HC Deb 27 April 1950 vol 474 cc1144-59
The Minister of Transport (Mr. Barnes)

I am now able to announce the decision on the British Transport Commission's application for authority to make certain increases in charges. I referred the matter for advice to the Permanent Members of the Transport Tribunal acting as a consultative committee, and their advice was that I should authorise the Commission to make the additional charges. I attach the greatest importance to advice from such an experienced body, given after a full public inquiry. Nevertheless, in view of the great importance of the matter. I have considered, with my colleagues, not only the Committee's advice but also wider aspects which could not be covered in a public inquiry.

The decision now reached is that I shall make Regulations under Section 82 of the Transport Act authorising the Commission to make the increases recommended by the Committee. The increases will come into operation on Monday, 15th May. I am circulating with the OFFICIAL REPORT a fuller statement of some of the facts which have led to my decision but the position may be outlined as follows.

The amount involved in the freight increases is £27 million, which is one-half of 1 per cent. of the output of manufactures. Tentative estimates show that the resulting increases in certain basic prices range from about 1 to 21 per cent. The effect on prices of food and clothing will not be significant. After the increase, railway freights over-all will stand about 80 per cent. above the 1938 figure, an increase substantially lower than the increases in other basic prices.

The railways' costs, on the other hand, are about 125 per cent. above pre-war. Staff costs are nearly two-thirds of the total, and wages have doubled. Coal is costing the railways nearly three times pre-war, while the increase in supplies and services ranges from 80 per cent. above pre-war for iron and steel to four-and-a-half times pre-war for timber, sleepers and crossings. The numbers of staff are 620,000 compared with 550,000 in 1938, an increase accounted for by the shorter working week, longer holidays, improved conditions, and the need to make up arrears of maintenance. In spite of some rise in costs during the last few years, over-all expenditure has been kept practically steady.

On the revenue side, while receipts from goods traffic have been steady, passenger receipts, on a comparable basis, have fallen since 1947 by £26 million, a substantial part of this being due to the falling off in Government passenger traffic. The rise in the price of transport services is, therefore, much below the increase in costs compared with pre-war. The improved efficiency which accounts for this achievement can best be seen in the increase in the number of ton-miles moved per engine hour, from 461 in 1938 to 542 in 1948.

I am satisfied, therefore, that there is no means of meeting the financial problem now facing the railways by any rapid and substantial further increases in efficiency. The economies to be achieved by integration of transport services must obviously be a gradual and long-term matter. Any attempt to meet the present situation by a subsidy payment would add to Government expenditure, which everyone is anxious to reduce.

The principle embodied in the Transport Act is that the Commission should pay its way. The expedient of a subsidy could be justified, if at all, only if there were reasonable expectation that the Commission's budget might shortly be balanced on the basis of existing charges and this, I am satisfied, is not the case. The increased level of charges now agreed upon is substantially below the general rise in prices, and no serious effect upon the cost of living is foreseen.

Mr. Eden

I am sure that the right hon. Gentleman the Leader of the House will realise that a statement of this importance, together with a number of additional statements which will be available in the Vote Office, will have to be studied before the House can usefully comment on them; but I must ask the Leader of the House now, in view of the seriousness of the situation, which I am bound to say I think the statement somewhat belittles, and the seriousness of the consequences of this decision, whether an early opportunity can be given for a Debate on the subject.

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

I am not sure. I think that the right hon. Gentleman had better study it. There has been a Debate on Transport recently, and I am not sure that a further Debate is essential. I have no doubt that if the Opposition have views about it, they can raise it through the usual channels, but I cannot give an undertaking.

Mr. Eden

I do not know why the right hon. Gentleman should speak in that tone. The Government have been in possession of this report from the Transport Commission since 16th February. We have repeatedly asked for the Government's views, and we have not received them. At long last, when I asked perfectly courteously for a debate, I should have thought that I was asking for something to which we were fully entitled.

Mr. Morrison

If it is a question of a debate on Supply, certainly that can be arranged with the greatest ease; it is only for the right hon. Gentleman to demand. But if it is a question of the Government providing time, I am not going to give an affirmative answer this afternoon. It can be discussed. After all, there is a Supply day on Monday, and it could be taken then.

Mr. Eden

Will the right hon. Gentleman bear in mind that he gave his answer after the Supply Days for next week had been arranged? If he wanted us to arrange a Supply Day for next week to discuss this matter it would have been courteous to tell us yesterday that the statement was to be made today.

Mr. Morrison

There is no reason for the right hon. Gentleman, who is usually very courteous, to lose his temper. From what he says anyone would think that the Government were seeking facilities for a debate. We are not; it is the Opposition. After all, this is a decision after a hearing by a judicial tribunal, and I am not going to attempt—[Interruption]. Excuse me, but I am not going to attempt to say that after the approval of a recommendation of a judicial tribunal by a Minister, Parliamentary Debate must necessarily follow. It can be discussed through the usual channels. All I can say is that I am giving no undertaking of Government time; but it can be talked about. If the Opposition wish to devote a Supply Day to this, it is within their power to do so.

Mr. Eden

Is the right hon. Gentleman saying that on a matter of this kind, which is obviously of the greatest interest to industry and to the life of this country, he cannot give time for a debate except out of the Opposition's time? That is quite unreasonable.

Mr. Morrison

It is not unreasonable; it all depends on one's sense of relativity as to which there is plenty of room for difference of opinion. I do not think that on the statement of my right hon. Friend, when it is studied, there is a case for the Government giving special facilities. I am not adverse to it being discussed through the usual channels, but I cannot give an undertaking. It seems to be one of those matters not unreasonable to be discussed in committee of Supply if the Opposition wish.

Major Sir David Maxwell Fyfe

In view of the statement of the right hon. Gentleman that the amount of the increase was to be £27 million in a year—if I got the figure correctly—and that the progression of loss of the Transport Commission has been £5 million, £20 million and approximately £30 million, it is therefore obvious that the £27 million will not fill the gap for this year and will do nothing to the back-log; and will he not consider even an informal inquiry, such as Sir Robert Burrows held in regard to the National Coal Board, to consider whether the statement that he made that there is no rapid and substantial economy to be made is really the last word? I ask the right hon. Gentleman to consider on this vital problem whether he ought to conclude that no substantial and rapid economy can be made without further examination, if possible by some impartial source.

Mr. Barnes

I should make it clear that the statement I made does not refer to a permanent situation. As the right hon. and learned Gentleman is aware, what we are dealing with here is a period in between or until the operation of the charges scheme of the British Transport Commission. This application and the Tribunal's consideration were not for the purpose of liquidating the whole of the losses that may occur between now and the end of 1952, but to avoid their becoming so substantial that they would seriously upset the consideration of any proper charges scheme. I do not think that, after the tribunal which was established under the Transport Act and the preliminary arrangements which we made in Committee when considering that Act to use this tribunal for any interim problem that arose, any further inquiry into this matter can affect these figures or these problems. In my view it would just introduce further confusion.

Sir D. Maxwell Fyfe

Will not the right hon. Gentleman realise that the charges scheme cannot have any effect for at least five years and possibly longer, and that the tribunal were only inquiring into the limited point of whether there should be this increase to deal with this special situation? Can he not hold out any hope that there will be an inquiry into increased efficiency and economy? I ask him not to close his mind to that because it is of vital importance to everyone.

Mr. Barnes

I can assure the right hon. and learned Gentleman that my mind is not closed against any steps that can be taken to increase the efficiency of the undertakings of the British Transport Commission. That is steadily going on. Indeed, investigations have been taking place, and I think that when hon. Members see some of these figures they will appreciate that already substantial steps are being taken in that direction, which will be steadily pursued. I want to emphasise that these charges, at the moment, are not to liquidate the whole of the losses but to prevent any further accumulation, and I think that they will go a very long way to avoiding that end.

Mr. Churchill

May I ask the Lord President of the Council on the question of debate in connection with this matter whether he will consider the following: We are now informed or given notice, that on 15th May a new tax of £27 million a year will be put upon the public and upon industry by raising the rates of freights on the railways—£27 million a year which is almost half the tax we voted on yesterday. Is there any reason why the House of Commons should not have an opportunity in Government time and on Government responsibility of debating so heavy an additional charge on the life and activity of the nation?

Mr. Morrison

These are commercial concerns.

Mr. Churchill

They were.

Mr. Morrison

That, if I may say so, is ridiculously partisan. They really are commercial concerns. If the railways had not been nationalised, their financial position today would have been much worse than it is. That comment of the right hon. Gentleman is typically partisan, and not exceptionally well-informed. Therefore, there is really no obligation on the Government in the course of this adjustment, that would have had to take place whether the railways were privately or publicly owned—

Mr. Churchill

It is the taxpayer's money.

Mr. Morrison

Excuse me, but it is not the taxpayer's money. The degree of ignorance about this matter is so appalling that I am almost tempted to offer to clear up the ignorance of Members opposite. I have already said that if the Opposition have suggestions to make they can be discussed through the usual channels, but I am not going to commit myself to giving Government time for a Debate. There is Supply time, and there is the further facility—do not let it be thought that we have been mean about facilities—given not only to the Opposition but to the House, and that is the promise I gave of three days for debating the conduct of the socialised industries, when this matter could be discussed. I think, therefore, that this pressure is quite unreasonable.

Mr. Boyd-Carpenter

Can the Minister of Transport say whether the Regulations, embodying this decision will have to be laid on the Table, and if so when, and are they subject either to the negative or affirmative procedure?

Mr. Barnes

No, Sir. This does not require any Regulations being brought before the House. The Minister was. empowered under the Transport Act to give effect to any decisions of the Tribunal.

Mr. Churchill

Does this not constitute a very great abrogation of Parliamentary liberties and of the duty of the House of Commons to deal with burdens laid upon the public and money extracted from them? Here is the right hon. Gentleman. imposing a tax of £27 million in a year. [HON. MEMBERS: " It is not a tax." It is in all except the name a tax on the public, and the right hon. Gentleman does not even feel that the Government have the responsibility to give some opportunity for discussing it.

Mr. Morrison

I have already covered this propaganda point. What is of interest is that when private enterprise put up the price of steel, which was a matter of great significance to the whole of British industry, there was no demand on the part of the Opposition for a Debate.

Mr. Churchill

And if the steel shareholders lost their money they had no means of coming to the Government and the House of Commons to recoup themselves.

Mr. Morrison

That is typical bias.

Mr. Churchill

Everything is bias. except what the right hon. Gentleman says.

Mr. Morrison

When the steel people put up their prices that is nothing, but when the railways have to put up their charges, it suddenly becomes a tax.

Mr. Speaker

This almost reminds me of the early days of the last Parliament.

Mr. S. Silverman

Can my right hon. Friend say, in view of what the Leader of the Opposition asked just now, what opportunity the House of Commons would have had to consider increases in railway rates awarded by a tribunal before the nationalisation of the railways?

Mr. Churchill

Before that question is answered, may I ask what redress railway shareholders would have had if, owing to the misfortunes of the enterprise in which their money was invested, their dividends were reduced?

Mr. Barnes

In answer to my hon. Friend's point, the procedure in the past was that the railways had the right under the 1921 Act which was passed by a Conservative Government to apply to the Railway Rates Tribunal which had the authority to give effect to any increased charges for the purpose of enabling the railway companies to meet their obligations both in regard to expenses and interest to their shareholders. That took effect irrespective of any decision by Parliament. The Transport Tribunal is the old Railway Rates Tribunal; it merely has a different name. In reply to the right hon. Gentleman, the railway shareholders were protected by the decision of the Railway Rates Tribunal, which always took into consideration their interest. Under the Transport Act, they are now guaranteed their interest by the State. As I have pointed out, these increased charges are roughly the same amount as that which the Transport Commission has to pay to the railway shareholders for their interest.

Mr. Churchill

Was this arrangement made by a Conservative Government or by the Socialist Government?

Mr. Erroll

Has the Minister any estimate of the further loss of rail traffic which must inevitably result from these increased charges?

Mr. Barnes

Yes, Sir. We have allowed for that in the figure I gave of £27 million. We do not anticipate that there will be any considerable loss in traffic, but an allowance has been made for any loss in freights in the figure of £27 million.

Mr. A. Fenner Brockway

May I ask whether, with these increased charges, there is a hope of an increase in wages for the low paid workers in the railway service?

Mr. Barnes

That is not a matter for me to decide. The point is that if these losses were allowed to accumulate it would make that problem even more difficult to solve.

Mr. Boothby

Does the Minister, and particularly the Secretary of State for Scotland who is sitting on his left, realise that this announcement will reduce the whole of the North of Scotland to the condition of a distressed area?

Mr. Fernyhough

In view of what has been said today by the Opposition, can my right hon. Friend say why it is that at the General Election the Opposition said in " This is the Road " that they would not de-nationalise the railways?

Mr. Speaker

I do not think the Minister can answer for the Opposition.

Mr. John MacLeod

Does the Minister realise that some concession must be made in the case of the Highlands, as this is virtually a tax on the people who live in that part of Scotland? Does he further realise that it is useless for the Government to talk of any further Highland developments if they are to increase charges in this manner?

Mr. Barnes

I should like to take this opportunity of correcting an answer I gave to the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). I find that the regulations are subject to the negative procedure.

Mr. H. Strauss

I have two questions to put to the right hon. Gentleman. In view of the evidence given before the Tribunal by the nationalised industries, has he made any estimate of what will be the increase in the price of coal? My second question to him is this. When he concluded his statement with the observation that no serious increase in the cost of living is foreseen, does he mean that when it takes places the Government will express surprise?

Mr. Barnes

With reference to the increased price of coal, if it is decided to impose this additional charge—which I cannot say—obviously it will vary in different parts of the country. In some parts it will be negligible; in other parts far distant from the coalfields it may be considerable, running into two, three or four shillings. However I am not able to say to what it will actually work out in practice.

Mrs. Middleton

Is it not a fact that all this bother this afternoon might have been avoided if the advice of the right hon. Gentleman the Member for Woodford (Mr. Churchill) had been taken at the time when he advocatcd the nationalisation of the railways in the early part of the century?

Mr. Churchill

May I assure the right hon. Gentleman that it was from no prejudice on my part—on the contrary, I had a predisposition in that direction—it was from no prejudice that I opposed the nationalisation of railways at about the most unsuitable time that the State could have embarked upon such a step.

Lieut.-Commander Gurney Braithwaite

Now that the Minister has informed us that the Regulations are subject to a negative resolution and can be prayed against, would he kindly inform the House when the Regulation will be laid?

Mr. Barnes

The increases will come into operation on 15th May, and so obviously there ought to be an opportunity before then.

Mr. Churchill

Let us pray.

Sir Herbert Williams

As this matter will now be the subject of a Prayer, which normally is taken at the end of Government Business, and as a large number of Members desire to speak on that Prayer, would the Leader of the House be prepared to make it a daylight Prayer and not a midnight Prayer?

Mr. Morrison

From my own observations I have always found that the hon. Member for Croydon, East (Sir H. Williams) wishes to speak on almost any Prayer that comes up in the House.

Sir H. Williams


Mr. Peter Thorneycroft

Will the Leader of the House agree from what has been going on, that this is a very difficult subject to deal with on the basis of Quesand answer, and probably will be equally difficult in the case of a Prayer? It does raise a matter which widely affects all walks of life throughout the country, and would he agree that whatever point has been raised so far, the Minister of Transport has always replied that he could not give an answer, because it was under consideration by the Cabinet? Does he not further agree that none of our points either on Supply days or at any time, has received an answer, and is it not reasonable to suggest that time should be given by the Government for a proper and full discussion on a matter of really great importance?

Mr. Morrison

It is entirely within the hands of the Opposition. [HON. MEMBERS: " No."] Well it is, because they have two opportunities whereby they can have a full day's Debate on it. [HON. MEMBERS: " Next week."] Next week if the Opposition like. There can be a readjustment of Business if it is wanted. It could also be debated the week after. The Opposition have two opportunities, either on a Supply day or on one of the three days for Debates on socialised industries. The Government have been forthcoming and reasonable in these matters, but if the House of Commons is going to enter into every 'individual and detail change that happens in the world of industry, and claim a right to have a day for a Debate, then we shall get into difficulties.

Viscount Hinchingbrooke

Does the right hon. Gentleman consider negligible an advance of 3s. on coal in London and ls. 6d. throughout the country as a whole for an ordinary household consumer, and did he take this very great extra burden on housewives fully into account before he announced these increased charges?

Mr. Barnes

It is not for me to say what increase will be imposed as a result of these increased charges. I am entitled to point out, however, that for over two years the railways have carried the increased charges put on elsewhere, and they did not immediately apply any increase on their own charges. It is difficult to understand why the railways are expected to take up, in the ordinary way, all the normal increased charges that come through from industry, and when they endeavour to adjust their charge to a rising price level everybody considers he is entitled to oppose it.

Mr. Peter Roberts

On a point of Order. I beg to ask leave to move the Adjournment of the House for the purpose of discussing a matter of urgent public importance, namely, " The proposed increases of rail charges."

Mr. Speaker

That is not the right way to do it. If the hon. Member wants to move the Adjournment of the House under Rule 9 he must bring the Motion up to the Table, so that I can read it and see if it is in Order or not. I can save the time of the House by saying that it is perfectly obvious that there has got to be a discussion on these Orders, which have to be produced in the House. I have to take into account whether there is a reasonable opportunity of discussing these Orders or not. To tell the honest truth, I do not know 'whether it is a negative Order or an affirmative Order, and if so that will be a very different question for the House.

Mr. Sydney Silverman

On a point of Order. Whether it is a negative Prayer or an affirmative Order, it seems to be clear that the Act provides for the House to give or withhold approval to the announcement my right hon. Friend has made. In these circumstances would it be in Order for the House to take any other opportunity of discussing exactly the same matter, since a discussion, which would cover the same matter, would not preclude a Member from putting down a Prayer or the necessity for the Resolution and the Rule against repetition might be a great embarrassment to him?

Mr. Speaker

That is complicated. if there were a matter before the House, I do not see how one could put down a Motion to talk about the same subject because that would rule it out. However, I should like to consider the proposition which the hon. Member has made.

Mr. Lennox-Boyd

Could we have an assurance that the Regulations will be printed and available to hon. Members in plenty of time before they come into operation on the 15th May?

Mr. Barnes

Yes, Sir, I think one can give that assurance.

Mr. Woodburn

On a point of Order. In view of the fact that Parliament set up machinery under which the railways can recover their outgoings by the decision of this Tribunal, and that a rejection of this Prayer would be tantamount to imposing a charge of £27 million of subsidy for the railways, would it be in order for the Opposition to reject the Prayer, which imposes a subsidy of £27 million?

Mr. Speaker

That is a matter for the Opposition and not a question of order for this House.

Mr. Spence

Can the Minister tell the House whether the rise in rail charges was simply a flat rate percentage increase over all charges, or whether there is a differential to give a lower rate for the longer haul?

Mr. Barnes

The hon. Gentleman will recollect that the organisations that presented their case before the Tribunal pressed in many instances for differential rates, and the Tribunal rejected it. Its recommendation to me was a flat increase of 16i-rds per cent., and that is the statement I have made today.

Following is the statement referred to by the Minister of Transport:

The increased powers of charge sought by the Commission were, in effect:

Railway Charges

A general increase of 16; per cent. in the present charges applicable to freight train traffic and to parcels, other merchandise and livestock by passenger train or other similar service.

Canal Charges

A general increase of 16; per cent. in, present charges.

Dock Charges

  1. (a) Dues on coastwise vessels and cargoes—the present general increase of 25 per cent. over charges in force on 31st August, 1939, to be raised to 50 per cent.:
  2. (b) all other rates, dues and charges—the present general increase of 75 per cent. over charges in force on that date to be raised to 100 per cent.

The Permanent Members of the Transport Tribunal, acting as a Consultative Committee, held a public enquiry, lasting 13 days, at which they considered the representations made by the Commission and no less than 28 representative bodies covering a wide field of trade and industry (including nationalised industries) and shipping.

In their Reports, the Committee summarise the evidence and arguments, give their conclusions upon the various issues, and recommend the making of Regulations authorising the increases proposed subject to a small modification in regard to dock charges. This modification is that the benefit of the lower rate of increase in respect of coastwise vessels and cargoes should apply to traffic with the Irish Republic.

Over-all railway costs are approximately 125 per cent. over pre-war. They are made up as follows:

Per cent.
Staff 62
Fuel and Power 13
Supplies and Services 21
Depreciation 4
Total 100

A large part of the costs is therefore staff. Weekly earnings have approximately doubled since 1938, as is shown from the following information given in paragraph 100 of the Commission's Report for 1948. This information relates to all railways; the increase on British Railways has been rather greater than that on the railways of London Transport.

Weekly Earnings
1938 1948
s. d. s. d.
Clerical, Supervisory, etc. 93 10 155 3
Conciliation Staff 68 7 135 0
Shop and Artisan Staff 71 11 146 6

The cost to the railways of coal per ton in 1948 was 175 per cent. above prewar and there have been further increases in 1949.

The Commission's Report for 1948 also gives the following increases in the price of supplies and services:

Increase over pre-war Per cent.
Tyres.(per car mile) 155
Timber, general 225
Timber, sleepers and crossings 344
Paints and colours 254
Oil, lubricating 215
Metals, non-ferrous 148
Iron and steel 80

In spite of increase in costs over the last year or two and an improvement in passenger facilities, total expenses have kept practically steady. The figures are:

£ million
1948 311
1949 (estimate) 312
1950 (estimate) 314

Numbers of staff are about 620,000 compared with 550,000 in 1938. In justification there are four reasons:

  1. (a) The 44-hour week.
  2. (b) Increased holidays.
  3. (c) Improved conditions.
  4. (d) Arrears of maintenance, etc.,

which have to be caught up.

Changes in total passenger and freight receipts are as follows:

1 million pound
1947 (actual, adjusted to reflect present level of charges) 349
1948 (actual) 336
1949 (estimate) 324
1950 (estimate) 319

Receipts from freight train traffic are fairly steady (£183—£182—£178—£180 million) and so are receipts from goods carried by passenger train (£29 million each year). Receipts from passengers, however, show a sharp fall of £26 million in all (£133—£123—£114—£107 million).

Both fares and freights were increased in 1947, when the position was still obscured by abnormal Government (including Forces) traffic. It has been suggested that the fall in receipts since 1947 has been due to the increases then made. In fact, however, much of it appears to have been due to a falling off in Government traffic, the figures for which are:

£ million
1947 (broad estimate reflecting present level of charges) 54 (including passenger 23)
1948 (actual) 40 (including passenger 14)
1949 (estimate) 34 (including passenger 10)
1950 (estimate) 33 (including passenger 9)

The keeping of the rise in the price of transport services so much below the increase in costs, compared with pre-war, could not have been achieved except by improved efficiency.

The main statistics are:

Average Train Average Wagon Empty Wagon Ton Miles Moved Per Engine Hour
Tons Tons Per cent.
1938 125 5.55 33 461
1947 159 6.42 27 516
1948 156 6.48 27 542

The principal changes in the economics of transport since 1938 are summarised in paragraph 118 of the 1948 Report of the Commission and, as far as they affect railways, are as follows:—

  1. (a) Weekly earnings per man are about double and prices of supplies and services are more than double.
  2. (b) Hours of work are less.
  3. (c) There are greatly improved ratios between train mileages and hours on the one hand and ton miles or passenger miles carried on the other.
  4. (This is expressed in the very important statistics given above of the ton miles moved per engine hour.)
  5. (d) These improved ratios are due on the freight side to the improvement in wagon capacity and loading, to the decrease in empty wagons hauled, to the longer hauls, to the bigger trains and decreased shunting, partially offset by a slight decrease of the rate of movement.
  6. (e)On the passenger side the improved ratios are due to a reduction in unremunerative services and to a much heavier loading of trains, offset in part by a slightly reduced rate of movement on certain services.

The process of integration of transport gives rise to many novel and difficult problems. It involves the procedure, laid down in the Act, of preparing Charges Schemes which must be approved by the Tribunal. It can only be done gradually and it must be a long-term process. It is not practicable at this stage to estimate the order of magnitude of the economies to which it will eventually lead.