehicles has doubled.

Mr. Davies

I think the right hon. Gentleman should be quite fair. It has not doubled since nationalisation. There was an increase of 200,000 before nationalisation, and an increase of 100,000 after. Why could these people have been taking out "C" licences because of nationalisation when they did not know what its results would be?

Sir A. Salter

I say that the first increase was due to the apparent shadow of coming events. I think the traders were able to make a forecast of what was going to happen when they studied the provisions of the Transport Bill, but since they have had the experience the increase has gone on and has even been accelerated, until it has reached 103,000 in each of the last two years. I think it is not only very regrettable but very surprising that, with all the advantages which the nationalised system has, it has not been able to attract the "C" licence people and has not been able to prevent a great number of additional people from choosing the "C" licence system.

The hon. Member seems to think that it was a kind of abuse of the right which traders at present possess, and which the Government did not originally wish them to possess, for them to carry their own goods in their own vehicles because it has deprived the railways of some traffic which they would otherwise have carried. Is that an abuse? What an extraordinary attitude! May I contrast that attitude—and it is not only the attitude of the hon. Member but also of the Government when they introduced the Transport Bill—with the attitude of an authority which is not only greater than mine or that of the hon. Member, but, I would say, is greater and more convincing than that of the Minister himself?

Some time before the war, I had the honour to preside over a conference on the road and rail haulage system. There were eight members of that conference apart from myself, and, with the exception of myself, there was not a single person who had not great experience and was almost unchallengeable in his expert knowledge and authority on the particular matter in which he was interested. On the railway side, there were the four general managers of the great railway companies, and the people who represented road haulage were as nearly as possible of comparable authority. Except possibly on a matter in which their personal or business interests might have conflicted with the public interest, I could hardly conceive of a body which could carry such authority as a body so composed.

They faced this particular problem, and, quite obviously, though they were divided on many points in their interests concerning railways and roads, there was one thing that was common to them. It was to the common interest of both the road hauliers and the railways that the greatest numbers of private traders should resort to them instead of running their own vehicles. In those circumstances, what were their recommendations? This is what that body unanimously recommended: We consider that the industrialist and the trader should remain free to utilise as many motor vehicles as they find their business requires. This freedom is the best security that the economic enterprise of the country will have the most convenient and cheapest form of transport that is practicable. With this safety valve, we need not fear that any form of semi-monopoly which may develop by a large-scale organisation of the haulier industry, or close relations between that industry and the railways, will be against the public interest. That was the point of view of a body of business people in private enterprise on the railway side and on the road haulage side whose business interest was in direct conflict with the private trader having this right. Is it not very surprising and very regrettable that a body so comprised should have been so much more public-spirited and should have seen the public interest so much more clearly than the Minister or the Government, who introduced the Transport Bill in its original form, or the hon. Member who spoke this evening? I would not have emphasised this so much except that I am a little alarmed by the actual terms of the report itself. The wording, which is a little ambiguous, has to my mind a certain nostalgic note, as though the Commission were thinking of the earlier provisions of the Transport Bill, which were happily changed. They say: It is essential to remember that the Commission have no monopoly of inland transport and that every trader remains free to carry his own goods over any distance in his own vehicles operated under 'C' Licences. … It is plain that the increased use made of 'C' licensed vehicles is a circumstance which vitally affects the policy of the Commission in planning, in fixing charges and in the eventual integration of their services. Does not the House detect a certain nostalgic note? I fear that I do. I do not want to press it too far, but my fears are not diminished by what the hon. Member has just said, and indeed I would like the House and the country to consider very carefully whether it is not probable, having regard to the finances disclosed in this report, that if this Government are returned to power they will first have the review that the hon. Member asked them to start at once and then get back as nearly as they can-perhaps completely—to those earlier provisions of the Transport Bill which were happily and rightly rejected before the torrent of public indignation.

I wish to say, in conclusion, a few words upon the subject of integration and co-ordination. In all the discussions on the Transport Bill there was, I thought, apart from doctrinaire arguments and apart from reasons for or against nationalisation on general grounds applying to many industries, one specific argument of some strength. It was that there are great potential economies and conveniencies to be derived from co-ordination between road and rail. That is undoubtedly true.

In any case I did not think that was a decisive argument for nationalising road haulage because I thought there was another way, if there was a plan of coordination, to give effect to it. I will not weary the House by saying what it was. I argued it at length in Committee and on the Floor of the House. There was another way of avoiding the terrifically high price which nationalisation has involved and will involve; but at least it was true to say that if there were a real plan for co-ordination it might be expected to give very great economies, and the simplest and quickest method would, of course, have been through nationalisation of road as well as rail transport.

It was simpler to put a plan into force that way, although it was not the only way by which one could apply it. But there was no plan; there was not even the beginning of a policy. "Integration," "co-ordination"—they were nothing but blessed words like "Mesopotamia." I do not say that before introducing the Bill, the Government should have had a programme worked out in the greatest detail. But they ought to have thought a little about what kind of co-ordination was wanted. They ought at least to have had some kind of inquiry before they introduced the instrument by which they hoped ultimately to put it into force, particularly when the strongest and really the only sound argument on behalf of that policy was that it would facilitate putting into force a policy of co-ordination.

If I may refer once again to the same conference that I quoted before, they said, reporting as far back as 1932, that they recognised very clearly the advantages that might be derived from co-ordination. They said: For local collection and local delivery, and for conveyance up to a distance which varies with the nature of the traffic, road transport has its undeniable advantages. Beyond a certain distance, for certain classes of transport service, railway transport is no less unquestionably preferable. They referred to the container system and to other devices which might be adopted. They then added: There is room for a scientific inquiry, in the light of the experience of other countries and the special conditions of traffic in this country, as to the most economic form of transport for each class of goods—e.g., up to what distance in each case road transport is the more economical, and beyond what point railway transport becomes so; the best use and development of standardised containers and transhipment under different conditions, etc.; such an inquiry being, of course, ancillary to the practical experience of those engaged in the transport industry itself. Such an inquiry ought, I suggest, to have been instituted before the Government introduced the Transport Bill, but if it was not instituted then that work certainly ought to have been begun and great progress made with it after the Measure was enacted. Two years have elapsed, and what has been done?

My right hon. Friend quoted the Commission's arrangements for certain consultations. Consultations are indeed necessary, but those consultations should have had some previous inquiry of the kind I have just referred to as a guide to give the strategy and to help them in working out the tactics. That work was not done before the Measure was enacted. It has not been done since, and has not been begun since. The hon. Member referred to the importance of having a subsidy during the transition period. He said that the subsidy should be continued for a definite time. We had a definite time; it was a time devised by the Minister himself. He asked us to put in the Bill a two years' period for the Commission to produce a specific charges scheme. That time expired in August this year. No scheme has been produced.

I asked the Minister today whether he would define some further period. It was another two years—I suppose about as safe as the first two years. I do not know. How long are we to go on in this way? What prospect have we of ever getting the benefits of co-ordination in any reasonable time? The real fact is that up to this moment—certainly, up to the time that the Bill became an Act, and to a large extent since—co-ordination has been rather a phrase than a policy. It has not been so much a plan as, if I may choose a word to which bitter and repeated experience has given a connotation, a target—a target beyond the reach of those who aim at it, and so remote as to be almost beyond their sight.

It is in that perspective that we should look at the hon. Member's suggestion for a subsidy for a definite period—it cannot be more definite than these two years—while they are trying to work out a scheme to give these economies and benefits. I realise perfectly well the very great damage that will be done by this further increase of charges to the whole economy of the country and its reaction indeed upon the coal industry, whose increased charges have to a large extent been a cause of the trouble in the transport industry.

But think of the considerations on the other side. If there is no obligation such as now rests upon the Transport Commission to make ends meet, what is going to happen in relation to the pressure which they will experience for increases in the costs within their responsibility? What is going to happen if that one safeguard is destroyed—the obligation which is provided in the original Act that a nationalised industry must pay its own way? I can understand the reasons why the hon. Gentleman proposed this subsidy, but I should like the House to realise the extreme danger which arises if, having proposed one safeguard against a perfectly obvious and indeed illimitable danger of waste, inefficiency, increased expenses and so on, this one effective safeguard which has been required by Parliament is destroyed almost as soon as it has found a place in the law of the land.

7.42 p.m.

Mr. Rogers (Kensington, North)

As time is getting on and we have not been able to hear many speeches this evening, I propose to make my remarks as short as I can to try to avoid repetition of the points made by other speakers. I was very interested in what the right hon. Gentleman the senior Burgess for Oxford University (Sir A. Salter) had to say. At the beginning of his remarks he said that he was a personal friend of the Chairman of the Commission. All I can suggest is that he has not been seeing him very often lately. I think that perhaps if he renewed the friendship he might find out something of what the Commission is doing in co-ordinating the transport service up to the present day. His knowledge is certainly far behind in that field.

I think that before we get into a too humble frame of mind about British transport, and imagine that we alone are incapable of running an efficient transport service, we ought to remember that there are other railways which are having difficulties. Although I do not propose to elaborate on this, I would remind hon. Members opposite that the American railways have lately been saying a great deal to the American Government about their own difficulties. Many of them are near bankruptcy, and their own spokesmen have announced that they made a loss of 100 million dollars on the last occasion. It appears that it is not nationalisation of transport which alone is responsible for deficits. In fact, although they received an increase in their passenger fares of 2s. 6d. over the first £, interpreted in English money, they still say that that will only make up one-third of their losses.

I think most of us on this side of the House, at least, will recognise that the report is a good one. I have heard nothing yet from the Opposition which convinces me that the Commission or any of its Executives have failed to do a remarkably good job of work in one short year. A close study of this report must indicate to any fair-minded man who is not hopelessly biased against public ownership from the start, as are many of the new "C" licence holders who get their "C" licences very often purely because of the propaganda of the Opposition, that public transport can be as efficient as private transport. I have found in my own constituency that state of affairs among local shopkeepers who have taken out "C" licences. In many respects, in transport as well as in other fields, the Opposition have done a good deal to sabotage public enterprise in this way.

Most of us, on reading this report, are impressed once again by the colossal nature of this enterprise. We see here an organisation with book assets of £1,666 million-odd, with 650,000 workers. It is clear that any measure of re-organisation and co-ordination that can take place in one short year can only be very small indeed. The right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) is always so charming and honest that we sheath our swords when replying to him instead of sharpening them, but I never felt that he was very comfortable in dealing with this subject of transport. If he will excuse me for saying so, I always felt that he has been put up to speak upon instructions; that is the impression he gives me.

One of the right hon. and learned Gentleman's statements was that to avoid this situation he would have streamlined nationalised industries, presumably including transport. I was one of those people who before the war were engaged in streamlining London Transport, and I can assure the House that it is not a thing which can be done in one year. After the 1921 Railways Act it took the four companies 10 years to complete the re-organisation of the complex constitution of the four main line companies. They announced in 1931 that the scheme of re-organisation had roughly been completed by them. How much larger and more difficult is this, and therefore how inadequate is any judgment of their progress, based as it is purely upon one year's experience? I believe from the records we have of the steps they are taking to improve their organisation, that they are well on the way in one short year to streamlining it.

Another thing we ought to remember, in order to keep a proportionate view of this subject, is that the peculiar method of presenting these accounts puts the transport industry in an unfavourable light as compared with an ordinary commercial firm. When the balance sheet is prepared in an ordinary commercial undertaking one declares one's profits and then announces the dividend, but in the case of the transport industry the interest paid to stockholders is included in the final figure before profit or loss is announced. That is a fair point. If we drew up the accounts in the same way as an ordinary commercial undertaking, we should declare a very large profit indeed and we should reduce the dividends that we pay to the level of our available surpluses. When we talk about this "disastrous loss" let us remember that if we looked at it from the point of view of an auditor auditing the books of an ordinary private company our position would be very different indeed.

Then, of course, under certain obligatory clauses, we have had to include items like capital redemption, a sum of £2 million odd, and there have been other factors such as compensation to traders and so on for loss and damage to goods, amounting to £8 million, which is a very serious factor.

Sir A. Salter

Does the hon. Gentlemen realise that the excess of earnings over working costs, which has been paid as interest to the previous owners of the railways, corresponds to the receipts of the debenture holders—not the ordinary shareholders?

Mr. Rogers

I appreciate that. I am not trying to make too much of the point. I merely want to put the matter in proportion.

There has been some criticism of the size of the staff, and I should like to say something about this. We are not being quite fair when we apply ordinary commercial standards to this question. In the engineering industry and similar industries incentive schemes can be introduced. Time and motion study experts can be brought in, and one can draw up basic scales upon which to decide some incentive bonus, but on the railways it is not possible to do that. It is true that with care it is possible to devise some sort of incentive scheme, but it is not the kind that is applicable in a productive industry.

It is extremely difficult to get a high output from gangers, porters, booking clerks, ticket collectors or signal box men, with the consequence—and this has always been true—that there is a certain leisurely tempo about the way in which certain sections of the transport industry work. To find a solution to this lack of a direct incentive is very difficult for those who have had to study the problem. I admit that it can be found, but it is very difficult. We ought not to apply to the railway workers the same standards which we apply to those who work on a production line with a moving belt, where it is easy to devise an incentive scheme.

There is no doubt that if it had not been for the fact that the majority of the workers welcomed nationalisation we should not have seen the increase in their individual output which we have seen. After all, let us be fair about it; however much one may hate nationalisation" one must admit that immediately after the vesting day there was an appreciable improvement in the punctuality of trains and an appreciable improvement in the cleanliness of trains; there was an improvement in the meals and the services and the cordiality, evidenced by such small things, perhaps, as the first reply of the telephone operator at Euston—"British Railways at your service"—a very pleasant change from some of the answers we got before—

Mr. J. Hynd

We never got any.

Mr. Rogers

—the curt monosyllable which, we were told, was the monopoly of Post Office counter clerks.

I want to mention one or two things about the organisation, in regard to which I think they have been guilty. The hon. Member for Enfield (Mr. Ernest Davies) made some very good points, with most of which I agree and which I will not repeat. The hon. Member for West Swansea (Mr. P. Morris) spoke about staff machinery. It is true that that is very good and in time will lead to an extension of the excellent machinery which the hon. Member for Abingdon (Sir R. Glyn) said was the best in the country before the war.

One of the things the Commission must do is to see that their policy goes right down to the bottom ranks. We used to find it in the Army; the War Office and the Imperial General Staff consisted of benevolent, kindly and broad-minded people, but when we got down to the adjutants and the sergeant-majors, the kindly spirit of the War Office seemed to be lost. I see that one hon. and gallant Member disagrees, but that is my experience, and it is the case to some extent with British transport that a lot of the goodwill of the Commission has not yet percolated down to the dug-outs of the lower ranks. That is why there is still a great deal of resentment amongst the ranks of the workers who, foolishly enough, expected public ownership to bring them paradise over-night. Of course, no one could pretend that it would do so.

Another aspect of the organisation which needs improving is that of the general review of efficiency. In London Transport for many years we had an efficiency section, an organisation and methods section, which never existed on the main line railways, and I am not sure, from this report, that the Railway Executive is tackling this problem with anything like the enthusiasm which is necessary. The main line railways completed their organisation about 10 years after 1921, but they were, even then, about 20 years behind modern commercial methods. There is a vast scope for the elimination of wasteful methods in the Railway Executive, and I think the Minister ought to examine the work of the Commission, so far as he can from his somewhat lofty position, so as to see that there is greater drive to eliminate the old-fashioned methods used on the railways—methods which have grown up during the history of a century.

When I was at the Ministry of Supply I went with the Minister to a carriage and wagon company which was making wagons. This firm was very anxious indeed to save hundreds of man-hours by spraying coaches instead of using the old hand-brush method. The firm had been unable to impress the mechanical engineer responsible with the advisability of changing from brush work to spraying and, as a consequence, thousands of man- hours were wasted producing carriages in this old-fashioned way. There are all sorts of things like that which I could mention but which I have not the time to particularise.

I agree entirely with the hon. Member for Enfield that it would be fatal to put up charges at this point. Frankly, the rising cost of living is the thing which is hitting our people most of all, and all of us know very clearly that a rise in the cost of transport falls, in the end, upon every single commodity which people have to consume. It has been worked out by statisticians—and I have said this several times in public and have never been contradicted—that the cost of transport to the average family in this country is £1 a week. Every family pays £1 a week towards transport in the things they consume. That is already too serious a figure and we ought to get it down.

What I am afraid is that in our attitude to these public undertakings we are becoming far too rigid. We ought to be able to manipulate these basic industries, which are in public hands, for the purpose of depressing the cost of living and encouraging trade, and we ought to have in transport a machine by which, at any given time, we could depress the cost of transport and so encourage trade without worrying too much about whether the organisation made a book loss. I think this House ought to send out a message of congratulation to the Commission on its first year's work, to send out our whole- hearted encouragement and our express confidence that we believe they will make a fine job of British transport—will make it like London Transport, the finest in the world.

7.56 p.m.

Commander Agnew (Camborne)

This Debate has ranged over a very wide field, but never very far from the subject of the railways. The hon. Member for North Kensington (Mr. Rogers) made one remark which I feel I cannot let pass; he said that since nationalisation he had found that the railway staff had increased their courtesy to inquiries and their attention to their work. I am afraid I have not noticed any such difference at all. I hasten to say that among the staffs I have come across, over a good many years travelling to a very remote constituency, I have always found the railway workers the most courteous and attentive men of any industry I know, in every way worthy of the great public service which, in fact, the railways have been for a great many years.

Mr. Rogers

I thought the hon. and gallant Member was about to say that they discovered he was a Conservative Member of Parliament and then changed their attitude.

Commander Agnew

I think they have known that for some time. I hope they will not have to change the character of their knowledge. The hon. Member for Enfield (Mr. Ernest Davies) advocated as the remedy for the railways' financial trouble, the granting of a subsidy—which is another way of advocating the imposition of more taxation on the people of this country in order to find the subsidy. I profoundly disagree with him in his view, because I hold that nationalised industries which do not at least come out all square—which show a loss—should rightly be held up to public opprobrium by this House and the country, until the situation has been remedied.

Furthermore, in his Ministerial capacity, the Minister who is responsible for whatever nationalised industry is concerned, should himself feel a sense of embarrassment every day he goes to the Ministry until the Transport Commission, in this case, are able to assure him that for the forthcoming year the railways and the transport industry will "break even" and will not continue to be a charge on the taxpayer. That should be the goal. The granting of a subsidy would undoubtedly take our eyes off it and would encourage a feeling of slothfulness and inefficiency in a service which we want to be in every way most efficiently managed.

I want to address my remarks this evening to the importance of the transport industry, and particularly the railways, to agriculture. I wonder whether it is fully known how much more the agricultural industry uses the railways than it did before the war. This, of course, follows the necessary war-time expansion of home-grown produce and the extent to which that has been continued, although not fully continued, since the end of the war. In such items as fertilisers and potatoes they have more than doubled the volume of traffic on the railways since the war. In vegetables they have increased their use of railway traffic by nearly half—and that at a time when motor transport has even been more fully developed. The total amount of freight charges that the railways received in 1938 for food, agricultural seeds and fertilisers, and agricultural machinery amounted to more than £30 million. Of that amount, if we break down those figures, we find that seeds and fertilisers and machinery accounted for £20 million.

Here I come to the point that I want to make, and that is how onerously and heavily the new railway charges that the Minister has announced will bear on the agricultural industry. It is true that some agricultural items can, of course, be taken into account at the February price review made for the agricultural industry; but in the case of seeds, fertilisers and machinery that sum of £20 million in freights will, for the oncoming year, show a very heavy increase. That increase, it seems to me, is bound to fall on the consumer of those articles, namely, the farmers who require them; and that is going to be a very heavy charge upon them. I shall not go into details about the fish section of the Ministry of Agriculture and Fisheries. However, I do know that the fish trade is very seriously concerned at the extra effect that these charges will have.

Having made a few generalisations with rather massive figures, let me illustrate them by referring to the impact of those charges particularly on my own constituency and West Cornwall. Cornwall is, all of it, a vegetable producing country as well as a beef producing one; and it is, as everybody knows, peculiarly remote from the great consuming markets of England. Therefore, of course, its industries—any that it has—are specially sensitive to any changes in conditions affecting transport. Let me illustrate that by giving these figures for two important crops that Cornwall is specially suited by its climate to produce, and which Cornwall does market in considerable quantities.

First of all, broccoli. It is estimated that next year the amount of broccoli sent up will be something like 60,000 tons—sent up mostly to the London market, but some of it to the Midlands, and a very little to the North. The freight charges would have averaged about £3 a ton. Now with the extra charge that the Minister has announced there is to be an extra £30,000 charged to that industry before it sees any return on its products.

Furthermore, the broccoli growers are charged 2d. a crate for the empty crates that are returned to them from the London market—because, as has been the case ever since the war, non-returnable crates are not allowed by Timber Control because they consume too much timber, and the industry has to rely entirely on returnable crates. Up to now the growers have been charged 2d. a crate, but, under the new charges scale, presumably those crates will bear very nearly ½ d. more every time they are sent down the railway.

There is another crop that is produced in the West Country, namely, early potatoes. It is estimated that at least 30,000 tons of those will be sent up next season. The freight for these has been £2 a ton, so that that industry will be saddled with an extra £10,000 in extra charges, and it will also have to bear some part of the extra freight charges on the seed potatoes that growers have always sent down to them, mostly from Scotland.

As I said just now, it is true that the farmers next February will be able to meet the Minister of Agriculture and will be able to put their general price situation before him in the price review, but broccoli is a free crop—if I may use the expression: there is no guaranteed price for it; and in the case of potatoes, whereas hitherto they have always been purchased by the Ministry of Food, for next season's crop they also are to be a free crop, and the potato producers in Cornwall will get only what they can for them.

Therefore, they will not be able to go to the Minister of Agriculture in the February price review and claim to be allowed to charge some extra price to offset what the Minister of Transport has imposed. Either they will have to bear the loss in less returns or somebody at some stage will have to pass it on to the public. So the agricultural industry is certainly going to feel the weight of these new freight charges which have been put on.

I venture to express this opinion, that whereas it might have been right at an ordinary time, if the country had been prosperous, to have said, "Oh, yes, this industry can certainly bear these extra charges placed upon it," at this time, when home food production is vital to the whole national scheme of fighting to retain our standard of living, consideration ought to be given to bringing the railway travelling public within the purview of some extra charge. I recognise at once that passenger fares have more than once been increased in the last five years. At the same time, there are still people in this country outside and beyond those who travel only for the purposes of duty—namely, pleasure travellers. I think it would have been right for the Minister to have shared out some of this extra freight money he has to have between industry on the one hand and the fare-paying public on the other. That would have been a more just solution.

I want to mention one way in which, I think, greater economy could be brought about in the administration of the railways. I have noticed myself, because I happen to live on the former Great Western Railway, now B.R.W., that there are at the present time railway carriages going up and down the line with three different colour schemes. If the Railway Executive decided that, for some reason, it could not leave the old Great Western colours as they were and had to change them, although to my knowledge Great Western railway carriages are not used on other sections of the national railway system—

Mr. Sparks

Yes they are.

Commander Agnew

Only on those lines over which they have always had running powers. They are not met with on other lines. If their colours had to be changed, I ask, why did the Railway Executive first have to go in for what, I admit, was a most attractive scheme—"maroon and spilt milk"—and then, having done some trains over in those colours, decide that those colours would not do at all, so that the trains have blossomed out now into cream and Transport House red. [HON. MEMBERS: "Oh."] Well, what is the meaning of that? I have no objection to red railway coaches, but I say that greater economy could have been ensured if so many changes had not been made. Moreover, if the Minister would like to know my personal view, it is that the "spilt milk and maroon" was much the most distinguished colour that has been seen on any railway for a great many years, and the Railway Executive would have done very well to leave it at that.

8.10 p.m.

Mr. Champion (Derby, Southern)

It is certainly a pleasure to follow the hon. and gallant Member for Camborne (Commander Agnew), particularly as he has spoken for the agricultural industry. He certainly made an excellent case for that industry, but I was rather surprised that he should refer to what he called the tremendous charges that would be involved in taking back empty crates, I gather from London to Cornwall, at a cost of 2½ d. per crate, which means an additional charge of ½ d. Considering the distance they are carried, I think there is not very much in that point. I think he might consider suggesting to the agricultural industry, with which he is so closely associated, that it should reduce the amount it charges for its products over pre-war charges to a similar proportion to that charged by the railway industry at this time: namely, 55 per cent. over the pre-war figure.

Mr. Beecham (St. Ives)

Might I put a point to the hon. Gentleman?

Mr. Champion

I was referring particularly to the hon. and gallant Member for Camborne, and answering the point he had made. I will give way if the hon. and learned Gentleman insists.

Mr. Beechman

I am much obliged. I quite agree with what the hon. Gentleman says about these charges, but what we have to contend with is the imports of broccoli from Italy. I have worked it out, and it is quite clear that these imports are subsidised, especially in regard to their transport, otherwise they could not be paid for. We in this country, of course, do not do that.

Mr. Champion

That is clearly not a British transport matter and has nothing to do with my reply to the hon. and gallant Member for Camborne. What I thought he was going to say was that the industry would be held up to opprobrium if it did not make a profit. He went on to say that we ought not to increase the charges to the agricultural industry. It is true that eventually he said there should be a slight increase on railway fares. He did make that point, and I give it to him.

I am sorry that the senior Burgess for Oxford University (Sir A. Salter) has left the Chamber. Of course, he has done what he always seems to do in this House: he came in, said his piece, and went out without waiting for the answers that come in the course of a Debate. But he did something else as well. He gave us his usual famous imitation of that mythical bird, the mugwump. That is the bird which can sit with its "mug" on one side of the fence and its "wump" on the other. The right hon. Gentleman seems to me always to try to sit on the fence; and he did it again tonight, particularly when he said that when the Transport Act was going through the House he did not add his voice to those who said that the compensation was not enough. What he failed to say was that at no time did he add his voice to those who said that the compensation was too much. He very carefully avoided doing anything of that sort.

The right hon. Gentleman seemed to do another thing that he always does, and that is to shout "Woe! Woe! Woe! Everything is wrong," without giving the slightest indication of what ought to be done to put it right, or indeed criticising the Transport Commission on any detail of its administration during the first year of its life. He said he detected in the Commission's report a somewhat nostalgic note; and he also said that "integration" and "co-ordination" were blessed words like "Mesopotamia." In this connection, I would comment that the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) used the word "decentralisation" like the blessed word "Mesopotamia." He entered into the very old controversy as to whether there should be regionalisation or centralisation. Of course, there is much to be said on both sides of this controversy, and it has been debated for years in the transport industry. But despite that, and despite his suggestion that decentralisation would bring tremendous advantages to the industry, the right hon. and learned Gentleman never at any time made one serious criticism of the running of the transport industry during the first year of the administration of the Transport Commission.

I think it right that I should also answer the right hon. and learned Member for West Derby on another point. He read out some extracts from articles which had appeared in the "Railway Review" over the nom de plume "Rover." Those articles did contain some very serious criticisms of the present management of the undertaking. I would agree, as every man who knows anything about this industry must agree, that there are many things that we can criticise. But what "Rover" has done is to fall over backwards in his desire to criticise, and much of What he is criticising happens to be a relic of the days before nationalisation, of things which have not yet been put right. I gather he is not now on the railways, so he is dealing with something about which he has not got first-hand information. In answer to his criticisms about the number of men leaving the railways, I would point out that fewer than 5 per cent. of the staff left of their own accord in 1948. That is an extraordinarily low figure. It is undoubtedly one of the lowest figures in industry, which in my opinion gives the complete lie to the exaggerations of "Rover."

I would not for one minute pretend that everything is all right on the railways. Of course, it is not. We cannot put the railways or any other industry right in a single year of altered administration.

It takes time. It takes time for those measures which have been devised to begin to make their due weight felt within an administration such as this. If I had time I could answer every point made by the right hon. and learned Gentleman arising out of these articles, but I do not think I ought to take up the time of the House by doing that.

I must say that I welcome this report, which is a clear descriptive story of the work of this Commission during the first year of its life. I should imagine that there can be no embarrassment to the Minister in the form or the accuracy of the accounting, described in the "Economist" as an accounting tour de force —which I suppose it is. However, while it records a year of considerable achievement, it has some very disappointing features. I think that is inevitable in the circumstances. I certainly regard as among the major disappointing features the fact that there has been slowness in producing area schemes. Secondly, despite all the inevitable difficulties of integration and co-ordination, and all that those words mean, I think we might have made a little more progress in integration than has in fact been made. Thirdly, although I do not ask the Minister to do anything about it at this stage, I note with disappointment the fact that there has been a considerable increase in the number of "C" licences issued during the period 1948–49.

With regard to area schemes two years have passed since the Transport Commission was set up, and as yet not a single scheme has reached the stage at which it can be laid before this House. I gather that a scheme which is almost ready is in the interim stage of discussion with the local authorities concerned. That is a very slow rate of progress, and I blame the Commission for not making more effort to present to this House schemes to cover practically the whole country. The major advantages that will accrue to the country as a result of the Transport Act must surely come from the specialisation of functions which integration will make possible and from the cutting down of wasteful competitive costs. Those two factors should have a great effect on the industry—on the accounts of the industry and the general efficiency of the industry.

My second point concerns integration, and I feel that sufficient has not yet been done thoroughly to integrate road haulage and the rail carriage of goods. Very much more could be done than has been done, because here, if anywhere, there is a tremendous wastage of capital which is invested in these transport undertakings and a very large wastage of manpower. Transport costs, which there is talk of increasing at this time, require to be watched very carefully. We have to ensure, or we ought to be ensuring, that co-ordination and integration are brought about as rapidly as possible so as to prevent any wastefulness in a sphere which is of such tremendous importance to this country, particularly at this time.

I had intended to deal with some points relating to "C" licences but this matter has already been fully covered by my hon. Friend the Member for Enfield (Mr. Ernest Davies), and I shall not follow him in that respect, except to say that it is quite obvious that if we are slow in bringing about integration and co-ordination, if we are slow in gaining the advantages which can come in that way, it is quite possible that people will turn more and more to "C" licensed traffic for the carriage of their goods. I believe that if we now had co-ordination and integration it would be possible to offer manufacturers and others a lower freight rate which would prevent people from turning over to that form of traffic.

The-difficulty in this matter is obvious. Once people turn to "C" licences, they will not easily turn back to the Transport Commission's services, because they will have invested their capital. Like ourselves, they are creatures of habit, and once having embarked upon the use of their own vehicles they will not readily turn back to nationalised transport, despite the fact that it might be possible for the Transport Commission eventually to provide carriage for their goods at a lower rate. When the Bill was before the House and the Minister withdrew the provision which was originally intended to deal with, this matter, he said that this aspect was something which he would watch very carefully. He must do so, but I would ask him, before he thinks of putting any obstruction in the way of the granting of "C" licences, rather to hurry on with co-ordination and integration, which are perhaps the best answer. It is certainly his function to watch these matters very carefully.

I believe that in the matters of the area schemes, integration and "C" licences it is for the Minister to impress upon the Transport Commission, and through them upon the various Executives, that they should move much faster in this matter. A passage from "Alice in Wonderland" occurs to me: 'Will you walk a little faster? ' said a whiting to a snail, 'There's a porpoise close behind us, and he's treading on my tail … ' I wish the Minister to be the porpoise, although he might not look like one, on the tail of the Transport Commission, which is the whiting, so that they in turn will urge speed on the snail, which in this case happens to be the Executives concerned.

Charges are a matter of vital importance to us now, particularly in a time of serious financial and economic difficulties. It is wrong if we embark upon the raising of charges before we have brought about the full result of integration, re-routeing and standardisation, and before we have assessed all the advantages which will emerge from those steps. At any rate the matter should be examined very carefully. There are some factors in this connection which cannot be ignored. I believe that a rise in the charges at this time would cause a further stepping up in the rate of increase of "C" licences. It would also bring about a further diversion of traffic from rail to road, and, perhaps more important, it would have a very serious effect upon our balance of payments position.

Obviously every day that passes makes our position vis a vis the world more serious. I do not think that anyone who has been outside this country and has had an opportunity of looking at the markets in parts of the world other than this, can make any mistake about the difficulties which face us in getting into these markets and staying in them. Buyers everywhere are getting up off their knees; everywhere we are finding it difficult to sell our products. For that reason, and because the price factor is the greatest factor in that respect, I ask the Minister and the Government, when they receive the report which is to be made on this matter, to consider very carefully the effect of the factors that I have mentioned before putting increased charges into operation.

My final point is on wages and interest payments. It is obvious that if transport rates are to be held at 55 per cent. over pre-war, it can only be done by a considerable subsidisation of those rates through the low wages paid to the men in the industry. There is not the slightest doubt that the recent unrest was caused by the low wages, particularly of the lower-paid groups. That unrest might have brought disaster to the country, but the feeling of responsibility of the men engaged in the industry made them refrain from taking the action which they might have done. However, it is obvious to anyone who knows anything about the industry that on the wages side unrest will remain as long as there are men in receipt of a basic rate of £4 12s. 6d. a week and so many men receiving under £5 a week.

An important fact in this connection is that the security which was always something which kept men working on the railways at low rates of pay no longer operates to the same extent. It cannot and will not operate as long as full employment exists, as I hope it will for very much longer. It is little wonder that men within the industry are saying that the amount of interest rates which has to be found is out of all proportion to the capital value of the assets. That is stressed at every branch meeting which one attends and by whatever group of people to whom one talks. Although most of the men I meet do not perhaps read the "Financial Times," I believe they would agree with these words: Before nationalisation it was the burden of the railways' complaints that they could not compete with the roads because they were not on equal terms. The railways had to bear the entire cost of their permanent way and signalling system whereas road transport paid only part, through taxation, for the maintenance of the roads. The situation has not been fundamentally altered by nationalisation. The railways are still heavily capitalised. The fact that they are so heavily capitalised must be a factor in this matter. The Minister and everyone concerned with taking decisions on these points must realise that the capital structure of the railways today is completely out of line with the concrete reality of the value of the assets.

Undoubtedly this has been a year of achievement. It is a year in which great strides have been taken towards ensuring that we get an efficient industry. There are some aspects of efficiency in which considerable advances have been made. The figures of ton-miles per engine hour illustrate some of the advance which has been made towards greater efficiency, and there has been a slight increase in wagon loadings and other features, another factor illustrating the gains made in this direction. Obviously the Transport Commission are in process of settling in, and we are in danger of expecting very much too much from them in the first year. We must realise that they should have a reasonable time in which to settle in to do the job which they have been called upon to do. We have been expecting very much too quickly, but I believe that, given the support of the mass of the railway workers and the co-operation of the Minister in impressing some of the points I have mentioned, this year will show a period of development which will lead to greater developments in the years to come.

8.35 p.m.

Brigadier Prior-Palmer (Worthing)

I shall not follow the speech of the hon. Member for Southern Derby (Mr. Champion) except to say that I deplore his attack on the senior Burgess for Oxford University (Sir A. Salter). Any of us who sat through the various stages of the Transport Bill will say that they enjoyed every one of his able speeches, and this House will be much the poorer if he does not find himself a constituency before the next Election.

It has often been said that the only justification for nationalisation is greater efficiency and cheaper fares, and I suggest that we should judge this report on that basis. The two sections of the community who are in the best position to judge on this matter are the travelling public and the employees. I should like any hon. Member to ask the travelling public their opinion of the transport in the recent summer holidays, and whether or not nationalisation has produced after two years one single improvement that is noticeable to anybody who travels on the railways. [HON. MEMBERS: "Oh."] I challenge anyone to tell me of one single improvement.

As far as the employees are concerned, it may well be that those articles in the N.U.R. journal were exaggerated, but a man who has worked on the railways and who writes that kind of article in that journal is not doing it, unless there is a good deal of fire with the smoke.

Mr. J. Hynd

He does not work there.

Brigadier Prior-Palmer

He used to do so. He said there never was a time when discontent was so rampant in the railways as it is today. As everybody who has read the article knows, the writer went on for several pages on that point, and as he said so truly, and as has been said so often from this side of the House, the most important thing which is wrong is the gradual development of a soulless, dehumanising, individuality-killing atmosphere. That is precisely what happens when any industry in this country is nationalised. [An HON. MEMBER: "What of it?"] That comment needs no reply. We get remote control and we get to the stage where the man in the coal pit or the main on the railway platform, is divorced from the people with whom he was formerly able to get into contact every day. [Interruption.] It is always encouraging when one hears those noises from hon. Gentleman opposite, for one knows that one is hitting them on the raw. I am delighted to hear them.

As the article stated, all that happens now is that there is a remote voice on the telephone from somebody one has never seen or heard of in one's life, and honest men are leaving the railways day after day. That is a sorry state of affairs if it is true.

Mr. Daines (East Ham, North)

Will the hon. and gallant Gentleman give way for a moment?

Brigadier Prior-Palmer

I am afraid not.

Mr. Daines

He has made a serious statement.

Brigadier Prior-Palmer

I must get on with my speech for I have been waiting far too long. The fact of the matter is, as was said by my right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe), that we one this side of the House do not believe that any of these enormous undertakings can be run from a central office in Whitehall. As we said during the Committee stage, the system will have to be decentralised before it can be made to work. Shortly it will be our duty to perform that function. We have said we shall not denationalise the railways, but we shall make them work, and we shall make them work a good deal more efficiently than they have been made to work under this Government in the last few years.

The system is overloaded at the top level. Staff costs are 63 per cent. of the total costs, and they have risen by £13 million in one year. I understood that it has been decided to reduce by 26,000 the number of men employed. What has been done in three months? In nine months only 13,000 have become redundant.

Mr. C. Poole (Lichfield)

The hon. and gallant Gentleman has just said that men have been leaving every day.

Brigadier Prior-Palmer

I suggest to the Minister that at the earliest moment possible he should approve the method of producing results by regions, so that we can see more clearly where the faults lie.

The vital problem, as the Minister has said, is that of rising costs and falling receipts. He made some reference to the cost which private enterprise was incurring against the railways. It is rather interesting to see on page 125 of the report that coal, which is no longer under private enterprise, shows an increase above its pre-war cost of 174 per cent. Linseed oil is 633 per cent. higher. [An HON. MEMBER: "Who is responsible for that?"] The Minister of Food, because he buys the linseed oil in bulk and at greatly inflated prices which are far above the world prices. The most interesting figure in the whole of this list is that of the one thing which is still under private enterprise—iron and steel; that has risen by only 80 per cent.

The great cry is for integration as the cure for all these ills. Does this mean that Peter is to be robbed in order to pay Paul; that in order to have an efficient transport system, road transport is to be robbed in order to make the nationalised railways pay?

Mr. Sparks

They are already subsidised.

Brigadier Prior-Palmer

The Minister himself gave the example of the tramways versus the buses. He said that because the cost of the tramways was higher than that of the buses, the tramways should go. I quite agree with him. Here we have a perfect analogy, the rail against the rubber wheel. I would go so far as to say that the whole transport system—not only here, but in the whole world—is obsolescent and dying on its feet. Satisfactory results will not be achieved until the Minister gets rid of the vast overheads in uneconomic small branch-line systems and stations; or until he begins to look really far ahead and sees that our future transport system will consist of certain main trunk railways, which are necessary for strategic purposes, and other lines for carrying long-distance passengers and the heavy goods traffic which cannot be carried by road. I believe that the day will come when large stretches of track will be replaced by concrete roads. I deplore very much that an out-of-date, obsolescent system should be kept on its feet at the expense of a very much more efficient one in the form of road transport.

I ask the Minister to give road transport a better break than it has yet had. There has been some very disturbing evidence of discrimination against private hauliers. When we suggested during the various stages of the Transport Bill that that would happen we were laughed to scorn, but now it is actually happening. I consider it absolutely wrong and contrary to what the Minister said in some of his speeches during the passage of the Bill. Is it not unjust that the valuation of vehicles which are taken over by the Commission does not take place until after they have been taken over and that people have to wait a very considerable time for their money? Is that just and proper? Why is it not possible for vehicles to be valued when they are taken over, or even before, so that these men may know exactly how they stand? I understand that the machinery for provisional assessment is not operating and cases have occurred where notices have been served and no payment has been made until several months later.

I was glad to hear the Minister say that the matter of compensation for loss of office was being looked into and that regulations were about to be produced, but why has it taken two years to produce those regulations under Section I of the Act? Is it because the matter only affects those despised people, private owners? During these 10 months there has been no officer or servant in an acquired undertaking who has known where he stood. It is high time that the situation was rectified. This system must be made to work—

Mr. Sparks

It is working.

Brigadier Prior-Palmer

That is the opinion of hon. Members opposite who have got into power, and who have spent the whole of this evening endeavouring to bolster up that which everyone in the country knows is not working efficiently and will not work efficiently while it is administered in the way in which it is administered at present.

The Minister made great play of the financial situation of the railways at the end of the war. He was perfectly well aware of what the situation was when the railways were nationalised, and therefore it is no excuse for him at this stage to say that that is the reason why he has not carried out some of the promises which were made at the time of the Election and at the time of the nationalisation of the railways. He was aware of the situation then and had no right whatever to make the promises with regard to greater efficiency and reduction of fares which were made at the time of the Election and the passing of this Measure. This system must and will be made to work, but it will not be made to work as it is being run now. It will not be made to work while this Government are still in office.

8.48 p.m.

Mr. A. J. Irvine (Liverpool, Edge Hill)

I am very glad to have the opportunity of speaking in this Debate if only for a few minutes, especially after the speech we have just heard from the hon. and gallant Member for Worthing (Brigadier Prior-Palmer). If I may be allowed to say so, I thought it was a defeatist and contentious speech, and speaking as the representative of a Division which has a great railway connection, I want to make it quite clear to the House that the spirit we have just seen manifested in that speech is not the spirit informing the railway industry. So far from being defeatist, the railway industry from top to bottom is determined to make a success of nationalisation.

It is difficult when time is so limited to know with which of the various points made by the hon. and gallant Member one should deal. He suggested there was nothing to be proud of in these last two years of working on the British Railways. I want to make it quite clear that we on this side of the House are perfectly satisfied that this book, the report of the Commission, is a report of a very great achievement indeed. There are elaborate details given in the report showing the amount of movement of freight measured in "tonnage miles," that is to say, taking account both of the length of the haul and the weight of the load, during 1948 compared with previous years. These tables make it abundantly clear that there has been a very high degree and an increasing degree of economic efficiency in British Railways in the last two years.

There is the additional point—I think it is made on page 78 of this report—of the comparative tables showing the punctuality of trains. These show a great improvement. There is an overall increase of 10 per cent. in the number of train journeys which were completed up to time in 1948 as compared with 1947. That improvement is borne out by each of us in his personal experience.

I think it was Mr. Disraeli speaking of an election contest, who said that the best kind of repartee was a majority. I always think in somewhat the same sense when I am travelling on the British Railways and hear all the nagging that goes on in first-class carriages from associates of hon. Members opposite against the working of the nationalised railways. I always think that the best repartee to that kind of nagging is when the train comes in on time, as trains increasingly do nowadays.

It is very significant that the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) has called in aid a retired railwayman, who calls himself "Rover" for an article he has written in the N.U.R. journal—a periodical which no doubt the right hon. and learned Gentleman reads regularly. The right hon. and learned Gentleman has not realised that the only reason why this writer calls himself "Rover" is to show that he has wandered away from all his colleagues and fellow workers in his judgment and estimate of our nationalised railways. I am glad to have the opportunity, if only for a few moments—and I promised not to take more than five minutes—to make it abundantly clear that what I have described as the defeatist attitude on this matter displayed by the hon. and gallant Member for Worthing is not shared by hon. Members on this side of the House nor by the railwaymen of the country.

8.52 p.m.

Sir Ronald Ross (Londonderry)

One thing is abundantly clear in this Debate, and that is that the time at our disposal is much too short. The subject is a vast one and of immense importance to all of us. There are aspects of it which have not been touched upon. The one to which I wish to address myself now is that of sea transport. In the 400 pages of the report there is only half a page directed to sea transport, and in that the life-line to my part of the country in Northern Ireland is not mentioned at all. I am sorry to see that the Minister seems to pay rather more attention to the Isle of Wight, which is, of course, an important place; but not quite as important as a place with a population equal to that of New Zealand—and with rather the same sentiments.

All the trains connected with the cross-channel boats now have to start at least an hour earlier, and sometimes more than an hour. The most cruel cut by the Minister is on the Liverpool boat-train which shows the greatest difference between pre-war and post-war conditions, although it is still extremely popular. With regard to ships, one of the ships, the "Duke of York," from the Heysham service has been moved round to the Harwich service. This vessel used to give a Sunday night service. If I have a meeting on Saturday night now and wish to travel by sea and rail I cannot get to this House on Monday. If anything goes wrong on the Harwich service, if a ship has to have her boilers attended to, they have to take one off the Heysham service and send it round.

On the Stranraer to Larne service before the war, there were two passenger steamers and a ferry which ran the service properly. Now it is being run by one ship, "The Princess Margaret" the oldest ship of the three, and a ship which still bears the honourable scars of war service, because she took part in many operations off the coast of France. She has never even had a complete refit after being derequisitioned. The Scottish passengers, for whom my heart bleeds, who are supposed to sleep on board have cataracts of coal coming down past their heads through the night. They are on board but do not sleep.

What has the Transport Commission done with the good ship, the modern one, the "Princess Maud"? She is at Holyhead waiting to ensure that nobody travelling to the Irish Republic will be inconvenienced because there is no relief ship, although there are two brand new ships which have been built for that route. We have the oldest ships in the service. In the report four new ships are mentioned as having been built for the Irish service, but not one of them goes to Northern Ireland. We are not even allowed the use of merchant ships of the power that we had before the war.

The trains that connect with the services all start much earlier than they did before the war. They arrive at the ports too early for the boats. Having started an hour and a half earlier than before the war for the Stranraer boat, one has to wait for hours before the boat sails. The only relief for that service was the admirable car ferry which, as a car ferry, was excellent. The third-class passengers who had sat up all night in the train and then had to wait for several hours before the boat sailed, found that there was no accommodation in which they could get some rest. Meanwhile, the modern ship, the "Princess Maud" was sitting peacefully in the harbour at Holyhead to ensure that nobody travelling to Eire was inconvenienced. These example show that the priority given to us is the lowest of all. Ours are the most crowded routes. No other routes require sailing tickets, but constantly at the busy times of the year sailing tickets are required for Northern Ireland. They are never required on the routes to the Continent.

The transport of goods is even worse. That service takes longer than it did before the war. It costs more to send goods, and we are told that the cost is to increase again. A constituent of mine has written to me commenting on the enormous difference in times between receiving goods from London and goods from Londonderry. In fact, the only appropriate comparison he could make was that it takes just about the same time for goods to come from West Africa as it does for goods to come from London. Inquiries should be made into that position, because the service is becoming even slower.

I should like to talk about this subject for a very long time but I have pledged myself not to do so. [HON. MEMBERS; "Hear, hear."] I hate to get applause from hon. Members opposite even when they applaud because I am being so nice. I conclude by pointing out that these services are our life lines. We depend upon them but the Ministry does not give any priority. Although this is the most crowded service, they take our ships away. I suggest that they should ask the Ulster Transport Authority to take over these services because, if they did, they would be very much better run.

Mr. Deputy-Speaker (Major Milner)

Mr. Peter Thorneycroft.

Colonel Dower

On a point of Order. Am I in Order in saying that a large number of hon. Members feel very strongly about this report and that in this one day there has been no chance of Mr. Speaker allowing us time to speak?

Mr. Deputy-Speaker

I am sorry. I am afraid that is not a point of Order with which I can deal. The question of time is out of the hands of the Chair.

8.59 p.m.

Mr. Peter Thorneycroft (Monmouth)

I welcome the chance to summarise the case on behalf of the Opposition and to reinforce some of the pungent arguments which have been advanced from those of my hon. Friends who have been fortunate enough to catch your eye, Mr. Deputy-Speaker, and some of those very few hon. Members opposite—far too few—who have had an opportunity of putting arguments on the other side. Let me say at once—and I think I shall carry the whole House with me in this—that I do not share the enthusiasm expressed by some people inside and outside the House about this being a good way of discussing a nationalised industry. I think it is a wholly inadequate way.

This is a vast subject, ranging from hotels to air charter companies, from the bulk carriage of goods on the railways to the details of local haulage. What is wanted is not a sort of Second Reading Debate as we have had today, but a searching analysis of what, if anything, is really going on behind the iron curtain of the Ministry of Transport. I find it rather a sad thing that the Ministry which I once had the honour to serve is for 364 days of the year a barrier to any sort of information at all, and then, on the 365th day, in a few rather quick speeches—some rather long, but very few speeches altogether—we try to lift this curtain to see what is going on. I think we will have to consider some other way of tackling this subject.

I must say that I am a little frightened at the air of complacency which I see in the opening paragraphs of the report. I see Sir Cyril Hurcomb and the Transport Commission stating the fact that 3,000 letters have come from Members of Parliament as a sign of the interest which we all take. Really, that is a most unrealistic approach to the attitude of ordinary Members of Parliament, on the other side of the House as well as this—3,000 letters from frustrated Members of Parliament who never get their Questions past the Chair, and quite rightly, no doubt. It is not our interest, but our sense of utter frustration, which makes us write these letters to the Transport Commission.

As I am winding up, I think it will be convenient if I say at the outset what is the gravamen of the charge which we make against the Minister. Our charge is that the right hon. Gentleman has pursued a policy of drift. He has neither integrated the transport industry, as some hon. Members very eloquently asked him to do, nor given it that freedom or the necessary opportunity to compete for which other hon. Members have been asking. All he has done has been to buy it up and stultify it.

I think there is something to be said, and that a logical case could be made out, for integrating the whole of the transport industry. Many countries have tried that sort of policy. National Socialism in Germany tried that policy, but I do not think it worked very well for them. It is, at least, an arguable case, and there is a good deal to be said for the other point of view—the competition side and shaping the industry from the consumers' point of view—but there is absolutely nothing to be said for doing neither of those things. Just to buy the thing out and leave it at that, is to turn the Treasury into a kind of political bucket-shop, and is not the slightest good to anybody. It is of no use to buy out the shareholders and leave the companies to continue as they were before. I shall develop that point later on.

The other matter to which I would refer in opening is that we cannot overemphasise the seriousness of the problem which confronts us in this transport industry. It is not that it has just lost £4.7 million—and I accept the figure—in 1948, or £20 million in 1949. What worries me is not the loss, but the fact that, on the admission of the Transport Commission and of the Government, things are getting worse and not better. The frightening phrase in the report is that there will be a further deterioration in 1949. The frightening phrase in the Minister's statement to the House the other day was that it would be worse in 1950 than it is in 1949, so that what we are seeing is the general decline of the whole system. That, perhaps, at a moment when the whole interests of this country, party politics apart, should be devoted to trying to reduce costs and bring prices down, is both a human and a material tragedy.

It is, after all, as my right hon. and learned Friend said in opening for the Opposition, vital to every industry in this country. My hon. and gallant Friend the Member for Camborne (Commander Agnew) illustrated its effect on the agricultural industry and on the horticultural industry in Cornwall. Let me say, on behalf of hon. Members who have been unable to catch your eye, Mr. Deputy-Speaker, that it is places like Scotland, South Wales and the far West of this country, where useful and profitable occupations are carried on—in many cases, far from the great centres of population—that are going to bear an increasingly heavy burden by reason of these increases in costs.

It is not a small thing to put up our transit charges on steel and coal and other great basic industries, and, moreover, it is cumulative in effect. When opening the Debate, the Minister drew particular attention to the terrible burden imposed on the transport industry by what is going on in the coal industry—the inconvenient deliveries, the mounting costs—which made it so desperately hard for transport to keep its costs within reasonable limits. For that reason the transport industry has failed. Coal charges and others will go up, and in that way we get a vicious circle of rising prices and costs.

This is a grave and serious matter with which we are confronted. It is serious not only in regard to freights, but also in regard to fares. The other day a man came to me to ask about getting extra petrol. Knowing the sort of letters one receives in answer to such requests, I said to him, "You should go by train." He was a married man earning £5 or £6 a week. He said, "The trains are not for people like us; we cannot afford the fares." [Laughter.] Hon. Members opposite may laugh, but I do not believe they yet realise—although I think the Minister of Transport does owing to his falling receipts—the immense hardship imposed on families of limited incomes when suddenly they are faced with these extremely high fares at a time when it is becoming increasingly difficult to balance the family budget. What is happening—and this is the real point I wish to make—is that British transport is pricing itself right out of the home market, both with regard to passenger fares and transport freights. If that goes on, not only will the livelihood of thousands of railway workers be placed in jeopardy, but also the whole economy of this country.

With those few opening observations i will now pass on to deal with one or two points made by right hon. and hon. Members opposite during this Debate. The Minister said, quite rightly, that railways in other parts of the world were faced with somewhat similar problems. We are not, of course, blaming the right hon. Gentleman for the existence of the problem, but we are blaming him for the absence of a cure. He said that there were two alternative ways of dealing with the matter—one was a subsidy, and the other integration. He put it a little differently later in his speech; he said that we must either have a subsidy from the Treasury or impose higher charges and get it from the public. We do not accept that for one moment. We say that there is always another way of dealing with it, and that is to increase the efficiency of the service with which one is dealing. If we are going to rule out that third possibility altogether, that is an abdication of every kind of industrial leadership.

The other point that the right hon. Gentleman made was a point which is very often made by hon. Members opposite. He used the analogy of the London Passenger Transport Board. He said that it had been a great success and that we ought to try to do something like it on a national basis. I beg hon. Members opposite to be a little careful of that analogy. Just remember what the object of the London Passenger Transport Board is. Its object is to keep people off the roads and not to have people on them. The object is to have a Tube system and encourage people to go down into the Tube so that the streets of London will not be cluttered up. The action adopted by the L.P.T.B. is to have its fares in London higher than anywhere else in the country. The right hon. Gentleman quite frankly and fairly, broadly speaking, stated that position and pointed out the costs structure which was used for that particular purpose.

All I would say to the Government is: Do not imagine that you can take a system devised for that purpose and turn it into a national system. We have got a great deal more than a few Tubes and a few London buses in this country. The road industry in this country cannot possibly carry the railways in the same sense that the Piccadilly buses carry the Piccadilly Tubes. That is a dangerous oversimplification of that problem.

The hon. Member for West Swansea (Mr. P. Morris) addressed his remarks to the passenger side. He said that he thought it was quite wrong that there should be such delays in taking over the road passenger side, and he wanted to sweep away those safeguards which Parliament has imposed in the matter—

Mr. P. Morris

I never suggested sweeping away safeguards. I merely mentioned short-circuiting in order to avoid deliberate obstruction with political ends.

Mr. Thorneycroft

I accept the hon. Gentleman's correction—short-circuiting the procedure which has been laid down by a majority of this House of Commons, in order to avoid what the hon. Gentleman himself conceives to be obstruction. I found that a most dangerous argument.

I never have believed that the Lord President of the Council meant everything he said about the rights of local authorities and how he wept when their rights were taken away. To take the bus companies away from the local authorities and deny those local authorities the full and democratic opportunity to object to those schemes would really be a monstrous thing. Sometimes the Government get a little too particular about anybody objecting at any time to the schemes which they themselves propose.

The hon. Member for Enfield (Mr. Ernest Davies) is, of course, a Socialist. He makes the great mistake in his own party of admitting that he is a Socialist. He should take a few lessons from the Lord President of the Council. If one intends to take over a municipal bus company, the thing to do is to write a book saying how much one loves the municipalities. One should not be quite as open as the hon. Member for Enfield His solution was to nationalise much more quickly. He thought that if we nationalised more quickly we should all be a great deal better off. I wonder whether that will be a plank in the election platform of the Socialist Party.

The hon. Member for Enfield wanted to abolish, or very much restrict, the issue of the "C" licences. We regard "C" licences as the sheet anchor of reality in transport costs. So long as a man has the elementary right of driving his own goods in his own lorry on the King's highway, there is some limit to the extent to which the road and rail costs can be rigged. What is the view of the Transport Commission and of the Government about these "C" licences? The Commission say: … it is plain that the increased use made of "C" licensed vehicles is a circumstance which vitally affects the policy of the Commission in planning, in fixing charges and in the eventual integration of their services. Will the Parliamentary Secretary give us the English of that remark when he replies? Does it means that they intend to keep them or that they hold themselves free to do away with them? I think he ought to give an answer to that. We on this side of the House stand firmly for the freedom of the "C" licences and I challenge any hon. or right hon. Members opposite to get up and pledge themselves that if they win the next Election they will not do away with the "C" licences. I will willingly give way for that. I hope very much that the traders of this country will see the enthusiasm of hon. Members opposite here.

The hon. Member for Enfield went on to say that the Government's policy was in the stage of transition. I think he over-emphasised it; that would imply that it was getting somewhere. If we followed the suggestions of the hon. Member for Enfield we should subsidise the transport industry to the tune of £60 million in the next three years. If we were getting anywhere at all we should be getting a little nearer to that national bankruptcy which we seem to be approaching.

I shall turn for a few moments to the accounts, and I hope I shall find this a less controversial subject than that of the "C" licences. For two reasons I do not intend to enter into the technicalities. First, I am not an accountant; I find great difficulty in discussing the rights and wrongs of depreciation. Secondly, I have not the time. I have only one criticism of the accounts; they do not tell me what I want to know. What I want to know is whether the road transport industry has made a profit or a loss, and how much. After all, I, in common with 40 million other people, own the thing. I am entitled to know whether it is being run at a profit or a loss and I ask the Parliamentary Secretary whether, when he replies, he will give us an undertaking that next year's accounts will be drawn up in a manner in which we can see whether the road haulage industry, the individual railway companies or even the Olley Airline, which is one of the strange things about to be owned by the Transport Commission, are showing a profit or a loss. I think we should have that undertaking.

Turning to the Commission itself, the thing which appears about the Commission is its lack of policy. Its job was to integrate the British Transport industry, to run it at a profit and to draw up a charges scheme in the industry in the national interest. I defy anyone to say that it has done any of those things. I do not think that even the Government will contend that it has done so. What is the policy of the Government? So far as I can understand the Government's policy, it is either to take the profits of the roads and pay out of them the losses of the railways or, alternatively, it is to put up the road or bus fares and road haulage rates in order to drive the traffic on to the railways—or it may be a combination of the two.

Mr. Sparks

Why not?

Mr. Thorneycroft

I am asking what is the policy. The Parliamentary Secretary made a speech a little time ago in which he said: Bus fares may be increased and rail fares lowered as a first step in the nationalisation plans, as the co-ordination of road and rail facilities and charges which are now out of scale was the first job of nationalisation. I understand that later he said he thought he had been misreported, in which case he must have had second sight because it is now the policy which is set out in the "Daily Mirror," who say they have been informed by the Government what the Government intend to do: It is hoped ultimately that profits from the State-run road services will meet any loss on the railways, although this loss will probably be considerably reduced as the two services are run to provide 'community transport.' It is an extraordinary thing that nationalisation immediately after an election becomes socialisation, whereas just before an election it is called mutualisation or community transport. It seems to me that the "Daily Mirror" and the Parliamentary Secretary are about agreed on this. I think we are entitled to know which of those policies is to be adopted. What is their policy about freedom of choice? Paragraph 38 of the Report says: The obligation to allow freedom of choice "— that is to the user of transport— seems to preclude any enforced direction of traffic to particular services contrary to the express wishes of customers. That does seem a very wistful sort of expression of opinion by Sir Cyril Hurcomb. What is the Government's view about freedom of choice? Is there to be freedom of choice?

Mr. C. Poole

No.

Mr. Thorneycroft

I hope that that remark was overheard by HANSARD.

Mr. Poole

Will the hon. Gentleman give way, and I will gladly declare my position? The hon. Gentleman believes in freedom of choice. We cannot have integrated transport and maintain freedom of choice.

Mr. Thorneycroft

I am much obliged. That is an honest, honourable and straightforward comment. It is also a very true one. Of course, we cannot have an integrated transport and maintain freedom of choice. But I ask the Parliamentary Secretary, when he replies, to say whether he agrees with his hon. Friend the Member for Lichfield (Mr. C. Poole) or not. After all, we are entitled to know, and the country is entitled to know, what is the Government's policy. Then we can see whether we agree with it or not.

What about the charges scheme—the great charges scheme—that was to be drawn up? It was stated to be an important task. It was said to be one of great urgency, and was so regarded by the Committee. In 1948 there was set up a Committee under Sir William Wood—a very admirable man—and they were going to have discussions with organised bodies of traders, and all the rest. But they have not started discussions yet. What have they been doing? Why have they waited all this time? Why did they wait until this demand for another 16⅔ per cent. without having any discussions at all? I understand—I may be wrong, and if I am, perhaps the Parliamentary Secretary will correct me when he replies—that the discussions have not even started. I think that they are entitled to take organised bodies of traders into their confidence, but I think they ought to take the House of Commons into their confidence, too. I think that after two years we might at least hear what progress they have made, and about the general principles on which the charges schemes are to be drawn up.

I should like to know what is the policy about manpower. I always understood that one of the arguments about integration was that we could do the same job better with fewer people and much more cheaply. That is the idea of taking everybody together. But they are doing it with many more people. Much worse; if one looks at the figures, one finds that in 1938 more passengers were moved, more goods were removed, and that was done with fewer people: about 50,000, at any rate—possibly 70,000—fewer.

Mr. Sparks

Certainly, the hon. Gentleman is not correct on that point in regard to 1948, because there was one-ninth more passengers carried than in 1938.

Mr. Thorneycroft

I said 1938. If the hon. Gentleman will look at paragraph 164, he will see confirmation of my statement.

I turn to paragraph 44, and I see that the Government—or the Transport Commission—say that in the change-over from one service to another, or from one Executive to another, one of the things that may happen may be redundancy, … which the Commission would desire to avoid so far as possible. Well, what is the object of all this? Are we trying to run this service, this integrated transport service, more cheaply, or are we not? If we are trying to run it more cheaply, how do we manage to do so with 50,000 or 70,000 more people at an average wage bill of £5 per week per head? If average earnings are £5 per week, that is £17 million a year, or something like that. We are entitled to know what the Government's policy is on a matter of that kind.

I now want to turn to the question of railway organisation. I shall not re-read the articles by "Rover," or anything of that kind, but I do want to say what my impression is. I have gone round the country and talked to men, from porters to regional officers, and they have all said broadly exactly the same thing; they have all told me that this system is grossly over-centralised—every one of them. I want to know whether the Government really do ignore the sum total of that advice. I know that those in charge of the Transport Commission, or at any rate some of them, are very keen centralisers; but I also know that there is a feeling against it which goes right through the railway movement, and I ask the Government to look at that matter again.

The last thing I want to say about the railways is this. I do not accept that railway companies are efficient.

Mr. Herbert Morrison

The railway companies?

Mr. Thorneycroft

Well, nationalised railway transport. I do not admit that that system is efficient. I know it is easy to criticise, but let us look at the facts.

The fact is that the policy pursued has been no good. I do not blame them a bit for trying to get as much traffic as they can; they have put on all sorts of new services, but this is what Sir Eustace Missenden said the other day: During the summer months just past we provided a fine train service, and, all things considered, it is, of course, somewhat disappointing to all of us that for one reason or another we have not conveyed as many passengers as we had hoped, or carried as much tonnage in our freight trains. It is not sufficient to provide a service and run trains up and down the country if those trains are empty at the time; it is not only very costly to the Transport Commission, but it is, of course, a very great waste of public resources, manpower, steel, coal and money.

I must say just a word or two on road haulage. What is the policy about the regional permits on this 25-mile limit? Our policy is that we are going to sweep that 25-mile limit right away; we regard it as a ludicrous state of affairs. But what is the Government's policy about that? And what about the short haul? Evidence is piling up that the Road Haulage Executive are doing their level best to squeeze out the short-haul man in order to provide more money. I gave an example the other day of the Christmas traffic; they are even taking that away, and making the private haulier apply to the Road Haulage Executive his principal competitor—in order to get the work. There could not be a more monstrous example of doing the very thing which I understood the Government had pledged themselves not to do. What about the excluded traffic, and all the pledges that were given about that? My information is that the Road Haulage Executive are extending their fleets in that direction in order to capture more of that traffic from the private road haulier. I do not know whether the road hauliers are making a profit or a loss.

Mr. D. Jones

The hon. Gentleman does.

Mr. Thorneycroft

Well, I see that General Russell came down to my division the other day saying that road hauliers were making more than they need do. Just imagine a company director going to his shareholders and saying, "We have got a bit of a monoply, we are making more than we need do, and we can help one of our subsidiaries." I do not know whether they are making a profit or a loss, but I believe that for the Road Haulage Executive to use their position to exclude still further the short haulage man who is still in private enterprise, or the excluded traffic, is contrary to everything the Government have pledged themselves to do.

We ask the Parliamentary Secretary: What is the policy of the Transport Commission? Are they going to pursue a policy of further integration, and if so, when? When can we be told about these charges schemes? When can we be told even the principles upon which those charges schemes are to be framed? What is the Government's attitude to the "C" licence holder? After all, people have to plan their businesses ahead and they are entitled to know what the Government policy is. I think it is a silly policy, and I am entitled both to think and to say so. The public may hold a different view, but at least let the Government have the courage to come out and tell the public exactly what that policy is. Are they going to take over all the road passenger side? They have permissive powers to do so at the present time. Is it their policy to take them over, one company after another, until they have all the buses in their hands? When they have got them, what are they going to do? Is it true that they will put up the bus fares? At the present moment they have no policy at all.

I can understand, and I have defended on many occasions, the Conservative competitive policy which the hon. Gentleman attacks. I can understand and respect the view of men like the hon. Member for Enfield and the hon. Member for Lichfield who argue for an integrated system and the elimination of freedom of choice and the rest of it, but what I cannot tolerate—at least I cannot tolerate it for long and the country will not tolerate it—is a Government too cowardly to choose between the two.

Colonel J. R. H. Hutchison

On a point of Order. Would it be in Order to protest at the farcical amount of time allowed for discussing this great question which has resulted in no Scottish voice being heard in the Debate and in the docks not being mentioned?

9.31 p.m.

The Parliamentary Secretary to the Ministry of Transport (Mr. James Callaghan)

I am sorry that more hon. Gentlemen have not had an opportunity to speak in the Debate and that the hon. Member for Monmouth (Mr. P. Thorneycroft) was a little hurried in what he had to say—

Colonel Hutchison

We ought to have been given more time.

Mr. Callaghan

—but it did not prevent him from making his usual typical speech. When I read the morning papers today my eye fell on two items. The first item said that the hon. Member for Monmouth would wind up the Debate for the Opposition. The second item was Mr. Ian Mackay's diary which said: When you are vehement, belligerent, angry, conceited, smart or dogmatically positive about something you are almost certain to be wrong. I shall return to the speech of the hon. Member for Monmouth in due course, but I should like first to deal with a number of questions put by the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) and other hon. Members. The right hon. and learned Gentleman raised a financial matter which, in conjunction with other matters, based on his reading of paragraphs 68 and 69 of the Transport Commission's Report, that the Commission were adopting a form of accounting which was disguising the true amount of loss. The right hon. and learned Gentleman said that it had been suggested that the figure should be something over £30 million—

Sir D. Maxwell Fyfe

Next year.

Mr. Callaghan

—and I intervened to say that what the British Transport Commission has done is to accept the conventional form of best commercial accounting in relation to depreciation and the replacement of assets. I do not know whether the Opposition wish to attack the basis of accounting upon which most of the big commercial firms run their affairs. I should hardly think they do. Why then do they wish to say that the British Transport Commission should adopt another system. I may say that London Transport ran the present system of the B.T.C. for the whole of the period it was in existence. Either there has been some misunderstanding about this or, because the Leader of the Opposition said at Wolverhampton that the loss ought to be £20 million, the Opposition are trying to make it become that. It is silly to suggest that because the Commission have not put away to reserve the £5 million that they thought they would like to put to reserve, the amount of the loss should be increased by £5 million I know a little about accountancy and I have never heard of that consideration being brought into it.

I will put another fact to the Opposition on this. The Commission are charged with the responsibility of redeeming their capital. They have to set aside every year a sum of money for that purpose. That is not the basis of most commercial accounting. Most companies do not have to provide for the redemption of their capital. Really, if this sort of point is to be made on one side about the basis of accounting in relation to the replacement of assets, the Commission are equally entitled to say on the other side that there are factors like the redemption of capital which simply do not apply to commercial firms. The point I want to make is a simple one. In my view and, far more important, in the view of most of the best commercial accountants in this country, the system of accounts shown in the first report of the Commission is a model for any other enterprise in the country.

Sir A. Salter

My point was that not only our hopes but the hopes of the Transport Commission have been seriously disappointed because they said they had expected to be able not only to make ends meet, but also to put aside a figure of something like £8 million to replace wasting assets and £5 million to reserve. Had they done that, it would have meant that the net loss on revenue for 1948 would have been £18 million and for 1949 it would amount to £33 million.

Mr. Callaghan

That is precisely what the right hon. Gentleman said the first time, so he has not added anything to it.

I come to the point raised by the right hon. and learned Gentleman in relation to wagons. He asked whether the Commission were breaking up too many wagons and were running it rather fine. I shall give the House some details about the wagon position. When the Commission took over there were 168,000 wagons over 40 years old and many of them simply were not worth repairing. It is those wagons which are being and have been broken up to a great extent.

The amount which the Commission estimate they have saved by the transfer of private wagons into public hands, with the consequent saving of selective shunting, and so on, is of the order of £1 million a year in interest, repairs and replacement done by an administrative stroke of the pen. If ever there was a saving which yielded practical results within months of nationalisation, here it it is. The other factor which the right hon. and learned Gentleman omitted in this connection is that while those wagons are going out, newer and better and bigger ones are coming in. Many, of course, are 16-tonners as against 8-ton, 10-ton and, indeed, 6-tonners which have been broken up, and 600 new wagons a week are coming in at the moment.

The right hon. and learned Gentleman asked me about the repair position. May I give him the figures? Some 13 per cent. were awaiting repair at the end of 1947, while" 9.8 per cent. were awaiting repair at the end of 1948. That percentage had risen to 11.9 per cent. in September, but that follows the holiday period, and if the right hon. and learned Gentleman examines the graphs he will know that there is always a rise in the percentage at the end of that period. So I confidently expect that it will have turned down again by the end of the year. However, I do not know what the position will be and I do not intend to prophesy.

About the staffing position it is true, as the right hon. and learned Gentleman and others said, that there have been substantial increases in the staff of British Railways, particularly since the end of the war. Those increases are to some extent natural. A number were the result of the return of Service men, although that was partially offset by the discharge of a large number of women who came to the rescue of the railways during the war. However, there are other factors. The first is that the railwaymen are now working a 44-hour week as against a 48-hour week. They have also secured a 12-day holiday a year as against the six-day holiday a year that they used to have. That clearly means that there has to be, on roster work particularly, an increase in staff in order to cope with the reductions in the hours that are worked. That accounts for some part of the increase.

I would remind the right hon. and learned Gentleman and the House that since December, 1948, there has been a reduction in staff on the railways from 648,000 to 632,000 in October, 1949, a decrease of 16,000. There is a review going on of all supervisory posts created since the beginning of the war in order to see how many of them are essential. It is quite clear—and I think that the railway unions as well as the Transport Commission understand this—that there can only be an optimum staff to do the job properly if the men are to have a decent wage structure. That is why there is now great co-operation on both sides to achieve the right level of staff for the job.

I should like to deal with a small point on which the customary caution of the right hon. and learned Gentleman deserted him. He lent himself to the acceptance of the astonishing estimate that the creation of headquarters staffs and the rest had resulted in the expenditure of £1 million a year and an addition of 1,000 staff.

Sir D. Maxwell Fyfe

I said an increase of £1 million a year.

Mr. Callaghan

An increase of £1 million a year and 1,000 staff. I at once asked the Railway Executive and the Transport Commission what they made of that. They find it quite impossible to get any figures at all that would in any way countenance what the right hon. and learned Gentleman has said. The Railway Executive, who are the only people able to make a check within the time, have recently made a comparison between the present strength of their staff at headquarters and in the regions and the total personnel of the former general managers' offices. They say that this reveals an increase not of 1,000, but of 50 people, represented mainly by the staff in registrars' and record offices not included in the former figure for general managers' offices. They have realised, they say, useful savings in the staffs formerly serving the directors and presidents of the companies.

Sir D. Maxwell Fyfe

What I suggested was that the staffs of the executives now numbered about 1,000, and that if that is compared with the staff required by the Railway Executive during the war, it is practically all increase; and that if we take the buildings into account the figure of £1 million a year is reached. The hon. Gentleman has not controverted that at all. Would he tell us what are the staffs of the Executive?

Mr. Callaghan

That is quite easy to find out if the right hon. and learned Gentleman cares to read the report, where it is all set out in detail.

Sir D. Maxwell Fyfe

No, it is not.

Mr. Callaghan

If he does not find it there, he will find it in the monthly transport statistics, where it is separately shown.

Sir D. Maxwell Fyfe

Tell us where.

Mr. Callaghan

I leave this matter by saying that the claim of the right hon. and learned Gentleman is utterly fantastic.

I propose to pass on to the question of original permits, about which the right hon. and learned Gentleman asked. Over 17,000 applications were received by the closing date on 2nd August. Many of the applications were in very wide terms. Obviously, the Commission cannot issue permits in the general terms in which some of the applications were made. They have had, therefore, to seek additional information from a number of applicants. They estimate that the first decisions about the granting of these permits will be given during the present month, and they will work through until all the applications are dealt with. The House will appreciate that operators may continue to operate until 1st March, 1950, or until one month after their applications are dealt with if permits are granted. Probably by January every applicant for an original permit should be aware of the decision which has been made.

I should like to come to the question of the increase in charges which has been asked for. Hon. Members are right to ask the many searching questions which they have put this afternoon about the need for this application and whether my right hon. Friend the Minister has been right in passing it on to the Transport Charges Tribunal and asking them to declare on it. The first question which has been asked is, what has caused this situation? I take it that for the moment we are not talking solely for our constituencies and it is clear that this situation has been caused by three things. First, that the railway revenues did not come up to the expectations—not of the Commission—but of the body which gave them the last increase in rates in October, 1937. The second cause is the increase in wages, and the third, the increase in the cost of materials.

We have had some talk this evening about the increased cost of materials. All the Opposition have fastened upon is the contrast between the increased cost of coal, which they say is 174 per cent., and the increased cost of iron and steel, which in the Report was shown at 80 per cent. But since then—hon. Members did not take this point—steel has gone up and I am told that the cost today is 105 per cent. above pre-war.

What the railways are asking for is an increase which will bring them to 81 per cent. above pre-war. I do not know what lessons hon. Members opposite draw from that, but it does not seem to prove their case. I should like to give the other costs, which include canvas 221 per cent., india-rubber 130 per cent., non-ferrous metals 148 per cent., lubricating oils 215 per cent., paints and colours 254 per cent., provender 225 per cent. rope 333 per cent., general timber 225 per cent.—

Brigadier Prior-Palmer

Linseed oil, read that.

Mr. Callaghan

The Commission have now asked to increase their costs to 180 per cent. over pre-war which compares favourably with these figures.

The next question which I think the House are clearly entitled to ask is whether the Commission are doing their best to cut down additional expenses in which they have been involved. I have dealt with the economies in staff already taking place. There are other economies, for example, they are not replacing assets which the former four main line companies thought necessary—such things as locomotives. The four main line companies wanted to build 700 locomotives a year but, as a result of their first review, British Railways do not want to build a fleet of 700, but 400. That is a saving brought about by unification. It is because they have been able to scrap a large number of old locomotives and wagons that they have been able to effect a great many of these economies.

The next question which has been asked is, ought the passenger fares to have gone up? That question was put by one or two hon. Members. The question to be determined there, and it has been partially answered by some hon. Members opposite, is whether it would have the necessary effect. As the hon. Member for Monmouth said, passenger demand is fairly elastic, and I think the Commission were right to frame their application in the way they have and that it will yield them revenue necessary to meet expenses.

I should like to ask the other question, should passenger fares have gone down? The answer to that is that the railways are taking every opportunity of putting the fares down when they can be sure of securing more revenue when they do so. I should think that a prudent commercial proposition which would appeal to the Opposition. During this year a large number of excursions have been run and something like 11 million people travelled on cheap tickets, cheaper than the standard rates, since 1st January this year. Is that not a sign of enterprise and an attempt to capture business? We must remember that the railways were deliberately restricted by the shortage of coal and other considerations, in trying to get new traffic during the war and for a considerable period afterwards.

The hon. Member for Monmouth asked about our policy and we were invited by the hon. Member for Abingdon (Sir R. Glyn) to walk into the Conservative Lobby tonight. I do not think we are likely to do that and I propose to tell the House why. The Conservatives have a policy for transport. Of course they have. It is in the little document that the Leader of the Opposition threw over. A Conservative Government"— I think they will be obliged for this free puff— will proceed to sell back to free enterprise those sections of the road haulage industry which have been nationalised. I do not detect much enthusiasm at the moment.

Mr. P. Thorneycroft

We are waiting for the Government's policy.

Mr. Callaghan

I am examining the Amendment of the hon. Member at the moment. What this means is that they propose to sell back to private enterprise the part of the public transport system which is making a profit, and leave with the public the part which is making a loss. As somebody writing in "The Commercial Motor" said: The Conservative Party promise to be the answer to a haulier's prayer. I should say it does! But it certainly will not solve the transport problem about which the hon. Member spoke so feelingly. But that is not the worst. What else is there? Operators will have to obtain 'A' or 'B' licences under the Road and Rail Traffic Act, 1933. But new entrants will have to prove that business is available and that it cannot be as cheaply and effectively handled by existing carriers of goods whether by road or by rail. Where is the free enterprise about that? I frankly cannot see much free enterprise about that proposal. Indeed there is no expert I know in the commercial motor field today who really believes that the Conservative Party can, if returned, carry out this policy. I will say this, it will be the first broken promise which will be apparent when they get back into power—if they ever do so.

The plain truth is that this is a doctrinaire policy, because they believe in private enterprise above all. It is based on party prejudices and it bears no relation to the needs of transport. It is such a flippant and light-weight policy that it could only have been fathered on the Tory Party by the hon. Member for Monmouth (Mr. P. Thorneycroft)

Mr. Thorneycroft

Go on, there are only five minutes more. Make it last.

Mr. Callaghan

I wish, during the last eight minutes at my disposal, to say something about the charges policy and the integration policy of the British Transport Commission. The Commission have already said, and I should like to repeat it to the House, that they propose to prepare a charges policy which will cover both road and rail. There has always been a charges policy for rail. We have never before had a charges policy for road, and if the Conservative Party were returned we would not have one now. They would still have the railway people fighting with one hand tied behind their backs. How they expect to make transport succeed I do not know; it is a crazy and lunatic policy.

Here is the sensible approach to the problem. A road and rail charges policy is being worked out today. Hon. Gentle men opposite speak as if it is a simple matter to do that. Bless my soul, there are millions of separate charges which have to be considered and rendered down into some common principle. What the Commission are proposing to do, is that by Christmas they hope to be in a position to communicate to the public and to the traders who will be especially interested in this matter, the principles upon which they propose to proceed.

They will then be ready to enter into discussions with them on how the charges policy should operate in order that the nation can get the best use out of both. It is really no use hon. Gentlemen telling us that this is drift and general decline, and that it is getting worse. The last time, when hon. Gentlemen opposite were in power, it took them seven years to produce a charges policy, and they succeeded in doing it only for rail; there was nothing for road. Within two years of the setting up of the Commission there will be produced principles which can be discussed with the traders of the country, and the effect of them can be worked out. I think that is a pretty good record, in the situation in which the Commission have found themselves.

We have been told by hon. Members opposite that we should have gone ahead with integration much faster but we cannot integrate things if we do not control them. It must surely be apparent to the House that, during the last two years in which the Commission has been engaged in taking over the road haulage companies, they were not in a position at that stage to integrate services they neither owned nor controlled. As hon. Members know, it is only on 1st February next that the Commission will be able to say, because they have followed up the due processes of law and have given everybody in this business the opportunity to exercise his full rights under the Act of Parliament, that the appointed day has arrived on which, broadly speaking, they can provide a substantial service throughout the country both for road and for rail.

When I contrast what they propose to do—this sensible and logical approach, for that is what it is—with the policy which is set out in the document I have read, I have no doubt at all that this House was right when it passed the Transport Act, and that we are likely to be one of the first countries in the world to solve this modern problem of road and rail. It is a problem which every country is facing. It is a problem which nobody yet has solved. I do not think that the hon. Gentleman's proposals begin to solve it. I do say that if we control and own both the longdistance haulage on the road side and the railways, at least we stand a chance of using a charges scheme to co-ordinate the use of both in the best interests of the traders and the public.

That is the task which the Commission set itself. I believe that the general record of their efficiency is revealed in the report of the Commission. My hon. Friend the Member for Edge Hill (Mr. Irvine) gave some most illustrative figures about the improvement in efficiency in reference to the work done on the railways per-ton-mile and relating to the timing of locomotives and express trains, which really make confusion of all that hon. Gentlemen opposite say in this respect. Here I speak as an apologist for the British Transport Commission. When they are subject to continuous attack, I propose to reply on their behalf, no matter what the "Manchester Guardian" may say. I believe that the Commission have done a very good job of work in their first year. I believe that the public agree with us and I believe that the policy that the Commission propose to follow is the one which is likely to give the best results for the people of this country.

9.58 p.m.

Colonel Gomme-Duncan (Perth and Kinross, Perth)

In the moment or so that remains, may I put some of the views of Scotland? It is unfortunately a fact that, in the very short time allowed for this Debate, the voice of Scotland has not been heard at all, and I think that if anyone is condemning the Government for the insufficiency of the time allotted, that is certainly a very good point.

We have had from the Parliamentary Secretary a well-thought-out and well-delivered address, in which he also failed to mention Scotland. He told us that the replacement of locomotives this year under the Transport Commission is to be 400 instead of 700. If he thinks that number of locomotives in Scotland is sufficient to run the main line services, he is quite wrong, and I invite him to go and see for himself. We have even got to the stage in Scotland where we have

to use what was called in the Army cannibalisation of locomotives, because we have not got enough bits and pieces to go, round. I trust that another time we shall have a better opportunity of discussing this report and going into the important problems of Scotland.

Question put, "That those words be there added."

The House divided: Ayes, 149; Noes, 303.

Division No. 297.]	AYES	[10.0 p.m.
Amory, D. Heathcoat	Hannon, Sir P. (Moseley)	Peake, Rt. Hon. O.
Assheton, Rt. Hon. R.	Harden, J. R. E.	Peto, Brig. C. H. M.
Astor, Hon. M.	Hare, Hon. J. H. (Woodbridge)	Pitman, I. J.
Baxter, A. B.	Harris, F. W. (Croydon, N.)	Ponsonby, Col. C. E.
Beamish, Maj. T. V. H.	Headlam, Lieut.-Col. Rt. Hon. Sir C.	Poole, O. B. S. (Oswestry)
Beechman, N. A.	Henderson, John (Cathcart)	Price-White, D.
Bennett, Sir P.	Hollis, M. C.	Prior-Palmer, Brig. O.
Birch, Nigel	Holmes, Sir J. Stanley (Harwich)	Ramsay, Maj. S.
Boles, Lt.-Col. D. C. (Wells)	Hope, Lord J.	Renton, D.
Boothby, R.	Howard, Hon. A.	Roberts, Emrys (Merioneth)
Bower, N.	Hurd, A.	Roberts, P. G. (Ecclesall)
Boyd-Carpenter, J. A.	Hutchison, Col. J. R. (Glasgow, C.)	Robertson, Sir D. (Streatham)
Bromley-Davenport, Lt.-Col. W.	Jeffreys, General Sir G.	Ross, Sir R. D. (Londonderry)
Buchan-Hepburn, P. G. T.	Joynson-Hicks, Hon. L. W.	Salter, Rt. Hon. Sir J. A.
Bullock, Capt. M.	Keeling, E. H.	Sanderson, Sir F.
Butcher, H. W.	Kendall, W. D.	Savory, Prof. D. L.
Byers, Frank	Kerr, Sir J. Graham	Shepherd, W. S. (Bucklow)
Carson, E.	Lambert, Hon. G.	Smiles, Lt.-Col. Sir W.
Challen, C.	Lancaster, Col. C. G.	Smithers, Sir W.
Channon, H.	Langford-Holt, J.	Snadden, W. M.
Clarke, Col. R. S.	Law, Rt. Hon. R. K.	Spearman, A. C. M.
Clifton-Brown, Lt.-Col. G.	Legge-Bourke, Maj. E. A. H.	Stanley, Rt. Hon. O.
Conant, Maj. R. J. E.	Lennox-Boyd, A. T.	Stewart, J. Henderson (Fife, E.)
Corbett, Lieut.-Col. U. (Ludlow)	Lipson, D. L.	Stoddart-Scott, Col. M.
Crookshank, Capt. Rt. Hon. H. F. C.	Lloyd, Maj. Guy (Renfrew, E.)	Strauss, Henry (English Universities)
Crosthwaite-Eyre, Col. O. E.	Low, A. R. W.	Stuart, Rt. Hon. J. (Moray)
Crowder, Capt. John E.	Lucas, Major Sir J.	Studholme, H. G.
Cuthbert, W. N.	Lucas-Tooth, Sir H.	Sutcliffe, H.
Davidson, Viscountess	MacAndrew, Col. Sir C.	Taylor, C. S. (Eastbourne)
Davies, Rt. Hn. Clement (Montgomery)	McCorquodale, Rt. Hon. M. S.	Taylor, Vice-Adm. E. A. (P'dd't'n, S.)
De la Bére, R.	Macdonald, Sir P. (I. of Wight)	Teeling, William
Digby, S. Wingfield	Mackeson, Brig. H. R.	Thomas, J. P. L. (Hereford)
Dodds-Parker, A. D.	McKie, J. H. (Galloway)	Thorneycroft, G. E. P. (Monmouth)
Donner, P. W.	Maclay, Hon. J. S.	Thornton-Kemsley, C. N.
Dower, Col. A. V. G. (Penrith)	Maclean, F. H. R. (Lancaster)	Thorp, Brigadier R. A. F.
Drayson, G. B.	MacLeod, J.	Turton, R. H.
Duthie, W. S.	Macmillan, Rt. Hon. Harold (Bromley)	Tweedsmuir, Lady
Eccles, D. M.	Macpherson, N. (Dumfries)	Wakefield, Sir W. W.
Eden, Rt. Hon. A.	Maitland, Comdr. J. W.	Ward, Hon. G. R.
Elliot, Lieut.-Col. Rt. Hon. Walter	Manningham-Buller, R. E.	Watt, Sir G. S. Harvie
Erroll, F. J.	Marlowe, A. A. H.	Wheatley, Colonel M. J. (Dorset, E.)
Fleming, Sqn.-Ldr. E. L.	Marples, A. E.	White, Sir D. (Fareham)
Foster, J. G. (Northwich)	Marshall, D. (Bodmin)	White, J. B. (Canterbury)
Fyfe, Rt. Hon. Sir D. P. M.	Marshall, S. H. (Sutton)	Williams, C. (Torquay)
Galbraith, Cmdr. T. D. (Pollok)	Medlicott, Brigadier F.	Williams, Gerald (Tonbridge)
Gates, Maj. E. E.	Morrison, Maj. J. G. (Salisbury)	Willoughby de Eresby, Lord
George, Maj. Rt. Hon. G. Lloyd (P'ke)	Neven-Spence, Sir B.	Young, Sir A. S. L. (Partick)
Glyn, Sir R.	Nield, B. (Chester)
Gomme-Duncan, Col. A.	Nutting, Anthony	TELLERS FOR THE AYES:
Granville, E. (Eye)	Odey, G. W.	Mr. Drewe and
Grimston, R. V.	Orr-Ewing, I. L.	Commander Agnew.
NOES
Acland, Sir Richard	Attlee, Rt. Hon. C. R.	Barton, C.
Adams, Richard (Balham)	Austin, H. Lewis	Bechervaise, A. E.
Albu, A. H.	Awbery, S. S.	Bellenger, Rt. Hon. F. J.
Allen, A. C. (Bosworth)	Ayrton Gould, Mrs. B.	Berry, H.
Allen, Scholefield (Crewe)	Bacon, Miss A.	Bing, G. H. C.
Alpass, J. H.	Baird, J.	Binns, J.
Anderson, A. (Motherwell)	Barnes, Rt. Hon. A. J.	Blackburn, A. R.
Attewell, H. C.	Barstow. P. G.	Blenkinsop, A.
Boardman, H.	Henderson, Joseph (Ardwick)	Oliver, G. H.
Bottomley, A. G.	Herbison, Miss M.	Orbach, M.
Bowden, H. W.	Hewitson, Capt. M.	Paling, Rt. Hon. Wilfred (Wentworth)
Braddock, T. (Mitcham)	Hobson, C. R.	Paling, Will T. (Dewsbury)
Brook, O. (Halifax)	Holman, P.	Palmer, A. M. F.
Broughton, Dr. A. D. D.	Holmes, H. E. (Hemsworth)	Pargiter, G. A.
Brown, T. J. (Ince)	Horabin, T. L.	Parker, J.
Bruce, Maj. D. W. T.	Houghton, Douglas	Parkin, B. T.
Burden, T. W.	Hubbard, T.	Paton, Mrs. F. (Rushcliffe)
Butler, H. W. (Hackney, S.)	Hudson, J. H. (Ealing, W.)	Paton, J. (Norwich)
Callaghan, James	Hughes, Emrys (S. Ayr)	Pearson, A.
Carmichael, James	Hughes, Hector (Aberdeen, N.)	Peart, T. F.
Chamberlain, R. A.	Hughes, H. D. (W'Iverh'pton, W.)	Perrins, W.
Champion, A. J.	Hynd, J. B. (Attercliffe)	Poole, Cecil (Lichfield)
Chater, D.	Irvine, A. J. (Liverpool)	Popplewell, E.
Chetwynd, G. R.	Irving, W. J. (Tottenham, N.)	Porter, E. (Warrington)
Cluse, W. S.	Isaacs, Rt. Hon. G. A.	Porter, G. (Leeds)
Cobb, F. A.	Janner, B.	Price, M. Philips
Cocks, F. S.	Jay, D. P. T.	Proctor, W. T.
Collick, P.	Jeger, G. (Winchester)	Pursey, Comdr. H.
Colman, Miss G. M.	Jeger, Dr. S. W. (St. Pancras, S.E.)	Randall, H. E.
Cooper, G.	Jenkins, R. H.	Ranger, J.
Corbet, Mrs. F. K. (Camb'well, N.W.)	Jones, Rt. Hon. A. C. (Shipley)	Rankin, J.
Corlett, Dr. J.	Jones, D. T. (Hartlepool)	Reeves, J.
Cove, W. G.	Jones, J. H. (Bolton)	Reid, T. (Swindon)
Crawley, A.	Keenan, W.	Rhodes, H.
Crossman, R. H. S.	Kenyon, C.	Ridealgh, Mrs. M.
Cullen, Mrs	Key, Rt. Hon. C. W.	Robens, A.
Daggar, G.	King, E. M.	Roberts, Goronwy (Caernarvonshire)
Daines, P.	Kinghorn, Sqn.-Ldr. E.	Robinson, Kenneth (St. Pancras, N.)
Dalton, Rt. Hon. H.	Kinley, J.	Rogers, G. H. R.
Davies, Edward (Burslem)	Lang, G.	Ross, William (Kilmarnock)
Davies, Ernest (Enfield)	Lavers, S.	Royle, C.
Davies, Harold (Leek)	Lee, F. (Hulme)	Sargood, R.
Deer, G.	Leonard, W.	Scollan, T.
de Freitas, Geoffrey	Lever, N. H.	Scott-Elliot, W.
Delargy, H. J.	Levy, B. W.	Segal, Dr. S.
Diamond, J.	Lewis, A. W. J. (Upton)	Shackleton, E. A. A.
Dodds, N. N.	Lewis, J. (Bolton)	Sharp, Granville
Donovan, T.	Lewis, T. (Southampton)	Shawcross, C. N. (Widnes)
Driberg, T. E. N.	Lindgren, G. S.	Shawcross, Rt. Hon. S.[...] H. (St. Helens)
Dugdale, J. (W. Bromwich)	Lipton, Lt.-Col. M.	Shurmer, P.
Dumpleton, C. W.	Logan, D. G.	Silkin, Rt. Hon. L.
Dye, S.	McAdam, W.	Silverman, J. (Erdington)
Edalman, M.	McAllister, G.	Silverman, S. S. (Nelson)
Edwards, John (Blackburn)	MeEntee, V. La T.	Simmons, C. J.
Edwards, Rt. Hon. N. (Caerphilly)	McGhee, H. G.	Skeffington, A. M.
Edwards, W. J. (Whitechapel)	Mack, J. D.	Skeffington-Lodge, T. C.
Evans, Albert (Islington, W.)	McKay, J. (Wallsend)	Skinnard, F. W.
Evans, John (Ogmore)	McKinlay, A. S.	Smith, C. (Colchester)
Ewart, R.	MacMillan, M. K. (Western Isles)	Smith, Ellis (Stoke)
Fairhurst, F.	Macpherson, T. (Romford)	Smith, H. N. (Nottingham, S.)
Farthing, W. J.	Mallalieu, E. L. (Brigg)	Smith, S. H. (Hull, S.W.)
Fernyhough, E.	Mann, Mrs. J.	Snow, J. W.
Field, Capt. W. J.	Manning, C. (Camberwell, N.)	Sorensen, R. W.
Follick, M.	Manning, Mrs. L. (Epping)	Sparks, J. A.
Forman, J. C.	Marquand, Rt. Hon. H. A.	Steele, T.
Fraser, T. (Hamilton)	Marshall, F. (Brightside)	Stewart, Michael (Fulham, E.)
Freeman, J. (Watford)	Mathers, Rt. Hon. George	Stokes, R. R.
Gaitskell, Rt. Hon. H. T. N.	Mayhew, C. P.	Strachey, Rt. Hon. J.
Ganley, Mrs. C. S.	Medland, H. M.	Strauss, Rt. Hon. G. R. (Lambeth)
Gibbins, J.	Mellish, R. J.	Stubbs, A. E.
Gilzean, A.	Middleton, Mrs. L.	Summerskill, Rt. Hon. Edith
Glanville, J. E. (Consett)	Mikardo, Ian	Sylvester, G. O.
Gooch, E. G.	Millington, Wing-Comdr. E. R.	Symonds, A. L.
Goodrich, H. E.	Mitchison, G. R.	Thomas, D. E. (Aberdare)
Gordon-Walker, P. C.	Moody, A. S.	Thomas, George (Cardiff)
Greenwood, A. W. J. (Heywood)	Morgan, Dr. H. B.	Thomas, I. O. (Wrekin)
Grey, C. F.	Morley, R.	Thomas, John R. (Dover)
Grierson, E.	Morris, Lt.-Col. H. (Sheffield, C.)	Thorneycroft, Harry (Clayton)
Griffiths, Rt. Hon. J. (Llanelly)	Morris, P. (Swansea, W.)	Thurtle, Ernest
Guest, Dr. L. Haden	Morrison, Rt. Hon. H. (Lewisham, E.)	Tiffany, S.
Gunter, R. J.	Mort, D. L.	Timmons, J.
Guy, W. H.	Moyle, A.	Tolley, L.
Haire, John E. (Wycombe)	Murray, J. D.	Tomlinson, Rt. Hon. G.
Hale, Leslie	Nally, W.	Turner-Samuels, M.
Hall, Rt. Hon. Glenvil	Naylor, T. E.	Viant, S. P.
Hamilton, Lieut.-Col. R.	Neal, H. (Claycross)	Walker, G. H.
Hannan, W. (Maryhill)	Nichol, Mrs. M. E. (Bradford, N.)	Wallace, G. D. (Chislehurst)
Hardman, D. R.	Nicholls, H. R. (Stratford)	Wallace, H. W. (Walthamstow, E.)
Hardy, E. A.	Noel-Baker, Capt. F. E. (Brentford)	Warbey, W. N.
Harrison, J.	Noel-Baker, Rt. Hon. P. J. (Derby)	Watkins, T. E.
Hastings, Dr. Somerville	Noel-Buxton, Lady	Weitzman, D.
Haworth, J.	O'Brien. T.	Wells, P. L. (Faversham)
Henderson, Rt. Won. A. (Kingswinford)	Oldfield, W. H.	Wells, W. T. (Walsall)

West, D. G.	Williams, J. L. (Kelvingrove)	Woods, G. S.
Wheatley, Rt. Hon. John (Edinb'gh, E.)	Williams, Rt. Hon. T. (Don Valley)	Wyatt, W.
While, H. (Derbyshire, N.E.)	Williams, W. T. (Hammersmith, S.)	Yates, V. F.
Wigg, George	Williams, W. R. (Heston)	Young, Sir R. (Newton)
Wilcock, Group-Capt. C. A. B.	Willis, E.	Younger, Hon. Kenneth
Wilkins, W. A.	Wills, Mrs. E. A.
Willey, F. T. (Sunderland)	Wilmot, Rt. Hon. J.	TELLERS FOR THE NOES:
Willey, O. G. (Cleveland)	Wise, Major F. J.	Mr. Whiteley and Mr. R. J. Taylor
Williams, D. J. (Neath)	Woodburn, Rt. Hon. A.

Main Question put, and agreed to.

Resolved:

"That this House takes note of the First Annual Report, Statement of Accounts and Statistics of the British Transport Commission for 1948."S

ADJOURNMENT

Resolved: "That this House do now adjourn."—[Mr. Popplewell.]

Adjourned accordingly at Eleven Minutes past Ten o'Clock.