HC Deb 10 February 1953 vol 511 cc293-306
Mr. Lennox-Boyd

I beg to move, in page 30, line 26, after "may," to insert: take either or both of the following courses, that is to say— (i) they may. I think I should have had something palatable to say to the hon. Lady the Member for Peckham (Mrs. Corbet) if she had been in her place. There is very great need for a headroom Clause to enable the Commission to meet a sudden and often unexpected increase in costs. Indeed, the Reports of the Commission show this from time to time, and in a recent Report they stress how their inability to meet a sudden increase in costs prevented them from putting money on one side to buy materials before the cost of the materials rose, or to take action which would have been to the advantage of the travelling or commercial public.

As hon. Members are aware, where there is no charges scheme—and there is no charges scheme in the case of merchandise—the Commission go to the Minister of Transport under Section 82 of the Act of 1947, and, if the Minister thinks it expedient, he authorises the Commission to make additional freight charges, but before doing so, of course, he approaches the permanent members of the Transport Tribunal and asks for their advice. This is what happened recently towards the close of last year.

Where there is a charges scheme, as in the case of passengers, Section 82 does not apply. The Minister has here no powers to help the Commission to meet sudden increases in costs. The Commission can only set about meeting their difficulties either by applying for the authorisation of a new scheme or an alteration in the existing scheme. It is through the exercise of their powers in that field that the Tribunal are now considering the increase in passenger fares.

I think that two things are generally conceded—the need for a headroom Clause and, at the same time, the fact that charges schemes should be most carefully, patiently and, indeed, exhaustively examined, whether they are passenger charges schemes or new proposals relating to freight. The practical difficulty that we are up against is how to reconcile these two things.

The purpose of Clause 22 as originally drawn is to give immediate aid, to be confirmed, amended or revoked later on after a lengthy inquiry. But, as the House will realise if they look at Clause 22 (2), in no case should the Amendment be such as would, in the opinion of the Tribunal, increase the revenue of the Commission from the charges to which the scheme relates by more than 10 per cent.

7.0 p.m.

The Tribunal could approve an increased revenue either in freight or in passengers or in both of 10 per cent. There is, of course, machinery for the lengthy public inquiry which would at the earliest date be set in motion. In earlier discussions on this Clause I was impressed by two arguments. One was about the special problem of London. This is a monopoly problem. The Transport Commission, through the London Transport Executive, have a monopoly of the passenger services. Outside, the Commission have to regulate their passenger charges by what the traffic can bear, and there are many other forms of competition. In London there is no competition. It has been represented that what I call the headroom Clause might operate unfairly in London.

Secondly, on the question of merchandise, though the Commission are limited to a 10 per cent. increase in revenue from freight charges under this headroom Clause, it is theoretically possible that they might put all the 10 per cent. revenue increase on one commodity, such as coal. It is highly unlikely that such a proposal would get the approval of the Transport Tribunal at the preliminary hearing, but it has been represented that, as it is theoretically possible, steps should be taken to prevent it.

That is the reason for the first of this series of Amendments, the general result of which I will outline. I believe that we have found a means which ought to give confidence and protection to the London passenger travelling public as to the consequences of this scheme. The revenue from all passenger increases would have to be limited to 10 per cent. It is theoretically possible that the Commission, who could only invoke this procedure to meet increases in costs, might put all their increases of costs for the whole British railway system—wages, fuel tax and whatever it might be—on to London fares alone. We are most anxious that this should neither be done nor thought to be done.

One purpose of our Amendment is to protect the London public against that possibility. We considered whether we could separate the different forms of travel in London—ordinary tickets, early morning tickets and workmen's tickets—and limit the increase to 10 per cent. in any one of these categories. But, as the hon. Member for Enfield, East (Mr. Ernest Davies) will know, the difficulty of having a 10 per cent. increase on a small 'bus fare would be such as to make that impossible. It might lead to the result that there could be no increase in the higher fares when a case had been made out.

Therefore, under our proposal, increases in revenue from the London Transport Executive services must not exceed so much of the relevant increase in the Commission's costs on wages, fuel tax or whatever it may be, as is properly apportionable to the provision of these services. This means that any increase in London up to the maximum of 10 per cent. can only result if the increase in costs, whatever they may be, in the London area alone justify that increase up to the maximum of 10 per cent.

The need for some provision of this kind has been strongly represented to me by a delegation of Conservative Members of Parliament who sit for London constituencies. I know that it is a view also held by a number of Members of the party opposite, not least by the hon. Lady the Member for Peckham. I hope that this will meet the fear that this Clause, which is generally recognised to be desirable and which the Commission have welcomed, should not be used or thought to be used or thought to be likely to be used to prejudice unduly the interests of the London travelling public.

I was also impressed by the argument that theoretically the whole of the 10 per cent. increase in revenue on freight might be put on a single commodity. It is inconceivable that the Tribunal would give approval to that, but so long as the theoretical condition exists—

Mr. Ernest Davies

Or that the Commission would propose it.

Mr. Lennox-Boyd

Or that the Commission would propose it, but so long as there is a theoretical possibility, it ought to be met.

There is also the possibility that a very large increase might be put on a certain form of merchandise and although later, after the inquiry, it might be considerably scaled down, the measure of the scaling down might be less than otherwise it would have been because of the height at which it was originally raised. In the case of merchandise it is possible to have a 10 per cent. increase in the charge for any one commodity. We could have a fraction of a penny per cwt., or whatever the relevant increase might be. We cannot do that fractionalizing, or whatever the proper word would be, in the case of passengers, so we have put down another Amendment, in line 28, which provides that in the case of an increase of revenue from freight, that increase should not be more than 10 per cent. in any maximum charge.

As for the application to the Tribunal, in the latter case, it does not appear necessary that there should now be this compulsory application to the Tribunal before the headroom Clause is invoked, but for increases in passenger fares, where there is a need to see that an improper proportion of the costs is not being attributed to London, we propose to retain the obligation to refer under this Clause to the Transport Tribunal.

I notice that my noble Friend the Member for Dorset. South (Viscount Hinchingbrooke) has proposed an Amendment, in line 39, at the end, to insert: Provided that in the case of merchandise traffic no such amendment shall result in an increase exceeding ten per centum in any maximum charge then in force. I should like to thank him for the assiduity with which he has pursued the arguments that are expressed in that Amendment, and to say that the Government have taken seriously to heart the representations that he and his colleagues have made. Because of this, I am happy to commend his proposal to the House.

Mr. Ernest Davies

I was surprised by the Minister's statement that he had been impressed by the arguments which had been produced on Clause 22, as a result of which he was making these Amendments, because—

Mr. Lennox-Boyd

Not in the House.

Mr. Davies

—as it happens, during our Committee stage we had no discussion whatever on Clause 22. It was prevented by the Guillotine.

Mr. Lennox-Boyd

But there was plenty on other stages of the Bill.

Mr. Davies

There has only been one other stage of the Bill and that was the Second Reading. I do not recall that this was one of the matters which received an outstanding amount of attention. However, we on this side of the House accepted on Second Reading the principle of what the Minister calls a headroom Clause.

As far as I understand the position, the Minister put two proposals before us. The first was that there shall be separate procedures for raising passenger fares and increasing goods charges. Secondly, there shall be protection for the passengers who make use of London Transport. Where the Commission desire to raise passenger fares they will have to apply to the Tribunal for a temporary scheme, and subsequently the Tribunal will hear the final scheme put forward by the Commission. On the other hand, the Commission, without going to the Tribunal, will be able to raise goods charges, subject to the qualifications which the Minister explained. Both increases must be applied so that they do not go above a certain maximum. I think that that is the position.

Does this mean that the Commission can obtain additional revenue either by putting up goods charges or by putting up passenger charges, or by both?

Mr. Lennox-Boyd

indicated assent.

Mr. Davies

If that is so, it occurs to us that perhaps there is lacking some protection against the Commission using one method to prejudice the other. There seems to be no provision whereby the Commission can be prevented from putting the burden on the travelling public and not on freight, or putting it on freight and not on passengers. In other words, there are no means whereby the Commission can be compelled to consider spreading the increased burden equally or proportionately over freight charges and passenger fares, and that does seem to be one of the weaknesses of this proposal.

Mr. Lennox-Boyd

We are only dealing here with a very temporary period, and when it comes to the point where the new application is put in, the long-term consideration is given by the Tribunal. Then. the justice of the case put forward by the Commission would come under searching review. I think the hon. Gentleman would agree that it is better to separate passenger fares and freight charges and give this flexibility to the Commission, who, after all, are bound in the case of freight, while in the monopoly field special protection is given under this Bill, and that is a fairly good protection.

Mr. Davies

Yes, but the unfortunate thing is that so often a temporary period becomes permanent, and we are still, under the 1947 Act, working on the transitional provisions with reference to the raising of freight charges. When the Tribunal, acting as a consultative committee, was recently considering freight charges, it had to decide on the Commission's proposals without taking into account the possibility of increasing passenger fares.

I would remind the Minister that last year, when the Commission applied to the Transport Tribunal for increased passenger fares and the Tribunal ruled on the scheme and assented to it, the Government then intervened and did not accept the recommendations of the Transport Tribunal, nor did they accept the view of the Central Consultative Committee, to which they were referred and which endorsed them. Whatever proposals the Minister puts forward, there is no guarantee that, for political purposes, the Government will not intervene again.

Although we accept the principle of the proposals which the Minister puts forward, we cannot feel that there is full protection for the public against a Government which yields to the temptation to intervene with a nationalised body, such as the Transport Commission, for political reasons, as they have done in the past. These Amendments provide no protection whatever against that. We deplore interference for political reasons when there is full machinery, as there is in this case, for a judicial body like the Transport Tribunal to give its ruling.

I want now to say a word or two about London Transport. The Minister has introduced this Amendment regarding London Transport to limit the extent to which charges in London can be raised to a fair proportion in regard to that increase that is to say, that the charges cannot be raised more than costs have gone up in the London area in proportion to the rise in costs over the whole of the Commission's undertaking. That would be all right if it were not for the fact that London Transport is already in an unfair and prejudiced position.

We who represent constituencies within the London Transport area have contended frequently, both in this House and outside, that London at the present time is being asked to contribute more than its fair share to the financial pool of the Transport Commission, and, if the position today is unfair to London, as we consider it is, then under this Amendment that position may well continue. Although this Amendment will mean that in future the increase in costs will only be made proportionately in London and in a fair proportion, the unfair position can still remain. I wish this Amendment could be framed in such a way as to apply after the position has been put right.

7.15 p.m.

I do not think there can be any dispute as to the unfair position in which the London travelling public find themselves. I do not want to go into the actual figures again because there are other hon. Members who wish to speak and the Guillotine falls in 15 minutes. Briefly, the position is that the Transport Commission, roughly, receives half its revenue from London and outside London in regard to passenger transport, but, on the last two occasions, the increase has been very much greater for London than for the rest of the country, and that is a position which must be put right.

Mr. Braithwaite

May I interrupt the hon. Gentleman because I am sure it would be helpful to the House? Do we understand from his remarks that he is supporting the action taken by some of my hon. Friends in putting down an Amendment to the British Transport Commission's Private Bill seeking an inquiry?

Mr. Davies

Certainly not. If the hon. Gentleman had read the terms of the Motion in regard to the Transport Commission's Private Bill, I am sure he himself would not support that. I hope the Minister will discourage and reject any suggested rejection of that Bill on the grounds proposed by his hon. Friends. Quite unjust accusations are levelled against the Transport Commission, but if I were to venture into a discussion of that Private Bill at this stage. I am sure it would be quite out of order.

What we have supported as far as London Transport is concerned is that there should be an inquiry into the financial position of the Transport Commission. We proposed that ourselves during previous debates in this House, because we consider that it should be seen to what extent the financial position of the Commission is such that there is an unfair burden placed on the travelling public of London as against the rest of the country. So far as London is concerned, the increase has always been proportionately far greater than in the country.

This Clause is necessary because of the great delay which has taken place between the application by the Commission to the Tribunal and the findings of the Tribunal and their implementation. The Transport Commission has been severely handicapped as a result, and this Clause does give them that flexibility to take temporary steps which should assist the Commission, but I would add that the position was made even worse by the action which the Government took on the last occasion, and of which I hope we shall not see a repetition when the Transport Tribunal has given its decision on the scheme which is now before it.

The Clause is also necessary because we fear very much that, as a result of this Bill and of the Government's action in forcing this Bill through the House, the Transport Commission will inevitably be placed in a situation which will require in to come forward with a demand for further increases in fares and charges. Not only will the amputation of certain of its services such as road haulage and the like place it in a more difficult position, but the prejudiced way in which the Bill has been framed, and the manner in which it is bound to be applied, will result in a deterioration in the financial position of the Transport Commission.

My final point is in regard to charges. The Minister referred to the fact that there was no charges scheme in the case of freight, and I would remind him that it is entirely due to the Government's action that there is no charges scheme in regard to freight. If there was a charges scheme for freight in operation today, along the lines which the Commission had claimed and which it had presented to industry, then the position of the Commission would be somewhat better than it is, and the relationship between the different forms of transport as regards charges would be very much improved. The Government, through their change of policy, held up the charges scheme, and it has not been proceeded with. While we are not fully satisfied with the way in which this Clause will be drafted as a result of this Amendment, we consider that it is necessary to give the Commission flexibility and because in a Bill of this type such a Clause cannot be omitted. Therefore, we do not propose to divide against it.

Mr. Henry Brooke (Hampstead)

As one of the London Conservative Members to whom my right hon. Friend was good enough to refer in his speech, I should like to thank him warmly for the valuable and ingenious method he has discovered for protecting the interests of Londoners. When I first saw Clause 22 in the Bill, I, as a London Member, became anxious. I was not criticising the idea of that headroom Clause, but I saw the possibility of a situation arising such as we have now, where the Commission is making an overall loss, with passenger traffic outside London decidedly unprofitable, with London passenger traffic slightly unprofitable, and with merchandise traffic throughout the country decidedly profitable.

To meet a loss like this arising from higher costs, the Commission might first look at the possibility of asking for an immediate increase in passenger fares outside London. But that would be dangerous because the economic rule of transport. that one cannot charge more than the traffic will bear, would come into play. Therefore, the Commission would be tempted to concentrate on raising fares in London, where alone it enjoys a monopoly position, and where the traffic can be got to bear practically anything that the Commission may put upon it in the way of higher fares, because people in London cannot avoid travelling to and from their work. That is where the Minister has helped us by his Amendments.

We in London do not accept the arguments often trotted out that London fares have risen less than fares elsewhere, or that fares per mile are lower in London than in the rest of the country. because those arguments when analysed are found to be based on a false comparison between road-cum-rail fares in London, on the one hand, and rail fares alone in the rest of the country. These things can only be judged rightly if the comparison is a direct one, based on road and rail together in each case.

The hon. Member for Enfield, East (Mr. Ernest Davies) and I are in agreement that in these charges schemes up till now London has been unfairly treated in general by the Commission. This is not the moment to deal with that vital point at length. But I would remind the hon. Gentleman that my right hon. Friend's Amendment safeguards Londoners from what was a really serious danger, the danger that the Commission might find means at private meetings of the Tribunal to get unjustified new charges imposed on the London travelling public, and that the London public and their representatives would not have any opportunity of arguing the case on their own behalf until the charges were already in force. Though there would be a public hearing after that, the Tribunal would by that time be in the invidious position of having to decide, through a public hearing, whether its conclusions reached in private had been wrong.

Against these dangers the Minister's Amendment goes far to protect us. This strikes me as the first recognition in any Transport Bill of the specially vulnerable position in which the London travelling public finds itself, and I am thankful that the Amendment secures that any increased charges imposed on London will either have to be directly related to London costs or justified at a public inquiry.

Mr. J. Hynd

Like other hon. Members on both sides, particularly those who are either resident in the London area or who know the special problems of London, I am sure that there will be a general welcome for the concessions made in this Amendment and a recognition of the desirability and, indeed, the necessity for ensuring not only that that flexibility is operated equitably as between goods and passenger transport, but also equitably as between the different parts of the country and the different people concerned. I do not think, for instance, that any charge would be made in my constituency of Sheffield to the effect that London was being given any special favour in the matter, because I am sure it is generally recognised throughout the country that the Londoner is in a special position vis-à-vis the conditions he has to face in regard to traffic.

It has been pointed out that people resident in London or working in the London area generally have to travel very long distances and, therefore, have to meet heavy weekly travel costs, in addition to losing the time involved in travelling, which is a very important factor. So far as railwaymen are concerned, I can assure the Minister that they will understand the position very well indeed because throughout the whole history of railway agreements covering conditions of employment it has always been laid down that there shall be a differential rate paid to people living in the London area. Indeed, there are three differential rates applying respectively to the London area, the urban areas and the rural areas.

The Londoner was always assumed to have to meet very much higher costs of living because of the fact that he lived in London or within the London area, and that therefore he must have a supplement to his earnings. That was done not because the cost of food, clothing or other items of that kind were necessarily higher in London than elsewhere, but because the Londoner has this very heavy transport charge to meet. That applies even to railwaymen with their specialised privilege in regard to travel.

On the last occasion when it was proposed to increase fares throughout the country and when for special political reasons the Government found it convenient to suspend that increase coming into force until after the municipal elections had been held, it was clearly emphasised that Londoners are in a very special position largely as a result of the fares they have to pay. I am speaking not only as one who knows the minds of the railwaymen in regard to this matter, but also as one who, though living in the London area, can claim, like many other hon. Members, to know the minds of the people living in the provincial towns and in the rural areas.

I am sure that there will be a great deal of understanding about this and a recognition that in a scheme of this kind, however deplorable the tragedies we may have to face as a result of this unhappy Measure, there must be a degree of flexibility throughout the country and as between the different sections of the community. Therefore, I do not think the Minister need anticipate any opposition from this side of the House to this particular Amendment.

Captain Ryder

I want to express my thanks to the Minister for being good enough to receive a deputation and for removing some of the misgivings which we had with regard to Clause 22, and also for moving this Amendment which, I feel, will protect Londoners against the possibilities which we foresaw. The only thing that I should like to add is, as I endeavoured to do earlier this evening in pointing out the disadvantages from which London suffered, to ask whether something similar could not be also applied to Clause 18, which is the more permanent Measure for increasing the charges?

It being Half-past Seven o'Clock, Mr. SPEAKER proceeded, pursuant to Orders, to put forthwith the Question already proposed from the Chair.

Question, "That those words be there inserted in the Bill," put, and agreed to.

Mr. SPEAKER then proceeded to put forthwith the Questions on Amendments, moved by a Member of the Government, of which notice had been given, to that part of the Bill to be concluded at Half-past Seven o'Clock.

Amendments made: In page 30, line 27, after "schemes," insert: (being schemes devoted exclusively or principally to determining the charges to be made for the carriage of passengers). In line 28, at end, insert: (ii) they may, by notice published in the London and Edinburgh Gazettes and in such other manner as may appear to them best adapted for informing persons affected, declare that all or any of the maximum charges fixed by any of the charges schemes (not being such charges schemes as aforesaid) are to be treated, as from a date specified in the notice, as increased by such percentage as may be so specified, not being more than ten per cent.; and where such a notice is published, the schemes shall be deemed to be amended accordingly. In line 37, after "opinion," insert: either— (a) In line 39, at end, insert: or (b) will together increase the revenue of the Commission from the passenger trans- port services provided at the passing of this Act by the London Transport Executive by more than so much of the relevant increase in the costs of the Commission as is properly apportionable to the provision of those services. In page 31, line 4, leave out "and," and insert: (5) Where the Transport Tribunal make an order under subsection (2) of this section or the Commission publish a notice under subsection (1) of this section, the Commission shall. In line 24, after "section," insert: or deemed to be amended by the relevant notice under subsection (1) of this section. In line 27, after "subsection (2)," insert: or deemed to be made by the relevant notice under the said subsection (1). —[Mr. Lennox-Boyd.]