BRITISH RAILWAYS

HC Deb 03 February 1955 vol 536 cc1280-407

3.50 p.m.

The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Harold Watkinson)

I beg to move, That this House welcomes the settlement of the recent wages dispute and believes that the steps proposed by the British Transport Commission will, with the co-operation of all concerned, lead to the establishment of a modern and economic railway system for the benefit both of industry and of the travelling public. This Motion recognises that, as sometimes happens in the affairs of a great industry, a number of different threads of policy have suddenly come together to form a new pattern for the future. I will give the House some of the most important.

First, we had the settlement of the recent wages dispute, a settlement that owed so much to the skill and patience of my right hon. and learned Friend, and I know that I carry the whole House with me when I say how much we all regret the reason for his absence, which, of course, is the reason why I am at this Box today.

Secondly, there was the rapid implementation of the British Transport Commission of its undertakings, a settlement, now, I hope, nearly complete, that must surely remove any bar against full and complete co-operation by the railway unions with the British Transport Commission. Thirdly, we had the final Report of the Court of Inquiry, upon which I propose to make some comments. Then we have had the publication by the Commission of its modernisation plan, and, finally, the assumption of their responsibility by the railway area boards and the introduction of a new management structure for the whole industry.

All these far-reaching developments fall within the scope of our Motion. My right hon. Friends and I have, therefore, tried to see how we can best give as much information and explanation as possible to the House on these diverse subjects. I hope that it will be most convenient for hon. Members if I deal as shortly as possible with the Court of Inquiry Report and with the proposals of the British Transport Commission to improve human relations and efficiency generally.

My right hon. Friend the Chancellor of the Exchequer proposes to intervene at a later stage to deal with the financial implications, and my right hon. Friend the Minister of Transport will wind up the debate. This, I should have thought, was quite enough ground to cover for one day, but I gather that the Opposition wants to discuss a quite different matter. It is—

Mr. Herbert Morrison (Lewisham, South)

I gather that three Ministers are to speak in this debate, which is a little unusual. Can the hon. Gentleman say when the Chancellor of the Exchequer will intervene?

Mr. Watkinson

No, but I would say for the benefit of any hon. Members who wish to catch your eye, Mr. Speaker, that I do not propose to take very much time. Therefore, the House will not suffer by reason of there being three Front Bench speakers. As to when my right hon. Friend the Chancellor of the Exchequer will intervene, he will no doubt intervene at a later stage at the convenience of the House.

Mr. Morrison

I am sorry to interrupt the hon. Gentleman, but, surely, this is a most extraordinary procedure. Here is a Government Motion following upon important events on which the House wants to know the Government case, including the financial consequences and the financial future. Surely it is right that the Chancellor of the Exchequer, or at any rate the Minister of Transport, should have opened the debate, but now a Parliamentary Secretary is put up who says that he will have very little to say. How can a debate be conducted on that basis?

Mr. Watkinson

I did not say that I shall have little to say; I said that I would try to be courteous to the House, and say it as quickly as possible. Why I am taking the first place in the debate—perhaps the right hon. Member will be kind enough to listen to me; I had the courtesy to listen to him-is because I am dealing with the matters which come first in the logical sequence of events, and which are in the Motion before the House.

As I have said, I propose to deal with the human relations and with the background of things which are essential to the understanding of the full picture. I quite realise that the right hon. Gentle- man does not understand human relations. If he did—[HON. MEMBERS: "Withdraw."] I am not trying to be rude. If the right hon. Gentleman does understand them, then I shall be happy to withdraw, but, in that case, he really cannot object to my opening the debate. I should be pleased to give way to the right hon. Gentleman.

Mr. Morrison

I do not know what the hon. Gentleman means.

Mr. Watkinson

The right hon. Gentleman says that he does not know what I mean. Perhaps I may now be allowed to proceed with my arguments.

It is a matter of regret to me, as I think it will be to the country as a whole, that the Opposition, in its Amendment, deliberately turns away from the practical problems of this great industry. It clearly believes that the railways cannot stand on their own feet, that they must be subsidised by other forms of transport. [HON. MEMBERS: "No."] I want to say, to make our position quite plain, that that is not our view. We believe that the railway industry has it within its own power to get out of deficit and into profitable operation, and that it can do it by its own efforts. In other words, we want to see this nationalised industry pay its own way without outside help, and I am surprised that hon. Members opposite have so little faith in their own doctrine.

It has been my lot to devote a great deal of time over the past 14 months to an examination of the problems of this industry, and I have had many discussions with those who represent both its management and its workers. One cannot escape the conviction that they are all, to some extent, the prisoners of the system, a system which fails in two major directions.

First, a high enough level of efficiency has not yet been achieved to enable the Commission to pay out of revenue wages that would have restored the position and prestige of railwaymen, who contain among them some of the cream of our industrial workers. Secondly, the elaborate structure laid down in the original nationalisation plan, which should have brought closer and better human relations, has so far failed to do so.

It may be said that this state of affairs dates back a long way before nationalisation. I am not trying to apportion blame, but it is right for me to say to the House—to quote the Court of Inquiry—that a very unhappy position exists in some aspects of the railways, that it is not denied that there is room for further economies and improvements, and that many problems yet remain to be solved. Indeed, there are still two wages issues outstanding, apart from other problems, but I hope that moderation and good sense will get these quickly out of the way.

The Opposition obviously wants, in some way, to divert the House from our Motion, but I say quite sincerely to the right hon. Gentleman opposite that we believe that the right way to deal with the problems in front of us is to do all in our power to help the Transport Commission and the railway unions to put their own house in order if they have the will and the ability to do so. I think I would carry the right hon. Gentleman with me in that.

The House is, of course, aware that our recent difficulties on the railways are not the first to occur since the railways were nationalised. A serious situation arose early in 1951 when there were strikes and go-slow action. The then Minister, the right hon. Member for Ebbw Vale (Mr. Bevan), intervened before a settlement was reached.

During 1951 and 1952, claims for increased wages were dealt with by the industry's own machinery. In July, 1953, a further claim was lodged which led up to the crisis at Christmas that year and to the long-drawn-out negotiations in 1954, which ended with the issuing of strike notices by the N.U.R. last December.

This, therefore, was the position when my right hon. and learned Friend and I met the Transport Commission and the National Union of Railwaymen on 23rd December last year. It was very quickly obvious that there was no room for conciliation, or, indeed, for bringing the parties together when their respective points of view were, from the Transport Commission, that it could not afford to pay more than had been agreed in October, and, from the National Union of Railwaymen, that the price for withdrawing strike notices was a firm offer of a substantial wage increase. In other words, the fruits of negotiation were demanded under the threat of a strike before the negotiations had indeed begun.

That was a demand to which no Government that wished to preserve our negotiating machinery could possibly agree. As to the reasons that prompted my right hon. and learned Friend to set up a Court of Inquiry, I would only say that I am quite sure that we should have been rightly blamed had we not taken this step to make the full facts known to the country in face of the industrial disaster that was threatening us all. On 5th January, my right hon. and learned Friend received this much publicised document, the interim Report of the Court of Inquiry.

Two things seem to have led to misunderstanding so far as this Report is concerned. First, the Report was, of necessity, based solely on the evidence submitted to the Court of Inquiry by the Transport Commission and the three railway unions. I want to make it plain that they had no time, or facilities, to inquire further into the industry. Their judgment was, therefore, based entirely on the evidence submitted to the Court of Inquiry.

Even more important is the fact that this interim Report was produced at great speed, solely for the purpose of seeing whether its findings would provide some basis on which negotiations could commence. It was for that purpose that the conclusions in the interim Report were accepted by the Government, and in making this clear, the Minister of Labour explained to the parties that the Government did not necessarily accept the argumentation in the Report.

As to its practical conclusions, as the House knows one of the most important was that the Transport Commission should not use the argument that it was prevented by certain terms of its financial constitution from paying rates which it might agree to be proper. The court agreed that there was a case for a critical re-examination of wage rates and concluded that negotiations should be resumed urgently—and another important point—that the negotiations must be resumed free from the threat of strike action. I thought it was my duty to give this short survey to the House as the House was not sitting when all these matters took place.

It was on the basis of these conclusions that my right hon. and learned Friend was able, as the House knows, to bring the Transport Commission and the N.U.R. together and so initiate the discussions between them which eventually led to a settlement. All I would say by way of comment on these negotiations is that a most damaging blow to our national economy was only just avoided. It was, indeed, a very near thing.

I received the final Report of the Court of Inquiry on 25th January, and before I comment on its findings should like to say this. The members of the court had a very hard and somewhat thankless task, and I think that the country owes them a debt of gratitude for the work which they have done. I should like to pay this tribute to them on behalf of the Government on this occasion.

Turning to the Report itself, I do not think that there is anything to be gained by going into what is said about the history of this dispute. Nor do I propose to deal with the court's strictures on the two parties. I think that hon. Members who are interested in these two things will have read them for themselves.

The first thing that I want to say about the final Report is that the Government look on it as a document which should lead to fruitful action rather than as one which should lead to further inquests or post-mortems. What I am concerned about is not the past but what we may hope to do to build better for the future, particularly what we may hope to do to provide the kind of co-operative atmosphere in the railway industry which will enable it to make best use of the new equipment and new construction that is to be provided, and which will give a real hope of increasing efficiency and productivity to the mutual benefit of railwaymen, the Transport Commission and the nation as a whole. That is why, if I may have the attention of the right hon. Gentleman the Member for Lewisham, South for a moment, it was thought appropriate that I should open this debate.

In any case, I make no apology for making the achievement of better human relations and good teamwork the central feature of my remarks, because I believe that unless we can succeed in this important first step that has to be taken by all concerned, we shall not derive very much benefit from anything else. Certainly, so far as my Ministry is concerned, if we can feel certain that there exists the good will and co-operation which will enable the Transport Commission to fulfil its plans for decentralisation and modernisation we shall have more time to devote to some of the other problems that beset us. I want to make clear to the House that we must be sure that the good will and co-operation are there and will be translated into practical action.

There has been considerable discussion about the views expressed in paragraph 10 of the interim report of the Court of Inquiry which said that the railwaymen should receive a fair and adequate wage and that in broad terms the railwayman should be in no worse case than his colleague in a comparable industry. The final Report has helped to clear away a good many misconceptions and hasty assumptions about what the court meant in its interim Report or, perhaps more importantly, what it did not mean. I think that the position is well summed up by the court in paragraph 61 of its final Report, which says: … to be a 'fair wage' it must be not only no lower than it should be, but also no higher than it should be. That, I believe, is not a bad way of getting over what, I am sure, all hon. Members realise is a very difficult task today, namely to decide what is a fair wage in any particular circumstances. I think that the court has been helpful in that matter. Many factors enter into the process of giving effect to this idea and I think that the court came down fairly, on the whole, in saying that the right way is to try to relate wages to those existing in other comparable industries.

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

I hope the hon. Gentleman will not suggest that the rates in the settlement are, by any stretch of imagination, very high in relation to the wages in other industries.

Mr. Watkinson

No. And I do not think that the hon. Gentleman will suggest that they are very low in relation to other industries. Therefore, although it is not my job to comment upon the wages situation, I think that, on the whole, the Commission has steered between the two extremes that the court laid down.

The court went on, as the House knows to try to define to some extent this principle of fair wages. In that there is nothing particularly novel, because the current Fair Wages Resolution was adopted by this House as long ago as October, 1946, but it is important, I think, to observe that those who work for the Government, Government contractors, and the Government themselves in their capacity as employer should have a general standard to observe in the matter of wages and conditions. This is just as important to the railways as to any other great national industry. I believe that what the court meant was this. It thought that a fair wage was the current market rate established by processes of negotiation and arbitration. Much the same principle is embodied in a large number of Acts of Parliament.

Of course, the railways have their own negotiating machinery, and that has its part to play in finding relevant comparisons for establishing proper rates, and this, I think hon. Gentlemen will agree, is a very difficult matter. It was not improper for the court to make suggestions about settling these things without bringing them to strike action and complete disruption of the life of the country. Therefore, all that has been said on the subject of fair wages is merely to indicate a broad principle, which, I think, is, on the whole, a fair and acceptable principle to which the parties can address themselves.

As this has to be done through negotiating machinery, I would only add—and I am sure it is realised very clearly by employers and the trade union movement—that it is vital in this context that the constitutional machinery should be respected, and that when arrangements are reached they should be honoured. Because we have no written constitution in industrial negotiation, it does, therefore, rest entirely on the good faith of the parties concerned.

Before I leave this part of the Report, I want to make one point on the important question of manpower. It has been urged that the level of wages must be affected by the extent to which the industry is successful in eliminating redundancy and overstaffing. This is true in the sense that efficiency and economical working can provide the conditions in which the consideration of these wages questions is helped. I think that I carry the House with me when I quote the court's sum- ming up on that point, that it is fundamental that the employer is entitled to expect and the employee is bound to give a fair day's work for a fair day's wage; and that in a case like this a particular obligation rests upon employer and employee to co-operate in measures which are necessary and reasonable for the improvement of productivity and the promotion of efficiency. Those, I think, were wise words on the part of the court which we would do well to remember, not only in this particular dispute, but in other disputes as well.

I now come to what is perhaps the most important part of the Report. The Report sets out, under the general heading of "Efficiency and Economy" on page 24, recommendations which deal with the steps that might be taken to avoid further disputes, and to improve human relations, the utilisation of manpower and the general level of efficiency.

I had meetings with the parties concerned last Thursday, 27th January, so that I might obtain their views on the Report in general and on these findings in particular. The discussion disclosed general agreement among the parties, that is to say, the Transport Commission and the three unions—the National Union of Railwaymen, the Associated Society of Locomotive Engineers and Firemen and the Transport Salaried Staffs' Association—and all agreed that a wide-ranging public inquiry was not the course best calculated to promote greater efficiency and economy, or, indeed, to improve human relations. It was the view of the Commission and of the unions that immediate action to deal with these matters was preferable to further public inquiry.

The Government do not dissent from this view, provided only that the industry shows itself able to put its own affairs in order. That is a very important qualification. I think that in any case that the House will agree that a wide-ranging public inquiry would inevitably hold up action of any kind until its report was available, and that the whole operation of the area boards and the new management structure might be seriously prejudiced. It is fair to say that the Transport Commission made it plain to me that it would co-operate fully if an inquiry were set up. The unions' opinion was, frankly, that a public inquiry would be harmful in its effects, but they reiterated their desire to play their full part in helping to promote greater efficiency and greater productivity. It was a feature of the meetings which I have attended between my right hon. and learned Friend and the unions, spread over 14 months, that the trade union position has been that ever since Christmas, 1953, they have expressed their desire to co-operate with management once the wages issue was out of the way.

The Government take the view that the most effective course of action will be one that is most likely to carry all parties with it and that will lead to practical results within a reasonably short period. During consultations with the Minister of Transport and myself, the Transport Commission informed me that it would put to the railway unions a proposal to set up special joint consultative machinery within the industry, to promote efficiency, with particular reference to the most productive use of manpower. The Commission would present to Ministers periodical reports on the progress made through this new machinery. The Chairman of the Commission has since informed me that he has put this proposal to the unions, and that he has reason to hope that agreement will be reached on effective machinery.

The chairman has also informed me that the Commission, in connection with its future plans for British railways, intend to take full advantage of the advice and facilities available from recognised bodies such as the British Productivity Council and the British Institute of Management—which are concerned with the promotion of productivity and efficient management—as well as of the experience gained in foreign countries. I undertand that this whole matter that I have outlined is to be discussed in more detail at an early meeting of the British Transport Joint Consultative Council.

Mr. James Callaghan (Cardiff, South-East)

Will the result of the inquiry with these outside bodies be equally available to the unions and to the management?

Mr. Watkinson

I am glad that the hon. Gentleman has asked that, because I would like to say again., so that the House might clearly understand it, that this is a joint enterprise between the Commission and the unions involved, and that my statement that the matter is to be discussed, and, I think, properly discussed, in the joint consultative machinery, shows that the Commission intend to carry the unions with it on this matter.

Mr. Callaghan

Then the answer is "Yes"?

Mr. Watkinson

Well, the answer is "Yes," but I do not want to say it categorically because the Commission has yet to discuss the matter through its own machinery and it might be unfair for me to anticipate what its decision will be in exact form. The unions and the Commission are setting up this new consultative machinery and, in the new plans for the railways, will welcome help from the British Productivity Council and other bodies.

Mr. Percy Morris (Swansea, West)

That body, the joint consultative council, has been in existence for a number of years, but the Government have not taken any notice of its joint recommendations.

Mr. Watkinson

A disappointing feature has been that very little has come out of the meetings of that body. It has nothing to do with the Government. It is entirely a responsibility of the Transport Commission. The Government welcome this initiative on the part of the Commission, and I think the hon. Member for Swansea, West, does, too.

Mr. P. Morris

Yes.

Mr. Watkinson

We have taken the view that action on these lines, if it can carry all parties with it, is most likely to deal in the most speedy and effective way with the matters to which attention is drawn in the Report of the Inquiry.

Mr. Popplewell

The hon. Gentleman said that very little has come out of the meetings of the joint consultative machinery. On what grounds does he base his argument there? A tremendous lot has come out of the consultative side, and the Minister should not underrate what has already been done in that direction, although I know there is a lot to do.

Mr. Watkinson

I did not underrate it for a moment. I meant that not a lot had come out of it on the productivity front, and on the utilisation of manpower. I willingly agree that the Commission has reduced its manpower by 17,000 this year; that is a very great achievement, as I think we all agree. I did not notice any dissent when I quoted that part of the Report of the Inquiry which said that there is much that can yet be done. I think the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) agrees with me there.

This is an attempt to get it done with the agreement of all the parties concerned. I should think that it is by far the best way to do it, and I hope that when the plans are discussed in detail all parties will find it possible to cooperate together and to work out a sensible plan.

I am sure that hon. Members opposite, who have the interests of the railways at heart, will agree that if this new initiative by the Transport Commission could succeed it would be an essential factor in the success of the new modernisation plans and would help very greatly in getting them carried out with speed and efficiency. The Court of Inquiry reflected the great public concern at the general situation on the railways. That concern will persist until it is clear that these new arrangements are working well and are producing the desired results.

This has been a long and disturbed chapter that I have tried to describe to the House, as briefly as I could. The House was entitled to some short statement of what has happened since we had these difficulties on the railways just before Christmas. The Commission's plans for better human relations and better use of manpower, coupled with the new management structure and the new plans for modernisation, should make it possible for the railways to become profitable and efficient by standing on their own feet and not accepting help from outside.

Mr. Callaghan

As the Parliamentary Secretary seems to be on the point of sitting down, may I ask whether he intends to finish his speech without telling us about the Government's share of responsibility for this matter in relation to the increasing prices which have caused these wage claims? Are we to hear nothing about that? [HON. MEMBERS: "Oh."] Is not this a matter within the responsibility of the Ministry of Labour? Is not that a very great part of the trouble? Are we not to hear about the consequences of Government policy in relation to the sale of road- haulage vehicles, losing the Commission about £9 million? Is not that part of the Government's responsibility?

Mr. Watkinson

I am astonished to learn that it is a responsibility of the Ministry of Labour to fix prices. I should have thought that was as little the Ministry's responsibility as to try to fix wages. In any case, that particular argument is not appropriate to this part of the debate, when I am endeavouring to give the House an accurate, and I hope factual, report of the circumstances which, over Christmas, brought this country to within a day or two of complete economic disaster. I noticed that the Opposition had not sought to amend that part of the Motion and I therefore thought it right to devote some time to it.

Mr. Callaghan

May I ask, without offence to the Parliamentary Secretary at all, whether, if he cannot deal with the real fundamentals of the dispute, it would not have been better for the Chancellor of the Exchequer or the Minister of Transport to have opened the debate?

Mr. Watkinson

I do not take offence, although I am afraid that I sometimes go off at half-cock, as I did when the right hon. Gentleman challenged me. But I do try to stick to my job which, in this debate, is to do what I hope I have done—to give the House an account of my part in the proceedings

Mr. M. Turner-Samuels (Gloucester)

rose —

Mr. Watkinson

Perhaps I might at least be allowed to finish what I was about to say. While I like to give way to hon. Members, I did set out with the ambition to finish my speech in half an hour. However, if the hon. and learned Gentleman wishes to interrupt I will give way, although it will prolong my remarks.

Mr. Turner-Samuels

The Minister says that the cost of living is not taken into consideration by his Ministry. Does he really tell the House that, in considering the question of wages, the Ministry does not take into account the cost of living?

Mr. Watkinson

No, I did not say anything of the sort. To clear up the doubt in the hon. and learned Member's mind I will say that my Ministry produces the Interim Index of Retail Prices and is responsible for providing those figures for the public as a whole. My Ministry is not responsible for fixing prices or wages.

An Hon. Member

He is in a muddle.

Mr. Percy Collick (Birkenhead)

Would the hon. Gentleman tell the House something of what occurred between Sir Brian Robertson and the Ministry which did have the effect of settling the crisis? Has some understanding been reached, and if so, what, between the Commission and the Government on the financial issue? That was one of the issues involved throughout the dispute.

Mr. Watkinson

I can only say that that question falls within the province of my right hon. Friend the Chancellor of the Exchequer, who will reply to it.

As for the hon. Member who said that I was in a muddle, I will only say that the question which I tried to answer showed the interest of the House in what I believe to be the important matter we are discussing today, which is how British Railways can be made to stand on its own feet, financially and otherwise—but the Opposition apparently wishes to talk about something quite different.

Mr. J. A. Sparks (Acton)

On a point of order. My hon. Friend said that he intended to deal only with that part of the Motion which is concerned with human relations. In view of the fact that the Chancellor of the Exchequer is to take part in the debate—and, presumably, is to make a statement of some consequence—would it not be better, Mr. Speaker, if the Chancellor could now follow the Parliamentary Secretary, so that we may clearly have the Government's case for the Motion?

Mr. Speaker

I do not think that that is a point of order. I have quite enough to do without determining the order in which hon. Members shall speak in this debate. The speech of the Parliamentary Secretary has so far been strictly relevant to the Motion which he has moved.

Mr. H. Morrison

Is it not the Government's duty to the House to state what their policy is? What are they going to do about the situation which has now emerged? What are their plans for putting British Railways on their feet—or on their wheels? What does the Chancellor intend to do about the financial con- sequences of the settlement? Surely, before we start the debate, the House is entitled to know what the Government are to do.

We have heard relatively nothing from the Parliamentary Secretary. I am not blaming him; I think he has been put in a totally false position owing to the Government's mismanagement of procedure. I do not know why we should be landed with three Ministers—one of them, apparently, with nothing to say. It is clearly the responsibility of the Government to make their case for the Motion. I do ask the Chancellor of the Exchequer—we will waive our right to follow the Parliamentary Secretary—to make his speech now and to tell us what the policy of the Government is. Will the Chancellor answer?

The Chancellor of the Exchequer (Mr. R. A. Butler)

I will certainly do my best to meet the wishes of the House and of the right hon. Gentleman. The Parliamentary Secretary to the Ministry of Labour has given a clear account of the incidents arising out of the dispute. He has dealt with a great many of the aspects of the situation, including the two Inquiry Reports. I have certain observations to make on the financial aspect, which concerns me, and, judging by the Order Paper, the right hon. Gentleman has many observations to make in relation to his own Amendment. I therefore suggest that a better way to meet the convenience of the House would be for the right hon. Gentleman to move his Amendment so that I can learn what is in his mind, and then, after giving due attention to what is said, I shall, during the debate, endeavour to catch Mr. Speaker's eye in order to reply.

Mr. Morrison

It is not in my power or yours, Mr. Speaker, to make the right hon. Gentleman state the case for the Government, but this is the most extraordinary situation. There is a Government Motion. In its course that Motion says that the House, … believes that the steps proposed by the British Transport Commission will, with the co-operation of all concerned, lead to the establishment of a modern and economic railway system.… Surely we have a right to know from the Government how this is to be done, and what action they have in mind. In particular, we have a right to know the financial outlook for the Transport Commission, how that financial position is to be met, and whether the Government believe that the finances of the Commission will be healthy or not. I put it to the Chancellor of the Exchequer that he is really treating the House of Commons with contempt, that we should be expected to embark on a debate with no one stating what the policy of the Government is. With great respect to the Parliamentary Secretary to the Ministry of Labour—and again I say that I am not blaming him—he has not told us what the Government's policy is in the sense of what they are to do.

Unless we do know what the Government intend we cannot go on with this debate. I would urge the Chancellor of the Exchequer, who has been in the House for a long time, to make his speech now and let us know what the policy of the Government is. It is a quaint idea that, when a Government Motion of a positive nature is set down, he should expect the Opposition to state their case before the Government have said what they are to do. May I again appeal to the Chancellor to make his speech now?

Mr. Butler

I do not really think that it would be in the interest of the House. I am sure that we all regret the absence—for reasons which we all know—of the Minister of Labour, who was chiefly concerned in this dispute, but we all know that my hon. Friend the Parliamentary Secretary took an intimate part in the dispute, and that his services in the course of settling the dispute were of the highest value to the nation. I think that it is not only courteous but sensible that the debate should start with a statement by the Ministry of Labour through the Minister in charge of the Ministry at the present time, and, also, that the House should be acquainted with the latest news arising out of the dispute. The whole operation was conceived with the utmost courtesy to the House. There was no question of discourtesy to the House at all.

Neither were we altogether surprised when we found the Opposition wished, by drawing attention to the sale of the Commission's lorries, to distract attention from the primary object of the debate which, I understood, was the future of British Railways. [HON. MEMBERS: "Oh."] The clamour of the Opposition gives force to my argument, because, if that is their view, it is essential that we should hear the right hon. Gentleman, with his usual clarity and ability, explain his point of view. I will undertake to intervene at an early time to give the Government's views.

Mr. H. Morrison

In these circumstances, Mr. Speaker, I ask your permission to move a Motion, That the debate be now adjourned. It is an intolerable situation with which the House is faced.

Mr. Speaker

The right hon. Gentleman cannot move the adjournment of the debate in the middle of a speech. I am uncertain whether the Parliamentary Secretary has finished his speech.

Mr. Frank Bowles (Nuneaton)

I do not think he moved the Motion.

Mr. Watkinson

I moved the Motion at the beginning of my remarks. I am prepared to go on arguing with the right hon. Gentleman if he wishes me to do so. I repeat what I said in the course of my remarks, that the whole gambit of the Opposition is apparently not to discuss the future of British Railways but to discuss a quite irrelevant topic which appears to imply that British Railways can only exist by subsidy from some other source.

Mr. Speaker

I understand that the Parliamentary Secretary has moved the Motion. To put the matter in order, I had better propose it to the House, and then I will call the right hon. Member for Lewisham, South (Mr. H. Morrison).

Question proposed, That this House welcomes the settlement of the recent wages dispute and believes that the steps proposed by the British Transport Commission will, with the co-operation of all concerned, lead to the establishment of a modern and economic railway system for the benefit both of industry and of the travelling public.

Mr. Morrison

I beg to move, "That the debate be now adjourned."

I submit that this is a very exceptional and extraordinary occasion, Sir. It is a situation in which the House was entitled to expect that a Minister would recount, on behalf of the Government, not merely the series of events with which we are all familiar from reading the newspapers and otherwise, but the result of the new financial situation, how the Government propose to deal with it and why they ask the House to believe that the steps proposed by the British Transport Commission will, with the co-operation of all concerned, lead to the establishment of a modern and economic railway system… That is the Motion.

Although I was furious with the Parliamentary Secretary during his speech because there was nothing in it, I am not blaming him. But I think the Government, or whoever is responsible—I gather the Chancellor is mainly responsible…is playing the fool with the House of Commons this afternoon. The Government have put up the Parliamentary Secretary as, so to speak—I nearly said "a dummy," but I do not want to be abusive—a decoy, somebody who has to say nothing, in order that the Government should hear the Opposition's case and then have two Ministers to reply to it. They have got the Chancellor of the Exchequer and two other Ministers. Why do they want three Ministers? I wonder that the Government back benches put up with it, as it encroaches on their opportunities to speak. Are the Chancellor of the Exchequer and the Minister of Transport not competent to deal with the matter?

I say that this is such a serious matter that it really is treating the House of Commons with frivolousness and contempt for a debate to be opened in this way, in which we have heard nothing new, nothing that we did not know before. In those circumstances, Mr. Speaker, I seek your permission to move, That the debate be now adjourned, so that the Government may think of better arrangements for the conduct of Parliamentary business.

Mr. Speaker

I have to consider the right hon. Gentleman's request, but I feel that I cannot accept such a Motion. I have never known the Adjournment to be moved because of the order in which speeches are delivered. I think that if the debate were now to proceed, the matter might clarify itself. I have a further reason, that if I accept the right hon. Gentleman's Motion it will prevent him speaking to his Amendment later on, and I am sure that the House is very anxious to hear what he has to say. Exercising the best judgment that I can, I think that the debate ought to proceed.

Mr. Morrison

On a point of order, Mr. Speaker. I am very grateful to you for saying that you are anxious to hear my speech, but if the debate is adjourned there will be other opportunities for the House to hear my speech. The debate will be adjourned and another date for the debate will have to be fixed. I submit, with great respect, that the question for the Chair is: has the Opposition a sufficient grievance? If so, is it serious enough for the House to decide whether the debate should be adjourned? That is all I am asking. It is not for the Chair to decide which will be carried and which will not. The House will do that. The question is whether prima facie we have a sufficient grievance that the Motion should be moved, and I submit with very deep respect that we have, Sir.

Mr. Speaker

I do not know anything about the rights and wrongs of this matter. I have to go by the Motion that is on the paper, and the Question that has been proposed is, That this House … believes that the steps proposed by the British Transport Commission will, with the co-operation of all concerned, lead to the establishment of a modern and economic railway system for the benefit both of industry and of the travelling public. I cannot exclude from my mind the fact that there is an Amendment to follow which raises much wider issues than that. I think that until that Amendment is moved it is premature to move the adjournment of the debate, and in the interests of the House I cannot accept it.

Mr. Morrison

Further to the point of order, Mr. Speaker. May I submit to you that the considerations which you have put to us, namely, that it is best for the Amendment to be moved first, raises the whole kernel of the grievance, that it is wrong that the Amendment should be moved until we have heard a reasoned case for the Government. You have heard the speech of the Parliamentary Secretary, and I should have thought that there was enough to lead one to say that not enough has been heard from the Parliamentary Secretary to establish anything in the nature of Government policy or a Government case. Therefore, I am landed in a situation in which, if and when I follow, I have literally nothing to answer. That is extraordinary, and I think that is a legitimate Parliamentary grievance which can be properly ventilated by the Motion, That the debate be now adjourned, and by a Division being taken upon it.

Mr. Bowles

May I point out, Sir, that although, if my right hon. Friend moved the adjournment of the debate, he cannot speak again in that debate, he can speak again on the debate arising from the Amendment? Therefore, on that point, he need not feel nervous about pressing his case.

Mr. Speaker

I have given this matter the best attention I can. My own mind is clear enough, that I should not accept the Motion, for the good of the House as a whole. Hon. Members have complained that the Parliamentary Secretary's speech does not give them enough information, but that is nothing to do with me. I gather that the information that the right hon. Gentleman wants is something to do with the relations between the Government and the Transport Commission. There is nothing in the Motion about that. It is the Transport Commission's plans which are commended to the House.

Mr. R. A. Butler

The Government attitude was conceived in courtesy, not in a desire necessarily to await the right hon. Gentleman's speech—I do not wish to be rude to the right hon. Gentleman—but to give an opportunity to the Parliamentary Secretary to the Ministry of Labour to speak, then for the financial aspect to be stated by the Chancellor and then for the Minister of Transport to wind up. I would, therefore, be perfectly ready to be at the service of the House and speak earlier if that is the wish of the House and if I should catch your eye, Mr. Speaker. I have nothing to conceal and I am satisfied with my case, but I should have to be called by you, Mr. Speaker, because I should be succeeding an hon. Member on this side of the House.

Mr. Morrison

I am very much obliged to the right hon. Gentleman. I think that the way out that he suggests will solve the problem. May I say, Mr. Speaker—not for your guidance, because that would be improper, but for your information—that, as far as we are concerned, we shall have no objection if the right hon. Gentleman the Chancellor of the Exchequer catches your eye. In fact, we shall be very glad.

Mr. Speaker

I have proposed the Question which is before the House. Does any right hon. or hon. Member rise to speak? Mr. Butler.

4.40 p.m.

The Chancellor of the Exchequer (Mr. R. A. Butler)

I do not feel, fortunately, that I am in any way deprived of copy by not having heard the right hon. Member for Lewisham, South (Mr. H. Morrison). I will leave the Minister of Transport to answer the various questions he may put on the road and rail aspect. The House will be relieved to hear that it will not have a very long speech from me on that aspect, because the Minister of Transport will be developing that when he deals with the Amendment. I am not so much in doubt about the Amendment, although I have not heard what the right hon. Member for Lewisham, South has to say.

I have been very glad to hear again the Parliamentary Secretary to the Ministry of Labour. I think that I have the support of the House in congratulating him and his right hon. and learned Friend on the magnificent diplomacy with which they conducted themselves in the midst of this very difficult situation. At the same time, I should also like to pay tribute to hon. and right hon. Gentlemen opposite for their attitude during the course of the discussions, in particular the right hon. Member for Southwark (Mr. Isaacs) and the right hon. Member for Blyth (Mr. Robens) for their contributions in the course of the debates and discussions preceding the dispute, because they indicated, as we all tried to indicate, that we were, of whatever party, behind the negotiating machinery. Having been twice at the Ministry of Labour myself, both as Under-Secretary and Minister—although for only a short time, but still as Minister of Labour—I realise the importance of the negotiating machinery as much as do the two right hon. Gentlemen to whom I have referred.

The Minister of Transport, in the circumstances of my earlier intervention in this debate, will speak on many of the transport questions involved. But I think that the House would like to hear—and the reason for my intervention is i to answer the main question which is in everybody's mind, as evidenced not only inside this House, but also in articles in the Press—the Government's attitude towards the future solvency of the railways, and to that point I will direct myself as concisely as I possibly can to give back benchers time to take part in the debate.

I will come straight to the point by mentioning the duty which the Transport Act places on the Commission of securing, and I quote: That the revenue of the Commission is not less than sufficient for making provision for the meeting of charges properly chargeable to revenue, taking one year with another. A similar duty is, of course, laid on other major nationalised undertakings. But I should like to make it clear that there is no question but that the Government expect all such major undertakings so bound by Statute to carry out the duties laid upon them in this way. I am phrasing it carefully, because there are certain undertakings connected with the air and so forth which are differently organised.

Mr. George Darling (Sheffield, Hillsborough)

Will the right hon. Gentleman quote the whole of that part of the Transport Act which calls upon the Commission to make ends meet, taking one year with another?

Mr. Butler

I think that I have quoted all the relevant part and, as I am now coming to describe the Government's case, perhaps the hon. Member will listen to what I have to say.

This evening I propose to confine my remarks to the Transport Commission and to the railways in particular. But that does not mean that we are neglecting the circumstances and problems of the other nationalised industries, and I feel therefore that it will be sufficient to say to the House and the country that the more the Government's policy develops, the more it will be found that we have been the saviour rather than the destroyer of such sections of our economy as remain nationalised at the present time. That will appear as the various activities of the various nationalised undertakings come under consideration by the House. I think, incidentally, that it is a very good thing that the Government of the day should be anxious about, care for and foster the nationalised industries of this country.

Relating to the British Transport Commission; we certainly expect the Commission to balance its current accounts, taking one year with another. The question at issue seems therefore to be whether at any time of special financial difficulty, like the present, the Commission is taking a realistic view of its duty to achieve and the prospect of achieving such a balance, given its present policies and future plans. I shall be summing up my view of our general confidence in the attitude of the Commission when I conclude my speech, but I should like to say in this early part that the Government have confidence that the Commission will take such a view.

Mr. Popplewell

Before the Chancellor leaves that particular point, which is very important, the Commission's duty to balance accounts is certainly laid down in the 1947 Act, but that also includes revenue that comes from railway company holdings in other undertakings. Does the Chancellor in his present interpretation agree that that means the whole of the transport undertaking and not one separate entity, such as the railways?

Mr. Butler

I am referring to the whole of the British Transport Commission in general, and that is the answer to the hon. Member's point.

Making allowance for the obvious differences between a private competitive undertaking and a nationalised undertaking, the remedies are pretty much the same, if either finds itself facing a loss on current account. Dealing with the present policies, not only must organisation and costs be reviewed so as to increase efficiency, but fares and charges must be adjusted so as to produce the best level of revenue.

Looking to the future, solvency must be assured by modernising plant and equipment. Therefore, there is a present aspect and a future aspect. I shall try to cover both in relating my remarks to the present aspect and then to the future aspect of the modernisation plan. These summed up are precisely the remedies the railways must adopt in order that, as we expect of them, they may, taking one year with another, keep their finances on an even keel.

I do not want to add to what my hon. Friend the Parliamentary Secretary to the Ministry of Labour said about organisa- tion. But I do want to say that I think that the manner in which the question of labour redundancy, as it is called, and labour relations has been dealt with by joint consultation between the Government and the two sides concerned is the right one.

We have high hopes now that the special joint machinery, to which the Parliamentary Secretary referred, will succeed in its task of promoting the efficient use of manpower, which is an absolutely vital concomitant of any future success in railway policy. The important thing I should like to add to what my hon. Friend has said is that it is vital that we should all work, not only with the Commission, but with the unions in this matter, because otherwise we are not going to get success, nor follow the path of statesmanship. Given such efficiency emerging from what, I trust, will be an efficient use of this joint machinery, there can be no incompatibility between railway solvency and the policy of fair wages.

I will now address myself to the particular remedies, the adjustment of fares and charges and modernisation. The adjustment of charges, to which reference has been made in the Press, has two aspects, sufficiency in size and flexibility. It is reasonable enough, if the Commission is to pay its way that it must be able, subject to proper safeguards, to raise charges to meet increases in its costs and thus reduce its deficit. It must be able to show that by greater efforts towards efficiency it has done all it could to avoid increases in charges and in its arrears.

We know that it has the opportunity to do this and we must rely on the Commission to do it in the most efficient way. Flexibility of charges is equally important. Again, subject to proper safeguards, and I use the words of the Commission itself: The Commission should be able to quote freely and competitively for traffic provided they do not exceed the prescribed maximum charges. In our view, there will clearly be competition for both passengers and goods between railways and roads. This is as it should be, and here it is that we differ from the conception of a form of monopoly which appears to be put by the Opposition. The Government firmly believe that there is no substitute for competition as a spur to efficiency; indeed, competition and decentralisation were and are the two themes running through the Transport Act of 1953. In our view, there is plenty of room for competition between road and rail on terms which are fair and reasonable to both sides. I hope that the Commission will press forward with its schemes for greater flexibility in its charges.

Arising out of that and the question of competition between road and rail, I believe there is a disposition in some quarters to question whether it would be fair for the Government to facilitate the plan for the modernisation of the railways, which has just been published. I will speak about the plan in a moment. First, I want to make some comments on this criticism. I think with some success yesterday my right hon. Friend the Minister of Transport indicated the massive expansion of expenditure on road development which the Government are prepared to undertake, both in the immediate future and for many years to come. That will be an expansion of road development of some two or three times its present figure.

Secondly, it has been said that it is very unfair to go ahead with the railways modernisation plan because the figures in it seem to be so much larger than those concerned with the roads. But we should examine the plan in detail. I am sure we all welcome the high quality of production and printing, and the expedition which has been shown which, in some respects, improves on what can be done by Her Majesty's Government. When we examine it we see that out of a total of £1,200 million on the plan as a whole some £200 million only is credited for expenditure on tracks and signalling. That is approximately equivalent to the actual road track side of the road development. As it is clear that more than £200 million is to be spent on road development over the next 15 years, it cannot be said that we are starving the roads, but it can be said that we have a proper balance between the two.

That enables me to illustrate to the House that a large part of this modernisation and re-equipment of British Railways is not the track, which is what should be compared with the roads, but it is the rolling stock, electrification and everything else which really accounts for most of the expenditure. The more that is under- stood by the public the less ill-feeling and inequity in argument there will be between the roads and the railways. It is now time to put more capital both into our railway and our roads. That is not only wise from the point of view of the present, but I believe it is wise from the point of view of the future of the economy.

Mr. Callaghan

It is long overdue.

Mr. Butler

Those are our long-term outlooks. We do not know who will be in power in the future. At the present rate it is quite certain that this party will be in power for some years ahead, but whoever is in power in this country, it is in the interests of the country that more capital should be put into transport. As a nation we have invested in industry, both nationally-owned and the private sector. We have invested in electricity and gas and have invested large sums in coal. Now it is the turn of transport. I am proud that this Government have so strengthened the economy of the country that we can go ahead on the right road and the right rail for Britain.

The right hon. Member for Lewisham, South has been more coy than ever in expressing his views this afternoon and has not wanted to express them before I speak. So, anything I say about them must be surmise. Looking at the Amendment, I see that the Opposition say that by wrecking the constructive policy of transport coordination and integration pursued by the Labour Government and selling publicly-owned road haulage vehicles we have deprived the country of the benefit of a comprehensive transport service and the British Transport Commission of a profitable source of revenue. As the right hon. Member has refused to speak first, I cannot do justice to his remarks. Therefore, he must not be critical if I put my own gloss upon them before hearing them. As I know him and his mind so well, let us see what he might have said had he had the audacity to speak first. So far as I can see, what the Opposition mean by this extraordinary statement is that, in order to make the railways pay, there has got to be a continuing subsidy from road to rail. [HON. MEMBERS: "No."] We start from that fundamental point, and we say we consider that to be definitely undesirable. It would be a continuous drain on the road haulage industry and its customers and—what is much more important—it would remove from the railways an incentive to seek a cure for their own ills.

Therefore, whilst I may not be able to go into great detail because I have not been able to hear what the right hon. Member has to say, we start from that point of principle that it is important that the railways should pay and important that the roads should pay. It is not right that one should milk the other in order to live.

I turn to a second argument. If it were the case that there was a great fund, to which the Amendment appears to refer, from which we could draw from the roads to make the railways pay—if there were a sort of Croesus mine into which we could dip our hands and be sure of railway solvency for ever—there might be some sense in the argument. As it is, we object to it in principle. If we look at the facts, we see that it is absurd to suggest that the net receipts of British Road Services are, or could have been, sufficient to solve the financial difficulties of the British Transport Commission.

I take the best year so far, 1953, when British Road Services had an operating surplus of £8.9 million. I would like to make this clear; it is an operating surplus, and before paying their own share of interest charges which, I am informed, amount to about £3 million. If we look at the position of the railways, on the other hand, and say they are to be left with an ever-growing gap between receipts and expenditure—and wages form, the House will remember, 60 per cent. or 70 per cent. of their total annual bill—any such figure, whether it be £8.9 million or £5 million, as I imagine it would be after paying interest, for the contribution milked from the roads to the railways would be far too small to be of real and lasting benefit to the railways. Therefore, we do not think this solution, which is obviously that of the Opposition, of using road surpluses to pay for railway deficits is either sound in principle or applicable in practice.

Mr. Callaghan

If it is wrong in principle, can the right hon. Gentleman tell us why, in the Government's first White Paper proposing de-nationalisation of road transport, the proposal should have been contained that the roads were to give a perpetual and continuous subsidy to the railways to be determined by the Government each year?

Mr. Butler

I am giving the opinion of the Government in the light of the new railways organisation, which I think forms a better outlook for the railways than anything we have been able to look to before.

Mr. J. A. Sparks (Acton)

The right hon. Gentleman referred to milking the road haulage services to pay for the railways. Is he aware that under the 1947 Act, a great deal of traffic that was previously conveyed by the railways was diverted to the British Transport Commission's road undertakings because it was more economic to do that? That traffic is being sold and the vehicles are to be owned by private enterprise, so we can say that the policy of the Government is milking the railways in order to pay for the roads.

Mr. Butler

I think that is an oversimplification with which my right hon. Friend will deal. If the hon. Member will look at the massive accounts of fixed assets and goodwill of British Transport in the Sixth Annual Accounts, pages 32 and 33, he will see that his argument is rather over-simplified in relation to these assets and goodwill. He also forgets the assets which come in—this arose at Question Time yesterday. The road levy brings in something which is of an asset value. When putting his points, the hon. Member might consider these rather greater implications, to which I have referred, in relation to the goodwill and the other values.

Mr. Popplewell

What is the asset value?

Mr. Butler

The Opposition cannot have it both ways. They cannot try to make their speeches in little snippets and then refuse to put their case before they allow me to put mine. Our policy is to proceed with the modernisation of the railways and to look forward at the same time to the profitability of the appropriate British Road Service fleet which remains.

I now come to apply my mind in detail to the modernisation of the railways. I should like to pay the tribute of the Government to the courageous and imaginative conception of the plan for modernising the railways, the responsibility for which lies with the Transport Commission. I have nothing but admiration for the specific and very practical manner in which the plan has been worked out and set before us. This will greatly help us as we examine it in detail.

The House will not expect me to bless and approve every detail of the plan today, because it has only just been published. There is a general provision in the Statute for the authority of the Minister, and it will be necessary for us to examine the plan in greater detail than we have had time to do and we shall have a number of questions to ask. But the general blessing which I have given is, I think, fully earned by the nature of the plan, including some of the electrification schemes, the outlook for traction by diesel and many of the other points in the plan, which will make our railways a great deal better than they are now.

Subject to reserving the Minister's right in regard to detail and questioning and examination, which is clearly vital at the present time, the important question to which I now address myself is whether the plan appears to be financially sound enough to justify the Government doing all that they can to give it a fair wind and help it forward.

Here, I want to make this statement. I have no reason to think that the Commission counts on any Exchequer subsidy to help it in fulfilling its statutory duty; but it may be just as well for me to say quite categorically that I for my part have no intention of proposing any Exchequer subsidy.

It seems to me that after allowing for all the uncertainties of forecasting for 15 years ahead, there is a reasonable prospect of the Commission's plan paying its way. I have, of course, been into the details of the plan and I have the detailed accounts of it before me. For the benefit of the House and in order not to detain hon. Members too long, I should like to summarise the financial outlook as follows. The Commission gives closely argued grounds for estimating that when the plan is completed, it will enjoy a net increase in railway revenues of £85 million a year. Hon. Members may remember that £35 million of that is made up from passenger services and £60 million from freight services, amounting to a total of £95 million. The Commission subtract the increased cost of keeping going the modernised track—£10 million—leaving £85 million. Of this, £40 million will be required to meet the additional interest and capital charges on the amount to be borrowed: that is, £800 million out of the £1,200 million. Depreciation will require an extra £15 million owing to the higher value of the new assets.

That leaves £30 million which will be available to make good the annual deficit which now faces the railways and to which reference is made on page 32 of the Commission's "Modernisation and Re-equipment" document as being the most up-to-date figure, and also to make some impression on the accumulation, which must obviously continue for some time yet, of past deficits.

So far as I can judge, and taking into account the figure of £25 million which has been given as the £15 million deficit plus the £10 million for the recent settlement, it is reasonable to say that there are good prospects of this plan paying its way. The Government therefore consider that funds for this plan must be found.

That means, that over the period of the plan, sums which, after all the detailed examination, on which I give no undertaking today, will be of the order of £800 million—I stress "of the order of "—must be borrowed on the market over the year. I stress the words "on the market." There is no question of our taking powers to enable the Exchequer to advance any part of this money to the railways. The Commission must, and can—and it will certainly have a good enough credit to do so—borrow on the market. Moreover, the Transport Act already provides for a Treasury guarantee of Transport Stock, and I can announce today that this will be available. Subject to the details of the plan proving satisfactory, the Government and all concerned will do whatever they possibly can to facilitate the borrowing programme.

At the opening of my speech, I said that the question at issue was whether, given the difficulties of its financial position, its present policies and its future plans, the Commission was taking a realistic view of its duty to achieve, and its prospects of achieving, a balance on its current accounts taking one year with another. I am assuming—I am sure, rightly—that the Commission will press on continuously with whatever internal measures lie within its own power to economise in its costs and to increase the efficiency of its undertaking. I assume also—these are the assumptions—that the Commission will take the necessary steps to secure the increased sufficiency and flexibility of the charges. Finally, when the details of this modernisation plan have been thoroughly canvassed and examined, I hope we will go ahead.

Mr. Collick

Would I be right in understanding from what the right hon. Gentleman has said so far that what it all comes to is that the Government do not intend giving any financial help whatsoever to the Commission in regard to the carrying out of the plan?

Mr. Butler

I do not think it was ever expected on any side that there would necessarily be an Exchequer subsidy, and I do not think that the Commission has either asked for one or necessarily expected one. What I think the Commission does expect is that it will be given a fair wind for its modernisation plan and will have the opportunity under it of borrowing from the market under the normal Treasury guarantee and that it will get normal Government support and encouragement, although the primary responsibility must rest with the Commission. That is the outlook, and what I have tried to do today in a preliminary way is to examine the outline of the plan and to say that I think there is a financial basis upon which, taking year by year and taking into account the recent settlement, the existing deficit and the outlook, there can be a balance in these accounts on the basis of the plan. [HON. MEMBERS: "When?"] Over the next 15 years.

Mr. Douglas Jay (Battersea, North)

Since the amount is so huge, can the right hon. Gentleman assure the House that he will do all he can to ensure that the interest rates involved are as low as they possibly can be?

Mr. Butler

I would have to have specific notice of a particular question like that, but I can give assurance of the utmost sympathy in dealing with this matter in connection with the future of British Railways.

That is the contribution which I wanted to put before the House today. I think it has contented the House and that it is important. It shows, at any rate, sympathy. If hon. Members opposite are critical of the road and rail aspect, I want them to understand that all our policy toward the roads has been as a result of pledges that we gave and is being carried out with absolute sincerity, with the same sincerity that we propose to carry out our policy towards rail.

I do not think it unduly sanguine to believe that the various assumptions on which I have based my remarks will be fulfilled. I conclude, therefore, that the Transport Commission is proceeding in a manner which is consistent with the Act under which it works and is taking a realistic view of its particular statutory duty, taking one year with another, to achieve a balancing revenue account.

5.10 p.m.

Mr. Herbert Morrison (Lewisham, South)

I beg to move, to leave out from "dispute" to the end of the Question and to add instead thereof: but regrets that Her Majesty's Government has wrecked the constructive policy of transport co-ordination and integration pursued by the Labour Government and is persisting in the sale of publicly-owned road haulage vehicles, thus depriving the country of the benefit of a comprehensive transport service and the British Transport Commission of a profitable source of revenue. I say once again that we are much obliged to the Chancellor of the Exchequer for having intervened and made a speech, which, at any rate, has given us some information about the outlook and the mind of the Government. I have no doubt that the Chair will take into account the fact that we have had two Government, speeches in succession—[HON. MEMBERS: "Oh."]—at our request. I really think that it was an extraordinary arrangement to expect the debate to run in the way in which it opened. Therefore, that had to be put right.

The Parliamentary Secretary has not left me much to which to reply. He gave a useful and factual account of the labour negotiations. He said that at the beginning the Commission could not possibly submit to the claims made by the unions, but in fact within a short time the Commission did submit to the claims of the unions. I am sure that the Commission did not submit to those claims without the Government, and particularly the Chancellor, being consulted.

Mr. Watkinson

There is a very important point here. It is that the Commission did not submit to the claims of the unions under the threat of a strike and no negotiations took place until, very rightly and properly, that threat was withdrawn.

Mr. Morrison

The facts are on record and I could argue the point, but I am not sure whether it would do any good. Perhaps we had better let it go, but I do not think that history will bear out the attitude of the Parliamentary Secretary.

The Chancellor has uttered his thanks for the restraint of the Opposition during those crucial periods when there was a possibility of a dispute, and when the Minister of Labour was called upon to answer Questions in the House. I thank the right hon. Gentleman for that. It is perfectly true that my right hon. Friends were restrained. My hon. Friends on the back benches were restrained too at that time, including those who have associations with transport unions, including the railway unions. We felt that it was right and in the public interest. When a dispute is being argued through the proper channels, perhaps it would be useful rather than the reverse if politicians keep quiet about it.

The Chancellor has expressed confidence in the future solvency of the railways. I hope that he is right, but I cannot follow how he begins to evolve a philosophy which is not in the Transport Act, 1947, and which is in utter conflict with the levy upon road transport to assist the railways, imposed at the time the present Government brought in their own Transport Act. I cannot understand why the right hon. Gentleman suddenly says that we must expect the railways to pay their way, the roads to pay their way and, presumably, the docks and inland waterways, the canals all over the country and every bar and every refreshment on every platform.

This is really absurd. To reduce it to its logical end, every refreshment room placed on a platform ought to be standing on its own financial feet and paying its way. It is true that some do and some do not and the results go into a pool. The Government in their own Act did not provide that there should be complete, independent separation between railway and road finances. They deliberately went out of their way to impose a levy or tax on road commercial transport in order that the railways might be helped—which completely knocks the Chancellor right over. I cannot understand why he should advance the argument which he has put forward today.

Moreover, the basis of the 1947 Act was not that each part of the undertaking had necessarily financially to stand on its own feet. I agree that it is entirely desirable that each constituent element of the British Transport Commission should pay its way, but that does not follow and it was not legally provided for in the 1947 Act. Section 3 (4) of that Act states: all the business carried on by the Commission, whether or not arising from undertakings or parts of undertakings vested in them by or under any provision of this Act, shall form one undertaking,… It was the one collective undertaking that was experienced to pay its way, taking one year with another. We have had enough confusion about this formula in the Act in some of the discussions that took place in connection with the first Report of the Court of Inquiry. It would be a pity if the Chancellor were to add to the confusion.

I do not think that the Chancellor's argument is right. Whilst I agree that it is desirable for the railways to pay their way—and every self-respecting railwayman would like that to be so—nevertheless, if the railways in one year are in difficulties and road transport or something else is doing well and they help each other out, there is nothing criminal or terrible about it. There is not a policy of deliberate subsidy there any more than there is in the case of a departmental store in Oxford Street, such as Selfridges, or the Royal Arsenal Cooperative store at Tower House, Lewisham—and a very good one it is. [An HON. MEMBER: "Rochdale."] I saw the Rochdale pioneers when I was up there, but why the Government should raise these personal matters, I do not know.

There is nothing terrible if one department or branch of a departmental store, whether capitalist or co-operative, does not happen to pay, and others help it out. It is quite a common occurrence. It happens in private enterprise and in the Co-operative movement. Why should the Government be suddenly so shocked at the idea that road commercial transport might possibly help the railways. Who knows? After all these £1,200 million have been spent—though I am not as optimistic as the Government—we might reach a point where the railways would be helping the roads. That would be a lark, and a very happy state of affairs.

The Chancellor referred to more flexibility in charges. Nobody wants to pronounce upon that point at first sight. There is a case for it and there may be a case against it. It will have to be considered. The matter which the Commission and the Government must consider is at what point, when charges are raised, one fails to receive the revenue consequential upon the charges. It is sometimes possible for receipts to go down.

The Chancellor indicated a new capital plan. I thought at one point that he was going to make the railways borrow on the market on their own security. That would not be right. I understand that they will borrow on the market but with a Treasury guarantee. That seems to be not too bad. No doubt, as we go along, we shall be able to see how the capital will be carried and what the net traffic receipts will be. The Chancellor said that the British Transport Commission was not asking for money. I am not saying that it is, and I am not proposing to incite it. But after the wages' settlement, when newspapermen asked the Chairman of the Transport Commission, "Where is the money coming from?" he replied—I think I am right in my recollection—"That has nothing to do with me." So if it has nothing to do with him and it has nothing to do with the Chancellor, it will be interesting to see with whom it has anything to do. But I expect both will have to do something about it.

The dispute gave us very great anxiety. Involved in it was the question of whether the railwaymen had a prima facie case. I thought at the time, and I think the general public thought so too, that, having regard to the general level of wages in other industries, the railwaymen had a case. That is now accepted by the Government. That having been established, other workers must recognise that the railwaymen had a case and must take it into account in consideration of their own problems. We think the railwaymen had a prima facie case for an increase in wages and a readjustment of their conditions.

No doubt the Government and the British Transport Commission considered it in relation to the Commission's finances. Of course, that has got to be taken into account. Nevertheless, if there is an injustice and if men are not being treated properly, then it is not enough merely to be negative. I am absolutely certain that the Government were in this business from start to finish. I do not think the Chancellor would deny it. I have no doubt they handled it in a long distance manner and were careful of not becoming politically involved. That I understand, but in matters of this magnitude it is inevitable that the Government would be in it. There was resistance and rejection, but ultimately concessions were made. I do not think that either the Government or the British Transport Commission came too well out of this argument, and it is an illustration of the fact that mere negation is not enough.

The Motion before the House is really an extraordinary one. It has not got any affirmation of policy, and there is no indication of action in it. It is something like the Maiden's Prayer; it is full of hope. It is a very curious Motion. It asks the House to say that we welcome the settlement. We do, and it was well-known that the Opposition thought the same. We welcomed the fact that there was not a strike.

But the Motion then goes on calmly, coolly, innocently and optimistically to affirm that the steps proposed by the British Transport Commission will, with the co-operation of all concerned, lead to the establishment of a modern and economic railway system for the benefit both of industry and of the travelling public. What are the steps proposed by the British Transport Commission? They may be two. One is an increase in charges and the other capital expenditure, but to suggest that all will be well in this optimistic way does not seem to me to be good enough or to be convincing.

The Motion refers to "the co-operation of all concerned." Let us see who are concerned. There is the British Transport Commission, and the trade unions and workers in the industry. It is perfectly true that they have got a part to play, but there is Her Majesty's Government and the House of Commons who have got a part to play, as have the public. When we look upon the policy and the history of this Government in transport, the part that they have played in relation to the railways has been positively mischievous throughout the period that they have been in office. Therefore, if the Government want to play a part in the co-operation of all concerned, it follows that they ought to change their policy.

Let us look at these elements. There is the British Transport Commission. It is very important that the Commission should be composed of able, competent, public-spirited men, and they should conduct their public relations with vigour and ability so that the public may know what they have achieved. Public relations do not end with the ordinary public, but enter into the relationship between management and workers, because the workers must have things explained to them. The staff and the workers, therefore, require to be covered by public relations.

The question is how to achieve efficiency and economy. It means enlightenment and progress internally in the undertaking. It also means that the Commission itself should be given adequate public credit for achievements where there have been achievements. There has been too much on the part of some Ministers and some hon. Gentlemen opposite of unjustly running down the transport organisation. There was the accusation made some years ago by the present Minister of Transport that any Conservative or capitalist who consented to serve on any public corporation, including the public corporations for which the right hon. Gentleman is now responsible, was a Quisling.

I would be very happy if the right hon. Gentleman later on were to get up and say, "I said that when I was a back bencher. I am very sorry I said it. I ought not to have done so, and I withdraw it and apologise for having said it." That would be a handsome thing. If he is going to say he never said it he has got some reporters with whom he will have to argue, and I warn him that the reporters usually get the best of it at the end.

The Minister of Transport and Civil Aviation (Mr. John Boyd-Carpenter)

I never have any objection to anyone quoting reports as reported by the reporters, for whom I have a very high admiration. It is the right hon. Gentleman's reliability about which I am less confident.

Mr. Morrison

I find it difficult to believe that we imagined this word "Quisling."

Mr. G. Lindgren (Wellingborough)

At the Tory Party conference, at Llandudno.

Mr. Morrison

He can tell us later exactly what he said.

It is necessary that within the transport undertaking there should be the promotion of good will by inside co-operation and education, by co-operation with the public and good will towards the public. All this, again, involves public relations. I am glad that the Parliamentary Secretary to the Ministry of Labour said that the Government, having considered the question of a public inquiry, had come to the conclusion that it would be a mistake, particularly on the aspect of labour relations. I am not against inquiries into nationalised industries; indeed, I think I announced on behalf of the Labour Government that once in seven years we would probably have one. However, I think that of all moments this would not be the one to have an inquiry on this business, particularly if it touched on the question of relations between management and labour. That is far better dealt with direct between the management and the unions, and, consequently, it would have been a great mistake to have had a public inquiry into the matter at this stage.

The workers have promised their cooperation with a view to promoting efficiency and economy, and it is right that the unions should so undertake to do that. Economy and efficiency are in the interests of everybody, not least the work-people employed by the undertaking. Certainly, it is in the public interest and it is in the national interest. Yet the fact must be faced that economy and efficiency may, and probably will mean modifica- tions and changes in the practice of the railways, and possibly modifications and changes in the physical working conditions of the workpeople concerned.

Therefore, just as the Government are careful in handling private industry—I think, too careful—and are conscious of the need for diplomacy in handling these delicate creatures in private industry, I wonder whether they are equally conscious about the workers and the trade unionists in these industries? I am afraid that sometimes, especially in the middle ranks of administration, the management can say, "We have decided to do so and so, and that is that." This is a mistake. It is right that there should be co-operation from the workers and the unions with a view to the promotion of efficiency and economy, but if that is to be done it is necessary that managements should talk about their ideas to the representatives of the unions and the workers; that there should be an opportunity for argument and discussion and, above all, an opportunity for responsible people to put the case to the workers so that they may feel that what is proposed is a sensible and reasonable thing to do.

Moreover, if experts are brought in from outside, which sometimes may be right but which sometimes is a silly thing to do—it depends on who the experts are; if they are brought in, it must not be assumed by management that this is the end of it. This also, should be a subject of discussion and consultation. Sometimes the unions complain that there has not been adequate and reasonable consultation all the way through. I admit that this may lead to some loss of time but, if it is reasonable, it is time well lost if there is good will as a result.

If there are changes and modifications which even indirectly affect the conditions and comfort of the workpeople, how much better it is if they are accepted with good grace than if they are merely pushed down the throats of people. Here again the public relations department ought to be brought in; merely to slap things down will not do—there will be trouble.

As I have said, the assertions in the Motion are not enough. Though it is not always admitted, the railway section of the Transport Commission has already done a considerable job of constructive work. Remember that the Commission has only been running effectively for five or six years. The present Lord Chancellor, I believe, said that we could not get a solution of this problem for ten years. I cordially agree with him. It takes time. If there have been material results already over an effective period of only five or six years, then I think that over the next five or six years there will be further development, further improvements, which will be all to the good.

There has actually been a staff reduction from 648,740 in 1948 to 601,381 in 1952. I am not sure what the figures are today, but that is a substantial decrease. It may be that further decreases could be made, but I suggest that it is better for them to be made out of wastage than out of dismissals, if that can be done, and out of transfers rather than by firing people, if that can be done.

Also, I am advised that notwithstanding this reduction in staff there has been nearly 40 per cent. more freight traffic—or at any rate, there was a year or two ago—compared with pre-war, and more passenger miles compared with pre-war. And that is notwithstanding the existence of a 44-hour week, holidays with pay and other labour improvements. The railways have also caught up maintenance arrears. All this has been done notwithstanding those circumstances and despite a reduction in staff of 47,500.

It is time people admitted that these are achievements because, whether it be management, clerical workers, administrative people or manual workers in a great undertaking like the railways, they will respond better if they get a bit of good cheer, encouragement and praise now and again; whereas they will get depressed and miserable and "under the weather" if they are nagged at, as certain newspapers and hon. Gentlemen opposite have nagged at them.

I do not say that British Railways are perfect, but I will say that they are much improved, and I would ask whether, if the old private companies were in existence now, if there had been no nationalisation, there is any hon. Gentleman opposite who would be optimistic as to their financial position and their state of efficiency at this time. [An HON. MEMBER: "They were in trouble before the war."] That is true, but they would have been in worse trouble today, and it is unreasonable that this kind of thing should go on.

This is not the end. Further improvements will be made. Here I come to one of the charges in the Amendment about the wrecking policy of the Government. I am not sure about success in the future, despite the somewhat dogmatic assertion of optimism in the Motion. Unless there is, over the whole transport field coordination and integration, it is doubtful—

Mr. Geoffrey Wilson (Truro)

When the right hon. Gentleman talks about "over the whole field" does he include the C licence holders?

Mr. Morrison

I am dealing with the Act of 1947. [HON. MEMBERS: "Ah!"] We will stay there for a moment. The undertakings are dealt with as a whole by the 1947 Act. If the hon. Gentleman wants to know what I think about C licences, I think there is a prima facie case for dealing with them. I do not propose to evade that; that is my own opinion.

Mr. R. A. Butler

Does the right hon. Gentleman propose to abolish them?

Mr. Morrison

The right hon. Gentleman, who sought so vigorously this afternoon to avoid stating policy on the part of the Government in power, now wants me to make detailed statements as if I were in power. He will know in due course.

Let us take the field covered by the Transport Act, 1947. I say that coordination and integration are necessary not only for the direct benefit of the railways and not only in order that the railways may, possibly, be assisted out of the common pool if it is necessary, but so that there may be that collective drive in transport whereby each constituent element is itself as efficient as ever we can make it.

But it is not enough that each element in transport shall do its duty by the public. It is vitally important that the various elements of transport shall cooperate so that we shall have a collective transport system in which the public is being served and in which we have the maximum efficient organisation for the collection and delivery of goods from door to door. British Railways have begun doing it.

There were, for example, national and regional organisations of road commercial transport to provide reliable public service with better maintenance than there had been previously. By 1952, empty running of goods commercial had been reduced from 30 per cent. to 20 per cent., which was a direct result of a national public service in that way, and there were developing transfer arrangements from road to rail and rail to road by containers, and so on. Accidents were reduced; the vehicles were safer. There was also the joint use of various facilities. The dream of the transport man as distinct from the railwayman and the road man was becoming true.

All that was happening, and then came the wrecking, anarchist policy of Her Majesty's Government, in which, no doubt, the Chancellor of the Exchequer played his full part. The Government, for mere doctrinaire, spiteful, catty, political reasons, gratuitously barged into this business and wrecked the whole basis of co-ordination and integration. Indeed, the Chancellor asserted this afternoon that he wants the railways to stand on their own and road transport to stand on its own, with no co-operation between them.

Mr. Butler

I beg the right hon. Gentleman not to exaggerate. I did not say that there should be no co-operation.

Mr. Morrison

How interesting it would have been, then, if the Chancellor had told us what form of co-operation he thinks there should be. As he has pushed a lot on to the Minister of Transport, perhaps the Minister of Transport could tell us what the Government's policy is for co-operation between road and rail. It might be that he could even get the words "co-ordination" and "integration" out of his mouth if he tried hard enough.

Mr. Ivor Owen Thomas (The Wrekin)

Would not my right hon. Friend also agree that it is really frightening that the chief architect of the destruction of coordination in the transport system, the former Minister of Transport, is now in charge of colonial affairs?

Mr. Morrison

I am very much obliged to my hon. Friend, but I think that if I went into the affairs of the Colonial Empire I might be ruled out of order.

The tragic thing about this messing about with the co-ordination of the transport system is that the effect upon the Industry from top to bottom—not merely among the manual workers down below, but also among the men above—has been to spread demoralisation and discouragement. The Government have been going ahead with the sale of the road haulage section with the result that there will not be—the Government do not intend there to be—any comprehensive service of road commercial transport. There is difficulty about the sale of buildings and about a sufficiently rapid sale of the vehicles from the Government's point of view, and, consequently, the sale is slow.

In these circumstances there is damage to Commission's finances. It is also damaging to labour relations and the self-respect of the people in the industry. I put this to the Chancellor. Why not call it a day and end this business of selling the vehicles? The Government are stuck with it. The sales are very difficult. Why not stop it and leave as substantial as possible an element of road commercial transport with the Commission's undertaking?

The truth is that all this business is part of a wider laissez faire, anarchist, reactionary policy on the party of the Government. The Chancellor of the Exchequer used to have a reputation for being a nice young progressive Conservative. He is losing it. He is now the principal architect of laissez faire, of letting things rip, of everybody doing as they like, and of the absence of economic supervision and leadership on behalf of the nation.

There is not only this transport business. There is iron and steel and there is television. They are all part of the same game, the abandonment of economic supervision and leadership. The result is that many food prices have gone up. There was the preposterous business of the former Minister of Food saying that there would be no material increase, if any, in the price of tea when the Government intervened in that matter. I quoted what he said in the debate on the Address; it is on the record of the House. The Minister has not lived up to it and the Government have not lived up to it, and the housewives are very cross. The Chancellor may think it is a bit of fun and sit there laughing, but it is not a bit of fun for the housewives.

Mr. Butler

I am concerned about the price of tea and I could give a very learned and important statement about it if I were given the opportunity, but I was wondering why, if the Colonial Empire was not relevant, tea was relevant to this debate.

Mr. Morrison

There is one clear and direct answer which, of course, would not occur to a Tory Chancellor of the Exchequer. The right hon. Gentleman does not know how the people live. Did it not occur to him that the wives of railwaymen buy tea, and if the price goes up, might they not say to their husbands, "Get some more wages, because the cost of living has gone up"? Perhaps that would not occur to a Conservative Chancellor of the Exchequer.

We now have posters going up. I hope hon. Members have seen them. Sixteen-sheet posters are going up all over the place. As they are beginning to go up, it seems to me to be clear that there will be a General Election this year, for they went up before the last one. These posters say that the nation is this, that and the other and that it is all the result of Conservative freedom. What "Conservative freedom" means is laissez faire and people doing as they like. Under the present Government there is no economic leadership of the country; there is no serious attempt at economic education; there is no serious attempt at leadership in business and industrial affairs.

There was a good deal of it under the Labour Government, and it was valuable and useful. If hon. Members opposite think they could have got through the post-war years without the economic organisation and leadership of the Labour Party, they are wrong. If it had not been for the Labour Government and their work, this Government would be facing more serious problems than they face now.

As part of the Government's philosophy, we have this transport situation, we see dividends getting out of hand, we are getting private monopolies all over the place, we are getting trade restrictions, whereby, if a man wants to sell something a bit cheaper, he is stopped as the result of a secret inquiry, and we are getting take-over bids.

If the Government want the cooperation of working people, including the trade unions, not to mention the co-operation of business men and industrialists, how can they expect it when they have given up all idea of advising, educating and counselling the nation in the handling of our economic affairs? The consequence is that people are increasingly feeling that they have not got the obligations to the community which they had when Labour was in power.

It is all very well to say that we have full employment. Indeed we have. But these things are not automatic, they will not automatically last, nor will high production or the export trade automatically last. Our policy is not one of control for control's sake. It is one of helpful social supervision and leadership in all appropriate cases in the public interest.

I am sorry that the Government have gone this way. This dispute, this trouble on the railways, was one of the direct outcomes of the Government's wider economic policy, for which the Chancellor is responsible; and, sooner or later, this policy will land the country in a mess. In all the circumstances, the facts of my case amply justify the Amendment which I have had the honour to move.

5.53 p.m.

Mr. J. Enoch Powell (Wolverhampton, South-West)

It is characteristic of the Labour Party that when the country is faced with a challenge for the future, their immediate reaction is to job backwards into the past. Today, we are considering the fact that a great national service, in its present form and in its present organisation, is unable to pay its way; and the contribution of the party opposite to the discussion has been a reference to the 1953 Act and a resuscitation of the shibboleths which they embraced in the good old days of our discussions on that Act in 1953. We even had a passage interpolated about the exact words used by my right hon. Friend the Minister of Transport at a party conference in Llandudno, seven or eight years ago.

Whatever was effected by the 1953 Act is irrelevant, both practically and in principle, to the problems which we are discussing today. It is irrelevant practically, because, before the 1953 Act—in 1951, for example—British Road Services were making an annual loss of £1 million. That changed to an annual surplus of just over £1 million in 1952. In 1953, the surplus rose to nearly £9 million. Last year, in 1954, the finances of the railways were assisted by assets of the Commission other than railway assets to the tune of £7 million and the same assistance from the non-railway assets is expected in 1955.

Thus, in every year since 1953, something has happened which did not happen before 1953, namely, the losses on the railways have been partially counterbalanced by the working surplus on the other assets of the Commission. Whatever may be the ultimate effects of the 1953 Act, therefore, the railway crisis of 1954–55 has nothing to do with the effects of that Act up to the present.

If hon. Members opposite seek to argue the theory, the combination of road assets and railway assets in a single financial entity, they are making one of two propositions: they are either saying that the losses on the railways ought to be made good by the profits from the road services—and that, I understand, a large number of them deny—[HON. MEMBERS: "No."]—well, if hon. Members opposite accept it as their policy that losses incurred by British Railways should be made up by the profits made by British Road Services—

Mr. Popplewell

Integrated transport.

Mr. Powell

—if that is what they mean by "integrated," I hope they will make it perfectly clear to the country that they want to see the wages of the workers in road haulage subsidising the wages of the railway workers—because that is what it means; and I hope they will make it clear that they want to see the charges levied on those who send their goods by road used to maintain an obsolete railway system—because that also is implicit in the claim that: the profits on road services should be used to make up the deficits on railway services.

If, on the other hand, they mean by co-ordination that by putting into a single hand, under a single control, all the alternative forms of transport, we can deliberately direct traffic from one form of transport to another and compel people to send traffic by a less economic method, a dearer method, than they would otherwise use, I hope hon. Members will also make it clear that that is the implication for the public of their policy of co-ordination.

It is not the features of the 1947 Act which were abolished in 1953 which are the root of our difficulties today. It is the features which still remain.

Mr. James Harrison (Nottingham, East)

The hon. Gentleman mentioned the transfer of road profits to railway undertakings. Before he leaves this theme would he say what he thinks about the canals? There are a number of workers on the canals. What is their position?

Mr. Powell

I will send the hon. Member a copy of a book which some of my hon. Friends and I recently published, in which it is argued that the canal system also should be economically self-sufficient and should as soon as possible be put in that condition. It is a further stage of transport legislation to which I and many hon. Members on this side of the House look forward.

Perhaps I may come to the essential feature of nationalisation with which we are here concerned. When the railways were nationalised by the 1947 Act, the great agglomeration of stock, of debentures, of securities of all kinds and of equities which made up their capital was transformed into gilt-edged securities, on which the payment of interest, if it could not be undertaken by the Commission, fell upon the shoulders of the Treasury, that is to say, of the nation. At the same time that this transformation in the capital structure of the railways was made, the Commission was given a statutory obligation to make its undertaking pay—if not year by year, at any rate over a period. Now, there is no necessary connection between those two things. There is nothing in the law of nature which makes it possible indefinitely to pay gilt-edged rates of interest upon that capital structure which British Railways received in 1947. A situation may well arise in which the earnings of this railway system which we have—the railway system whose capital was frozen into gilt-edged securities in 1947—cannot service and amortise that capital. It is that problem which, basically, we face today.

Mr. Popplewell

May I assist the hon. Gentleman on that point, because this is not confined to gilt-edged stock? Before nationalisation about £200 million of ordinary railway stock in 1938 paid no dividend at all.

Mr. Powell

I am obliged.

Mr. Popplewell

May I finish? That included L.M.S., L.N.E.R. and Southern Railway stock. Forty-three million pounds worth of Great Western ordinary stock received half per cent., so it was not just gilt-edged stock; it was ordinary stock on which interest is now being paid as was never done previously.

Mr. Powell

I am obliged to the hon. Member for reminding the House that before nationalisation the capital structure of British Railways included a great deal of stock on which it was not necessary as an obligation, year in year out, to pay a definite rate of interest, and that the great financial change which took place on nationalisation was that the whole of the capital of the railways became gilt-edged securities.

Just at that moment the railways were given the statutory duty of always paying gilt-edged rates of interest on that capital structure. There was no reason to anticipate that in all circumstances it would be possible for them to do so; and as soon as it begins to be impossible for this railway system to service and amortise its gilt-edged capital, we are threatened with precisely such a crisis as we have just entered upon—that the two statutory obligations of the Commission come into conflict with one another.

As my right hon. Friend the Chancellor of the Exchequer said, the situation of not being able to pay dividends on capital is not unknown outside the field of nationalisation. The remedy for it is the same inside, as well as outside, the nationalised field: it is a reconstruction of the enterprise. But, of course, when the enterprise that we are attempting to reconstruct is an enterprise of which the capital is entirely gilt-edged stock guaranteed by the Treasury, the difficulties of making the transition, the urgency of that transition, and its direct problems for the nation, are very much more serious.

The Commission has put before the country what was its plan for the transformation of the railway system, for the transformation of British Railways from a system no longer able to service and amortise its capital, into a different and profitable system. Let no one say that a service like the railway service, which is economically essential to a flourishing and exporting nation cannot itself be economical. It is a contradiction in terms to say that the railways cannot pay in an economy which is paying. It is a contradiction in terms to say that we can produce at a profit, that we can export at a profit, but that we cannot at a profit transport the factors of production or the finished goods.

Therefore, there must be, concealed, as it were, in our present railway system, as a sculpture is concealed in a block of marble, the railway system of the future which does pay and which corresponds to the economic needs of the country. What we are concerned about is how the transition is to be effected. How are we to make the transition from the present structure to that structure of the future, that railway system which will be truly economical?

In the modernisation plan of British Railways we have their answer to that question as it stood at the end of last year. There was put forward there a plan designed over a period of 15 years to convert the annual deficit of £25 million that was then anticipated into an annual surplus of £5 million. Evidently it was also calculated that the cumulative deficit which would arise during that part of the 15 years in which annual deficits were still incurred, could be defrayed, in one way or another, out of the assets of the Commission itself. It was a very nicely balanced plan. It required for its success the fulfilment of a number of assumptions and conditions. But it was a workable plan which, if all went well, and if the assumptions were fulfilled, would bring solvency over a period of 15 years.

That was the position at the end of last year; for it will not have escaped the notice of the House that the modernisation plan is dated December, 1954, and that the annual deficit of £25 million which it takes as its starting point is the annual deficit for 1955 as anticipated before the wage increases were granted in January of this year. I think that is clear from a reading of paragraph 43 of the Report of the Court of Inquiry which shows that before the wage increases of January of this year all the other factors which had come into play during 1954 had raised the annual deficit of the Commission from £15 million to £25 million.

Since this plan, a further factor has been added. The annual deficit which British Railway stock. Forty-three million pounds £25 million referred to in paragraphs 42 and 43 of the Report of the Court of Inquiry, plus whatever additional [...]may be involved in the wage increases granted in January of this year, which, I believe, is unofficially estimated at about £10 million. If that is correct, it will be quite clear that this modernisation plan is no longer sufficent to meet the challenge, that the period of transition has got to be less than 15 years, and that the ruthlessness with which the system is to be transformed must be greater than is implied in the plan. In fact, we must now have a second edition of the modernisation plan of December, 1954.

That only throws into relief this great difficulty with which the Commission—and this may apply in course of time to other nationalised industries—is grappling the fact that the act of nationalisation threw away all the experience of 150 years in the building up and working of the joint stock company, that flexible instrument by means of which British enterprise and industry has been financed and which has enabled it to survive successive modernisations and reorganisations without placing a burden upon the Treasury or the public.

Of course, it is not possible for us, here in 1955, to say, "Oh, what a pity. What a pity we did this in 1947. What a pity we changed it all into gilt-edged stock on which we have to pay interest of 3½ per cent."

Mr. M. Follick (Loughborough)

Three per cent.

Mr. Powell

Three per cent., and we still cannot do it. We cannot say, "Let us go back. Let us turn it back into preference shares and ordinary shares on which perhaps for 10 years we need pay only half per cent. or no dividend at all" as the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) said.

Mr. Popplewell

Ordinary stock, I said.

Mr. Powell

Yes, ordinary stock. It would be very nice indeed if we could, but we cannot. We have now to extricate ourselves from this fix into which nationalisation has landed us, by the efforts of the Transport Commission, spurred, not by shareholders, but by the Government, by this House and by the public. It is by that means, therefore, by a modernisation plan which is even more drastic, which operates even more quickly than this one. that British Railways will win through to solvency.

6.11 p.m.

Mr. Percy Morris (Swansea, West)

In his opening speech, the Parliamentary Secretary to the Ministry of Labour emphasised the importance of human relations and said that he would confine himself to that aspect of the problem which we are now discussing. That happens to suit my convenience, as I propose to make one or two comments upon it.

Before doing so, however, I would remind the House that the Chancellor of the Exchequer said that the Government had not found a suitable alternative to competition in dealing with transport. In coming to that conclusion the right hon. Gentleman is opposing the experience of nearly all his friends who rendered great service to this country in the transport world—Sir Eustace Missenden, the late Lord Stamp. Mr. William Whitelaw, Sir Alfred Read, and a host of others, who stated that the unification of transport was a far better thing than competition. I am surprised that the Chancellor of the Exchequer is so ready to ignore the experience of his friends. Their experience was based not on politics, but upon actual experience in the transport industry.

The time has come when something should be said in vindication of the employees of British Railways in view of the attacks which have been made on them by hon. Members opposite and in that section of the Press opposed to nationalisation. The fact is that Nemesis has overtaken the Minister of Transport. Quite rightly, the burden has been passed on from the Railway Executive to the Transport Commission, which, in turn, has passed it on to the Minister of Transport.

Sir Brian Robertson has inherited a very unfortunate legacy. He is expected to straighten out all the anomalies and clear up the arrears which have accumulated over many years; due to the de- liberate refusal of the Government, and, indeed, in many respect of the B.T.C., to maintain better standards of wages and salaries and to modernise their services. The very fact that a development plan of £1,200 million has to be attempted is convincing evidence of past neglect.

The most surprising feature has been the patience of railwaymen of all grades. With the exception of a few sporadic outbursts, there has been a no major strike for many years, despite the refusal of the railway companies in 1947 to negotiate any claims or to accept responsibility for any settlement that could be arrived at.

The House should be informed of subsequent history. In June, 1947, the Minister of Labour had to set up a Court of Inquiry. The Chairman was Mr. C. W. Gillebaud, M.A., Lecturer in Economics at Cambridge University. Other members were Mr. C. G. Honey-man, a barrister; Professor L. W. Macdonald, M.A., Professor of Accountancy at Glasgow University; Lieut.-Colonel Briggs, Chairman of Lever Brothers; and Mr. A. G. Tomkins, General Secretary of the National Amalgamated Furnishing Trades Association.

Incidentally, Sir John Benstead, now Deputy-Chairman of the British Transport Commission, was the N.U.R. advocate on that occasion and I quote from his speech: The £186 million which had accrued to the Treasury during the years 1940 to 1946 over and above the rental paid to the companies under the control agreement had been earned by the sweat and labour of railway workers under circumstances most difficult and dangerous in character, and had presumably gone to relieve the taxpayer, to the benefit of the community. Railwaymen should not have to endure a depressed standard of living in order to provide cheap transport. The railway companies refused to discuss or argue the merits of that claim. That was their approach to industrial peace.

The Court of Inquiry came to this conclusion: We think that the need for an inquiry is paramount, both for the purposes of ironing out existing anomalies and in the interests of the general efficiency and contentment of this vital service in the future. The object of the inquiry should be, in our view, a comprehensive examination of the grading of railway workers with a view to a more accurate assessment of the relative value of the differ- ent types of work performed. A further vital need to which consideration should be given is re-arrangement of intergrade margins so that adequate incentive is given for the acceptance of higher responsibility on promotion. Neither of those recommendations was implemented, and up to a fortnight ago the salary structure of British Railways remained unaltered since it was established 35 years ago. It is not surprising, therefore, that we have had a good deal of disgruntlement and discontent.

Further claims were made in 1951. They were well-founded, but they were declined on the same grounds—that there was "no money in the kitty." The Minister of Labour at the time was my right hon. Friend the Member for Ebbw Vale (Mr. Bevan). His help was sought. He revitalised the negotiations, and although he was never given the credit due to him, he saved the country from a calamitous strike and the railwaymen realised the debt we owe him.

Why has there been all this difficulty in recent years? The transport industry is the biggest in the world; it is an industry in which £1,100 million of capital has been invested. The difficulties are threefold. Some of them are being removed just now. First, the restriction of capital development, the refusal of the Government to agree to the recommendations of the Joint Consultative Council on which hon. Gentlemen opposite pin such hope for the future. Had the recommendations of that council been accepted, and capital investment authorised several years ago, British Railways would be in a much more efficient state today.

Secondly, the refusal until recently to acknowledge the legislative and other handicaps under which railway managements were working, and the demands for a public inquiry when railway rates had to be increased to meet the increased cost of coal, electricity, gas, steel, etc. Why there was so much resentment when British railwaymen asked that their wages should be increased to meet the added cost of living, we could not understand—and we had no help from hon. Gentlemen opposite in that respect.

Every time I quote an argument I am immediately suspected by hon. Gentlemen opposite, so perhaps they would be more influenced by a statement of Sir William Wood, formerly financial adviser to the L.M.S. and later an officer of the Railway Executive. At the inquiry in 1947 he said: The railway industry, like any other essential industry, must be self-supporting if it is to be efficient and have scope for development. Its costs must be covered by its receipts. Therefore the users of transport should pay an economic price for the services they receive. Railwaymen resent being told that their low wages must subsidise other industries.

I wish to say a word or two about the criticisms of restrictive practices. I have quoted evidence to show that the Transport Commission and the railway companies failed to implement the recommendations of independent courts of inquiry, although those recommendations had been arrived at after hearing evidence from everybody concerned. If anybody has been guilty of restrictive practices it is the former railway companies and, in some respects, the Railway Executive and the B.T.C. Yet the railway unions are being criticised over and over again, especially by the Press. They ask our members what contribution we are prepared to make to improve the efficiency of the undertaking.

Since nationalisation, the members of my union, the Transport Salaried Staffs Association, have co-operated fully with the Commission in an effort to rationalise, reorganise and add to the efficiency of the industry. Hundreds of its members, in Glasgow. Edinburgh, Birmingham, London, Manchester, Cardiff, Swansea and other centres, have accepted revised conditions of employment, transferred their homes, and recognised that reorganisation is an essential part of co-ordination and integration.

They have never been given the slightest credit for doing so by any section of the British Press. When we are asked what we are doing I suggest to hon. Members on both sides that if they examine our record in that respect they will be much encouraged.

Mr. Robson Brown (Esher)

The hon. Member is making a valid point, but has his union made these facts available to the Press? These are things of which the public and the House would like to know.

Mr. Morris

Yes, it has been due to the initiative and co-operation of the union that this has been brought about in the various centres which I have mentioned, and when giving evidence at the last inquiry Mr. W. J. P. Webber, General Secretary of the Transport Salaried Staffs Association, made it clear that he would accept no reproach of his organisation. He said that it had responded to every appeal of the Railway Executive and the B.T.C., and nobody was able to contradict him. It might have been more difficult for other grades of railway workers—represented by other hon. Members—to say that, but that is because they have so much reason to suspect the inactivity of the Executive and the Commission in implementing recommendations that they have been reluctant to engage in further economies.

Mr. Popplewell

I think my hon. Friend will agree that they have played a loyal part in achieving many of the results which have already been accomplished on the railways.

Mr. Morris

Yes. I was leaving it to my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Popplewell) to make that clear, as he has so much more responsibility and is more closely associated with the question than I am.

Another question to which I wish to refer is that of discipline. This is a matter for management and its representatives. If discipline is properly applied by men who have a real understanding of the conditions under which people are working it is bound to be effective. In my experience, men respond to discipline when they have personal examples of it in their immediate chiefs, going up the scale to such people as regional managers. Their influence is very much greater when the staff recognise that they are making every effort to economise; that they are making their contribution to reorganisation, and that they are doing what they can to encourage the members of the staff to lend a helping hand.

We have told our members at annual and sectional conferences, in precise terms, to give of their very best to the industry, because it is only upon those grounds that we can demand the very best for them. We have made the additional comment that our Association does not stand for the lazy, incompetent or indifferent clerk, and certainly not the dishonest one, and when we have made that comment at annual and sectional confer- ences there has never been the slightest dissent. Our people—and I am sure that this applies to people in other grades—accepted those conditions. If anybody is worried about discipline let him get the men at the top to apply discipline in the right manner. Let evidence be put forward if a man is thought to be lazy or neglectful of his duty. If that is done, no responsible trade union officer will stand up for the man in question, because such people only add to the penalties of their fellow workers.

We have made the one reservation that if a colleague is working alongside a man who has a grave physical handicap, or has great domestic anxiety at the time, that colleague should lend him a helping hand as long as he finds it necessary. But if a man has no such burdens we expect him to pull his weight. If regional managers and commercial superintendents, who are responsible for staff administration, will deal with the matter as honestly and courageously as the unions have dealt with it, discipline will be established in the railway service without any difficulty. I beg the Minister of Transport and the Transport Commission to profit from the unfortunate mistakes of the past. Then, after inquiries had been forced upon them, they refused to implement the recommendations put forward only upon the grounds that there was "no money in the kitty."

The Parliamentary Secretary to the Ministry of Labour has said that his right hon. and learned Friend was not prepared to negotiate under duress. That is a principle to which I would readily subscribe, if it were not for the fact that we have found that we can never get to grips on vital claims until the men are driven into a corner and say, "Unless something is done we are going to strike." We are becoming weary of the fact that what are described in cynical terms as "power politics" seem to be the only politics that influence hon. Members opposite in dealing with transport difficulties. In 1945, 1947, 1948, 1951, 1953 and 1955 we have never been able to exact the dues owing to railway employees without being driven into the desperate position of telling the public that it will be deprived of essential public services because responsible bodies will not negotiate, or will not implement agreements which have been reached.

Mr. Watkinson

I do not object at all to the use of the strike weapon; it is quite a proper one. But I think the hon Member will agree with me—in fact, he has said it—that once an examination, whether by a court of inquiry or otherwise, has been made, it is proper to withdraw the strike threat in order that proper negotiations may proceed. That is the difference.

Mr. Morris

Yes, but if the B.T.C., with the blessing of the Minister of Transport, would deal with negotiations and representations upon a proper basis, the right hon. and learned Gentleman's Department would never be troubled. That is the point I want to make. We beg the Minister to use his influence with the B.T.C. and with the Railway Executive to come to grips with these problems and find the answers, and not suggest to us that because the railway industry has not made enough money during the past 12 months our legitimate claims can be ignored.

I remember a Commission, which included Sir Lincoln Evans, Mr. James Crawford and Mr. Guillebaud, which agreed that the claims of the men had been proved, but which said, "We are unable to make any award because there is no money in the kitty." That is not good enough if this 15-year plan is to be implemented. The hon. Member for Wolverhampton, South-West (Mr. Powell) suggested that it should be implemented in 12 years, in a much more ruthless fashion. If we are to have a much more ruthless implementation of this great plan, problems of wages and salaries will have to be dealt with upon better lines.

I want to refer to the hon. Member's compaint that, upon nationalisation, all the railway stock was made interest-bearing. Had we taken over the railways and not paid any interest on that stock he would have been the first to call us con-fiscators and robbers, but because we dealt with the matter in a proper way he now reproaches us. I beg the House to give consideration to the human aspects of the industry as mentioned by the Parliamentary Secretary to the Ministry of Labour and in the comments which I have endeavoured to make.

6.30 p.m.

Mr. Eric Johnson (Manchester, Blackley)

It is a great pleasure to follow the hon. Member for Swansea, West (Mr. P. Morris), who speaks with such knowledge of this subject, and I would only venture to disagree with him on one point. He referred to the fact that various gentlemen who were very distinguished in the field of transport before the war had advocated the unification of the transport system, and he took issue with my right hon. Friend the Chancellor of the Exchequer because he had said that he believes in competition.

I venture to say that there was a good deal wrong with the railways before the war, but I believe that one reason why they went wrong was that, instead of facing up to competition and meeting it, they shouted for protection. Had they met that competition, they would have been much better placed later on.

Hon. Members opposite, judging from the Amendment which they have put down and from the speeches we have heard so far, appear to think that the best solution of the financial difficulties of the railways is that they should be subsidised by road transport. I would not have thought that even those who believe most fervently in the merits of the State owning all forms of inland transport would accept that solution, which seems to me to be such a defeatist one and suggests that the railways cannot stand on their own feet, at least, until a much greater effort has been made to make the railways much more efficient.

I think everyone would agree that there is ample room for improvement on the railways. Indeed, I have no doubt that many hon. Members read the article in the "Economist" last week which stated that, if this modernisation and re-equipment plan is carried out in 15 years and after the expenditure of about £1,200 million, British Railways might then catch up with the facts of railway working as most civilised nations know them.

Hon. Members opposite are always extraordinarily critical—we have had examples of it this afternoon—of any form of agreement between private firms for arranging prices or working together in any way. They are very quick to talk about the evils of monopoly, but, for a reason which I am unable to understand, when a monopoly is a State monopoly it becomes co-ordination and is altogether praiseworthy. I do not understand why that should be so. If the Transport Commission has the control of road transport as well as of rail transport, it seems to me that there will be very little inducement for either of them to try to improve the services they give, and surely it is not still seriously suggested that the basic industries will serve the country better if they are owned by the State. I do not think that many people would agree with that after the experience of the last seven years.

Just the same, I believe that the late Government had a great opportunity in 1947, when they took over the railways, and that, if they had got on with the job of making the railways efficient while leaving road transport alone, they would have done much better. They might have stepped in and improved the running of the railways while meeting the competition from the roads in the same way as the American railroads had to do it—by overhauling the whole of their services, investing new capital and cutting down their overheads. Instead, for doctrinaire reasons presumably, they preferred to create this great unwieldy state monopoly.

Mr. David Jones (The Hartlepools)

Is the hon. Gentleman aware that, in the years before the last war, the railways and the transport industry of the country were subjected to more Royal Commissions, Select Committees and committees of all kinds than any other industry, and that each of these inquiries, without exception, recommended that unless we had a completely co-ordinated system of transport in this country, it could not possibly succeed?

Mr. Johnson

If the hon. Gentleman had done me the honour of listening to what I was saying, he would have realised that I said that the railways did not face up to competition before the war, and that I also referred to the great opportunity which the Labour Government had in 1947 to do something about it, but instead they wanted to create this State monopoly.

I should like to turn briefly to the recently published Report on the modernisation of the railways, which, we all agree, is a great step in the right direction. Hon. Members will, no doubt, have observed that there is a proposal in that Report to spend £25 million over the next 15 years on replacing steam locomotives with diesels for shunting, and to spend a further £125 million on diesel locomotives for main line purposes.

I admit that I have no technical knowledge whatever on this matter of locomotives, but I cannot help wondering whether it is wise to undertake to spend such a vast sum of money on diesel locomotives, which, it seems to me, may quite possibly be out-of-date in a comparatively short time.

I say that because I have been told by others that the French have been experimenting, and I believe successfully, for about 18 months with a locomotive powered by a free piston gas generator turbine engine. I understand that they have now bought or are buying them for use on the main lines, and I am informed that not only are they much cheaper to build, in the first place, than diesels, but that they are very much cheaper to operate because they use residual fuel which is, of course, much cheaper than diesel oil. I would be interested to know to what extent British Railways have looked into that matter.

The Report also raises a number of problems which will affect the general public as a whole. One, in particular, concerns the closing of many branch lines. The proposals also appear to envisage not only a redeployment of the staff, but a very considerable reduction in the number of men employed on the railways, and these things will not be readily accepted by those most directly concerned without some very good explanations.

It is for that reason that I venture, with considerable diffidence, to disagree with some of those who have spoken already, including the Parliamentary Secretary to the Ministry of Labour, in connection with the question of an inquiry, because, along with a good many other people, I would like to see an inquiry into the whole working of the railway system.

I would suggest that that inquiry should be conducted by people who have practical experience of the running of railways, and, if it is possible to get them, I should like to see their numbers include railroad men from the Commonwealth and others with knowledge of the running of railways in Europe. I should prefer to see such people holding the in- quiry rather than the lawyers, economists, civil servants and others who usually conduct these inquiries.

There may be objections from the Transport Commission and from the unions, but, when all is said and done, it is the British people who own British Railways, and many of us are not satisfied with the way in which the business is being run at present. We know that something is going wrong, we want to know what it is that is going wrong and see that it is put right. We therefore want this inquiry. It is all very well to say that this may be a waste of time, as I understand has already been said, but, in the long run, we, the owners of the railways, are the people who are the best judges of that.

The hon. Member for Swansea, West referred just now to statements which have been made in responsible newspapers and periodicals about restrictive practices on the part of some of the trade unions, and about redundant labour. I have no idea whether those charges are true or not, but I would like to find out, and so would a good many other people. I would have thought that the trade unions would have been only too glad to welcome an inquiry which could have exposed those statements, if they were untrue. I make no allegations against anybody, but the railways are the property of the people. The railways are doing badly and are losing our money, and we want to find out why.

All sides of the House welcomed the settlement of the recent dispute in a way which avoided the disaster of a railway strike. I pay my tribute to my right hon. and learned Friend the Minister of Labour and to his Parliamentary Secretary for the very great part they played in the conduct of the negotiations. There are a number of railwaymen in my constituency, and it is for that reason that I attempted to catch Mr. Speaker's eye today. I am glad that the railwaymen have secured the increase in wages. They were undoubtedly underpaid before, by comparison with other workers, and I am not sure whether engine-drivers and signalmen have yet secured adequate recompense for the much greater responsibilities they carry. There ought to be a much greater difference between the pay of an engine driver and of a porter, for example, than there is at the present time.

The bill we shall have to meet for the settlement will be formidable, but it will be well worth paying if it results in better understanding between the Commission and its employees. Looking further ahead, I can only hope—we have good reason to hope—that the proposed modernisation of the railways will prove effective in enabling the railways to be self-supporting in the not-too-distant future. But I am sure that re-nationalisation of road transport would be the wrong way to make the railways efficient and profitable, so I shall have no hesitation in voting against the Opposition Amendment.

6.42 p.m.

Mr. James Harrison (Nottingham, East)

The best thing I can do is to invite the House to take particular note of the fact that the negotiations that nearly terminated in a railway strike started in July, 1953. They are not finalised even yet. It throws great credit on the patience of the union negotiators and of the members of the union that nothing serious occurred during those long months of unsatisfactory and discouraging negotiation. I commend that patience to the appreciation of this House.

Secondly, I make a complaint. I cannot imagine anything that could do more harm to industrial and human relationships on the railways than loose talk which alleges that thousands of railwaymen are redundant, kept in the service out of charity and at the expense of the Commission. There seems to be a competitive feeling among some hon. Gentlemen on the Government benches to increase the figures of redundancy in a most irresponsible manner, to 5,000, 10,000—

Mr. Lindgren

One hundred thousand.

Mr. Harrison

—and scores of thousands. I am sure that some who do that know nothing whatever about the internal administration or organisation of our railway system. Responsible people who know nothing at all about an industry but go around spreading stories of that description must have a very strong prejudice and a really tough skin. The best way to describe it is "effrontery." It is an effrontery that amazes me. I hope that everybody concerned, and particularly hon. Members of this House, will refrain from making statements of that kind which cannot be proved or substantiated in any way.

Mr. David Renton (Huntingdon)

Can the hon. Member prove or substantiate the making of those statements by hon. Gentlemen on this side, which he says have been made? I do not recollect such statements having been made.

Mr. Lindgren

The hon. and learned Member cannot read the newspapers.

Mr. Harrison

It is not within the knowledge of the hon. and learned Member for Huntingdon (Mr. Renton) that these statements have been made, but I assure him that they have been very widespread, and that he will probably hear more about them in a few minutes.

I emphasise as strongly as I can the urgent need for modernisation in railway equipment and organisation, and I propose to give two illustrations that will typify exactly the state of our equipment on the railways owing to lack of capital investment over the years.

To bring the illustration home to every hon. Member, let me say that I proudly own a 1938 eight-horse-power car. One of its essential fittings is the speed gauge, necessary by law for proper, safe driving during day and night. It may amaze hon. Members to know that there are very few railway engines, apart from locomotives of the latest type—not 1 per cent.—which have a speed gauge. That fact is important, and particularly applicable, when we remember some of the evidence which has been given in the recent inquiry into the disaster at Sutton Coldfield. I do not know anything about the accident other than what has appeared in the Press. On practically none of our engines is there a speed gauge.

Let hon. Members visualise the position in relation to that accident, or to any other special circumstances. An express train comes out of a dark, steam-filled tunnel and immediately approaches a speed restriction of 40 miles per hour, which drops almost at once to a restriction of 30 miles an hour. There is no speed gauge on the locomotive. Let hon. Members imagine the amount of skill necessary on the part of the engine crew to adjust the speed of the train quickly to such a restriction after passing through the tunnel at perhaps 50 or 60 miles an hour.

It is only the complete co-operation and the almost uncanny skill of locomotive crews that has made it possible for the railways to carry on with this out-of-date equipment up to now. We have a lot to thank our railwaymen for. Anyone who drives a car knows the difficulty of adjusting and judging speed. Why cannot speed gauges be fitted to the engines and in the guard's vans? That is a simple suggestion towards modernising our equipment.

I have another illustration of the difficulties of operating with this out-of-date equipment. Not so many years ago the average number of wagons—filled, it may be, with coal, pig-iron and other heavy freights—that the locomotive used to drag was probably between 30 and 40, and the weight of the train would be between 400 and 500 tons. The driver of such a train had to remember that the loose couplings between the wagons were like cotton which the slightest undue pull of a powerful locomotive would break. It required great skill to avoid pulling the train in two.

Some big engines have been built lately and, instead of 30 or 40 trucks, the train now has about 90 loaded wagons. Instead of a weight of from 400 to 500 tons there is a weight of 2,000 tons—but the train still has these loose couplings. It is a great comfort to me to read on page 23 that something is to be done about those. At present, however, although the engine can shift a load of 2,000 tons, the trucks are still only joined by these thin threads of couplings—like bits of cotton to the powerful engine. It requires great experience to work those trains but, irrespective of the antiquated equipment, the men on the railways are still giving good service.

Those are two examples of co-operation and skill willingly given to this great transport service. It is because of those facts that I want to impress on our people the importance of trying to bring about reasonably happy relationships in this vital industry. In 1947, 12,000 of our passenger coaches, 350,000 of our wagons and 8,000 of our engines were more than 35 years old. The railwaymen were therefore working with out-dated equipment but they have continued to do their best and have given good service.

Can we be surprised that in an industry furnished like that there is difficulty in making it pay? There must be difficulty in trying to make it a financially sound proposition. That is why I am very comforted to see this plan for reorganisation which will mean so much to the operators in the industry. I am quite sure that there will be a great improvement in the railway transport world now that we are to receive the capital necessary to re-equip our outmoded system of transport. I have mentioned these matters from my own practical experience, because I thought they might be illuminating to people who often consider them from a purely theoretical angle.

6.58 p.m.

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

It seems that a lot of charges have been levied by the other side and in the Press—referred to, really, in paragraph 49 of the Court of Inquiry Report—amounting almost to an allegation of bad faith on the part of the union concerned in the negotiations—the union which, as usual, has borne the brunt in this difficult time. It is as well that the House and the country should be made fully aware of what these allegations amount to.

The difficulty in the railway world goes back a long way, but in July, 1953, an application for an advance in wages was made. After many months of talk, an award of about 4s. was given in December, 1953. That was in reply to a request for a 15 per cent. increase. It was a most miserable award. The union, which is one that honours its word, entered into an agreement to talk about increased efficiency provided there was a reasonable settlement of its claim in place of the miserable 4s.

From December, 1953, to December, 1954, at least 38 meetings took place between the N.U.R. and the B.T.C. to try to hammer out a reasonable wage-scale. Having entered into the agreement of December, 1953, the union said to the B.T.C., "In order to arrive at a modernised wage structure, we suggest that there should be only 24 different scheduled rates of pay"—so cutting down the cumbersome conciliation grade machinery which involves 60, 70, or 80 different grades.

The B.T.C. knew that this was a commonsense proposal but was so circum- scribed by the action of this Tory Government, which refused to allow it to do the right thing, that it could not accept that suggestion. An hon. Member shakes his head, but the very first action of this Government when they came to power was to refuse to allow the B.T.C. to increase its charges when it had made an application to the Railway Rates Tribunal.

How could the British Transport Commission improve efficiency with this sort of threat in the background? As soon as the present Government came into power, they declared that they were going to denationalise. How could the British Transport Commission build up an efficient organisation in those circumstances? It is not the fault of the Commission that there is no proper wage rate. The fault lies fairly and squarely on the shoulders of this Tory Government.

These negotiations continued through 38 meetings. and there was no tangible result. The executive committee of this organisation at last said in desperation, "This is as far as we can go. Let us see what we can do about it." The Government said to the executive, "You have accepted this arrangement. If your rank and file are not satisfied, you must go back to the old machinery." What nonsense suggesting that they should go back to a form of machinery which had already wasted 18 months. Is it any wonder that the rank and file refused to accept the advice of the executive committee, knowing as they did of the 18 months weary negotiation? The British Transport Commission, who want to do the right thing, are so hamstrung by the policy of this Government that they cannot do it.

That is the background to these allegations of bad faith. The bad faith is to be found, not among the men in the industry, nor in the British Transport Commission, nor the union, but with this Government which is responsible for policy.

The hon. Member for Somerset, North (Mr. Leather) has been very vociferous, particularly when earning a few extra shillings on the wireless, in condemning the railways for inefficiency—

Mr. E. H. C. Leather (Somerset, North)

The hon. Gentleman is quite wrong.

Mr. Popplewell

He has made all kinds of wild allegations, saying that some 100,000 men engaged on the railways are redundant. There also seems to be a campaign—and the Parliamentary Secretary adopted this as a main theme in his remarks—for increasing efficiency and making more effective use of manpower. Here again, little has been said about the wonderful co-operation and good work that has already been done in this direction.

The Report of the Inquiry, on page 24. refers to a clouded atmosphere and imperfect understanding in the industry. Most of the clouded atmosphere is caused purely by wage rates. I can assure the hon. Gentleman that, at headquarters level and at sectional council level, never were there better industrial relations than exist today. There is some difficulty at the lower levels, but I will talk about that a little later. This matter has already been admirably pin-pointed by my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison).

The total staff employed on privately-owned railways in 1938 was 571,000. By the end of 1947, due entirely to war conditions, the demand for efficiency rather than economy, the staff had gone up to 641,000. My right hon. Friend the Member for Lewisham, South mentioned the figure at the end of December, 1952. Let me deal with the figure at the end of December, 1954. The total staff on the railways was 578,000—only 7,000 more than were employed on privately-owned railways in 1938. There has been a great change on the railways in the amount of traffic that is handled, in the reduction of working hours from 48 to 44 and the extra week's holiday with pay, besides other improved conditions of employment.

As a result of these better conditions, the Commission estimated that an increase of 12½ per cent. in staff based on 1938 figures would be required. But, instead of an increase in staff, there has been a reduction of 10 per cent. since 1947, in spite of all these big changes. Is that not evidence of co-operation? The public ought to be told these facts.

The nation owes a debt of gratitude to the various organisations concerned. particularly the National Union of Railwaymen, because they have shouldered the responsibility for the vast bulk of the workers, including the unskilled workers. They had a reduction in working hours from 48 to 44. Yet the average number of hours actually worked by the grades mentioned on the back page of the Report was 51.12 and not 44. Now they know that they will get better conditions because their case is understood by the British Transport Commission. But so difficult has been the situation that they have been prepared to put up with these difficulties. Is that not evidence of co-operation?

Mr. Watkinson

I agree that there has been a lot of co-operation, and the hon. Gentleman has not mentioned one figure that I gave—namely, a 17,000 reduction in staff in the last year. There is one point on which I would like to see whether we agree, because I have had talks with the union, as he has done. The union representatives have told me that they have no doubt that further improvements and economies could be made.

Mr. Popplewell

I will deal with that point in a little while. Let us not get the idea that it is possible to get a sweeping reduction in staff of 60,000, 80,000 or 100,000, because that is nonsense. The hon. Member for Somerset, North, who gives such ridiculous figures, ought to have more sense.

Mr. Leather

In the first place, I have not talked of any of the figures which the hon. Gentleman has mentioned. I have not mentioned any such figures at all. In the second place, I did not make the comments, about which he has complained, on the B.B.C. I made them in that excellent journal presided over by his hon. Friend the Member for Reading. South (Mr. Mikardo).

Mr. Popplewell

And the "Economist."

Mr. Leather

No, not the "Economist."

Mr. Popplewell

There seems to be an impression that this latest settlement is a wonderful achievement. It is a big thing for railwaymen; what has been done on this occasion has not been done before. Do not let us minimise it. But what is the settlement? Let me give one or two examples. Under the new settlement, a special C-class signalman gets £9 10s. a week. I am not talking about a countryside signalman in a signal box where a train goes by every half-hour or so. I am talking about a signalman at Clapham Junction, or at the big signal box at York, for example. He is a top-grade man with a great deal of responsibility on his shoulders, and his rate of pay is £9 10s. a week. Some of the ordinary motor drivers in London earn £9 6s. Where is the comparison between the two?

Let us consider the case of a head shunter, who has a difficult task in a large marshalling yard. His top rate is £8 8s. Is that a magnificent sum? Let us consider a junior shunter—£7 8s. A guard in charge of a train gets £7 4s. to £8. The highly-skilled telecommunications staff, the highest grade, get £9 2s. Other skilled rates go from £7 2s. to £8 Is, for an installer. Let us get these things in the correct perspective. This is a big agreement for railwaymen, but it is not a magnificent thing to shout about when it is compared with the situation in outside industry.

Consider the position of a permanent way man—a skilled man, make no mistake about it. We all know the old joke about his leaning on his shovel. I am talking about a skilled man, a permanent way man, and his rate of pay is still less than £7 a week. He reaches that only after he has become experienced over a number of years. It is nonsense to think of this settlement as a new Eldorado. It is as well to have the background right.

Nevertheless, the union has loyally accepted this agreement, and I am convinced that if the Government will give the B.T.C. the opportunity of doing the right thing, everybody will be much happier. The Government's policy is bound to enter into this discussion, and it was a little shabby of the Chancellor of the Exchequer to try to speak later in the debate and not declare Government policy at the outset. Even when he has spoken, how much wiser are we about the Government's immediate policy? He has given nothing away.

He has not told us what undertaking he has given to the Commission in order to tide it over the immediate necessities. What he has said is that by these improvements it is hoped, over a period of time, to balance one year's accounts with another. In an intervention, I tried to get him to state that he did not mean each separate unit, but that in balancing its accounts the Commission could take all sections together. Although the 1947 Act said the Commission should balance one year with another, some of the minor officials in the railway industry and some others who ought to know better said that each separate undertaking had to balance its accounts. I hope we shall hear no more of that.

That was the only line of policy which the Chancellor gave—that there should be a balance "over a period of time." But the Government are destroying the B.T.C.'s ability to pay its way and make a profit. A sum of £9 million went to the hiving off of road haulage. A Question was asked in the House about how much had been received from the Transport Levy on road vehicles, and the reply was £6,670,000. That is the amount which has come in to the end of January. It can be set against an expected B.T.C. deficit of anything from £20 million to £50 million, due to the Government's denationalisation policy. This is a charge on probably 600,000 to 700,000 motor vehicles. I understand—and I am open to correction—that the charge is due to run for only about four years. Who is to shoulder the rest of the deficit? Is it to be the British Transport Commission? Under the terms of the 1953 Act it is. The deficit is likely to go up to £20 million or £40 million—and that is the effect of Government policy. As long as this policy continues, how can the Commission do the right thing?

I am pleased that the Government have turned down the suggestion of an outside inquiry. No satisfactory result can be achieved on the railways by a group of individuals coming in and conducting an inquiry. To establish a commission or a committee like that would mean that the process of getting greater efficiency, which has been taking place through the years, would at once stop. The manpower reorganisation would at once stop, because an independent committee would have to investigate it. We should delay the process by probably 18 months to two years and then have to start all over again.

It is much better that there should be this co-operation between the two sides. I am not saying that these wage rates are the last word, and the Government should not regard them as the last word. I hope there will be some period of stability, but these men in the railway industry are good and intelligent men and they are determined no longer to be at the bottom of the wage scales. They carry great responsibility. But if we can get some stability in this direction, there will be the utmost co-operation. I am sure of that.

In the question of redundancy, the B.T.C. did not follow the policy of the old railway companies. When they wanted to dispense with a man's services, the old companies simply gave him his cards. I had experience in negotiations in the railway industry in those years between the wars when I was dealing with the cases of redundant signalmen in the north-east, from York to Darlington. I remember the old north-east area redundancy agreement of 1921 and all its implications.

A change has taken place since then. The 60,000 men who have become redundant in recent years have gone out of the industry without a hitch, by means of normal wastage, the stopping of recruitment and steps like that. There has been a reasonable feeling, and providing that the B.T.C. continues similar work in this direction, as I am sure it will, then it will get the co-operation which it wants.

Hon. Members opposite and the Press should not go into loud hysterics if there happens to be some trouble because of the refusal of men to work a double lodging turn. Certainly economies can come about through that, but it is a minor thing compared with the big economies taking place all the time. There are some expert technical men in the railway industry, and I take off my hat to them. We should remember that the coloured light signalling installed at York did away with no fewer than seven signal boxes where at least 51 men were employed whose work is now done by 18 men. We should also think of the wonderful coloured light signalling at Park Street, Hull, Paragon Parade, Doncaster and Leeds. The railways have been refused capital to develop that type of thing.

I welcome this development. The Chancellor has indicated his intention of guaranteeing the market for the loan. I am not keen on subsidies, and the men in the industry are not keen on them, but, given a completely integrated transport system with adequate capital behind it which is regarded as a single unit, it can give efficient service to the public and a square deal to all concerned. I give my blessing to the development plan generally. I hope that it will not be knocked about too much but that it will be entered upon at the earliest opportunity. With all these things acting together, our transport industry can play its rightful part.

7.23 p.m.

Mr. Aubrey Jones (Birmingham, Hall Green)

The core of the problems we are discussing today and the core of the problems lying behind the practical remarks we have heard from the last two speakers is that the railways are not making a full contribution to the central charges of the Transport Commission. The contribution last year was deficient by about £20 million. Before the settlement of the threatened strike it was likely to be £30 million this year and since that settlement, I should say, it has gone up to £45 million. Quite clearly, this cannot continue. The problem is how we are to set it right, obtain from the railways their full contribution and so facilitate the payment of an adequate rate of wages.

We have heard today mention of certain solutions. We have heard of the problem of redundancy. I agree with the last two speakers that this problem seems to have been greatly exaggerated. I think it the duty of the trade unions not to resist schemes for the efficient deployment of labour. At the same time, I think that this question has been over-rated and is of secondary significance.

We have heard about the modernisation scheme. If I understand the trend of the debate rightly it is to that scheme that we should look to put things right. I confess to certain doubts. I agree with the doubt expressed by my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). On the figures I have given of a deficiency of £45 million in 1955, I do not see that this modernisation scheme will put things right. My hon. Friend pleaded for a bigger and better modernisation scheme, but, again, I am in doubt. I am in doubt because, although the railways have a problem of equipment, the more important problem appears to be a commercial one.

The problem is that the railways are carrying a load of uneconomic traffics. To give an instance, I believe I am right in saying that 20 per cent. of the traffics carried by the railways are carried over distances of fewer than 40 miles. I do not say that the whole of that is uneconomic, but where the distance is so short and, therefore, the proportion of handling charges to the length of distance so great, there is a presumption in favour of the view that a large quantity of this traffic is uneconomic.

Mr. Lindgren

I am sure the hon. Member will agree that the railways are common carriers and cannot refuse traffic.

Mr. Jones

That is precisely the point to which I am coming.

I appreciate that the railways have been a monopoly. Since they were a monopoly certain public obligations were imposed on them of the common carrier type and, in addition, other public obligations were expected. As a result, there has grown up the tradition by which the railways carried all traffics. Their aim is to carry a volume of traffic and not necessarily just economic traffics. When an era of technical change sets in a large proportion of those traffics become uneconomic and, therefore, should be transferred to the more economic carrier—the roads. The question before the House is which of the two theses embodied in the Motion and in the Amendment is better calculated to promote this transfer of uneconomic traffics from one method of transport to another.

Mr. Lindgren

I do not want to interrupt the hon. Member too much, because he is always very polite, but is not the problem caused because the roads will not accept the traffics? The greatest uneconomic factor about the railways is empties. The railways have to accept empties whereas the roads would not accept them if they were offered.

Mr. Jones

I am not sure that the answer is "Yes," or "No." If the answer is "Yes," I would be in favour of increasing the load of public obligation imposed on road transport. My general approach to the problem is to try to equalise the two sets of public obligations. In the Amendment to the Motion we have the thesis of integration. It is a very attractive thesis. I confess that I have been attracted to it.

As I understand the theory of integration, it is to set up for road and rail one single owner and that single owner, more readily than anyone else, will transfer the uneconomic traffics from rail to road. After all, he owns both and suffers no loss. It is a very attractive theory but, unfortunately, in practice it has weaknesses. It had weaknesses in the 1947 Act in that the integration was incomplete. But more fundamental than that, I do not think the theory takes into account the way in which things happen in the real world.

Things do not happen in the real world as a result of rational action, as a result of someone pale with thought rationally transferring traffic from one method to another, but as a result of conflicts of pressures. That is why this debate is taking place in this Chamber today. That is the conception lying behind the 1953 Act and I suggest that that Act, by the public at large and even by hon. Members here, has been insufficiently understood.

The purpose of that Act is to apply pressure to the transport medium of the railways while, at the same time, trying to help the railways the better to meet that pressure. That Act hurled against the railways competition from the roads and, at the same time, endeavoured to lift certain public obligations from the railways. It might have gone further; it probably should have gone further, but, nevertheless, it did that.

The best description I can give of this change is to draw the attention of the House to Section 25 of the 1953 Act. Hon. Members will remember that the 1947 Act laid upon the Commission the duty of providing an efficient, adequate, economical and properly integrated transport system. But that is not what Section 25 of the 1953 Act says. It deletes those words and it lays upon the Commission an obligation to supply railway transport and any other forms of transport which it thinks fit. That is something quite different and is a watering down of the conception of the common carrier. In other words, we have embodied in tradition this conception of the railway as a public service or a public utility. The 1953 Act made a move towards a different conception—the conception of the railway as a competitive, commercial enterprise. I believe that the Court of Inquiry, when making its incursion into the philosophy of ends and means, ignored this change completely and fastened on to the 1947 Act rather than on the later and different Act of 1953.

I believe that we have to promote this conception of the 1953 Act further. We need a revolution in thinking, a revolution in the first place on the part of the railways themselves. The railways must come into the habit of thinking of themselves as a commercial concern, not just as a public service concerned with volume of traffic rather than with a search for paying traffics. We need a revolution on the part of the public themselves and I would say, with all due deference, that I think we need the revolution in this Chamber. We in this Chamber, on both sides of the House, have imposed upon the Commission an obligation to make its ends meet.

Having done that, and having in the 1953 Act legislated for a form of competition against the railways, we cannot, at the same time, block and hinder the railways if they endeavour, for instance, to close branch lines or to end uneconomic concessions in fares. It is easy to say that. Psychologically, it is difficult to act on the precept. Nevertheless, we, too, have to think of the railways as a commercial proposition.

That being so, we must not think in terms of political interference in the affairs of the Transport Commission. It is laid upon the Commission to pay its way, and in so far as there is political intervention that onus upon the Commission is weakened and the Commission has an alibi or a pretext elsewhere for its inability to pay its way. I do not think we ought to do that.

Mr. D. Jones

Do I gather that the hon. Member is now repudiating the action of his own Prime Minister and Government in stopping the Commission from raising charges when it got permission to do so, because it was politically unwise to do it?

Mr. Jones

All that I am endeavouring to suggest is that political intervention, from whichever side of the House it comes, carries with it its danger and weakens the responsibility—the onus of paying its way—which devolves upon the Commission.

Dr. H. Morgan (Warrington)

A good excuse.

Mr. Jones

This is not just a question of nationalisation versus denationalisation; it is a question of integration versus competition. Even on the assumption that nationalisation is desirable, which I do not share, I would suggest that it was preferable to have two independent nationalised undertakings in transport rather than simply one—to have a public road undertaking and a public rail undertaking; even within the sphere of nationalisation, to have competition rather than integration.

As for the labour problem, I cannot help being struck by the great contrast between the position of the Commission, on the one hand, and the position of the unions, on the other hand. The Commission is destitute of reserves and has no funds, while the union, with considerable funds, by-passes the ordinary negotiating machinery, makes its appeal to the Government under threat of strike, and gains the day—and gains the day not just on one occasion, but two or three times. The Commission is in a position of weakness, and the union, I would say, is in a position of considerable strength. [HON. MEMBERS: "No."] That is the impression left upon my mind. If it is wrong, I am open to correction.

If the unions endeavour to exploit that contrast, I for one see no hope whatever from the modernisation scheme. Unless there is this change in commercial outlook on the part of the railways equally, I see no hope from the modernisation scheme. There is every point in modernising an industry which on other grounds has a favourable economic prospect, but there is no point in modernising an industry which on other grounds has no great economic hope, and I hope very much that we do not fall into that position.

Mr. G. Wilson

Will my hon. Friend tell us whether he appreciates the very profound changes that were made by Section 21 of the 1953 Act? He has referred to Section 25. Although the common carrier obligation is not done away with, the provisions as to undue preference were done away with and the charges are now maximum charges instead of standard charges. Does not that alter my hon. Friend's argument?

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris)

The hon. Member is developing an argument.

Mr. Jones

No, it does not in the least alter my argument; it merely confirms and amplifies it. I am aware of the changes to which my hon. Friend draws my attention. I was not endeavouring to enumerate all the instances of the change of idea which were evident in the 1953 Act. I merely drew attention to one instance as seeming to me to be the most illustrative.

7.38 p.m.

Mr. Ian Mikardo (Reading, South)

I am grateful for the opportunity of saying a word or two in this debate, especially as I am well aware that I have much less claim to do so than many of my hon. Friends, like those who have already spoken, who, because of years of service on the railways and to the railway trade unions, have experience of this subject which is very much wider and deeper than my own.

If I venture very shortly to address the House, it is only on two grounds: first, that the constituency which I represent is a great transport centre of both road and rail and, therefore, I have the advantage of hearing the views of many transport workers in both fields; and, secondly, because I have had the opportunity recently of making some study of the railways and of the transport industry generally as a problem in organisation and management.

I would refer to only two points that were made by the hon. Member for Hall Green (Mr. Aubrey Jones). He is, as we all know, perhaps the most skilled of all hon. Members opposite in disguising the ferocity of Tory policy beneath the lambskin of superficial sweet reasonableness; but, when one gets beneath his words, it all comes out in the wash in exactly the same way, whether it is the milk of the hon. Member for Hall Green or the acid of the hon. Member for Somerset, North (Mr. Leather).

The hon. Member for Hall Green referred, for example, to the relief given by the 1953 Act to the Commission from some of its obligations under the 1947 Act, and he seemed to suggest that the Commission ought to be grateful for it. That is rather like saying that one will amputate a man's right arm and adding that that is perfectly reasonable because one does not require him to be a professional boxer and he should have no grievance at all. All that the 1953 Act did was to remove from the Commission duties which have been made absolutely impossible by the 1953 Act itself. I would not thank anybody for kicking me in the teeth and then saying, "Do not worry old boy. We do not require you to go into a beauty contest now that we have disfigured your face."

I do not pretend to quote the exact words of the hon. Member for Hall Green, but he was obviously wistfully harking back to the days when, unlike today, it was the unions who were in a weak position and the employers were in a strong position. He said, in effect. "What a problem is created in modernisation and re-equipment of the railways by the fact that the Commission is in a weak position and the unions are in a strong position." He went on to say rather homiletically that it would be a waste of time to do the re-equipping and modernising if the unions took advantage of the fact that they are strong and the Commission is weak.

Mr. Aubrey Jones

If the hon. Member would like my own interpretation of my own words, it is that there should be a reasonable balance of the position, weighted in neither one way nor the other.

Mr. Mikardo

I am quite sure that the hon. Member is glad to retreat from the effect of his remarks when the effect is pointed out to him, but what he said is within the recollection of the House. I am not being unfair when I suggest that the argument which he used was that it would not be much use trying to carry out this modernisation and re-equipment if the trade unions took advantage of their being in a strong position vis-à-vis a comparatively weak Commission.

The hon. Member and his party and the employing classes have good reason to be grateful that all the trade unions, including the railway trade unions, have been much more responsible in their use of their strong position under full employment than were employers in their use of a strong position under conditions of mass unemployment. If the trade unions had behaved since the war in the greedy, mad dog way in which employers behaved during the depression of the 1920s and 1930s, the country would never have dealt with the economic problems which it has faced in the way it has done under both Labour and Conservative Governments.

Up to now it seems always to have been assumed that the only contribution which the roads should make to an integrated transport system should be to provide a profit surplus which the railways could milk. That is not the position at all. The position is not at all that we have two branches of an industry one of which is inherently profitable and one inherently unprofitable and we put the two together in order that the surplus of one should make up or partly make up the deficit of the other. That is a gross oversimplification of the sort normally peddled, not by thinking hon. Members like the hon. Member for Hall Green, but by sloganising demagogues like the hon. Member for Somerset, North.

The real position, surely, is that by putting together two things, which can be used either to compete with each other or to dovetail into each other, one may increase the profits and efficiency of both merely by the act of integration. The advantage to the railways of being united with the roads is not just to have a cow to milk but that the railways themselves, because of that union with the road services and integration into the road services, will not need to do any milking, or will need to do less milking anyway.

When talking about increasing efficiency and productivity in an organisation it is silly to overlook the fact that the first problem to be faced is not the real or alleged redundancy but the structure of the organisation—the question whether the managerial and organisational structure of the outfit is the best designed to secure the best results. In considering that question, the relationship between road and rail and within the industries themselves falls to be considered before we consider superficial questions like redundancy.

I can best illustrate this point by talking about the internal structure of the railway system itself. When they were in Opposition, the Conservative Party and its members used to talk very loudly about the advantages within the railways of decentralisation. I always thought that only a few of the Conservative Members who made such speeches had the first idea of what they were talking about and what is really involved in decentralisation. None faced the question whether one was decentralising regionally or functionally or both, or partly one and partly the other.

This is a technical and complicated problem which really is not susceptible to highly over-simplificed solutions, but the first thing that strikes one when reading the Report on the Modernisation and Re-equipment of British Railways, to which reference has already been made, is that it makes absolute poppycock of the attempt at decentralisation. It is impossible to conceive that this plan could have been evolved by four separate companies or by six separate companies or four regions or 23 areas or what one will, each jealously guarding its autonomy and being encouraged to do so. One could neither conceive the plan nor execute it, because if we had different regions each would be clamouring for the best treatment under the plan, and there would be very difficult problems of priority as between one part of the country and another.

If we had a regional or area breakdown we should have a mad race for priorities. Different areas would be putting in claims for special priority, based on regional considerations instead of being based on the best overall national considerations. I do not envy the Commission, or the Minister if he gets involved in it, as I fancy he must do, the job which they have to do in sorting out these conflicting regional claims if the plan is evolved on a decentralised basis.

The most striking example is the proposal in the plan to go, in most places, from steam to electricity in two stages, that is, from steam to diesel and then from diesel to electricity. I have not had the advantage enjoyed by the Minister of seeing the enormous mass of background papers which went to make up the Report, but I can guess from this document that from the papers it was clear that those concerned looked upon this two-stage project as an issue of last resort. If one had all the time and all the money in the world and no headaches one would do the job in one go, but those responsible for the Report had to fall back upon expedients to deal with practical problems.

What does it mean? It means that over a long period a section will be converted from steam to diesel and that a bit later that section will be converted from diesel to electricity. Its diesel equipment will then be taken away and put into another section so that that section shall go through the first stage on its way to electrification. Can any hon. Member opposite tell me how that can be done without central planning or on the basis that each region runs its own affairs, makes its own claims and has its own priorities? It is an absolutely impossible problem of reorganisation, when we get down to its details, without centralisation.

Similarly, there is in this question a problem of organisation and structure of road and rail. The hon. Member for Hall Green said we had to do some fresh thinking. So we have, and he is completely right. May I suggest that we might give fresh thinking to why we have to assume that consignments either go in toto by road or in toto by rail? There must be classes of traffic in many classes of district in which it would be sensible to provide for their efficient transhipment between road and rail—something which has not been efficiently done—so that they can pass from one system to another.

Except in those cases where goods are consigned from a firm with its private siding to another firm with its private siding, there is no complete rail traffic in the country and at some stage it gets transferred to road. There would have been much more of that if, in fact, our railway goods yards, in which transhipment takes place from road to rail and from rail to road, had been sited differently. But those goods yards were made in the days when the road part of the journey was carried out with a horse, and, therefore, all those terminal yards are very small and too close to each other because each of them was designed only to cover an area that a horse and cart could cover.

The consequence is that in those circumstances there are great difficulties about transhipment between road and rail. This the Commission clearly understands, and I find that the most interesting passages on technical matters in the Report on the Modernisation and Re-equipment of British Railways are those where the Commission is clearly considering the question of the way in which its new capital expenditure will affect relations between road traffic and rail traffic. In page 7, it says that one of the results of the modernisation plans will be to attract to the railway a due proportion of the full-load merchandise traffic which would otherwise pass by road. The Commission goes on to say that this will be a major contribution to relief of road congestion. So it would, and we who are concerned with road congestion and the incidence of road accidents should be grateful for anything which would make such a contribution.

Then, later in the Report, the Commission talks about reorganising its depots, spacing them further apart so as to fit motors instead of fitting horses, and reorganising the method of goods handling. I think at the back of this—and the right hon. Gentleman will have seen the papers about this—are such things as hopper feeds, conveyers, tip loaders, fork lift trucks, cranes, and so on. The Report also says: In planning for the future it will be necessary to close various old depots and concentrate their work in a smaller number of large modern depots.… These depots will be so constructed and laid out as to provide for the expeditious exchange of full-load traffic between road transport and rail.… Associated with the improvements at freight terminals there will be requirements for expenditure upon cranes and other mechanical handling devices.… Where is the hon. Gentleman opposite who will tell me that all that can be done in a situation of complete divorce between those who run road transport and those who run rail transport? I am trying very hard to do what the hon. Member for Hall Green said we should do, namely, look at the matter without political blinkers. I am even trying to avoid financial blinkers and to look at it as a technical operation. How can we plan what traffic we are to divert from one to the other, how do we plan what handling equipment we are going to put in at the exchange points, if the extent to which the traffic is diverted from one to the other is determined capricously by factors of competition instead of being planned at the centre as a single, integrated scheme? How is it to be done? I do not know any way to do it, except by integration.

Yesterday, we heard about this great road development plan. We are to have a new motor road from London to Doncaster. Then we are to have the line from London to Leeds via Doncaster electrified. The Transport Commission, in working out that it is going to expend what must be a large amount of money in electrifying the railway to Doncaster, must have made an estimate of what traffic it is to carry on that line by 1965 as compared with what is carried in 1955.

The right hon. Gentleman, in deciding that there should be a new motor road from London to Doncaster, must have had some advice from somebody about how much road traffic there will be between London and Doncaster in 1965 as compared with today. But were those two estimates put together? I doubt it. I do not see how they could be unless the Transport Commission had some jurisdiction over both road and rail.

If they were not put together are we then building a new motor road because we believe that, apart from the normal increase of traffic, there will be a 10 per cent. change-over from rail to road, and are we electrifying the railway line because we are assuming that 10 per cent. will change-over from road to rail? That is where there is serious inefficiency, and it will not be cured by homilies from inexperienced hon. Gentlemen opposite attacking railwaymen, suggesting that they are a lazy lot of devils, and that they ought to be thrown out on their ears.

So the real point is not that road and rail should be integrated so that the fat should subsidise the lean, but so that the lean can be made fat and the fat made fatter. It is not a question of one robbing the other. A happily married couple are a bigger unit than the sum of two single units taken together.

It is because the Government have prevented that proper integration, because they have not harmed the rail by advantaging road transport but have harmed both by separating them, that I think that my right hon. Friends were absolutely right to put our Amendment on the Order Paper. I hope there will be a vote on this Amendment which will so shatter the Government's complacency as to induce them for once to think of these matters in terms of the technical problems involved instead of from their silly political slogans.

7.59 p.m.

Mr. David Renton (Huntingdon)

The hon. Member for Reading, South (Mr. Mikardo), in his essay on transport problems, has put words into the mouths of those of us on this side of the House which we have not expressed and ideas into our heads which we do not hold. In the course of the remarks I hope to make I shall deal with some of the arguments he has put forward and show whether they are based on an imaginary premise or on a real one.

In the first place, I should like to congratulate the Government on the part they have played in settling this very unforunate dispute. So far as the dispute itself is concerned, I trust that both sides will regard it as they would a bad dream, which disappears with the light of day.

I am sure that, when they first evolved that formula for governing the finances of the Commission which has been the subject of so much thought in recent weeks, the party opposite never for a moment contemplated that the Commission would not pay a fair and adequate wage. Indeed, it would be futile to try to run a railway system nationally without paying a proper wage; and I am sure that the general public have all along accepted that view. Certainly, hon. Members on this side have done so.

Mr. Lindgren

But hon. Members opposite never gave us a fair wage prewar.

Mr. Renton

Doubts have arisen as to the capacity of the Commission to pay, whatever view one takes of its statutory obligations. There would have been much less misunderstanding about the capacity to pay if the spokesman of the Commission had not said what is recorded in page 20 of the Report, in the Commission's written statement: A substantial deficit is likely to remain, which must be met by the public somehow, since the Commission has no reserves. That statement, which is not entirely accurate, has led to a great deal of misunderstanding and unnecessary criticism in the Press of the settlement which has been reached.

It is quite true that since nationalisation the Commission has not put anything to general reserve. It has not been in a position to do so. But it took over tremendous reserves. It took over liquid funds amounting to about £300 million, and reserves in the form of real property which have since, to some extent, been converted into cash. It has used these reserves to finance its net deficit so far, and some has been used to finance its capital replacements.

If we turn to the 1953 Report, we find that in page 59 there is a very interesting diagram setting out the movement of those liquid funds, which are, indeed, the reserves of the Commission. They are much smaller now than when nationalisation started. Whereas, as I said, they once amounted to about £300 million, they amounted to £134 million by the end of 1953. We have not yet been given the figures for 1954, but I should say that, although they must have declined, they are, with the aid of borrowings, still above the £100 million mark. So that the Commission can, in fact, go on for several more years financing its deficits, annual and accumulated, out of its liquid funds.

But the important thing which the Government, this House and the Commission have to consider is whether the Commission can eke out its liquid funds and other reserves until such time as the modernisation plan enables better results to be produced. As I see it, that is the main issue, the crux of the present problem. The Chancellor of the Exchequer today gave us a good deal of enlightenment on that matter. I welcome his firm statement that no subsidy is required, and no subsidy will be given. But, implied in his statement—and let there be no mistake about it—is the fact that the Commission has not an unlimited amount of time to play with. Somehow, it must manage its finances in such a way as to carry over until the modernisation plan brings better results than have been achieved since nationalisation.

The modernisation plan must be considered in relation to the new charges scheme, which we have not yet seen. It is a pity that we have not seen it, but it was inevitable. I understand that it will not be long before we have an opportunity to consider it. To my mind, what is important is that there should not be too much delay in its implementation. It must go through the process of negotiation and consideration by all the interests concerned, and must go before the Transport Tribunal; and unless we persuade the Commission and the Tri- bunal to get on with the job as quickly as possible, we shall not have the charges scheme as quickly as the Commission will need it.

I propose to make what I hope is not too bold a suggestion. It is one which, I think, emerges from many of the speeches today. I am going to express the view that the only hope for the railways, taking a long-term view, is that they should confine themselves to those traffics which they can carry economically—and I hope that I have the support of the hon. Member for Reading, South in that.

Theoretically, the railways still have their common carrier obligation, but that obligation in itself entitles them to charge for the carriage of any particular item the amount it costs them to carry it. They should be entitled to ask the public to pay the cost of carriage, and if it were the fact—

Mr. Lindgren

rose—

Mr. Renton

No, I cannot give way. I do not wish to take up too much time—

Mr. Lindgren

But surely we are dealing with railway economics.

Mr. Renton

—and I am in the middle of a sentence and an argument—

Mr. Lindgren

The railways are not allowed to charge what they like.

Mr. Renton

We have not yet had the new charges scheme, and that touches on the point I am about to make.

It seems to me that the railways will be well advised to concentrate on the carrying of passengers over long distances and over suburban journeys; on the carriage of heavy goods, especially over long distances, and on the carriage of goods which can be made up into full truck or container loads whether going by road and rail or wholly by rail. Under the charges scheme they should find their economic level by offering attractive charges for those traffics, whether passenger or goods, which they can carry economically; and by insisting on their right to charge the economic cost of carrying all other goods.

In other words, it means that in the course of time the enormous nineteenth century network of railways in this country must be reduced. A start has been made by the Commission, with a great deal of encouragement from hon. Gentlemen on both sides of this House. Uneconomic branch lines have been closed, but the process must go a good deal further. Summarising my argument, I would say that the alternative confronting the railways is either to follow a future policy of efficient shrinking, or face the fact of shrinking efficiency.

A policy of efficient shrinking will require the co-operation not only of their employees, but of the public, of local authorities and of hon. Members of this House. I agree with hon. Gentlemen opposite who say that no inquiry is necessary for this process, that it would be a burden on the Commission and a waste of time. The Commission and the unions know what to do. It has been recorded in inquiries, especially in the Guillebaud inquiry of four years ago, and in considerable detail. Some of that still remains to be done.

May I briefly mention the Amendment. It is quite irrelevant to the general railway problem which I have been discussing. The Amendment is based upon a harking back to the past of British Road Services instead of a looking forward to the future of the railways. It refers to the constructive policy of transport co-ordination and integration.… Was it so constructive? "The Times" today does not seem to think so. It says Nor is it generally felt, after a limited experience of integrated road and rail transport, that its benefits outweigh the different benefits which a competitive system confers. That is plain enough speaking. [Laughter.] It is a pity that the only defence which hon. Members opposite have when the powerful criticism of "The Times" is directed against them is to sit back and laugh like a lot of schoolgirls.

At the time of nationalisation the railways suffered from two serious disadvantages. First, their equipment, their network and their system of charging were obsolete, and, secondly, they were hampered by restrictive, nineteenth century legislation. Nationalisation did not cure those defects, though I should mention that they are now being cured as a result of the policy of the present Government. But nationalisation created various difficulties of its own, the worst of which was over-centralisation.

As for integration, which it was intended to bring about by nationalisation, hon. Members opposite were themselves. in their heart of hearts, disappointed at the small amount of integration achieved. In fact, at the time of the 1952 Annual Report, extremely little integration as between road and rail had been achieved. There was still a good deal of rivalry between the functional executives. The Report set out various items of integration which, it was hoped, would he achieved shortly, but they had not then been achieved. Hon. Members opposite are in a very difficult position on their own argument, for they are lamenting the passing of something which has never happened, in spite of the opportunity there was for it to happen.

Mr. Mikardo

The hon. and learned Member should think a little before he talks like that. If two things are to be integrated, each of them has first to be completed, and the Road Haulage Executive had by no means completed taking over all the services which it was going to take over. Obviously, it was not going to start seriously to integrate with the rail services until that first stage had been completed.

Mr. Renton

As I understand, the first stage in the taking-over of services was completed—[HON. MEMBERS: "No."]—and unless it was going to take over services from the railways—which may well have been the case—what further integration was at once contemplated I do not know. But that is not my point. The hon. Member for Reading, South has merely digressed from my argument, which was that when the party opposite went out of power, after a spell of several years of attempted nationalisation, extremely little integration had been achieved.

The Amendment also complains that the sale of British Road Services vehicles deprives the country of the benefit of a comprehensive transport service … That is wildly inaccurate. I have never heard the word "comprehensive" applied to transport before, although I have heard it applied to education. British Road Services never pretended to offer a comprehensive service. They attempted to offer a regular service on certain trunk routes, a parcel service, and various specialised services, but never a comprehensive one. It is difficult to understand that phrase in the Amendment.

The Amendment also says that the sale deprives the Transport Commission of a profitable source of revenue. I wonder whether hon. Members opposite agree with this rather interesting expression of opinion upon this subject: 70 per cent. of transport receipts came from the railways. I gather that this was in 1950. There is no question of other services carrying the railways. Even if this were desirable these services simply have not sufficient surplus to do so. I shall willingly give way to any hon. Member opposite who agrees with that proposition. Is there nobody? It is surprising, because that quotation comes from the Labour Party Handbook for 1951, under the heading "Facts and Figures for Socialists," in page 79. It is evident that at one time there was some reasonably sound thinking going on in the Socialist Party upon this matter.

The idea that the losses on the whole of a national railway system with a capital value of about £1,200 million could be covered by the profits on a fleet of 30,000 road vehicles—

Mr. Follick

Forty thousand vehicles.

Mr. Renton

Let us split it at 35,000, which is the figure it stood at when denationalisation started.

There were 35,000 vehicles with a capital value of certainly not more than £20,000. [HON. MEMBERS: "Ten shillings per vehicle?"] I am sorry; I should have said £20 million. It was thought wise by hon. Members opposite to try to pool the finances of the railways and the British Road Services but, on the arithmetic, it was just fantastic. Only hon. Members opposite, with their ostrich-like heads buried in the sands of doctrinaire prejudice, could posibly have thought that it could be done.

I ask hon. Members opposite to look to the future of the railways, taking the facts as they are and not as they would like them to be. I should like them to bear in mind some of the very constructive speeches which have been made in the House tonight by representatives of railway unions, and to join with me in wishing every success to the Transport Commission, which, we know, is so anxious to serve the country in the best possible way.

8.17 p.m.

Mr. W. T. Proctor (Eccles)

We have listened today to tributes paid to the Minister of Labour and his Parliamentary Secretary for the part they have played in these negotiations. Those tributes have the support of the National Union of Railwaymen, whose General Secretary has expressed similar sentiments, but I should like to pay tribute to the railwaymen for making this settlement possible. Had it not been for the extreme modesty of their demands, no settlement could have been reached. When we look al the results of those negotiations and see the wages that will be paid under the settlement—the figures were outlined by my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Popplewell) and I shall not repeat them—we can appreciate that the National Union of Railwaymen, and railway men themselves throughout the country, have been very modest in their demands. This settlement does not by any means create what we regard as an adequate standard of life for the duties performed.

The other day the hon. Member for Somerset, North (Mr. Leather), whom I am sorry to see is not in the Chamber at present, made a reference to the Chairman of the Transport Commission and alleged that he had said that he was not concerned who found the money to pay for this settlement. The hon. Member said, "If the Chairman is nor concerned, who should be concerned?" I am able to tell him: it is the hon. Member for Somerset, North and his friends upon the Tory benches, because they brought about this situation. They will have to be concerned about who shall find the money.

The Government have not faced the issue. The hon. and learned Member for Huntingdon (Mr. Renton) has told us precisely what has happened, but the Chancellor of the Exchequer was very careful to gloss over what the Government are doing in this matter.. They are doing precisely nothing. They have accepted the settlement and the principle, and the Commission has to pay. Everyone knows that the Commission will be unable to pay out of revenue, and the Government have decided that it shall pay out of capital. That was the statement made by the hon. and learned Member for Huntingdon.

He gave us figures of liquid resources, and he himself wondered how long they would last and whether the Commission would be able to eke them out until such time as a change took place. I want to tell the hon. and learned Gentleman that the Commission will not be able to eke them out as they would have been able to do if he and his friends had not robbed it of a profitable part of its business. Taking away the road transport section of the Commission's business has meant that it will not be able to withstand this financial loss as long as it would have been able to do.

What happens then? Under the present legal arrangements the Government of the day are responsible for certain payments; that is, they guarantee the payments on Transport stock, and we shall be taxed for the folly of the Tory Party in carrying out the policy which they have pursued. What was the Government's policy when they came into power? It was to denationalise road transport, and, irrespective of the arguments that were put forward in this House, they were determined to carry it out. There is much talk today about the Commission, but it is common knowledge that the Commission itself was utterly opposed to the Government's policy.

I have no doubt that, if the Minister of Transport cares to get up and admit it, he could say that in the files of his office there is recorded the opinion of the Commission that the policy of the Government at that time was a policy of financial disaster for the Commission; but the Government pursued that policy to its bitter end and brought about the present state of chaos and unbalance in the financial position of the Commission. I am not pretending that that position would have been good had they let it alone, but it is much worse as a result of their activities, and someone will have to clear it all up some day.

The Labour Party policy was a policy of public ownership of the large-scale sections of road and rail transport. We made certain mistakes in that policy, such as that in regard to C licences, by which we allowed large firms to increase their transport and obtain traffic that would not otherwise have gone to the Commission. I am not talking about the small grocer's vans, the butchers' vans and small-trader transport which the Government of the day are so anxious to associate with C licences, but about the large fleets of C licence transport which should properly be co-ordinated with the operations of the Commission in a sensible system of organisation.

Despite its difficulties, the Commission worked up one of the finest road transport systems of any country in the world. Indeed, I do not think there is any other country which has anything like it. Under very great difficulties, they took over numerous private firms, and every one of the employees of these firms was offered a job with the Commission. Every one of them had his livelihood secured, and anyone, whether a manager or an owner—if the owner was acting as manager—who wanted to consider a position was offered a job with the Commission. No one was put out of work as the result of our policy.

Let us contrast that with the different position when it came to denationalisation. There was no regard at all for the livelihood of the men concerned in the firms that were to be denationalised. I had a letter from a gentleman who worked for a fairly large transport firm before nationalisation, and he says that all he ever did for that firm was to give them loyal service. He went on to say that all he ever did for the Commission was to give it loyal and efficient service, but, as the result of the policy of this Government, he was going to be turned on to the road without a job at 55 years of age. That was the way the Tory Party treated the workers. The Government never gave them any hope or consideration at all.

I warned the Government in this House when I told them that, as a result of their policy, they would find that the railwaymen of this country were not prepared to be made the financial victims of the policy the Government were pursuing. I went so far as to say that I did not think they would have tried that same policy on the miners of this country. I do not believe that this Government would have attempted to take from the mining industry any profitable subsidiaries. I do not believe they would have done that to the miners, and they would not have carried out that policy with the railwaymen if they had known the spirit which they have shown since. I say that that policy has turned out disastrously as far as the country is concerned.

I turn from that to say that we have got to face this problem as workers, politicians and citizens. We went right up to the very edge of disaster on this occasion, and I say that if we have an official strike, backed by the resources of any of the great unions, it will be a disaster from which we shall have very great difficulty in recovering. We have to face that situation and find a way of giving social justice without recourse to an industrial struggle, because we do not possess the resources to endure the disastrous results of an industrial conflict. The party opposite must not compel the workers of this country to come to the conclusion that there is no other way out for them except to fight.

I want to point out that, as far as they are concerned, they have come to that opinion now, and it has been created as a result of the policy of this Government—the policy in regard to food prices, in regard to throwing over all the protective machinery which safeguarded the workers against the results of higher prices. It has caused a feeling of desperation among trade unionists, causing them to feel that the right answer to that situation is wage demands backed by industrial power, which is a very bad thing for the nation.

We have to look today at what is best in the transport world. We made a tremendous mistake in the past in keeping road and rail transport separate, even when it was privately owned, and to do it through denationalisation and make them separate again is disastrous. As my hon. Friend the Member for Reading, South (Mr. Mikardo) said, very few journeys begin and finish on the railways. Most of them have a road section in them.

This country pursued a disastrous policy when it prevented the railway companies from becoming road and rail transport companies. They were not excluded from the roads by any natural processes, but by the process of the law. They had many restrictions placed upon them. Unless we can co-ordinate the two systems and work them efficiently and properly, then we are bound to meet with disaster.

It seems to me that the policy of the present Government is to bring the railways up to the point of tip-top efficiency and then to send the traffic by road. That is the policy of absolute economic imbecility. We should relate our traffic needs to the amount of capital we spend on transport. The ideal system would be whereby heavy traffic was sent by rail to a certain point and was then easily transferred from rail to road.

Experiments are at present being made in America whereby a detachable trailer goes easily on to a rail vehicle, on which it travels for a few miles, and is then pushed back on to a road vehicle and is delivered. That is a much better system than the system in this country at the present time, and it is along those lines that we should look for a solution to our problems.

A Sunday or two ago, the "Observer" stated that the railways had been in deficit throughout the years. I am indebted to my hon. Friend the Member for Swansea, West (Mr. P. Morris) for calling attention to the fact that during the war the Government made a profit of £186 million from operating the railways.

Once the initial capital expenditure on the railways has been made, and the signal boxes, the rails and all the other equipment is ready, then, if an immense amount of traffic is available, there is nothing so cheap as railway transport. Of course, if there is not a sufficient quantity of traffic to move, then it becomes economically impossible to make the system pay.

We on this side of the House stand for the authority and supremacy of Parliament, because we believe that that way lies salvation. Never once have we suggested that industrial action was the answer to the political stupidity of the Government in dealing with the transport industry in the way they did. But the consequences of that stupidity were bound to come out industrially.

As I warned the Government, the railwaymen would not allow their wages to be continued at an artificially low level in order to permit the party opposite to hand over to their friends the huge profits of a privately-run road transport. They have not stood for it, and they have had sufficient industrial power to say so. The nation is now paying twice over. In one way or another it has got to pay a subsidy to the railways, as well as lose the money on road transport.

I say a few words to the Minister of Transport. We have an admiration for his abilities, especially in Opposition. On many a night he kept us here all night in this House. But there is one thing which I have always held against him in the matter of the supremacy of Parliament. Reference was made today to his Quisling speech. I consider that speech to be one of the most shameful orations that any politician has ever made.

I understood the right hon. Gentleman to say today that he had never made such a speech. That being so, I will quote once again from the Report of the Conservative Party Annual Conference, for which, of course, I am not responsible, although I have no doubt that the right hon. Gentleman will regard it as authentic. He said: There is only one other thing I want to say, and I am putting this by way of warning. In the industries which are menaced by nationalisation at the moment, there is a very small minority of people who do not resist the Government wholeheartedly in its nationalisation Measures because they have got at the back of their minds the hope that they are going to get a job on these national hoards. Let us, therefore, make it quite clear that there is no misunderstanding in the minds of these industrial quislings that betrayal and appeasement never pay in the long run, and that they will find that they will not serve their selfish interests by betraying the industries with whom their first duty lies.

Hon. Members

Withdraw. Shocking.

Mr. Proctor

My quotation finishes: It is with that desire, and with the ultimate authority of this, the ruling body of the party that our views on this subject should be made abundantly clear to all concerned, that I beg to move the Motion.

Hon. Members

Withdraw.

Mr. Proctor

Not only did that speech contain something that no politician in this country should have said—that is, encouragement to people in private industry to undermine the policy of the Government of the day which was backed by a large majority in the House of Commons—but the right hon. Gentleman used a threat that in the end that policy of supporting the Government of the day would not pay them. I should be quite satisfied if the Minister of Transport were to say something to the effect that most of us make mistakes and that on reflection he is sorry he made that speech, which is unworthy of a right hon. Gentleman in his position.

Mr. Turner-Samuels

Can my hon. Friend tell me whether the Conservative Party Conference passed the Resolution?

Mr. Proctor

I have no doubt that the eloquence of the Minister of Transport would cause the conference to pass almost anything.

We face a very serious situation as a result of the policy of the present Government, and I see no hope out of it other than by a reversion to our policy of complete integration of transport and co-ordination, working these things together so as to make them all efficient. Transport is one of the most important elements in our industrial life. It is essential that it should be efficient and that its cost should be reasonable.

8.37 p.m.

Mr. Geoffrey Wilson (Truro)

The hon. Member for Eccles (Mr. Proctor) referred to the Llandudno speech of the present Minister of Transport. I think I was present when that speech was made, but I do not entirely remember the circumstances.

I am not quite sure that the hon. Member has not become rather muddled in his criticism. If a Government propose to nationalise an industry and the people in it disapprove of the idea, why should it be wrong for a body of people connected with the industry to object to the nationalisation? If some of them, on the other hand, for reasons not of party but of personal gain, oppose their friends, is there anything wrong in calling them "Quislings"?

Mr. Proctor

The hon. Member has not got this right at all. No one questions the right of anyone to oppose nationalisation, but this was a rebuke to those who failed to oppose it and a threat to them that it would not ultimately profit them.

Mr. Boyd-Carpenter

Will the hon. Member allow me to intervene, as it appears to be my observations which are interesting both him and my hon. Friend the Member for Truro (Mr. G. Wilson)? I am most grateful to the hon. Member for Eccles (Mr. Proctor) for taking the trouble, unlike his right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), to quote from a published report. He did not rely, as did his right hon. Friend, upon a palpably fallible memory. It is now apparent from the passage which the hon. Gentleman has been good enough to quote from a contemporary Press cutting, and which my memory has confirmed, that my observations were addressed to those in industries—I used the expression "menaced by nationalisation"—who did not resist that, because—

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris)

I must remind the right hon. Gentleman that the hon. Member for Truro (Mr. G. Wilson) is in possession of the House, and that the right hon. Gentleman will have an opportunity to speak later.

Mr. Boyd-Carpenter

On a point of order. I abide by your Ruling, Mr. Deputy-Speaker, but as I have been referred to both by my hon. Friend the Member for Truro and by the hon. Member for Eccles, I thought it was—

Mr. Turner-Samuels

On a point of order.

Mr. Boyd-Carpenter

I am on a point of order. My submission is that it would be for the convenience of the House and in accordance with the rules of order, reference having been made to a speech I made—very fairly, but without warning—if I made the position clear.

Mr. Deputy-Speaker

The right hon. Gentleman could have intervened when the reference was made, but the right hon. Gentleman will now, I understand, be replying for the Government and can then deal with it.

Mr. Boyd-Carpenter

On that point, Mr. Deputy-Speaker, I do not know whether you heard, but my hon. Friend the Member for Truro referred to what he thought I had said. I think he indicated that he was present on the occasion. From the point of view of legal evidence, I should have thought that my evidence was the best.

Mr. Callaghan

rose—

Mr. Deputy-Speaker

I have no doubt that the right hon. Gentleman's evidence is the best, but he will have an opportunity to speak later.

Mr. Callaghan

Would not the simplest way to clear up the matter be for the Minister to do the decent thing and withdraw what he said?

Mr. Deputy-Speaker

Order. Mr. Wilson.

Mr. G. Wilson

I do not propose to deal further with that point.

The only common ground between the Motion and the Amendment is a welcoming of the settlement of the dispute. Apart from all national considerations there are very cogent reasons, which have not been mentioned, why railwaymen, and those interested in railways should welcome the settlement. I do not think that it is always appreciated that the biggest competitors the railways have at present are not the omnibuses, or the lorry services, whether publicly or privately owned, but the private motor car, the C licence vehicles and even the power-assisted bicycles. It is the conflict between public transport as a whole and those people who transport themselves and their goods from place to place in their own vehicles.

Every time there is any sort of stoppage—or threat of stoppage—on a public service and on the railways in particular, it is an encouragement for people to buy either their own motor car, bicycle or C licence lorry. Once they have done that it is very much more difficult to bring them back to public transport. For that reason, the fact that there was no stoppage is much to be welcomed by those interested in railways.

That, incidentally, brings me to a point which I do not think has been sufficiently brought out in this debate. It seems to be assumed—and these arguments are still being used despite their having been disputed on many previous occasions in our transport debates—that everything rests between the railways and the roads. At no time did the Transport Commission control a sufficient number of lorries on the roads really to dominate the roads. The maximum number of lorries the Commission ever possessed was about 41,000, and it never used anything like that number.

In the debates in 1953 on the Transport Bill I estimated that British Road Services never used more than 28,000 vehicles. Whether or not I was right I do not know. In fact, the available operating stock was about 35,000 and I estimated that it used rather fewer than that. Whatever the number it was some infinitesimal proportion of the large number of lorries on the road. To talk of an integrated road and rail service and assume that the B.T.C. had control of the roads was always absurd. With the number of vehicles it had it could never have produced the service it was expected to provide.

Mr. D. Jones

Is the hon. Gentleman saying that he has now reached the conclusion that the Transport Commission never had a monopoly? If so, will he now say that the 1953 Act should be abolished?

Mr. Wilson

No. The object of the 1953 Act was to restore freedom to the small road haulier, because he was restricted to a 25-mile radius and because British Road Services had a few lorries on the road which were engaged on long-distance road services in competition not with the private haulier but with the trader who was running a C licence vehicle.

Mr. Turner-Samuels

If the vehicles were never used for that purpose, why should the Government now want to get rid of them to private road hauliers?

Mr. Wilson

We are getting away from the argument. If the number of vehicles owned in 1951 was 41,000 and the number has now been reduced to about 35,000, while the number of vehicles which were operated and used by British Road Services in 1951 was 35,000, I do not follow the argument of hon. Members opposite when they accuse the Conservative Government of having ruined the road services. It seems to me that we have, in fact, made them more efficient because we have got rid of their surplus stock. We have persuaded British Road Services to sell a lot of the road vehicles which they were not using. That is perhaps a debating point, but I think it answers the argument adduced by hon. Members opposite.

If I may refer to the point at which I intervened when my hon. Friend the Member for Hall Green (Mr. Aubrey Jones) was discussing the provisions of the 1953 Act, I do not think it is always appreciated exactly what was done under Section 21. In the debates on that Measure in 1953 it was suggested that something should have been done to get away from the common carrier obligation. That was not done. The common carrier obligation remained with the railway companies, but, on the other hand, a very important obligation which rail- way companies had in the past was removed. That was, by Section 21 (1, b), that so much of section two of the Railway and Canal Traffic Act, 1854, or any statutory provision passed or made with respect to any particular undertaking, as prohibits undue preference … was repealed.

That had a profound effect on railway law, and that, together with the charges scheme which will publish only a maximum charge, seems to me to give the railway companies much greater flexibility in charging, and should go a long way to enable them to meet any difficulties which might arise. Incidentally, that is part of the answer to the argument of my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), who seemed to be worried that the improvements which could take place under the modernisation and re-equipment scheme might not be sufficient because these improvements were devised before the additional wage awards were made.

If the charges scheme is sufficiently flexible that we can arrange charges so as to discourage uneconomic traffic and encourage economic traffic, it seems to me that the profit to be made from that source would be additional to that which could be made by modernisation and that the figures given in the modernisation scheme are not the total figures which can be expected.

Mr. Powell

That is on the assumption that the financial calculations in the modernisation plan leave out of account any expected advantage from the charges scheme. I had assumed that those advantages had also been taken into account by the Commission. Perhaps my right hon. Friend could clear that point up in his winding-up speech.

Mr. Wilson

There was a third point from which we could expect some benefit. The hon. Member for Reading, South (Mr. Mikardo) gibed at us because we had talked about decentralisation of the railways and wanted to know how we could carry out modernisation and decentralisation at the same time. That is, in fact, what is now happening, because the degree of decentralisation for which we asked is to a large extent being achieved by the appointment of the regional boards.

We never suggested that there should be a complete divorce of one system of line from another, with no central organisation at all. All we wanted was a much greater degree of local control and that, we hope and believe, will be the result of the appointment of the regional boards. We hope that the appointment of those boards will add to efficiency and to the profits which will be available for the Commission from its rail services.

On all these grounds there is substantial reason why we should congratulate the Commission on the proposals which it has made and express our belief that they will lead to the establishment of a modern and economic railway system.

8.53 p.m.

Mr. Frederick Lee (Newton)

In the seven minutes dash which I shall have to make, I shall be compelled to omit some of the things I wished to say, but I want to comment more on the final Report than most hon. Members have done. I suggest that this Report is one of the most remarkable documents on the subject of industrial negotiations yet published, and we cannot now escape a wide discussion of two basic questions of supreme importance which I think until now have been rather sedulously pushed into the background.

The first question posed by the Report is, do we insist that the capacity of a given industry to make a profit is the determining factor in deciding the level of wages? Secondly, the Report poses the problem to what degree should Governments become involved in wage disputes in the public sector. If we answer the first question in the affirmative, it ensures an impregnable position in competing for available labour for such industries as the football pools, while it sounds the virtual death-knell of such industries as the railway industry.

A close examination of the final Report leaves one with something of a sense of sorrow that most worthy and capable men on both sides of these negotiations should be forced into a position in which, while saddled with the responsibility for negotiating a settlement, neither side in fact ever had the power to conclude one. No wonder the Reports talks about the present position being an unhappy one.

I venture to suggest that if we now deceive ourselves into the belief that the cause of the trouble has been removed, we shall deserve the tragedy which will undoubtedly come. On almost every page of the Report, I suggest, we see an indictment of a system which we have known as the system of collective bargaining, and we see that in this industry, at any rate, it has become a complete and utter farce. I could give dozens of quotations from the Report in support of that statement. Perhaps I could give one quotation showing the Commission's side of the question. I quote from paragraph 62 on page 21: Where (as in the case of the Commission) the employer is bound to keep his business going and can neither show a working profit, nor shift the scene of his operations, nor reorganise his capital structure, nor be wound up by his creditors, then the factors which are understood by all as affecting the wage rates in normal industry are absent. That is the problem of the Commission. Then we turn to Mr. Campbell's evidence quoted on page 10, in paragraph 25: As long as the Commission continued to plead inability to meet the higher wages they expressed the wish to pay, any new negotiations were doomed to failure. It was, therefore, decided to approach the Minister of Transport in the hope that some way could be found of enabling the Commission to pay reasonable wages while awaiting the financial benefits from their plans for the future, namely, revised charges and modernisation. The Minister was, however, unable to assist in clarifying the position beyond a rather nebulous repetition of the Commission's letter to the effect that if the Railway Staff National Tribunal awarded the Union's claim in part or in whole, the Commission would have to consult with the Government. I suggest that those two statements form the basis of the end of any hope of collective bargaining being a success in this industry.

We have now arrived at the position where either the Commission must first obtain the consent of the Government to wage increases which can only be made with Government assistance, or make agreements with the unions in the knowledge that the Government can compel it to repudiate those agreements when they are made. In years gone by when I have tried to pose this sort of problem in this House, the Press and elsewhere, I have been told that the Government must be kept out of wage negotiations. I now ask the purists who raised their hands in horror at talk of Government intervention, "Is this collective bargaining, or is it a fact that we have now come to the point that, unless we can get a properly organised wages system within this industry, there is no hope for peace?" We are bound to have repetitions of the sort of thing we have seen during these negotiations, which nearly paralysed the country.

The Government are in the position in which they alone can determine what type of wages or wage advances can be given in the railway industry. They themselves by their action in divorcing rail from road laid down the most disgraceful wages policy the country has ever seen. They said in effect—the Chancellor repeated it this afternoon—"We will force you to try to pay your way as a transport industry but we divorce from you the road section, which was the only profitable section you had under your control. Having made it impossible for you to make a profit until you have modernised your industry, we now insist that the wages you shall pay to your railway employees have to be based on the fact that you have to make a profit." Under those conditions it is really quite insane to believe that we can get peace in the industry.

We need only go a little further and see the remarks in some influential journals, not unsympathetic to the Government on general policies, to see something of the fury of their type of Toryism at having missed the chance to shoot down the N.U.R. in flames because it asked for more than £6 5s. for a railway porter. I believe there is no room for complacency over this settlement. The Chancellor today gave the impression that we could slide beautifully over a 15 years period during which the modernisation must take place. If he or any of the Government believe they have a solution of the problem by this settlement, candidly I think there is no hope for them. I believe that there must be an examination of the basis of the negotiating machine inside the railway industry. Otherwise, I prophesy that within a year we shall have the same problem all over again.

9.0 p.m.

Mr. James Callaghan (Cardiff, South-East)

My right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) has asked me to apologise to the Minister and to the House for not being here lot the winding-up of the debate as he is attending a Commonwealth Prime Ministers' function from which it is difficult to escape.

I am sorry that my hon. Friend the Member for Newton (Mr. Lee) had to sit down at nine o'clock, because he was providing the complete justification for the Opposition's Amendment and its desire to widen out the issues under discussion today rather more broadly than those that are contained in the Government's Motion.

I quite understand the Government's anxiety to have a comparatively narrow discussion and their determination, therefore, to put up the Parliamentary Secretary to the Ministry of Labour, which is always a non-controversial Ministry, to keep the House on an even keel. But the Government cannot escape from the consequences of their own actions, and it is the belief of the Opposition that the wages dispute and the near-strike to which the country was subjected must be seen both in the context of the Government's own transport policy and in the context of the Government's economic policy.

It is the view of the Opposition that it is the ill-conceived transport policy of the Government which has led directly to this crisis and that it is the Government's economic policy which has contributed to its seriousness. It is upon those two principles that we stake our Amendment this evening and ask the House to support us.

The Opposition rejoices at the increase in pay won by the National Union of Railwaymen for its members. We believe that the railwaymen were underpaid, that they should have had more pay earlier, and that the increase came only just in time to prevent a most serious strike. If that is so, we must ask what is the attitude of the Government in this connection.

It is all very well for the Government to put an innocuous phrase at the beginning of their Motion, which states: That this House welcomes the settlement of the recent wages dispute … Of course, the House welcomes the settlement—

Mr. Walter Monslow (Barrow-in-Furness)

Are we not rather premature in saying that the dispute has ended? That is not quite a correct statement. The matter is sub judice at the moment.

Mr. Callaghan

I understand that my hon. Friend, who is a distinguished member of the Associated Society of Locomotive Engineers and Firemen, refers to the claim that his own union has put forward following upon the recent award. I do not wish to get at cross purposes with my hon. Friend, but I think that this debate is really concerned with the strike action that we might have had to face as a result of the events just before Christmas in which the N.U.R. was involved. But I am grateful to my hon. Friend for making that correction.

It is fair that we should say to the Government now, "What is your attitude? Do you approve of the wage settlement? Do you approve of the wage increases as distinct from the settlement?" I ask it for this reason, and I should like to know the views of the Minister of Transport when he replies to the debate. If the Government accept the agreement, if they believe that the railwaymen were underpaid and should have had more pay, and if they are accepting the fact that the railwaymen have got more pay and are rejoicing in it, why did they leave it until the fifty-ninth minute of the eleventh hour to see that these men got justice? A responsibility devolves upon the Government.

When the representatives of the A.S.L.E.F. secured an increase in pay before the tribunal, which led to the N.U.R. members overturning their own executive and saying, "We cannot tolerate a settlement, even though you have already arrived at it," the N.U.R. went to see the Minister of Transport.

The N.U.R. has behaved with great patience and circumspection throughout the whole of the dispute. It put in the wage claim in July, 1953, and I should like to pay tribute to the patience and negotiating skill of its general secretary as well as the Executive. They went to see the Minister of Transport on 30th December and they put to him the impossible position in which they found themselves as a result of the wage increase that had been conceded to the Associated Society of Locomotive Engineers and Firemen and they asked him for his help.

At this stage, the Minister knew what the Commission's finances were. He knew that the claim was justified. At least, I assume that he believed it was, otherwise we would not now be asked to accept a settlement. He knew that the Commission had no money with which to meet this claim. What did he do? In a letter which he wrote on 20th December he referred the N.U.R. to the normal processes of negotiation and arbitration and asked it to pursue through those normal channels negotiations which had been fruitless over the preceding 18 months.

Mr. Watkinson

I must intervene to point out the historical facts. The hon. Gentleman is quite wrong. The N.U.R. rejection of the agreement was on 11th November and the Railway Staff National Tribunal award was on the 15th, so it could hardly have been the award which led to the N.U.R. rejection of the agreement.

Mr. Callaghan

I hardly think that intervention was worth while.

Mr. Watkinson

It got the fact right anyway.

Mr. Callaghan

If the hon. Gentleman wishes to put the fact right he can do so, but if he does not know that things get out before an award is published he does not know as much about these things as he ought to know. I have been a member of the trade union side of negotiations. [Interruption.] None of us is quite as innocent as that, not even the Parliamentary Secretary.

What useful purpose did the Minister think that he was serving the community or the underpaid railwaymen by sending the N.U.R. back to negotiation through channels which had already been exhausted over a period of 18 months previously? He told the N.U.R. that … the Government consider that, inasmuch as the normal processes of negotiation and arbitration have not been exhausted, they could not intervene.… That was on 20th December.

On 21st December the N.U.R. received this letter. It called the Executive, which met on 22nd December and called for a national strike. On 23rd December the Government went into action through the Minister of Labour and called the Commission and the N.U.R. together. It is very reminiscent of the young lady of whom Byron wrote in "Don Juan" that she whispered that she never would consent, and consented. I think that that is near enough right. No doubt the Minister of Transport will be able to quote it completely accurately. It is remarkable that within three days of the Government telling us that they did not intend to intervene they intervened and procured a settlement as a result of the Court of Inquiry.

The Court of Inquiry made a statement which is most remarkable to those of us who have been concerned with nationalised industries since 1947. The court said that it did not regard the obligation upon the nationalised industry to pay its way, taking one year with another, as being a reason for rejecting reasonable wage claims. That is a sentiment of which I most heartily approve, but the court was quite unfair to blame the Commission for turning down wage claims on the grounds that it could not afford them, when the court knew that there was not the money in the "kitty" to pay them.

If the Government had given some guidance to the nationalised industries that they need not pay their way over a period of 10 or 15 years, the court might have been justified in the strictures which it passed. I do not believe that it was justified in the circumstances of the Government's attitude—both the last Government and the present Government—towards the desirability, indeed the necessity, of the Commission paying its way, and, for that matter, the other nationalised industries, too.

What made the Transport Commission decide after the Court of Inquiry that it had the money to pay the wage claims? Was any indication given to the unions by the Minister of Labour that the money would be there? If so, then I can understand the comment of Sir Brian Robertson that where the money was coming from was not his concern. That would have been a clear indication that the money was coming by some form of Government assistance.

I hope that the Government have not "welshed" on the Transport Commission. I hope they have not misled Sir Brian Robertson and other members of the Commission at a time when a settlement of the strike was essential into the belief that there would be financial help, and now that the strike is over and they have only the Commission to deal with, the Chancellor comes to the House and says. "In no circumstances would I dream of giving a subsidy." It would be very interesting to know from the Minister what were the circumstances that led to the Commission finding the money only a week after it said it was impossible to do so.

If I may sum up this part of the question of pay, I believe the issue is simply this—that the Government believed the railwaymen had got a case, they hoped they could dodge that case, but eventually, because of the display of unity and strength by the National Union of Railwaymen to secure a claim which was theirs in justice, the Government yielded to force what they would not concede to reason. There can be no bigger condemnation of the handling of the dispute than that.

Mr. Watkinson

I really cannot let the hon. Gentleman get away with that. If he wants to distort the facts let him have a go, but it is equally my duty to put them right. The point is, as he knows well, that this settlement was arrived at on the basis of the interim Report of the Court of Inquiry. I myself most carefully went through the findings, although I doubt whether the hon. Gentleman was listening at the time, and I indicated quite clearly the findings the Government accepted and the argumentation which they did not. The findings they accepted were that the Transport Commission should not shelter behind the provisions of the 1947 Act, that negotiations should be commenced providing that the threat of a strike was called off, and those things being agreed in the end negotiations were renewed on a proper basis.

Mr. Callaghan

I hope the Parliamentary Secretary is satisfied with that intervention.

I come now to the question of overstaffing and efficiency, because it seems to me that a great deal of the discussion that has taken place during the last three weeks or so in what pass for responsible newspapers as well among apparently responsible Members of Parliament has been very wide of the mark. My hon. Friend the Member for Swansea, West (Mr. P. Morris) and other hon. Members have today indicated the degree of saving in manpower that has taken place in the activities of the Transport Commission since 1948, and they are very remarkable.

It is well known that there are considerable vacancies for particular jobs in the railway service today. These do not often come to the public notice, but when they do it is in the form of trains that are cancelled because there are no firemen, dirty carriages because there is no cleaning staff, and so on. That is the way the public sees it, but behind it there are many thousands of unfilled vacancies in the Transport Commission today.

It is well known, certainly to railwaymen but not, apparently, so well known to a number of hon. Gentlemen opposite, that efficiency teams, called, in the vernacular, "razor gangs," have been going round local railway depots for a very long time cutting out staff. It seems to me that all these facts might well have been studied by Government spokesmen in an attempt to correct the impression which has been created that the Commission is heavily overstaffed. I believe it was the "Economist" which stated that 100,000 men would be cut out. I believe that to be the veriest nonsense, and unsupported by a shred of evidence of any sort, except that the writer once saw a large number of porters at Euston Station.

I believe there is room for overhauling the methods and procedure of British Railways. But I would remind the Minister and the Commission that in the Navy it is usually said that where a ship is an unhappy ship it is the responsibility and fault of the captain. I do not blame the captain of this particular ship. I believe that the top level, the Commission, is as anxious as anyone else to get efficient and good management in the organisation. I say that in the lower echelons of management there are a number of people who. I believe, are not up to the job in the way in which they should be.

I believe that it is to that level first that the Commission might well turn its attention in an attempt to get its management relations right rather than attempting to cut out a guard here and a porter there. It may well be that a reorganisation of methods would save a considerable number of men. But the conciliation grades see no reason why they should be cut down while the empires being built up above them go on. I believe that if the empires building up above them were cut down, it would be more easily possible to get rid of a number of people at the bottom—[HON. MEMBERS: "Hear, hear."]—this is, of course, very welcome to hon. Gentlemen opposite, and I am not surprised. But most of the people in the lower echelons, three-quarters or nine-tenths of them, were taken over from private enterprise. In my view it is because of their lack of managerial skill that they have endangered the efficiency of British Railways over the last few years.

Mr. Campbell, the General Secretary of the National Union of Railwaymen, has expressed his view about it today. This is what he said: What the railway unions really have been riddled with is this: plain, common, straightforward dissatisfaction—dissatisfaction with a rate of wages that was an insult to a proud and honourable occupation. And as long as that dissatisfaction remained, it was ridiculous to expect railway workers to pitch into the job of boosting railway efficiency with all the enthusiasm of highly paid business executives. Now, having involuntarily 'willed the means' for higher railway wages, the public is entitled to look for a change of atmosphere in the industry. And we in the N.U.R. have given our assurance: the public will get it. But Ted Leather, along with a little band of self-appointed railway experts, is doing his level best to wreck that new atmosphere before it has a chance. If there is much more of this sort of petty sneering, it may well go sour. I say to the hon. Member for Somerset, North (Mr. Leather) that he might well watch his words in some of the things that he has been saying recently about railway workers.

Now I come to the question of the attitude of the Minister himself, because he has not a clean sheet in this matter. The Minister who is now in charge of this nationalised industry was one of the foremost opponents of nationalisation. He was entitled to be an opponent of nationalisation, but he was worse than that; he sneered at it, and those who served in it, and we are entitled to know whether he still holds the view that he expressed at the Conservative Party Conference in 1947. That view, quite shortly, was that a number of industries were about to be nationalised, and that there were some people in those industries who really were not opposing the Government as they ought to have been doing. The fact that it might have been because they believed in nationalisation did not occur to him; he put the reason on the more genial basis that they hoped to get jobs on the nationalised boards. It was in that context that he called them industrial Quislings.

It is up to him to say that he has changed his mind upon this issue. It is up to him to say that he does not believe them to be industrial Quislings, or that Sir Brian Robertson, the part-time area railway boards which have recently been appointed, and every other servant of the nationalised industries are not doing their level best to serve the community in their jobs. Unless the Minister does that he will remain on a par with the former private Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who expressed his attitude towards nationalised industries in the phrase: No one wants to give Santa Claus a kick in the pants on Christmas Eve. The Motion before the House is a singular one. It has a top and a tail, but no body. It welcomes the settlement and expresses the hope that, in time, the Commission may be able to pay its way and establish a modern and economic railway system, but it does not say what is to happen in the meantime. What is to be the position of the Commission during the next 15 years? We all agree that a substantial deficit is about to accrue to the Commission. That deficit will be made worse by the failure of the Government's transport policy in the matter of selling the publicly-owned lorries. The policy has been a flop. The intention, quite simply, was based on the assumption that British Road Services were making a loss, therefore they would be broken up and sold off quickly, preferably by 31st December, 1953. The Government would give the purchasers twelve months to dig themselves in on the routes, and, from 31st December, 1951, the 25-mile limit would be repealed, so that all the hauliers would be able to run wherever they might like to carry goods.

What has happened? The lorries due to be sold by 31st December, 1953, are still in the hands of British Road Services. Something like 30,000 British Road Services' lorries are still competing with private road hauliers who are available to take their lorries wherever they like throughout the length and breadth of the country. From the point of view of the Government's philosophy, what is the objection? Why do we have to press ahead with the sale of these lorries?

It is impossible for the Government to stand any longer upon the ground that British Road Services are not paying their way, because they are. The year before last they made a profit of £9 million, and last year they made about £7 million. If this process of disturbance and denationalisation had not taken place we should not be talking about a profit of £9 million; it would be more like double that sum. That is what the Commission is being robbed of by these sales.

There is now no moral leg upon which they can stand for proceeding to sell lorries when the sales are not popular—the fact that they cannot sell them is proof of that—and when complete competition exists in the industry as between British Road Services and private road hauliers. Why press ahead? Is it just for reasons of face? Is it that they do not like to admit that they are wrong? If that is the basis of their policy, so much the worse for the transport industry and the country. Let us be quite clear that, in the situation with which it is faced, the Commission, had its road services not been interrupted, would have had an additional £15 million a year to put towards their revenue, and the Government deprived the Commission of it.

I come now to the question of road subsidising rail. There is really no principle involved here. If there were any principle involved in it, how is it that Conservative Members have stood for so long for London buses subsidising the London Underground? if there is a principle in it, why is it the farmers have been substantially subsidised? There is really no question of a subsidy.

I ask hon. Members opposite to cast aside their political blinkers. So far from road subsidising rail, the Socialist case on the organisation of transport in this crowded industrial island is that if we run road and rail together and treat them as one unit, and having seen, after they have been working together as one, that we do not duplicate resources unnecessarily, that we do not waste capital investment and expenditure, we can provide a comprehensive service for the community.

It is not a question of a subsidy, but of what is the best organisation, and the whole nation, including every expert inquiry, was moving towards that solution at the time the last war broke out. Now we have to start re-educating hon. Gentlemen opposite once more.

I now come to the other aspects of the Government's policy which have been so disastrous and for which the Chancellor of the Exchequer is himself responsible. The right hon. Gentleman laughed this afternoon and interrupted my right hon. Friend the Member for Lewisham, South to ask him what the price of tea had to do with the issue we were discussing.

Mr. R. A. Butler

I think the hon. Gentleman is not correct. I asked the right hon. Gentleman why, if the question of the Colonial Empire was out of order, the price of tea was in order in this debate. I never laughed about the price of tea.

Mr. Callaghan

The Chancellor of the Exchequer, I must say, is falling below his usual level if he can see no connection between the price of tea and this issue, because it was the Government's economic policy, starting out with the lifting of the food subsidies, which precipitated the first round of the wage claims. The Chancellor of the Exchequer and his colleagues in the Government have consistently and continuously removed controls of all descriptions.

Mr. Butler

May I ask the hon. Gentleman why it was that for a whole year we kept the cost of living stable, while, under the Labour Government, it rose steadily?

Mr. Callaghan

I think that the short answer to that is contained in the Price Statistical Index, which is published every month, and which, as the Chancellor knows, shows a substantial increase in the cost of foodstuffs in particular ever since the Government came into office.

The charge I make against the Chancellor—and I have only two minutes left in which to make it—is that, under his philosophy and under his administration, we in this country are now living in an era of grab. Profits, dividends, share values, prices—[HON. MEMBERS: "Wages."] Do hon. Gentlemen opposite realise the significance of what they are saying? They are now saying "Wages." Is not this the danger to their philosophy? Can hon. Gentlemen opposite, can the Government, sustain a full employment economy under a philosophy of grab? Is it possible?

I ask hon. Gentlemen opposite to pause and reflect before they carry their philosophy too far—because prices, dividends, share values and wages are going up, and the Government have not been able to break the N.U.R.—although they tried to break them on this issue—because of the strength of the railway unions and the vital necessity of the railways to our economy.

I would say one last word to the trade unions. I say to them, "I believe that the Tories will try to break you yet." They will have to break them and break through the constantly increasing wage claims which are bound to come in this set of circumstances, because full employment cannot be maintained while the rest of the economy is moving forward leaderless, without any direction, and with the reins thrown forward on the horse's neck.

I say to the House and to my hon. Friends that the real authors of this near-strike are not in the N.U.R. or in the Transport Commission, but on the Treasury Bench.

9.31 p.m.

The Minister of Transport and Civil Aviation (Mr. John Boyd-Carpenter)

Let me at once repudiate the wholly unfounded and wildly irresponsible charges the hon. Member for Cardiff, South-East (Mr. Callaghan) saw fit to make in the concluding stages of his speech by saying that this Government had no wish to break the N.U.R. The whole record of my right hon. and learned Friend the Minister of Labour and of my hon. Friend the Parliamentary Secretary to the Ministry of Labour, the care and skill with which they have in the most helpful way, and with the greatest co-operation from the trade union movement, handled these matters, is of itself an emphatic and devastating repudiation of a charge which the hon. Member for Cardiff, South-East knows to be false.

I shall not waste any more time on it. It is not worth it for this reason. Until the concluding passages of the hon. Gentleman's speech, I was reflecting on how valuable a debate this could have been if no Amendment had been put down in the terms of that of right hon. and hon. Gentlemen opposite. I was strengthened in that view by the very helpful and valuable speeches which were made on the main Motion by the hon. Member for Nottingham, East (Mr. J. Harrison), by the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) and by my hon. and learned Friend the Member for Huntingdon (Mr. Renton), to mention only a few.

This is an important moment in the history of our railway system, with great steps being taken which may well be decisive for the future of our railways. It seems to me that it would have been better if we could have debated this matter on the basis of the Government's Motion and left the well-known expression of the Opposition's views on road haulage denationalisation for another and more appropriate occasion.

I am particularly sorry that the terms of the Opposition's Amendment seek not only to add certain words with respect to road haulage denationalisation, but seek also to delete from our Motion the words: … and believes that the steps proposed by the British Transport Commission will, with the co-operation of all concerned, lead to the establishment of a modern and economic railway system for the benefit both of industry and of the travelling public. I am bound to say that it is a pity, when the British Transport Commission is making the most strenuous and skilful efforts to build up the prosperity and strength of an industry which right hon. Gentlemen opposite nationalised, that those same right hon. Gentlemen should seek by this Amendment to deny to the Commission that expression of confidence which is given in the words of the Government Motion. [HON. MEMBERS: "Quislings."] I will deal with that at the appropriate stage. Do no let hon. Members worry about that. But I do put this to them.

It would be very wrong, wholly contrary to a great deal of what was said by the right hon. Member for Lewisham, South (Mr. H. Morrison) as to the work which the Commission has done, and wholly contrary to a certain amount of what was said by the hon. Member for Cardiff, South-East, if hon. and right hon. Gentlemen opposite were to go into the Lobby to support an Amendment to delete those words which express confi- dence in the future of the Commission in view of the work it has done. I very much regret what turns out to be the amended version of the Opposition's Amendment to seek to cut out those words.

That compels me, in the course of the very limited time at my disposal, to deal firstly with the steps which the Commission is taking to improve and strengthen its enterprise and which, in the judgment of the Government, give good reason for confidence in the future of our railway system. It would not have been necessary to do so if hon. and right hon. Gentlemen opposite had not indicated their desire, quite apart from their road haulage point to which I will also come, to oppose that part of our Motion which relates to this most vital matter.

Let me say at once that Her Majesty's Government have the highest regard and the highest confidence in the Commission and that that confidence is very much strengthened by their experience of what has been done, successfully, during the last year, some details of which I will give in a moment.

Let me deal with the point which appears to interest hon. Gentlemen opposite far more than the future of our railway system, and that is a speech which I made at Brighton many years ago. I was not given by the right hon. Member for Lewisham, South or any other hon. Gentleman any notice of an intention to refer to that speech. [HON. MEMBERS: "Oh."] I take it that hon. Gentlemen opposite regard my speeches as of such world-compelling interest as to require no particular notice. Let me take up the misrepresentation made of it, I am sure inadvertently, by the right hon. Member for Lewisham, South—whose absence, in the circumstances outlined by the hon. Member opposite, we completely understand and accept—in order to challenge what he said.

The right hon. Gentleman said that in the course of those observations I said that anybody who took office on the board of a nationalised industry was a Quisling. That is wholly inaccurate. I will read to the House a quotation from a Press report of what I said on that particular occasion, and then I will leave it there. It is: There is another set of people whom I have in mind. That is the industrial quislings. In some menaced industries there are a small minority of people who are not wholehearted in their fight against nationalisation because they have at the back of their minds the thought that it would be very nice to end up on one of these State boards. That is a very different thing from what the right hon. Gentleman said. [HON. MEMBERS: "No."] Cannot hon. Gentlemen opposite see the difference between a charge against anybody who takes office in any circumstances on a State board and a charge against those who are affected by considerations of possible personal gain in their attitude towards nationalisation? If right hon. or hon. Gentlemen opposite cannot distinguish between those it is really hopeless to argue with them, and I propose to leave the matter there.

Mr. Callaghan

The only importance of the speech is that the speaker then happens now to be the Minister concerned with the largest nationalised industry in the country. We should, therefore, like from him a clear assurance that he does not regard those serving him in that capacity as Quislings, and that he withdraws that comment as applying to any one of them.

Mr. Boyd-Carpenter

I have not the slightest difficulty, as on other occasions I have made abundantly clear my very high regard indeed for those who serve on that Board. I can tell the hon. Gentleman at once that these observations—which related, of course, to people who at that time had not, or may never have, been appointed—[Interruption.]—had no reference whatever to any of those who are serving on the boards at the present time. I have a good deal to say on matters much more important than this.

Our confidence—our high confidence—in the British Transport Commission is suported by what it has done—particularly in the last year—and I want to tell the House a little about that. Since last year it has put in hand a complete reorganisation of its own headquarters, which it has very much streamlined. I think it is a great pity that the hon. Member for Cardiff, South-East should talk of building empires at the top. There is not a word of justification for that. On the contrary, the higher organisation of the Commission has been streamlined and greatly improved since last summer and has been put on a much more efficient basis.

Mr. Callaghan

Half-way up.

Mr. Boyd-Carpenter

The hon. Gentleman said at the top—it has moved halfway down. But the hon. Gentleman is quite wrong, and is falling into the precise error with which he charged certain of my hon. Friends; the error of making charges of this sort without a scrap of evidence to justify them.

The area boards have been appointed and took over responsibility for a great part of the management of the railways as from Tuesday of this week. The hon. Member for Reading, South (Mr. Mikardo), whose knowledge of administrative questions I think the House recognises, referred to the fact that the party on this side of the House has always been in favour of devolution of control in the railways. I think the House will acknowledge that the setting up of the area boards, to which has been devolved a very great part of the management of the railways, is a very considerable step in the devolution of authority. The area boards themselves are taking steps and pressing on with a further decentralisation of authority. That is another step.

Mr. Popplewell

rose—

Mr. Boyd-Carpenter

I am sorry, but time presses.

The most important of all the steps being taken by the Commission has been the preparation of the modernisation and re-equipment scheme. I understand, Sir, that a good deal more will be said about this during the debate next week, but it is at least important from the point of view of our confidence that what the Commission is doing will give to the railways a better and more prosperous future. The Commission has been working during the last few months on the production of this bold and imaginative scheme for the modernising and bringing up to date of our railway system.

In addition to that, in accordance with the Act of 1953, it has prepared the new freight charges scheme. I entirely agree with the right hon. Gentleman the Member for Lewisham, South that the charges will, of course, have to be Framed so as not to be excessive to the point of losing traffics. Naturally, that point will be con- sidered by the Commission when it comes to frame the charges. What is, indeed, important about the 1953 Act is that under it the Commission will have much more flexibility, much more opportunity—like any other business—to adjust its charges on business principles in accordance with what is a proper and businesslike charge for the traffics which it is carrying.

Then the Commission made a lot of progress on the commercial side. It had special officers detailed to go through the whole of the system to make sure that the system was conducted on a more commercial basis in order to get business. Then it has made a good deal of progress on the technical side. Multiple unit light diesel trains are running in Yorkshire with extremely satisfactory results. The Sheffield—Manchester stretch of line has been electrified and a large new tunnel has been completed.

The House may be interested in the financial and commercial results of recent electrification. The Shenfield electrification scheme is an example. In 1949, while under steam operation, the line carried 11.2 million passengers. In 1953 the line, by then electrified, carried 30.6 million passengers. That is an indication of what electrification can mean. [Interruption.] I am sorry that hon. Members opposite, even though they are indicating their unwillingness to vote for a Motion indicating confidence in what the Commission is doing, should seek to arrogate to their political theories the very solid achievements of the Commission. I hope that the House will feel able to deal with this question of the future of the railway system bearing in mind that we all want to see greater progress and efficiency and that we all applaud and appreciate the steps which the Commission is taking.

One final point on this part of the matter is the question of manpower. The right hon. Member for Lewisham, South and my hon. Friend the Parliamentary Secretary to the Ministry of Labour both dealt with the decrease in manpower employed by the Commission. The number of men employed by the Commission fell by 17,000 in the year that has just finished, and that again is a solid achievement in the redeployment of labour. I hope once again that the House will take that as an earnest of what the Commis- sion, with the Government's backing, are trying to do to improve the efficiency of this system—on a nationalised basis, if you like, but a system which matters a great deal to this country.

There are similar figures, with which I will not weary the House, which show that, taking the various indices which are normally used in railway operation, indicating the extent to which locomotives, track and rolling stock are employed, there has been a steady improvement in efficiency, particularly in the last year. [HON. MEMBERS: "Hear, hear"] I am sorry that hon. Members opposite, while prepared to cheer that fact, are not prepared to vote for it. The words which the Opposition Amendment proposes to add raise a perfectly clear clash of opinion between the two sides of the House. The whole Amendment is rather reminiscent of the debates of two years ago. Even our old friends co-ordination and integration are dragged out, burnished up and produced again for our contemplation.

Let me put this to the House, if I may: for the road haulage issue, which the Amendment seeks to raise, to have any relevance whatever to the Motion before the House, right hon. and hon. Gentlemen opposite must adopt one of two attitudes: either they must take the view, which some of them have strenuously denied, that the purpose of maintaining the road haulage enterprises with the Commission is to enable surpluses from the Commission's road haulage enterprises to subsidise the railways, or they must take the view that, under the sacred name of integration, they propose to deprive the consumer of a considerable degree of freedom in his choice of transport.

I think that is what hon. Members opposite mean by integration. They mean that the supplier of transport, not the consumer of transport, should determine by what means of transport goods or passengers should travel. It is perfectly fair to say that there are certain goods for which the arguments in favour either of road or of rail are overwhelming, but in the middle there is a considerable amount of traffic for which someone has to settle whether it shall go by road or by rail. As I understand the attitude of right hon. Gentlemen opposite, integration and coordination are simply a smoke screen for saying that it shall be the supplier of transport, the Commission, who shall determine.

Mr. Sparks

No.

Mr. Boyd-Carpenter

That is what it means, and that is what it must mean if it is to have any relevance whatever to the present issue.

Our attitude is the opposite. We believe in competition because we think it provides one of the best stimuli to efficiency, because the fact that if one purveyor of transport does not give good service the consumer can go somewhere else is the best possible stimulus to the provision of these services.

Mr. Mikardo

Petrol.

Mr. Boyd-Carpenter

There is another aspect of the matter. Competition will be one of the best checks on the way the modernisation scheme is going. Large sums of money are to be invested in modernisation. If there is competition between the modernising Commission and private enterprise in their transport services, then the way in which that competition goes will be a very good indication of how efficient the modernisation scheme is. I note that the "Economist," in its leading article last Friday, took just this point and said: Both in order to keep a continuing check on whether it really is advisable for the railways to spend all this money in the long period between now and 1974, and in order to provide some gauge of whether what is being spent is spent wisely, it will be necessary—in these next 20 years—to keep competition in between road and rail. The only other argument in favour of co-ordination and integration is one of which I believe right hon. Gentlemen opposite are now becoming a little ashamed, although the right hon. Member for Lewisham, South relied on it a little. It is that the road haulage assets of the Commission should be used to earn money to support its railway activities. Indeed, the hon. Member for Cardiff, South-East, in about the middle of his speech, quoted certain figures, which in fact are very exaggerated and which ignore altogether the proceeds of the Transport Levy, in order to demonstrate the extent to which the Commission has been prejudiced by the sale of its lorries.

I should like to follow the more ingenious argument of the right hon. Member for Lewisham, South who said that if a big store—I think he suggested the Rochdale Co-operative Society—

Mr. H. Hynd (Accrington)

Lewisham.

Mr. Boyd-Carpenter

I am sure the House is glad to know that there is a certain affinity between those two boroughs.

The right hon. Gentleman suggested that if a big shop has a number of departments it is not necessary for every department to make a profit but perfectly legitimate for one department to be supported by another. But that begs the whole question of whether road haulage should be a department of a body also conducting a great rail enterprise. It begs the question of whether the shop round the corner should be a branch of the department store. It is going very far, I suggest to the House, to say that we must keep road transport within the ambit of the Commission because if we do not we shall undermine the finances of the railways.

That, in our view, shows an appalling lack of confidence in what can be done by our railway system. It assumes that all the measures that are being taken to modernise and improve the system, the re-equipment and freedom in charges, can never in any circumstances make our railways solvent. That is the inevitable assumption of hon. Members opposite. I call in aid the leading article in "The Times" this morning, which deals with the matter effectively: though in any transport undertaking there must often be a balancing of losses on some services against profits on others, economic reason recoils from the thought of so wide an extension of this system as a deliberate balancing of railway losses against road profits as a whole. I know that on doctrinal grounds right hon. and hon. Members opposite regret the denationalisation of the road haulage enterprise which they nationalised. The

House knows also that I and my hon. Friends take a different view of that matter. There is a clear clash of party opinion, a clear and honestly held division of opinion on that matter. But that clash of opinion, which may be debated from time to time, really has nothing whatever to do with the issues raised by this Motion, unless indeed right hon. and hon. Members opposite are at the last moment prepared to admit that what they have in mind is using road to subsidise rail. If they do not accept that argument and that idea of compelling transport users to use the form of transport the supplier wants them to use rather than the one they want to use, this Amendment has nothing whatever to do with the case.

It seems lamentable that when an opportunity has been given by this Motion to say to the Transport Commission that the efforts it is making to put the railways on a firm foundation will enable it, in the words of the Motion, to give service to the community and so that it can have a solvency which would enable it to ensure good wages to those who work in the industry—in short, to make the railways of this country a credit to this country—the Opposition should wish to go on record at this moment that they and they alone would not give support or applause to that project, but prefer to use this occasion for a rather squalid debate on road haulage.

The Parliamentary Secretary to the Treasury (Mr. P. G. T. Bucban-Hepburn)rose in his place and claimed to move, That the Question be now put.

Question put accordingly, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 302, Noes 265.

Division No. 29.]	AYES	[10.0 p.m.
Aitken, W. T.	Astor, Hon. J. J.	Bennett, F. M. (Reading, N.)
Allan, R. A. (Paddington, S.)	Baldock, Lt.-Cmdr. J. M.	Bennett, Dr. Reginald (Gosport)
Alport, C. J. M.	Baldwin, A. E.	Bennett, William (Woodside)
Amery, Julian (Preston, N.)	Banks, Col. C.	Bevins, J. R. (Toxteth)
Amory, Rt. Hn. Heathcoat (Tiverton)	Barber, Anthony	Birch, Rt. Hon. Nigel
Anstruther-Gray, Major W. J.	Barlow, Sir John	Bishop, F. P.
Arbuthnot, John	Baxter, Sir Beverley	Black, C. W.
Armstrong, C. W.	Beach, Maj. Hicks	Boothby, Sir R. J. G.
Ashton, H. (Chelmsford)	Bell, Philip (Bolton, E.)	Bossom, Sir A. C.
Assheton, Rt. Hn.R. (Blackburn.W.)	Bell, Ronald (Bucks, S.)	Boyd-Carpenter, Rt. Hon. J. A.
Boyle, Sir Edward	Higgs, J. M. C.	Moore, Sir Thomas
Braine, B. R.	Hill, Dr. Charles (Luton)	Morrison, John (Salisbury)
Braithwaite, Sir Albert (Harrow, W.)	Hill, Mrs E. (Wythenshawe)	Mott-Radclyffe, C. E.
Braithwaite, Sir Gurney	Hill, John (S. Norfolk)	Nabarro, G. D. N.
Bromley-Davenport, Lt.-Col. W. H.	Hinchingbrooke, Viscount	Neave, Airey
Brooke, Henry (Hampstead)	Hirst, Geoffrey	Nicholls, Harmar
Brooman-White, R. C.	Holland-Martin, C. J.	Nicholson, Godfrey (Farnham)
Browne, Jack (Govan)	Hollis, M. C.	Nicolson, Nigel (Bournemouth, E.)
Bullard, D. G.	Holt, A. F.	Nield, Basil (Chester)
Bullus, Wing Commander E. E.	Hope, Lord John	Noble, Comdr. A H. P.
Burden, F. F. A.	Hopkinson, Rt. Hon. Henry	Nugent, G. R. H.
Butcher, Sir Herbert	Hornsby-Smith, Miss M. P.	Nutting, Rt. Hon. Anthony
Butler. Rt. Hon. R. A.(Saffron Walden)	Horobin, I. M.	Oakshott, H. D.
Campbell, Sir David	Horsbrugh, Rt. Hon. Florence	Odey, G. W.
Carr, Robert	Howard, Gerald (Cambridgeshire)	O'Neill, Hn. Phelim (Co. Antrim, N.)
Cary, Sir Robert	Howard, Hon. Greville (St. Ives)	Ormsby-Gore, Hon. W. D.
Channon, H.	Hudson, Sir Austin (Lewisham, N.)	Orr, Capt. L. P. S.
Clarke, Col. Ralph (East Grinstead)	Hudson, W. R. A. (Hull, N.)	Orr-Ewing, Sir Ian (W't'n-s'p'r-M're)
Clarke, Brig. Terence(Portsmouth, W.)	Hughes Hallett, Vice-Admiral J.	Page, R. G.
Cole, Norman	Hulbert, Wing Cmdr. N. J.	Peake, Rt. Hon. O.
Colegate, W. A.	Hurd, A. R.	Perkins, Sir Robert
Conant, Maj. Sir Roger	Hutchison, Sir Ian Clark (E'b'gh, W.)	Peto, Brig. C. H. M.
Cooper, Sqd. Ldr. Albert	Hutchison, James (Scotstoun)	Peyton, J. W. W.
Cooper-Key, E. M.	Hyde, Lt.-Col. H. M.	Pickthorn, K. W. M.
Craddock, Beresford (Spelthorne)	Hylton-Foster, Sir H. B. H.	Pilkington, Capt. R. A.
Crookshank, Capt. Rt. Hon. H. F. C.	Iremonger, T. L.	Pitman, I. J.
Crosthwaite-Eyre, Col. O. E.	Jenkins, Robert (Dulwich)	Pitt, Miss E. M.
Crouch, R. F.	Jennings, Sir Roland	Powell, J. Enoch
Crowder, Sir John (Finchley)	Johnson, Eric (Blackley)	Price, Henry (Lewisham, W.)
Crowder, Petre (Rulslip—Northwood)	Johnson, Howard (Kemptown)	Prior-Palmer, Brig. O. L.
Darling, Sir William (Edinburgh, S.)	Jones, A. (Hall Green)	Profumo, J. D.
Davidson, Viscountess	Joynson-Hicks, Hon. L. W.	Raikes, Sir Victor
De la Bère, Sir Rupert	Kaberry, D.	Ramsden, J. E.
Deedes, W. F.	Kerby, Capt. H. B.	Rayner, Brig. R.
Digby, S. Wingfield	Kerr, H. W.	Redmayne, M.
Dodds-Parker, A. D.	Lambert, Hon. G.	Rees-Davies, W. R.
Donaldson, Cmdr. C. E. McA.	Lambton, Viscount	Remnant, Hon. P.
Donner, Sir P. W.	Lancaster, Col. C. G.	Renton, D. L. M.
Doughty, C. J. A.	Langford-Holt, J. A.	Ridsdale, J. E.
Drayson, G. B.	Leather, E. H. C.	Roberts, Peter (Heeley)
Dugdale, Rt. Hn. Sir T. (Richmond)	Legge-Bourke, Maj. E. A. H.	Robertson, Sir David
Duncan, Capt. J. A. L.	Legh, Hon. Peter (Petersfield)	Robinson, Sir Roland (Blackpool, S.)
Duthie, W. S.	Lennox-Boyd, Rt. Hon. A. T.	Robson-Brown, W.
Eccles, Rt. Hon. Sir D. M.	Linstead, Sir H. N.	Rodgers, John (Sevenoaks)
Eden, J. B. (Bournemouth, West)	Llewellyn, D. T.	Roper, Sir Harold
Elliot, Rt. Hon. W. E.	Lloyd, Rt. Hon. G. (King's Norton)	Ropner, Col. Sir Leonard
Errington, Sir Eric	Lloyd, Maj. Sir Guy (Renfrew, E.)	Russell, R. S.
Erroll, F. J.	Lloyd, Rt. Hon. Selwyn (Wirral)	Ryder, Capt. R. E. D.
Fell, A.	Lloyd-George, Maj. Rt. Hon. G.	Sandys, Rt. Hon. D.
Finlay, Graeme	Lockwood, Lt.-Col. J. C.	Savory, Prof. Sir Douglas
Fisher, Nigel	Longden, Gilbert	Scott-Miller, Cmdr. R.
Fleetwood-Hesketh, R. F.	Low, Rt. Hon. A. R. W.	Sharples, Maj. R. C.
Fletcher, Sir Walter (Bury)	Lucas, Sir Jocelyn (Portsmouth, S.)	Shepherd, William
Fletcher-Cooke, C.	Lucas, P. B. (Brentford)	Simon, J. E. S. (Middlesbr'gh, W.)
Ford, Mrs. Patricia	Lucas-Tooth, Sir Hugh	Smyth, Brig. J. G. (Norwood)
Fort, R.	McAdden, S. J	Soames, Capt. C.
Foster, John	McCallum, Major D.	Spearman, A. C. M.
Fraser, Hon. Hugh (Stone)	McCorquodale, Rt. Hon. M. S.	Speir, R. M.
Galbraith, Rt. Hon. T. D. (Pollok)	Macdonald, Sir Peter	Spence, H. R. (Aberdeenshire, W.)
Galbraith, T. G. D. (Hillhead)	Mackeson, Brig. Sir Harry	Spens, Rt. Hn. Sir P. (K'ns'gt'n, S.)
Gammans, L. D.	McKibbin, A. J.	Stanley, Capt. Hon. Richard
Garner-Evans, E. H.	Mackie, J. H. (Galloway)	Stevens, Geoffrey
Glover, D.	Maclay, Rt. Hon. John	Steward, W. A. (Woolwich, W.)
Godber, J. B.	Maclean, Fitzroy	Stewart, Henderson (Fife, E.)
Gomme-Duncan, Col. A.	McLean, Neil (Inverness)	Stoddart-Scott, Col. M.
Gough, C. F. H.	Macleod, Rt. Hon. Iain (Enfield, W.)	Storey, S.
		Strauss, Henry (Norwich, S.)
Gower, H. R.	MacLeod, John (Ross and Cromarty)	Studholme, H. G.
Graham, Sir Fergus	Macmillan, Rt. Hn. Harold (Bromley)	Summers, G. S.
Gresham Cooke, E.	Macpherson, Niall (Dumfries)	Sumner, W. D. M
Grimond, J.	Maitland, Cmdr. J. F. W.(Horncastle)	Sutcliffe, Sir Harold
Grimston, Hon. John (St. Albans)	Maitland, Patrick (Lanark)	Taylor, Sir Charles (Eastbourne)
Grimston, Sir Robert (Westbury)	Manningham-Buller, Rt, Hn. Sir R.	Taylor, William (Bradford, N.)
Hall, John (Wycombe)	Markham, Major Sir Frank	Teeling, W.
Hare, Hon. J. H.	Marlowe, A. A. H.	Thomas, Rt. Hn. J. P. L. (Heref'd)
Harris, Frederic (Croydon, N.)	Marples, A. E.	Thomas, Leslie (Canterbury)
Harris, Reader (Heston)	Marshall, Douglas (Bodmin)	Thomas, P. J. M. (Conway)
Harrison, Col. J. H. (Eye)	Maude, Angus	Thompson, Kenneth (Walton)
Harvey, Air Cdre A.V. (Macclesfield)	Maudling, R.	Thompson, Lt.-Cdr. R.(Cr'yd'n. W.)
Harvey, Ian (Harrow, E.)	Maydon, Lt.-Comdr. S. L. C.	Thorneycroft, Rt. Hn. P. (M'nm'th)
Hay, John	Medlicott, Sir Frank	Thornton-Kemsley, Col. C. N.
Heald, Rt. Hon. Sir Lionel	Mellor, Sir John	Tilney, John
Heath, Edward	Milligan, Rt. Hon. W. R.	Touche, Sir Gordon
Henderson, John (Cathcart)	Molson, A. H. E.	Turner, H. F. L.

Tweedsmuir, Lady	Ward, Hon George (Worcester)	Williams, R. Dudley (Exeter)
Vane, W. M. F.	Ward, Miss I. (Tynemouth)	Wills, G.
Vaughan-Morgan, J. K.	Waterhouse, Capt. Rt. Hon. C.	Wilson, Geoffrey (Truro)
Vosper, D. F.	Watkinson, H. A.	Woollam, John Victor
Wade, D. W.	Webbe, Sir H. (Lnd'n & Westm'r.)
Wakefield, Edward (Derbyshire, W.)	Wellwood, W.	TELLERS FOR THE AYES:
Wakefield, Sir Wavell (St. M'le'bne)	Williams, Rt. Hn. Charles (Torquay)	Mr. Buchan-Hepburn and
Walker-Smith, D. C.	Williams, Gerald (Tonbridge)	Sir Cedric Drewe.
Wall, Major Patrick	Williams, Paul (Sunderland, S.)
NOES
Acland, Sir Richard	Foot, M. M.	McNeil, Rt. Hon. H.
Adams, Richard	Forman, J. C.	MacPherson, Malcolm (Stirling)
Albu, A. H.	Fraser, Thomas (Hamilton)	Mallalieu, E. L. (Brigg)
Allen, Arthur (Bosworth)	Freeman, John (Watford)	Mallalieu, J. P. W. (Huddersfd, E.)
Allen, Scholefield (Crewe)	Freeman, Peter (Newport)	Mann, Mrs. Jean
Anderson, Frank (Whitehaven)	Gaitskell, Rt. Hon. H. T. N.	Marquand, Rt. Hon. H. A.
Attlee, Rt. Hon. C. R.	Gibson, C. W.	Mason, Roy
Awbery, S. S.	Glanville, James	Mellish, R. J.
Bacon, Miss Alice	Gooch, E. G.	Messer, sir F.
Baird, J.	Gordon Walker, Rt. Hon. P. C.	Mikardo, Ian
Balfour, A.	Greenwood, Anthony	Mitchison, G. R.
Barnes, Rt. Hon. A. J.	Grenfell, Rt. Hon. D. R.	Monslow, W.
Bartley, P.	Griffiths, Rt. Hon. James (Llanelly)	Moody, A. S.
Bellenger, Rt. Hon. F. J.	Griffiths, William (Exchange)	Morgan, Dr. H. B. W.
Bence, C. R.	Hale, Leslie	Morley, R.
Benn, Hon. Wedgwood	Hall, Rt. Hon. Glenvil (Colne Valley)	Morris, Percy (Swansea, W.)
Beswick, F.	Hall, John T. (Gateshead, W.)	Morrison, Rt. Hn. H. (Lewisham, S.)
Bevan, Rt. Hon. A. (Ebbw Vale)	Hamilton, W. W.	Mort, D. L.
Bing, G. H. C.	Hannan, w.	Moyle, A.
Blackburn, F.	Hardy, E. A.	Mulley, F. W.
Blenkinsop, A.	Hargreaves, A.	Murray, J. D.
Blyton, W. R.	Harrison, J. (Nottingham, E.)	Nally, W.
Boardman, H.	Hastings, S.	Noel-Baker, Rt. Hon. P. J.
Bottomley, Rt. Hon. A. G.	Hayman, F. H.	O'Brien, T.
Bowles, F. G.	Healey, Denis (Leeds, S.E.)	Oldfield, W. H.
Braddock, Mrs. Elizabeth	Henderson, Rt. Hn. A. (Rwly Regis)	Oliver, G. H.
Brook, Dryden (Halifax)	Herbison, Miss M.	Orbach, M.
Broughton, Dr. A. D. D.	Hewitson, Capt. M.	Oswald, T.
Brown, Rt. Hon. George (Belper)	Hobson, C. R.	Owen, w. J.
Brown, Thomas (Ince)	Holman, P.	Padley, W. E.
Burke, W. A.	Holmes, Horace	Paget, R. T.
Burton, Miss F. E.	Houghton, Douglas	Paling, Rt. Hon. W. (Dearne Valley)
Butler, Herbert (Hackney, S.)	Hoy, J. H.	Paling, Will T. (Dewsbury)
Callaghan, L. J.	Hudson, James (Ealing, N.)	Palmer, A. M. F.
Carmichael, J.	Hughes, Cledwyn (Anglesey)	Pannell, Charles
Castle, Mrs. B. A.	Hughes, Emrys (S. Ayrshire)	Pargiter, G. A.
Chapman, W. D.	Hughes, Hector (Aberdeen, N.)	Parker, J.
Chetwynd, G. R.	Hynd, H. (Accrington)	Parkin, B. T.
Clunie, J.	Hynd, J. B. (Attercliffe)	Paton, J.
Collick, P. H.	Irvine, A, J. (Edge Hill)	Peart, T. F.
Collins, V. J.	Irving, W. J. (Wood Green)	Plummer, sir Leslie
Corbet, Mrs. Freda	Isaacs, Rt. Hon. G. A.	Popplewell, E.
Cove, W. G.	Janner, B.	Porter, G.
Craddock, George (Bradford, S.)	Jay, Rt. Hon. D. P. T.	Price, J. T. (Westhoughton)
Crosland, C. A. R.	Jeger, George (Goole)	Price, Philips (Gloucestershire, W.)
Crossman, R. H. S.	Jeger, Mrs. Lena	Probert, A. R.
Cullen, Mrs. A.	Jenkins, R. H. (Stechford)	Proctor, W. T.
Daines, P.	Johnson, James (Rugby)	Pryde, D. J.
Dalton, Rt. Hon. H.	Jones, Rt. Hon. A. Creech	Pursey, Cmdr. H.
Darling, George (Hillsborough)	Jones, David (Hartlepool)	Rankin, John
Davies, Ernest (Enfield, E.)	Jones, Frederick Elwyn (W. Ham, S.)	Reeves, J.
Davies, Harold (Leek)	Jones, Jack (Rotherham)	Reid, Thomas (Swindon)
de Freitas, Geoffrey	Jones, T. W. (Merioneth)	Reid, William (Camlachie)
Deer, G.	Keenan, W.	Rhodes, H.
Delargy, H. J.	Kenyon, C.	Robens, Rt. Hon. A.
Dodds, N. N.	Key, Rt. Hon. C. W.	Roberts, Albert (Normanton)
Driberg, T. E. N.	Lawson, G. M.	Roberts, Goronwy (Caernarvon)
Dugdale, Rt. Hn. John (W. Brmwch)	Lee, Frederick (Newton)	Robinson, Kenneth (St. Pancras, N.)
Ede, Rt. Hon. J. C.	Lee, Miss Jennie (Cannock)	Rogers, George (Kensington, N.)
Edelman, M.	Lever, Harold (Cheetham)	Royle, C.
Edwards, Rt. Hon. John (Brighouse)	Lever, Leslie (Ardwick)	Shackleton, E. A. A.
Edwards, Rt. Hon. Ness (Caerphilly)	Lewis, Arthur	Shinwell, Rt. Hon. E.
Edwards, W. J. (Stepney)	Lindgren, G. S.	Short, E. W.
Evans, Albert (Islington, S.W.)	Lipton, Lt.-Col. M.	Shurmer, P. L. E.
Evans, Edward (Lowestoft)	MacColl, J. E.	Silverman, Julius (Erdington)
Evans, Stanley (Wednesbury)	McGhee, H. G.	Silverman, Sydney (Nelson)
Fernyhough, E.	McGovern, J.	Simmons, C. J. (Brierley Hill)
Flenburgh, W.	McInnes, J.	Skeffington, A. M.
Finch, H. J.	McKay, John (Wallsend)	Slater, Mrs. H. (Stoke-on-Trent)
Fletcher, Eric (Islington, E.)	McLeavy, F.	Slater, J. (Durham, Sedgefield)
Follick, M.	MacMillan, M. K. (Western Isles)	Smith, Ellis (Stoke, S.)

Smith, Norman (Nottingham, S.)	Thornton, E.	Wilcock, Group Capt. C. A. B.
Snow, J. W.	Timmons, J.	Wilkins, W. A.
Sorensen, R. W.	Tomney, F.	Williams, David (Neath)
Soskice, Rt. Hon. Sir Frank	Turner-Samuels, M.	Williams, Rev. Llywelyn (Ab'tillery)
Sparks, J. A.	Usborne, H. C.	Williams, Ronald (Wigan)
Steels, T.	Viant, S. P.	Williams, Rt. Hon. T. (Don V'll'y)
Stewart, Michael (Fulham, E.)	Wallace, H. W.	Williams, W. R. (Droylsden)
Strachey, Rt. Hon. J.	Warbey, W. N.	Williams, W. T. (Hammersmith, S.)
Strauss, Rt. Hn. George (Vauxhall)	Webb, Rt. Hon. M. (Bradford, C.)	Willis, E. G.
Stross, Dr. Barnett	Weitzman, D.	Wilson, Rt. Hn. Harold (Huyton)
Summerskill, Rt. Hon. E.	Wells, Percy (Faversham)	Winterbottom, Ian (Nottingham, C.)
Swingler, S. T.	Wells, William (Walsall)	Winterbottom, Richard (Brightside)
Sylvester, G. O.	West, D. G.	Woodburn, Rt. Hon. A.
Taylor, Bernard (Mansfield)	Wheeldon, W. E.	Yates, V. F.
Taylor, John (West Lothian)	White, Mrs. Eirene (E. Flint)	Younger, Rt. Hon. K.
Thomas, George (Cardiff)	White, Henry (Derbyshire, N.E.)
Thomas, Ivor Owen (Wrekin)	Whiteley, Rt. Hon. W.	TELLERS FOR THE NOES:
Thomson, George (Dundee, E.)	Wigg, George	Mr. Bowden and Mr. Pearson.

Question put and agreed to.

Resolved, That this House welcomes the settlement of the recent wages dispute and believes that the steps proposed by the British Transport Commission will, with the co-operation of all concerned, lead to the establishment of a modern and economic railway system for the benefit both of industry and of the travelling public.