HC Deb 08 February 1955 vol 536 cc1740-853

Order for Second Reading read.

3.32 p.m.

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

I beg to move, That the Bill be now read a Second time.

The purpose of the Bill is to increase to a total of £600 million the borrowing powers of the British Transport Commission. The total borrowing powers of the Commission were fixed at £275 million by the Transport Act of 1947, and although certain changes were made in the Act of 1953 the total permitted borrowing powers were then left at the original total of £275 million. Of this authorised total of £275 million, up to the end of last year borrowing powers have been exercised up to a total of £253 million. Although the Commission has substantial liquid assets, it looks as though its borrowing powers will not be sufficient for its normal capital development much after the middle of this year. It is, therefore, necessary to increase them and it is proposed to increase them to a figure of £600 million.

In fixing the precise figure to recommend to the House for the new maximum, I think one has to bear in mind two conflicting considerations—and this is a problem which applies not only on this Bill but on all other borrowing powers Bills which the House has taken in recent years. On the one hand, one must secure that the industry concerned over a reasonable period of years has enough elbow room to borrow the necessary capital for its own development. On the other hand, if the figure is fixed too high Parliament is deprived of adequate control for too long a period.

Consequently, weighing as best we can these two rather conflicting considerations against each other, we came to the conclusion—and I will indicate in a few moments how the money broadly will be used—that the right step to take at present is to raise the permitted figure to £600 million. The House is, I think, aware that normally the Commission finances a good deal of its capital expenditure out of its own resources, and in that context it may interest the House to know that during the six years since the original limit of £275 million was fixed—as I have indicated, £253 million have, in fact, been raised—the total capital expenditure of the Commission amounted to £506 million.

Of this, £286 million went on the railways, £10 million on the collection and delivery services, £54 million on London transport, £74 million on other activities of the Commission like hotels, docks, ships, etc., and £82 million on road haulage. The compulsory acquisition of road haulage under the 1947 Act was outside the borrowing powers and was dealt with by an issue of stock. That has nothing to do with the borrowing powers limit. In all, with the increase in working capital and repayment of £27 million in respect of outstanding loans to the Railway Finance Corporation, a total expenditure of £578 million was effected in the 1948–54 period, which is rather more than twice the amount borrowed.

The proposal contained in this short Bill will increase the borrowing powers by a total of £325 million. This is mainly related to capital expenditure which it is expected the Commission will undertake during the years 1955 to 1959. This does not, of course, mean that that is all the capital expenditure which the Commission contemplate undertaking during that period, for just as in the period which has just closed, so, in the period during which this Bill will, it is hoped, operate, the Commission intends to find a considerable amount of its capital expenditure from its own resources.

The expenditure during this forward period, what I may call the normal capital development of the Commission, is expected to be about £450 million, of which about £200 million will be found from the Commission's own resources. I used the expression "normal capital development" to refer to development which is mainly apart from that contemplated in the modernisation and re-equipment plan which has recently been published. It is, of course, impossible to draw an absolutely arbitrary line between normal capital development and capital development contemplated in that plan.

It is perfectly clear that there must be some overlapping, and, in fact, certain electrification projects which have been planned apart from, and in advance of, the modernisation plan have been absorbed into it, and, for the purpose of this Bill, have been to a considerable extent treated as part of the normal capital development of the Commission that is given in the £450 million figure which I mentioned.

It is equally true, of course, that even strictly normal expenditure such as replacement of railway stock must be effected in its shape and to some extent in its tempo by the fact that this very big scheme is coming along.

Mr. Ernest Davies (Enfield, East)

Would the Minister make that quite clear? Did he mean that, apart from these schemes already in force or immediately projected, any finance required for the modernisation plan will require further legislation?

Mr. Boyd-Carpenter

Not absolutely, because I am coming to that part of the provisions of the Bill which relate strictly to the modernisation plan alone. If the hon. Member will allow me I shall succeed, I hope—I realise that the figures are complex—in making the matter clear.

If one allows for £200 million from the Commission's own resources for normal capital development and £250 million in respect of borrowing powers proposed in this Bill, there is a margin of £75 million which is for the modernisation plan, strictly and quite distinctly over the line on the side of the modernisation plan.

It may interest the House to know, broadly, the direction in which that £75 million will go. I will summarise it. There will be a great deal of the first work on extra bridge renewals and track strengthening in preparation both for higher train speeds and electrification. There will be preliminary expenditure on automatic train control—on which experiments are now proceeding—a great deal on signalling and the additional cost of new methods of propulsion—new types of locomotive—on which, later, I want to say something. There will be the first steps of the further electrification beyond Chelmsford to Ipswich, a start on the fitting of continuous brakes on wagons and a small amount of preliminary work on the main line passenger and freight line terminal reconstruction schemes.

That is apart from the suburban electrification schemes set out in a "box" on page 14 of the Report on Modernisation and Re-equipment which are, broadly, projects of the kind I referred to, projects planned in advance of modernisation and incorporated for the purpose of making the whole thing comprehensive and clear in the plan, but which it is hoped will be mainly financed from the normal capital development. I will have something to say later about the electrification of the London-Tilbury-Southend line and the extension of the Shenfield electrification to both Southend and Chelmsford.

I assume that as some part of the finance proposed in this Bill covers the modernisation scheme as a whole, I shall not incur your displeasure, Mr. Speaker, if, shortly, I say one or two things about that bold and imaginative project. For the moment, in strict reference to the Bill, it only remains for me to say that the Bill is mainly, although not exclusively, a Measure to increase the borrowing powers of this industry, rather on the same lines as proved necessary in the case of other nationalised industries, for the purpose of its continued and continuing development.

What precise figure should be put in the Bill is a matter to some extent of judgment and opinion balancing the desirability of Parliamentary control and the undesirability of making inadequate provision. It seems to us that these figures, calculated to cover the normal development plus a certain amount of the modernisation plan, perhaps up to 1959, are a fair compromise between those two conflicting considerations.

If actual expenditure on the modernisation plan goes quicker than that the only effect will be that the House will have an earlier opportunity to review the matter on another Bill. At that very interesting stage of the plan I do not suppose that the House would regret that opportunity. At the moment, the virtual exhaustion of the borrowing powers of the Commission makes inevitable the introduction of a Bill of this nature. I have no doubt that the House will accept that that is so. Whatever the plans for the future may be and whatever views there may be on them, it is necessary to maintain the current borrowing powers of the Commission at a reasonable level.

Certain aspects of the modernisation and re-equipment plan were to some ex- tent referred to in the debate last Thursday. But that debate covered a much wider scope and there was not perhaps as much opportunity as the House would want for discussing the details of the proposals of the plan as I understand will be possible. I think the House will want to discuss them for they are of first-class importance both to our railway system and to the economy of the country.

Dealing first with their financial aspect, so far as can be calculated at present, they will cost £1,200 million over the next 15 years. Following the practice of financing some part of capital development from its internal resources, the Commission expect to find £400 million, leaving £800 million to be borrowed in the normal way. The Commission has carefully calculated how this will affect its financial position. Necessarily, the figures going to 15 years ahead must be tentative and depend to some extent on price movements in either direction, but they are the result of a great deal of careful thought and are the best figures on which it is possible to proceed at the moment. They indicate that when the modernisation plan has been completed net freight earnings are to be up by about £60 million and net passenger earnings by about £35 million, making a gross increase of £95 million. As against those figures the operative expenses in respect of the larger volume of traffic are expected to increase by about £10 million. About a further £15 million will have to be found for additional depreciation on the greater assets and about £40 million in the service of the necessary capital making a total on the other side of the ledger of £65 million giving an increase in the net earnings of the railways of £30 million.

That calculation relates to the modernisation scheme and does not necessarily take into account the full benefits which may be expected to flow to the Commission from the new charges scheme, which I imagine I should be out of order in referring to on this Bill, but which, for the purposes of completeness, I ought to say are excluded from that calculation.

Point has been made of the comparison between provision on this scale for the railways with the provision Her Majesty's Government are making for the roads. I do not think that a direct comparison of the figures involved is very helpful since the railway figure necessarily takes into account and includes items such as locomotives and rolling stock, to which there is no equivalent in roads expenditure since vehicles are provided from a quite different source. But the total provided under the modernisation plan which, I think, is relevant for the purposes of comparison, is the total provision it is proposed to make for the track, signalling and perhaps, for the sake of completeness, marshalling yards and goods stations.

The total to be spent under those three heads under the whole scheme in the 15-year period is £340 million, which compares with the authorisation of expenditure of £147 million on the first four years of the road programme which announced the other day, to which must be added £50 million in respect of other expenditure on roads. I do not think there is an unfair balance between those two proposed expenditures.

Large though the total expenditure proposed under this scheme may seem from some points of view, it is perhaps worth recalling that the House recently increased the borrowing powers of the British Electricity Authority to a total of £1,400 million, although the gross receipts from the activities of the Transport Commission in recent years are not far short of twice those of the Electricity Authority, which is a very different undertaking. I do not think it is useful to weigh so precisely questions of road and rail expenditure against each other. In recent years both road and rail have been starved of capital. Transport has been the Cinderella of the capital market and there is need for large investment in both forms. That is the line on which we are proceeding.

It might interest the House to know the share which road and rail respectively take in the transport of goods. In 1952, a survey was made by my Department which produced the following interesting figures. Taking tonnage of goods, irrespective of the distance carried, in round figures 300 million tons was carried by the railways as against 900 million tons by road, but, passing from tons to ton mileage and taking into account the distance as well as the weight of the load which is perhaps the more normal comparison in respect of transport undertakings—22,000 million tons were carried by rail and 19,000 million tons by road. That is an interesting indication of the extent to which the healthy tendency is developing of the longer distance haul going on rail and the shorter distance haul going on the roads.

One other figure which is, perhaps, interesting for purposes of comparison is that apart from any modernisation proposals, if it were proposed merely to maintain the railways at something like their present basis and level of efficiency, it has been calculated that an investment of about £600 million would, in any event, be required—that is to say, half the expenditure proposed in the modernisation plan.

The purpose of the modernisation proposals is not only to make the railways solvent, but to enable them to render service which only an efficient and up-to-date railway system can render to the economy of the country and to the comfort and convenience of the travelling public. I do not want to weary the House with details of the plan, particularly those which are already set out in the printed document which hon. Members have, but there are two or three aspects which are particularly important and in respect of which I can perhaps add one or two facts which have so far not been disclosed.

The whole system of freight traffic is to be reorganised and the very large number of marshalling yards—incidentally, I never used the term "marshalling yard" until the B.B.C. used it during the war—is to be reduced to a much smaller number of modern and efficient ones, which will have the effect of very substantially speeding up the delivery of goods and of dealing with that bane of any transport system, wasted vehicle hours. Fully braked freight trains will maintain fast freight services, giving delivery in the day between a large number of the big cities and also having the valuable effect of not delaying other traffic on the tracks behind them and so enabling a higher use to be made of the track.

Then there is the revolution, which I think it really is, in the form of propulsion to be used. It is vital as the plan develops to keep some flexibility between the two new proposed means of propulsion, diesel and electric, because as the years develop it will become apparent, particularly in the marginal cases, which is the more economical. For instance, if the atomic generation of electric power results in a considerable fall in the price of electricity, the Commission would be wise to extend the proportion of track which it proposes to electrify as the operating costs would be proportionately less. But, clearly, there is room both for electrification in respect of high density traffic and for diesel propulsion in respect of low density traffic.

In using the broad expression "diesel," I am deliberately including its different variants and not excluding the possibility of the development of gas turbine propulsion, with which the Commission is already experimenting. Further incidental advantages from this are the reduction, as the steam locomotive is reduced in numbers, of the demands on that scarce commodity large steam coal, and a reduction also in the contribution which the railways from time to time make—although, I think, their contribution is somewhat exaggerated—to the creation of smog in great cities.

So far as diesels are concerned, the Commission intends to invite tenders in the near future for a substantial number of main line diesel locomotives, whereas so far it has done so only in respect of prototypes. In other words, earlier developments will take place in this field. For the diesel locomotive, which has been experimentally used on certain main line tracks, orders are likely to be placed on a substantial scale in the very near future.

One of the advantages of the diesel from the broad point of view of the Commission is the higher utilisation which is possible as compared with the steam locomotive. There is a good example on page 16 of the Report, in which it is indicated that on certain parts of the Southern Region about 200 diesels will replace 300 steam locomotives. So far as electrification is concerned, as the House knows, extensive schemes are projected in the plan. In general, apart from the Southern Region, it is proposed that it should be electrification by the use of the overhead method, as used in certain other countries.

So far as the Southern Region, and the eastern half of the Southern Region in particular, is concerned, electrification there consists of completing an area already largely electrified: for example, by carrying on the electrified lines right through to the Kent coast. In that instance, it would be inconvenient to operate two different systems, and there the third rail system will be continued. Where, however, a complete new area is involved, such as the two main line proposals forecast in the plan, it is proposed to use the overhead method. Apart from diesel main line locomotives, to which I have just referred, orders have been placed for some time for diesel shunting locomotives, and this programme is to be accelerated.

Viscount Hinchingbrooke (Dorset, South)

My right hon. Friend spoke earlier about the "box" on page 14 of the Report showing the amount to be spent on suburban lines. These, I think, are all to the North, and I am wondering whether the line between King's Cross and Hitchin, for example, which is part of the former Great Northern main line, which is later to be electrified by overhead transmission, will now be electrified for the suburban service by overhead transmission or by the third-rail system.

Mr. Boyd-Carpenter

I will obtain confirmation of the system to be used and will let my noble Friend know.

Mr. Kenneth Robinson (St. Pancras, North)

What sort of progress might be expected on the two main line electrification schemes, and particularly the Euston main line to Rugby and Glasgow?

Mr. Boyd-Carpenter

I cannot add much on that to what is in the plan, but I propose presently to give an indication of the programme for some of these proposals. I should be misleading if I suggested that I was giving firm dates for these very large, and expensive main line electrification schemes. The locomotive aspect, with which I was dealing, will involve heavy calls on industry. The Commission, which is in touch with industry, is satisfied, however, that its orders will be able to be carried out.

I come now to the question of timing. It is important that this work should not be too rigidly laid down in advance, as such inflexibility does not generally work out altogether well. What the Commission proposes to do is to publish yearly forecasts of the work to be undertaken in the coming 12 months and forecasts of a slightly less firm nature in respect of work to be carried out in the 12 months that follow. That is to say, there would be the submission and publication of annual forecasts, which will enable the House and the country to keep in touch with the progress of the work.

Mr. David Jones (The Hartlepools)

The right hon. Gentleman said that the Commission proposes to seek tenders for an extensive number of main line diesel locomotives and, secondly, that the Commission proposes to put out tenders for additional diesel shunting locomotives. It follows, obviously, that the construction of steam locomotives, which is now undertaken at Swindon, Doncaster, Eastleigh and Crewe, will gradually diminish. What is to happen to the Commission's own workshops, which are now engaged in the construction of steam locomotives, if all its diesel locomotives are to be obtained by tender from outside?

Mr. Boyd-Carpenter

That is an important point. As the hon. Member will have seen from the plan, the proposal is not to construct steam passenger locomotives after the 1956 programme and it is in view of that that these orders are being placed. But there is a passage in the Report on Modernisation and Re-Equipment itself, which I have asked my hon. Friend the Joint Parliamentary Secretary to find for me, which indicates in terms that the Commission intends to make the necessary adjustments in these means of propulsion, with their effects upon their workshops, in a manner which will cause the least dislocation.

Paragraph 27 of the Report states: The change-over in the shops of British Railways will be arranged to cause the minimum dislocation to the staff affected by it. There is a very real problem here. It is the intention of the Commission, with which I have discussed the matter, to try to see that an expanding overall programme such as this, involving, as it does, new techniques and engineering problems, is effected so as to cause the minimum dislocation in its own very fine shops.

Mr. J. T. Price (Westhoughton)

May I have an assurance that it is intended to use the Horwich workshops in my constituency, which are at present engaged on maintenance and repair work on existing equipment, for the fabrication of the new types of equipment envisaged by the reconstruction plan?

Mr. Boyd-Carpenter

I cannot go beyond the Report which I have quoted, but I think that the hon. Member can be assured that the Commission will handle this matter in a sensible and humane way.

Reference has been made once or twice by my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) and others to the words in the "box" on page 14 of the Report. That is mainly composed of the schemes to which I referred a few moments ago as having been planned separately and in advance of the modernisation plan and which it is desired to incorporate in that plan. Therefore, the financing of each part of the schemes mentioned in the "box" falls under the normal provisions of the Bill.

The position with respect to them is as follows. Work has begun on the extension beyond Shenfield towards Chelmsford and Southend. I told the hon. Member for Dagenham (Mr. Parker), in answer to a Question, that approval had been given for the first of the major engineering works on the London, Tilbury and Southend line. So far as the biggest item on this list is concerned—the Glasgow suburban lines electrification—the present position is that a committee presided over by a member of the Commission, Sir Ian Bolton, and including members of the Corporation of the City of Glasgow, are discussing this matter which has very clear and definite repercussions on the existing local transport system. I hope that it may be possible for agreement to be reached.

Mr. J. A. Sparks (Acton)

Can the Minister tell the House why the suburban electrification of the Western Region is completely neglected and does not appear in this plan at all in any substance?

Mr. Boyd-Carpenter

There is always a problem in this respect. The House will know that I come across it more directly in the case of roads. It is the problem of deciding—and somebody has to decide—where is the greatest need for expensive modernisation steps of this kind. I am sure the hon. Member will recollect that although there is very heavy traffic coming into London from the West the traffic into London from the northeastern direction is very heavy indeed. I am sure I shall carry the hon. Member for Enfield, East (Mr. Ernest Davies) with me in saying that for some years it has been accepted that this is a problem of exceptional urgency.

Mr. Ernest Davies

It should have complete priority.

Mr. Boyd-Carpenter

The hon. Member for Acton (Mr. Sparks) will appreciate that we have to weigh the problem in the light of traffic figures and the facilities and, without necessarily going as far as his hon. Friend the Member for Enfield, East I hope that he will realise that there is a very strong case for these suburban lines.

Another quite separate aspect is the intention to bring up to date our passenger stations, some of which are somewhat mediæval, and also to secure that track and signalling are brought up to the pitch of efficiency which will enable really fast passenger trains to operate, because on the longer hauls speed is the great competitive strength of the railways as against other forms of transport. These proposals are intended to benefit both the railways and the public.

I mentioned on Thursday night the remarkable increase in passenger traffic on the Shenfield line which has followed electrification. We have had a similar improvement much more recently on the Manchester-Glossop section of the newly electrified Manchester-Sheffield line, where the local passenger traffic has increased by 137 per cent. since electrification. Similarly, new services operating in West Yorkshire have brought in considerably increased traffic.

In a very large number of these cases it is possible to calculate with a good deal of precision the savings in operating costs which follow from changes in stations and developments in marshalling yards. It is interesting, for example, to note that the proposed reconstruction of the Temple Mills marshalling yards at Stratford, London, should produce an annual saving of £166,000, and the new marshalling yard at Thornton, in Fife, an annual saving of £40,000. Apart from giving passengers a good deal more comfortable travelling, even the improvement of passenger stations will produce a certain amount of saving.

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

Will there also be considerable improvements in station booking offices? Will there be further improvements in the accommodation for shunters and guards? Will those and similar welfare work be carried out?

Mr. Boyd-Carpenter

Yes, Sir. The hon. Member will have noted that the Report states that certain expenditure under the plan will be definitely devoted to welfare.

The hon. Member has brought me to what is perhaps the strongest of all arguments for these proposals to undertake the very necessary investment to bring British Railways up to date. It is that those proposals will undoubtedly have a very considerable favourable effect on the well-being of the railway system as a whole. The knowledge that one belongs to an up and coming progressive and developing organisation, such as it is our intention that British Railways shall be, is possibly the best encouragement to those at all levels who work in it.

I am sure that this will help the morale of existing staffs and will also help to overcome some of the recruiting difficulties. Already, the fact that British Railways are now to be placed in the forefront of railway development has had an understandably healthy and valuable effect. That is really the essence of the plan.

During the course of the debate I have no doubt that hon. Members will desire to raise a number of points to which my hon. Friend the Parliamentary Secretary will seek to reply. However, I would tell the House that we are sincerely determined to give to the railways and to those who work on them a fair chance to earn a proper living. We are anxious that this country, which, a hundred years ago, led the world in railway development and which has fallen behind other nations through no fault of the railways themselves, shall be given a thoroughly up-to-date and efficient railway service, in which it will be a pride and privilege to serve, and which will serve this community as it deserves and needs to be served today.

4.11 p.m.

Mr. Ernest Davies (Enfield, East)

The Minister has had a much smoother passage this afternoon than he had the other evening, when he received rough treatment at the hands of my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). The right hon. Gentleman has carefully avoided any controversial matters of policy and has given us a great deal of information and a mass of figures which we shall all study with great interest at our leisure. As far as I could follow his statement, this side of the House is likely to disagree very little with the modernisation scheme and the financial borrowing powers, but there is a considerable amount of further information which we shall endeavour to elicit from the Minister or his Parliamentary Secretary as the debate continues.

In the first place, I want to ask the Minister to what extent the Government have accepted this plan, because the right hon. Gentleman was speaking this afternoon as though the plan had been accepted. My recollection of last Thursday's debate is that while the Chancellor of the Exchequer said that, in principle, the Government were favourable towards it considerable discussion was still to take place before final decisions would be reached. To what extent, therefore, have consultations taken place already between the Commission and the Government about the plan, to what extent is it an agreed plan at the present time, and to what extent is it merely a draft scheme, the general lines of which it is intended to follow?

As the Minister stated, the debate covers two matters, the first of which is the question of the Second Reading of this Bill, which provides the opportunity to debate the second, modernisation plan. They are related. Finance links the two, as it were. I do not propose to deal at great length with the modernisation plan. I prefer to leave that to my hon. Friends, many of whom have worked so long with the railways and are far more competent to speak on its technical aspects. However, we on this side of the House welcome the plan which has been presented by the Commission, and we feel that all those responsible for drawing it up deserve congratulation for the work they have put into it.

The plan is unquestionably imaginative in its conception, courageous in its scope and skilful in design. As the Minister indicated, it is a challenge to the engineering industry and it will call upon all those who work in the industry, and all those who work with the railways, for tremendous efforts if the scheme is to fulfil its purpose and to succeed.

The plan is the minimum which is necessary if British Railways are to regain the leadership of the railways of the world which they held in the past. The railways, even today, proportionately carry a far greater density of traffic than any other first-class railway system, and have among their personnel some of the finest railway engineers. Yet there is danger, owing to the neglect of their development, of a shortage of technicians for carrying out this plan, and it will be a considerable problem to be able to attract, to train and to hold a sufficient number of civil engineers so that the scheme can be carried out as speedily as is envisaged.

Here I want to refer to one of the closing remarks made by the Minister. The right hon. Gentleman implied that it was no fault of the railways themselves that they had lagged so far behind. I would say that to some extent the magnitude of this plan, and its very high cost, is in itself a reflection upon past neglect in developing and modernising the railway system of this country before the war. It is true that during the war the railways were put to tremendous use and did an incredibly fine job, and that they were left thereafter in a state of depreciation which had to be made good. The fact remains, however, that the railway system which was inherited by the Transport Commission was already lagging far behind some other railway systems and subsequently, under both Governments—Labour and Conservative—the Commission was not given the necessary facilities to enable the system to be brought up to date. Only now are those facilities being provided—

Captain J. A. L. Duncan (South Angus)

By a Tory Government.

Mr. Davies

It will be recalled that when my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), in discussing the compensation to be given for the acquisition of the railways referred to them as "a poor bag of assets," he was severely criticised. I think subsequent events have shown that this was by no means an exaggeration; in fact, it now appears to have been an under-statement. It is hoped, therefore, that this scheme will convert that poor bag of assets inherited from private enterprise into a very good bag of assets under public ownership.

There are a number of unknown factors in connection with this plan which must remain in doubt until it has been put into practice, and it will be a long time before the results are realised or experienced by the travelling public. In spite of what the Minister said about priorities, I regret that it has not been possible to give a little clearer indication as to which schemes are to be proceeded with, and in what order. At the same time, I welcome his statement that there are to be annual forecasts, and we look forward to the first of these appearing.

All of us here keep our own constituencies in mind, and I was glad to hear what the Minister said about what I and other interested hon. Members have been pressing upon him for so long, the priority which should be given to the electrification of the North-East suburban lines. It is obvious that these lines out of London should be among the first to be electrified because, as the Report points out, electrification in densely populated urban areas is the most practicable and the most remunerative, whereas over long distances the results take far longer to be realised. I cannot quite understand why priority has been given to the London—Tilbury—Southend line and not to the North-East suburbs, but we will leave it at that.

The success of the plan does not depend solely upon British Railways. It depends equally upon those who use the railways and, of course, upon the staff. The co-operation of both is essential. During the previous debate the question of relations with the staff was fully discussed; and I do not wish to embark upon it now, but to refer to the users. Many of the present methods of the customers will certainly have to be changed if the modernisation scheme is to bring about results, because at the despatching and receiving ends there is a lot of equipment which is unsuitable for modern large wagons and other modern railway equipment. That applies equally to the national coal mines as it does to private industry.

In addition to the £1,200 million which will be required for the scheme, a very substantial sum of additional capital will be required on the part of private enterprise to enable its facilities to take full advantage of the modernisation of the railways. Also, private industry's use of railway wagons must be changed. The Report says that railway wagons are still used to a great extent for storage. It is ridiculous that this rolling stock, instead of being unloaded and turned round speedily, should be held up for days on end in sidings throughout the country.

Mr. Gerald Nabarro (Kidderminster)

The hon. Gentleman's last statement is against privately-owned industry, but is he not aware that the largest single user of railway wagons is the National Coal Board, which regards wagons as a major storage facility?

Mr. Davies

I am aware of that, but the greatest offenders in this respect are the persons to whom the goods are consigned. When a wagon arrives at a factory it is held in the yard for a very considerable period and used for storage facilities until the factory uses the materials in it. That is well known. The 30 per cent. improvement in turnround which the Report says will be necessary is the absolute minimum. There could be a considerable improvement if private industry and, equally, if the hon. Member insists, the Coal Board co-operated with the railways in the matter.

Mr. Popplewell

Is this not a well-known problem in the railway industry? Did not the privately-owned railway companies introduce demurrage charges to try to stop the rot?

Mr. Davies

The success of the scheme also depends upon the level of fares and charges. I note that in paragraph 11 of the Report the Commission suggests that if the increase in traffic which is required under the plan to make it a success is to take place The extent to which the railways will be able to share in this demand will depend on their ability to provide improved services at lower cost.…. Therefore, there has to be a holding of fares and charges at their present level or at a lower level if full use is to be made of the railways and the traffics are to increase in the way in which the plan envisages.

However comfortable, fast and modern the new electrified services are made, they will not get the traffic if they are too costly. That is inherent in the plan, and it is so stated. However, I regret that owing to the present financial position of the Commission and the attitude which the Government have been adopting about its finances, it looks as though an increase in fares and charges in the near future will be unavoidable.

I now turn to the question of finance. I wonder whether the Government have faced up to the gravity of the Commission's financial position or whether they are not accepting too lightheartedly the accumulation of deficits which they envisaged during last week's debate. The deficits are likely to be far too large for them to be allowed to accumulate over an indefinite period, and they certainly cannot be allowed to do so over the 15 years envisaged as the period which the plan will take to fructify.

I wonder whether the Government have fully weighed the repercussions of this bad financial position, this accumulation of deficits, on the Commission. There would be a danger of a considerable deterioration in the morale of the staff of any organisation if the near future held no prospect of its getting "out of the red" and the prospect was one of incurring losses and accumulating them and seeing no way out of the problem except in the far-distant future if the plan turned out as expected. There would be always a fear in the minds of those employed in an industry that if there are deficits there will be a pressure to hold wages down and to resist improvements in wages to meet changes in the cost of living and to resist improvements in working conditions. That is inevitable in such a situation.

The Chancellor of the Exchequer made it clear last Thursday that no financial assistance was to be given to the Commission. I want to ask the Minister whether this decision was reached after consultation with the Commission. I and my hon. Friends are not clear exactly where the Commission stands in relation to the Government over finance. The Chancellor said: 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. Later, my hon. Friend the Member for Birkenhead (Mr. Collick) intervened and said: 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? The Chancellor replied: 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."—[OFFICIAL REPORT, 3rd February, 1955; Vol. 536, c. 1312–4.] It was clear that the Chancellor did not know what was in the mind of the Commission and whether the Commission expected or required a subsidy. I should like the Parliamentary Secretary to tell us what consultations have taken place with the Commission and what the Commission's attitude on this matter is in view of the very serious financial state of the Commission.

After the Government had indicated that they would accept the interim Report of the Court of Inquiry, it was stated by the chairman of the Commission that where the money was to come from was not his concern. It is very difficult for us to believe that a chairman would have made a statement like that unless he had been given to believe that if there were an increase in wages as a result of the court's Report the Government were to give assistance to the Commission. Surely this position has been discussed with the Commission and it has been told where it stands and has been given an opportunity of making its views clear to the Government. I do not feel that sufficient explanation has yet been given to the House of this relationship.

As to the future, the Government's view seems to be that with greater efficiency and economies which they consider possible, with increased charges and with the fulfilment of this plan, the Commission will be able to fulfil its statutory obligations. The Government appear to believe that the Commission will be able to get increased revenue from the plan. The Commission agrees with that, as shown by its figures which have been repeated in the House.

But how soon will any result come from the plan? It is clear from the figures the Minister gave this afternoon that the actual extent of implementing this plan is not to be on a large scale in the near future. The Minister said that only £75 million were to be provided from the money we are now discussing towards the £800 million which it will be necessary for the Commission to borrow to fulfil the plan.

That is less than 10 per cent. The Minister definitely said that of the borrowing permitted by this Bill, only £75 million is to carry out the plan. If that is the amount of money to be spent between now and 1959, I cannot see that there will be a great deal of additional revenue coming to the Commission from the expenditure of that money.

During our previous debate on this subject, the Chancellor of the Exchequer said: … 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. We interrupted the Chancellor to ask him when, and he replied: Over the next 15 years."—[OFFICIAL REPORT, 3rd February, 1955; Vol. 536, c. 1314.] If the Government take the view that it will not be possible for the Commission to get into balance until the plan is fulfilled, that is, over the next 15 years, then the outlook for the Commission is appalling.

Let us look at the position. The deficit accumulated to date is about £27 million, that is, to the end of 1953. For 1954 the Commission has estimated a deficit of £15 million. For 1955, before the wages award, it was estimated at £25 million. The wages award is considered to add £10 million deficit for 1955. That brings the total deficit at the end of this year, to about £77 million, making no allowance, of course, for any future wage increase which might be demanded and granted during the year should the cost of living rise and that be necessary. Nor is there an allowance for the future losses, presumably losses on revenue, from any further sales that take place in the British Road Services, or any increase in costs, and so forth.

Then the Commission estimates that when it starts in 1956 it will already have this deficit of £77 million and will then be operating at the rate of a £30 million deficit and that subsequently the deficit will be about £30 million from 1956 onwards.

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

Would the hon. Member say where he gets that figure of £30 million from?

Mr. Davies

It has been referred to in the Press as coming from the Commission. Suppose we leave the figure at £25 million, which will be the loss during 1955. Actually, during 1955 the deficit is £25 million plus £10 million for the increase in wages. If we reduce that £35 million by £5 million, which, let us hope, will come from economies—and that amount may well be the maximum—we still have the £30 million to which I am referring. So let us assume that this £30 million is a figure which is a reasonable estimate.

If we take the five years from 1956 until 1960, with a £30 million deficit each year, a deficit of £150 million will accumulate during that period, and to that we have to add the £77 million. The Minister may well say that I am making no allowance for off-setting factors.

Mr. Boyd-Carpenter

I do not want to interrupt the flow of the hon. Member's argument, but, to make a fair calculation of the deficits, should he not take account of the substantial benefits which the Commission anticipates obtaining from the charges scheme which will probably be approved by the tribunal by the end of this year?

Mr. Davies

I was coming to that. I did not want to dwell too long on this position, but I have quoted these figures to show that if the deficit continues at roughly its present rate, we shall, within the five years which is the shortest time before which there can be any real increase in revenue from the plan, be faced with an accumulated deficit of about £200 million.

That would be an appalling position for the Commission to be in and I suggest that the Government have not faced up to this. They have taken the short view of this position and have hidden behind this plan and talk of economies and efficiency, co-operation of the staff, and so on. They should look further ahead and be more realistic. All the Government have so far suggested as a way in which to cope with this situation is, first, to economise in costs and increase efficiency.

In view of the praise which the Minister himself was bestowing the other evening on the nationalised railways for efficiency, I am very sceptical whether further large savings can be made in future years. As the Minister pointed out, very considerable savings have been made and there has been a great increase in the efficiency of British Railways since nationalisation. Further, I have grave doubts about whether it will be possible greatly to extend the savings, in view of the changes in organisation which have taken place and the introduction of area boards. This, I fear, will lead to each region becoming so much an empire in itself that there will be resistance to the removal of the overlapping and waste which results from the operation of separate regions by separate area boards. The Minister disagrees with that. We have had arguments about this before, and I have consistently opposed the interposition of these area boards between the Commission and the general managers.

The second reason why I doubt whether there will be a great saving, or any economies, as a result of increased efficiency is because the Government have put an end to the possibilities of integration by their policy of denationalisation. There were considerable potential savings from further integration of road and rail, but these have been brought to an end. We are not only losing the revenue which otherwise would have come from British Road Services, but we are losing potential savings which would have accrued from the further integration which was contemplated.

The second proposal of the Government for balancing revenue is that there should be increased fares and charges. The Chancellor assumed that the Commission would take steps to secure increased flexibility of charges, and the Minister intervened just now to draw attention to the saving resulting from the increased revenues from the charges scheme; presumably because it puts the Commission in a more flexible position to compete in the market.

It is very doubtful whether revenue will increase, owing to the increase in competition which is now taking place. That competition will become greater with the further sales of road transport and there also will be increased competition between road and rail.

Mr. Nabarro

That is a good thing.

Mr. Davies

It may be a good thing for some, but it will be a bad thing for industry if it does not have a comprehensive transport service—

Mr. Nabarro

It is a good thing for everyone.

Mr. Davies

—and if services are cut out in those areas where they cannot be provided remuneratively. That is inevitably the result of excessive competition between road and rail and within road transport.

Mr. Nabarro

How can there ever be such a thing as excessive competition? All that anybody wants is fair and reasonable competition between road and rail. If the monopoly practices of the hon. Gentleman's party were continued, that could lead only to a steady and continuous inflation of costs.

Mr. Davies

The excessive competition is precisely that which is taking place in the road haulage industry at present. One symptom of it is when operators find it necessary to evade the statutory requirements laid down about hours of work of their employees, rest periods and the maintenance of their vehicles.

To refer to the increase in fares and charges as a potential source of revenue, I estimate that were there an increase in freight charges today amounting to 10 per cent., it would bring in, roughly, £15 million, not allowing for any loss of traffics as a result of the increase. Of that, a considerable proportion—it may be two-thirds—would be on heavy traffics, coal and minerals and the like, which are largely monopoly traffics.

One should remember that under the 1953 Act some protection is given to those who make use of the railways for carrying these monopoly traffics. Be that as it may, the maximum increase at present would surely be 10 per cent., and the maximum additional revenue would be £15 million, which goes some way to meet the deficit. But against that must be set the danger of losing some of the traffics.

The third way in which the position could be improved—according to the Government—is by the modernisation of plant, and we have dealt with that already. It must not be overlooked that electrification and "dieselisation," the modernisation of the marshalling yards, and so on, takes considerable time and the results cannot be clearly realised.

The Government must be held responsible for the bad financial position of the Commission. It is the transport policy of the Government which has landed the Commission in this serious financial position.

Squadron Leader A. E. Cooper (Ilford, South)


Mr. Davies

It is not rubbish, for the reason that under the 1947 Act provision was made for a planned transport system. The Government brought that plan to an end, and disintegrated the industry through their denationalisation policy and otherwise. Provision was made under the 1947 Act to enable the Commission to meet its statutory obligations, but that position has been changed, and the Government have prevented means being found to achieve that. They abolished the general duty of the Commission to provide a properly integrated system of public transport. They substituted the running of separate undertakings as separate entities and hived off a considerable section to private enterprise. The previous debate revealed that the Government are completely lacking in understanding of the transport situation of this country, and of the objectives of the Labour Government's plan.

I suggest that the Government are being unfair to the Commission in expecting it to fulfil its statutory requirements in a situation entirely different from that in which those statutory requirements were imposed. Those requirements were written into the 1947 Act and could have been fulfilled. But that Act has been changed, and, as a result, those requirements can no longer be met. The Government are responsible for the changes, and therefore, in my view, they should come to the assistance of the Commission, if the Commission so desires.

The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Hugh Molson)

I am anxious to be clear about what the hon. Gentleman is trying to show. He has emphasised how very large may be the deficit of the Transport Commission at the end of 15 years. He has quoted large figures. Are we to understand that, had road transport not been denationalised, that deficit would not exist; that the profit made at that time out of road transport would have been available to subsidise the railways?

Mr. Davies

The hon. Gentleman is echoing all the speakers on his side of the House who took part in last Thursday's debate, and he is revealing his complete ignorance of Labour Party policy. We were not—as has been suggested—proposing to "milk" road haulage for the benefit of the railways. Our policy was to run road haulage, the railways and other transport undertakings of the Commission as a single undertaking, cutting out waste and overlapping, and encouraging traffics to flow to the most economic form of transport, through charges schemes and otherwise. That would have enabled the Commission to pay its way. It is the bringing to an end of the integration and co-ordination which was taking place that has made it impossible for the Commission to pay its way.

All hon. Members would probably agree that in the long run it is desirable that the Commission should pay its way, but because the Government, through their transport policy, are responsible for getting it into a position where it cannot do so, temporary assistance might have to be given. If it is not given, there is bound to be a deterioration in the services of the Commission. With the cutting out of unremunerative services, higher fares and charges will be introduced, and if prices rise there is a danger that a more difficult labour situation will materialise, because of the resistance which the Commission will offer to the just demands of the trade unions if it is continuously faced with a deficit.

Mr. Powell

Can the hon. Member say what sort of temporary assistance he has in mind?

Mr. Davies

I was trying to shorten my speech by leaving that out. [HON. MEMBERS: "Oh."] I have some notes about it, and I can refer to them if required.

I suggest that the Commission is now faced with very heavy capital charges. Its greatest fixed burden consists of capital charges of about £41 million a year. Of that sum, £36 million results from the payment of compensation. None of my hon. Friends suggests that there should be a going back upon the contract which was entered into when the railways were nationalised. Compensation was given, albeit on the generous side, and that must be honoured. But it is too large a burden for the Commission, in the light of present events, and possibly part of that interest charge should be met temporarily by the Government.

Mr. Powell

An annual subsidy.

Mr. Davies

Such would be a form of subsidy, but if so, it should be for a fixed term and should be reviewed from time to time with a view to bringing it to an end at the earliest possible moment, which would be when the results of this plan began to be seen. Subsidies in other industries are fully supported by hon. Members opposite. We must get away from the idea that everything, in all circumstances, must pay its way, and appreciate that in certain conditions the welfare of the community demands that the State should come to the assistance of an industry.

The only answer, however, to the problem which faces the Commission today is the abandonment of the Government's present transport policy. Whatever temporary assistance were given—and the Government do not appear to be willing to give any—there cannot be a permanent solution to the Commission's financial difficulties until there is a reversal of the policy which is wrecking the planned transport system which was being set up. We welcome the plan and will not oppose the Second Reading of the Bill, but we stand by our condemnation of the Government's transport policy, which has landed the Commission into its present situation.

4.55 p.m.

Viscount Hinchingbrooke (Dorset, South)

I sometimes try to follow the hon. Member for Enfield, East (Mr. Ernest Davies) deeply into his arguments. I will not do that on this occasion, partly because I think that the country and the industry are getting heartily fed up with these party dog-fights on transport—which have been going on for far too long and which are always reintroduced and stimulated by the speeches of the hon. Member—and partly because all the old ground was raked over only last week, and I have understood that the House wished to concentrate upon this modernisation scheme.

I will just say, in passing, that hon. Members on this side of the House firmly support Her Majesty's Government in resisting any idea of a subsidy for the railways, either now or for any foreseeable period in the future, not only because of this modernisation scheme which, if fulfilled, will eventually render such a subsidy totally unnecessary, but also because of the decentralisation proposals which are now being carried out in the Commission and which will stimulate the enterprise of the Commission, region being pitted against region. Many opportunities will now occur which did not occur in the days when the industry was totally nationalised, for stimulating demand and getting in revenue.

Another reason for our opposition to a subsidy is the removal of the restrictions upon trading and charging methods in Sections 21 and 23 of the 1953 Act, which will be of great benefit to the Commission, as we said at the time. Finally, the freight charges scheme which has been mentioned today and which is shortly to be presented to the country will also help to avoid the necessity for a subsidy.

I should like to say something about the style of this Report. It is beautifully produced; it is very impressive; the language is cogent, and it flows easily, as one would expect, coming from the pen of Sir Brian Robertson, whose powers of expression and exposition are well known to us all.

Mr. G. Lindgren (Wellingborough)

It shows how simple the hon. Member is if he thinks that Sir Brian Robertson wrote it.

Viscount Hinchingbrooke

I am not suggesting that he wrote every word of it; I suggest that I discern his style of narration in it. It has been referred to by my right hon. Friend as an imaginative Report, as it is. It is so imaginative, in some ways, that it is difficult to give it full credence.

Over many decades the railways have been in a sorry plight. If we look back we can remember the dour political and industrial atmosphere of the railways in the 1920s and 1930s, how hard-pressed they were during the war, and what magnificent service they then gave—and we can remember them in the post-war years, in the grip of an ideological system, transplanted upon them by the party opposite, which we sincerely believe has kept them in a state of continued depression. The ordinary man in the street feels that, just like one of these old chugging branch-line trains, he has been bumbling along a kind of dark and dirty track with British Railways throughout his lifetime. Looking at the railways in this way, it takes a tremendous effort of imagination to conceive that this great scheme can ever be realised. Can it be true that the Transport Commission can really put through some of the proposals that it makes in the Report?

I will say something more about that before I conclude, but I want at this stage to concentrate on one or two of the passages in the plan, and to ask questions to which perhaps my hon. Friend the Parliamentary Secretary could reply, or, if it is inconvenient to do so in the debate, invite the Commission to allude to in detail in their next report. We are told that £400 million of the requirements for the new capital developments is to be met from internal resources. I am afraid that I must weary the House by looking at some figures in order to show that, in my view, unless good reason be given, it really is impossible to see where that money is to be found. I am referring now to page 5 of the last Statement of Accounts of the Commission for the year ended 31st December, 1953.

We find there a sum of £40 million represented by bank balances and so on, and that cannot be reduced without jeopardy to the Commission's day-to-day work. Next, there is a sum representing marketable securities, of £16 million, and these perhaps could be sold as being invested in assets outside the business. There are outstanding traffic accounts which are the same from year to year, and on which by screwing down the administration process we could perhaps extract £10 million. Again, we find other debtors and payments in advance, and, applying the same technique, we might extract another £5 million. Stores and materials represent £102 million, from which perhaps we could take £10 million without causing any embarrassment to those working in the industry.

Next, we have investments in respect of British Transport Stock Redemption Fund accounts, representing £17 million, and perhaps all that could be spared. There is another £10 million in fixed assets and interests in non-controlled undertakings. Supposing that we were to suggest that all such undertakings should be sold, that might realise another £10 million there.

We come to the large figure of £847 million for rolling stock, vehicles, ships and plant and equipment, depreciated by about half that amount out of past reserves. Unless these assets are to be sold abroad, or to some other customer in the country who operates a light railway or a shipping line, I do not see how anything is to be saved from that source, and I should like to know if anything can be saved. There is nothing in the plan about it; on the contrary, paragraph 54 of the plan speaks of steam locomotives which will still need to be used to the best advantage.

The total amount, so far as I have gone, is about £70 million. Then, there is the largest item of all—land, buildings, permanent way, docks, canals and other works, totalling £1,006 million. If any of these are to be sold, it involves very considerable questions of policy on which I think the House has a right to be informed at the earliest possible stage.

For example, there are British Road Services—£15 million. They are being whittled down, according to the law, and quite right it is in equity. They may provide £15 million. When we come to the provincial and Scottish road passenger services, we find a figure of £13 million. Are these being sold to realise this sum? Next, there is London Transport Road Passenger Services, another £13 million. Are these to be sold?

Docks, harbours and wharves represent £69 million and these are obviously not going to be sold, because they will be needed by the Commission for its continuing services. Inland Waterways shows £21 million, and there is an Inland Waterways Association which badly wants to revive the canals in some other form. Is that one of the ways in which the Commission will find the finance internally for this modernisation? Next come hotels with £8 million. What is the future of the hotels? Finally, we come to land and buildings not in use for transport purposes—that is a good one—£31 million.

The total of that last list is £170 million, and the previous total was £70 million, so that there is a sum of £240 million which can thus be provided from internal resources without very considerable change in the methods of operation of the Commission. I ask the rather blunt question: where is the other £160 million coming from?

My right hon. Friend has referred to diesel locomotives, and I wish to mention paragraph 53 of the Report, which refers to— the high degree of reliability attained in other countries. Earlier in the paragraph, there is reference to the "teething troubles" of British prototypes, and these two phrases taken together make me speculate as to whether—

Mr. A. C. Manuel (Central Ayrshire)


Viscount Hinchingbrooke

The hon. Gentleman is in great distress, but perhaps he will intervene with a positive constructive remark.

These two phrases, taken together, make me speculate whether it is the intention of the Commission to purchase diesel locomotives from the United States of America. My right hon. Friend said nothing about that. He has suggested, I think, that these locomotives will be manufactured at home, and, perhaps, even manufactured in the great railway centres where steam locomotives are now produced. For my part, I would be quite prepared, although this may not be generally agreed even on this side of the House, to agree that such purchases should be made in the United States. I am one of those who rather regrets the attitude taken up about the purchase of United States aircraft for B.O.A.C., and I think that, if we are to complain to the Americans every time British transformers and alternators are not purchased for use in the Chief Joseph Dam in the United States, we have no right to try to manufacture at home all the things required for our own use. I hope that the Parliamentary Secretary will be in a position to be frank about the intentions of the Commission to purchase locomotives overseas, and to justify the position now in order to save a great deal of questioning and anxiety later on.

I come now to a short point about the London termini. Page 19 of the Report gives a number of ideas on the improvement and redecoration of stations, and my right hon. Friend referred to it again today. There is, however, no mention of any major reconstruction of any London station. These high vaulted roofs were built for gigantic emissions of smoke and steam, and when we get diesel-electric or full electric locomotives, gliding smoothly out of the station, they will seem a fearful anachronism. More than that, they will appear cold, remote, medieval and sepulchral. In New York, there are the Grand Central and the Pennsylvania Stations, which point the way to what we should try to do in the future.

On page 6 of the Report, the Commission speaks in a very large sense about its programmes and the sums associated with it. I do not think that it would be at all out of scale to add another paragraph on the lines of paragraph 270 of the County of London Plan for 1943. Sixthly, that a reconstructed Euston should include the facilities of St. Pancras: Paddington should be enlarged and the frontage brought forward: at Liverpool Street the present site should be used as an underground station for suburban lines, with a new main line station at Bishopsgate … £200 million.

Before I come to my last submission, I want to say one word on the question of management. We have had the appointment of these new regional boards, and I am sure that, at any rate on this side of the House, we welcome the names thereon. They are good, impressive, worthy names, representative of their regions.

Mr. Lindgren

Jobs for the boys.

Viscount Hinchingbrooke

In no sense are they "jobs for the boys." There is not a trace in them of what hon. Gentlemen opposite might well dislike or despise, the black-suited, top-hatted City gent of before the war. I am not defending them. They are not Tory nominees, but nominees of the Commission. I should say that they know a great deal about business management, and there is no question at all that they fulfil the terms of the Act regarding their appointment. We are impressed with them.

But what is happening below that level? What is the Commission now doing to attract into its senior and middle ranks able men with drive, determination and new ideas? Has anything yet been decided about scales of payment to attract from industry those people who are now going into it to seek influential and important positions and careers for themselves? If not, I think that the sooner the Commission begins, and the sooner it uses some of this capital money, as it is entitled to do in the early stages, for that process, the better. We shall never get this great scheme put into action unless we get into the Commission, in all ranks from top to bottom, those who are determined to cut away a lot of the past dead wood and sterile bureaucratic un-remunerative operations, and really to streamline their concerns for the future.

That brings me to the mention in the plan of the tonic effect which it will have on staff morale, a matter to which, again, my right hon. Friend referred. I have spoken about the past, the 1920's and 1930's, and about the war atmosphere, and, of course, they have had their effect upon manners on the railways. There is now a return of good manners and of a kindly and human feeling towards the traveller, but the improvement is as yet much too slow. Civility is one thing, but effort is another. We shall not get a spirit of service on the part of the railway servants—which is something that the railways must get in their employees—a real effort to give the best kind of service to the people who use the railways—

Mr. Manuel

To what staff is the hon. Gentleman referring?

Viscount Hinchingbrooke

I will tell the hon. Gentleman. Suppose one were a traveller and asked a railway servant, "How late are we going to be in getting to King's Cross?" During the war, he would have answered, "If you stay in the train, you will get there somehow." Now he answers, "Don't ask me; I don't know what is happening." Let us hope that when this new spirit infects the railways, as I feel sure it will in the future, the railway servant will say, "If you will wait a minute, I will go and get the information you want." We all know, when we travel by air or ship, the quality of the service, the friendliness and the desire to leap forward and satisfy the traveller and to placate his anxieties. Why cannot we have the same on British Railways?

I come now to my concluding remark, and that is to refer to page 8, where the character of the expenditure is described and where the Commission says that it is not visionary. That may be true so far as the figures are related to each other in the accounts, and related to the great sums which we are to spend on roads and which we have been spending on electricity and other services. Yet, as I said at the beginning of my speech, one cannot help wondering whether the Commission can do this thing with the dead weight of the past hanging round its shoulders.

According to page 32 of the accounts, the total gross assets of the Commission, that is to say, the historical cost without provision for depreciation, only amounts today to £1,477 million. That value has been set up over a period of roughly 120 years.

Mr. Manuel

It has been written down a bit.

Viscount Hinchingbrooke

Is it therefore possible to conceive of a situation where that sum is nearly doubled in the next 15 years? Is it possible, even allowing for depreciation in the value of money, to lay all that money on the ground in the time? Is it possible to return to the fierceness, drive and urgency of the 1850s and 1860s when railway development was at its height, and when, of course, there was much local unemployment, much Irish labour to be taken up, and when there was much more evidence of an exhilarating competitive spirit on the part of the great railway entrepreneurs of that time?

Capital then was not a problem, and it is not a problem now. The Treasury has waved the wand, and the capital is suddenly forthcoming.

Mr. Nabarro

At a preferential rate.

Viscount Hinchingbrooke

It is not a question of capital, but of what incentive exists in these regional managements and of what incentive can be made to exist. It is a question of our common experience as travellers from day to day. We see teams of men on the line or on the stations working on their own at the pace of the slowest one among them, in a kind of—I will put it as mildly as I can without offence, I hope, to hon. Members opposite—friendly trade union fellow-feeling. Shall we ever see them working together under supervision at the pace which the work really requires?

Mr. Manuel

Will the hon. Gentleman allow me to interrupt him for a moment?

Viscount Hinchingbrooke

No, I am sorry that I cannot allow the hon. Gentleman to interrupt me, but I have been too long already. No doubt the hon. Gentleman is going to make a speech, and I shall listen to him with the greatest pleasure.

It is a question of the experience of all of us as travellers watching physical improvements being made on the line, as, for example, the Potters Bar widening scheme, which I see about once a month, and noting the months and months it takes to get any way forward at all. As I say, it is a question of wondering whether the Commission can do the job. In his statement to the Press when the Report was issued, Sir Brian said that the project was not a pipe dream. One cannot resist a kind of feeling that it may be a pipe dream, as was the Abercrombie scheme for London, which inspired so many of us during the war, and of which not one square yard has been accomplished.

Mr. Nabarro

Six years of Socialism.

Viscount Hinchingbrooke

I do not want, however, to end on a note of pessimism. This country did great things in the war, and it has done remarkable things since, in the motor and aircraft industries and in atomic energy development. I will give hon. Members opposite electricity, gas and coal development. We have done remarkable things. Can we now do similar things for the railways? I hope that we can.

Nationalisation, so far, has given the worker good wages and good conditions. It has provided the social engineering to which hon. and right hon. Gentlemen are so much attached. We do not object to that; we accept it. Indeed, we welcome it. Welfare has been given by the Welfare State to the men and women who work in these concerns. Will they requite that treatment now? Will they give the country back some of the benefits which have been given to them and really make the railways a great enterprise which can serve the traveller, and give him comfort and an agreeable journey? I believe that they will do that. If they do, it will be a considerable access of fortune to the great political party to which I have the honour to belong.

My right hon. Friend, and the Government of which he is a member, during his term of office, will have laid the foundations not only for the continuance of the Welfare State in the nationalised industries, but also for their surge forward to serve the needs of the community.

5.23 p.m.

Mr. George Darling (Sheffield, Hillsborough)

I know that the whole House enjoys the sort of comic, knockabout turn which we get from the hon. Member for Dorset, South (Viscount Hinchingbrooke) when we are dealing with transport questions, but I do not think that it contributes a great deal either to the constructive work of the Commission or to anything else.

There were one or two points he made with which I should like to deal. He gave a long list of the saleable assets of the Commission, to try to show that these would not add up to the £400 million which the Commission hopes to get from its internal resources to help finance the great plan of development that we have before us. The answer to that was given by Sir Brian Robertson, at his Press Conference, when the plan was published. He said: You will, of course, understand that the figures presented in this section are not like figures in an annual profit and loss account. They are not, on the other hand, picked casually out of a hat, but are the result of profound, careful thought by men equipped with the necessary knowledge and experience to produce forecasts of this nature. Quite clearly, the noble Lord does not come into that category. That is all that need be said about his observations on that point.

The observations which he made about the men working on the lines as he proceeds through Potters Bar remind me of the story, which I am sure hon. Members have heard, of the stockbroker who frequently travelled on a section of line which was under repair, and who used to say every time he did so: "How terrible it is that the men are always leaning on their shovels," not taking note of the fact that men cannot work on the line when a train is passing.

The noble Lord also trotted out again the rather silly suggestion that, under the devolution plan of management on the railways, "region will now be pitted against region"—those were his words—to create greater efficiency. Can one picture the Scottish region being pitted against the Western Region to carry traffic from Liverpool to Hull? There cannot be any pitting of region against region to improve efficiency. It may be necessary—and I am not arguing against it—to have managerial devolution in order that the size of the undertaking can be broken down into more easily manageable units. I would not quarrel with an argument along those lines; but to suggest that region has to be pitted against region is, I think, nonsense.

The final point which I should like to take up from his remarks is with regard to diesel and diesel electric locomotives. I wonder whether the Minister would confirm the view which I have that when the Report refers to diesel locomotives, it is in fact referring to diesel and diesel electric locomotives.

Mr. Boyd-Carpenter

I tried to explain that I was using the word "diesel" to cover all that category and possibly ultimately to cover the gas turbine.

Mr. Darling

There are diesel and diesel electric locomotives made in this country, as the noble Lord probably knows, for use on railways overseas. Great engineering firms are engaged in these operations, and they are building the finest diesel and diesel electric locomotives in the world. There is no need to go out of this country to get railway equipment and engineering equipment of that sort. We make the best in the world, and we shall go on making the best in the world.

Viscount Hinchingbrooke

Why, then, does the plan refer to the various teething troubles that have been experienced with British prototypes?

Mr. Darling

They are experimenting with new types, and there is a point about that which I will come to in a moment.

This is a very big plan of technical improvement which we have before us. It is far more than a mere replacement of equipment recently worn out. The Commission is proposing in this plan to replace equipment, much of which has been out of date for 30 to 60 years. In fact, so much of the railway equipment of this country is obsolete that I think the Commission's plan ought to be considered only as a first step in the necessary modernisation which is needed to bring the railways to the state of efficiency that is required. In fact, much more will be needed than this plan if all the optimistic hopes and expectation of hon. Members are to be realised.

I certainly hope that, as this plan gets under way, the Commission will start thinking out the next steps to replace much of the out-of-date equipment, and to introduce new methods and new means of propulsion on some of the many lines that are not mentioned in the plan, but where improvements are needed. Even so, this is a very big plan, and it is difficult for us to question the details; in fact, this is not the place to enter into technical discussions of that kind.

All of us have our own personal ideas about what we think should be done—all of us who are railway enthusiasts or who, like myself, have worked on the railway systems. My pet idea is gas turbines. I have no interest in any firm that is making gas turbines, but I put forward the view that gas turbines ought to be used in electric power stations, in locomotives and in many other ways, because they are the best means of creating a proper fuel and power policy which will make full use of our resources in this country and help to do what the hon. Member for Kidderminster (Mr. Nabarro) wants to do—get rid of smog.

After talking with people who are interested technically in this subject, my view is that British Railways have not experimented in the right way. Their two gas turbine locomotives are far too big and heavy and are not of the type that would be suitable for the tasks mentioned in the Report. We have to take note of the experiments which are going on on European railways and in the United States, and which make it quite possible that the gas-turbine electric locomotive will become a great feature of railway propulsion. I do not want to say anything more about that because I am not technically equipped to go into the details.

If we are to have a far more efficient means of locomotion on our railways and still make use of our natural power resources out of coal, developments and experiments will have to be more active than they appear to be now. I think we can have gas turbines that use powdered coal instead of oil. The British Transport Commission ought not to commit itself to a full plan for diesel and diesel-electric propulsion until there has been far more experimentation with gas-turbine electric locomotives.

I turn to the wider aspects of the plan and make two comments. I served an engineering apprenticeship in the railway workshops. I am convinced from that experience and from keeping in contact with my old workmates, and so knowing something about what goes on upon the railways, that British Railways have not sufficient technical staff, or the right sort of managerial capacity, to carry through a modernisation project of this character. In the ranks of management, between the regional manager and what I might call the man at the stationmaster-deputy-superintendent level, there are far too many stodgy and unimaginative managers. They cannot carry through a great, ambitious programme of this kind with the initiative and enterprise that the plan will need if it is to be successful.

On the engineering and technical side, the railways have not, for nearly half a century, made the best use of their young engineers. They have turned out some excellent engineers, and "turned out" is the right phrase to use. The railways have turned them out, and we can find them in managerial positions in the railways of the United States, Canada, Australia, New Zealand, South Africa, South America, India and Pakistan. These men have not given their services to British Railways because they have been driven out of the British railway system.

Mr. Nabarro


Mr. Darling

Through bad conditions, not enough pay, and inadequate opportunities for promotion to get to the higher level; and through the stodginess of management and lethargy in the managerial set-up. [An HON. MEMBER: "Private enterprise."] Of course. It has been going on for 50 years. What we need in this connection is enterprise. If the British Transport Commission is to carry through a great plan for improving the technical facilities and resources of our railway system, it has not only to bring in technicians from outside but to pay far more attention to the training of its own young people.

The present training arrangements are inadequate in the scope that they offer to the young man either to go on to a university or to get technical training and practical knowledge. They are completely inadequate also in size, because they do not offer opportunties for enough young men to reach a high degree of technical efficiency and reach the managerial positions which should be based on the technical efficiency that a modern railway system requires.

British Railways have no scheme to compare with the training plans of the National Coal Board, either in scope or in size. I refer to the training schemes which are linked with university scholarships and which are an attempt to give to the coal industry the technicians which the development of the industry requires. The job of finding highly technical managerial staff is even more urgent and important on British Railways than in the coal industry. The railways have nothing to compare with some of the best training schemes of the best firms in the engineering industry.

The right hon. Gentleman quite rightly said he hoped that this plan would make railwaymen proud and privileged to be in the railway service, but something more than the plan is needed, and that is proper training schemes, and proper opportunities for selection and promotion to higher posts on the technical and on the managerial sides. Unless we offer better prospects in the railway service in training and promotion we shall not get the young men that will be required if the plan is to be properly carried out.

Mr. Boyd-Carpenter

I am much interested in what the hon. Gentleman has said, and I am in sympathy with a great deal of it. In fairness to the Commission, I would remind him of paragraphs 106–110 of the Report, in which there is a lengthy reference to the subject, which shows that the Commission has this aspect of the matter in mind.

Mr. Darling

I am glad that the right hon. Gentleman has interjected. It is very difficult when one does not know the details, but if the Commission is approaching the matter, as seems to be implied in the Report, of merely extending existing training schemes, that is not enough. Something really revolutionary is needed in the training of younger men in the railway service, unless it is the view of the Commission that it should go on providing people from outside to fill the higher technical posts. That may have to be done, but it is a very dangerous policy. It means that the bright young men will not choose the railway service for a career because they will not get the proper training and chances of promotion that a satisfactory career would require.

As for managers, we all know, as travellers on the railways, the silly little things that we come up against and that indicate bad management. There was the case this week of the "Dog Special" on Saturday night from King's Cross. Apparently it was nobody's job to appreciate that this train was being used as an excursion train and that dogs might also be on it. Be that as it may, the really surprising thing was the apologetic statement put out by the railway publicity department, or whatever it is, to the effect that if passengers had complained to the stationmaster an extra coach could have been put on. "Complain to the stationmaster" indeed; people complained to the porters, to the officials round about, to station foremen and so on. Apparently these officials had no contact with the stationmaster. There was no means of communication between the ordinary staff at King's Cross and the stationmaster. The same kind of thing goes on throughout the railway system, and we could all give examples.

Some of my old workmates were telling me that, upon nationalisation, they tried to put new ideas forward for improving the methods of dealing with locomotives in what was in my day the largest locomotive shed in the country. They suggested new methods of inspection and the use of new tools and equipment for repairs so that engines could be kept running for a longer mileage without major overhaul. The idea was sensible, I suppose—I do not know—but at any rate they were turned down on the ground that the men were also suggesting that a higher proportion of fitters should be upgraded to be inspectors so that these improvements could be made. As there was nothing in the railway rules to provide for such a degree of upgrading, the whole thing had to be turned down.

As for the use of new and modern tools for locomotive repair work, the shop stewards—who were really trying to improve things—were told that as these tools were not normally supplied for use in locomotive sheds they could not be provided. So it goes on for ever. New tools or methods are suggested but they cannot be supplied or adopted because they have not been supplied or adopted before. I suppose someone sitting in the remoteness of Euston Station concocted that reply. It is that attitude which stifles initiative and enterprise.

Somehow the Commission must lay down for managerial grades qualifications which have never been laid down before. Mine managers, sea-going engineers, sea captains, and others in similar posts are required to have qualifications. In that sort of job a minimum of training is needed and certain qualifications coming from experience are needed. There is no promotion to managerial posts except for those with the necessary qualifications. I see no other way of breaking through the stodgy, unimaginative, unenterprising managerial set-up within the railway service, except to adopt similar qualifications.

Although some of my hon. Friends will probably disagree profoundly with me, I say that the managerial set-up is responsible for quite a lot of our present troubles. We cannot grumble at the men for having restrictive practices. Believe me, the sort of restrictive practices we are talking about today—for instance, those chaps at Stockport who have been mentioned—are amateurish compared with some of the things with which, in my day, I was associated after the First World War. The men did not create the climate in which operations are conducted by British Railways. This climate has been created by the management. It goes back for over half a century.

At the beginning these restrictive practices were defensive. It was a case of men trying to keep their jobs in days of excessive unemployment; when they knew that there was no opportunity for promotion, because, as the Americans say, they were born on the wrong side of the tracks. There was no opportunity of promotion for them—and if they were trade unionists their chances of promotion to managerial jobs were sunk right away. Those protective or defensive practices have grown into the indefensible restrictive practices of today.

How are we to get rid of them in order to make this, or any other, plan successful? In the first place, it is by changing the attitude and outlook of the management. Without that we cannot expect the men to respond. They do respond when the managerial side is right. The noble Lord spoke of the progress in the motor car industry. That has come about because the men have responded to efficient, imaginative management with plenty of enterprise in it.

Somehow or other we must get the same sort of outlook in the management of British Railways. It is a devilish hard job because, if it is to be done as it should be done, many of the managers should be sacked straight away. We do not want that, but a new spirit must be created. It is not enough to produce the plan. We must have a new managerial set up. All the young men in the railway service must be given the chance of training, and promotion to the higher posts. The managment must be properly paid, and the rewards of enterprise made worthwhile. We can get that in a nationalised system far better than under the old private railways. That is the task. It is a task which, I hope, in working along the lines of this plan, the Transport Commission will not shirk.

5.45 p.m.

Mr. Geoffrey Wilson (Truro)

As a West Country Member, I have a particular reason for supporting this Bill. Before the war—despite the depression in the inter-war years and the uncertainty caused by the constant threat of nationalisation—some at least of our British railways kept their efficiency and had a reasonable amount of capital spent on them to keep them up to date. I say that notwithstanding the remarks of the hon. Member for Enfield, East (Mr. Ernest Davies), who seemed to imply the contrary.

I would tell hon. Members opposite that it really is quite a mistake to suppose that in the inter-war period the British railways compared very badly with foreign railways. It is just not true. In that period the Cheltenham Flyer was for a time the champion train of the world. When the George V engine went to Canada it received favourable comment. When British locomotives and equipment were sent to the Chicago Exhibition they also received favourable comment. Those engines are not now up to date, but it is untrue to suggest that at that time they were hopelessly inefficient, or that money had not been spent on improving our locomotives and equipment.

Mr. Arthur Moyle (Oldbury and Halesowen)

Is the hon. Member aware that the uncertainties to which he has referred were started by the present Prime Minister in his famous speech at Dundee in 1918, when he advocated railway nationalisation?

Mr. Wilson

I am not trying to make a party point. I am merely saying that, if private enterprise needs capital, to be under the constant threat of nationalisation does not help it to get the necessary capital on the open market. That was one of the difficulties the British railways had to face before the war.

It is quite obvious that during the last 16 years the railways have been starved of capital development. The first reason was the war. Secondly—and this, I am afraid, will also cause a certain amount of criticism from hon. Members opposite—the Labour Government, having acquired the railways and nationalised them, and having explicitly stated that they were a poor bag of assets, for some inexplicable reason did very little about giving them any capital for improvement. The Labour Government spent most of such capital as was available on the coal mines and electricity. If they thought that the railways were in a bad way, one would have expected them to spend more capital on an industry which they had taken over.

Mr. D. Jones

I think that the hon. Member will admit that in 1948, 1949 and 1950 the railways had more capital for development than they have had since 1951.

Mr. Wilson

I was just stating that that was part of the explanation for the delay in bringing the railways, which were considerably in arrears, to a more efficient state.

The extent to which any defect in transport hits hardest the remotest areas of the country is not generally appreciated. Any transport defect of any sort is multiplied by distance. If one makes the very briefest reference to transport history this fact can be seen very clearly. The horse-drawn stage coach and the turnpike road were an improvement, but not a very great improvement, on what had gone before. They were a sufficient improvement to turn Brighton into a popular holiday resort for the fashionable people of London, but they were not a sufficient improvement to make any difference at all to the seaside places in the far west.

The same applied to goods traffic. The carrier's cart was sufficiently progressive a means of transport to provide London with vegetables from the home counties, but was of no use at all for Devon and Cornwall. It was not until the railway was built into the far West and Brunel put his bridge across the Tamar that we ever heard about the Cornish Riviera or about flowers and fresh vegetables from the far West being sold in the Midlands and the North. For a time that put the western counties on some degree of parity with counties nearer the centres of population. For a time that redressed the balance. It was soon out of balance again, however, because further improvements were made which acted to the greatest advantage of places nearest the centres of population.

There are now many alternative forms of transport to the railways but I do not think it is always appreciated that they benefit the nearer places most. The buses, motor coaches, lorry services and the C licence lorries all work to the advantage of the places nearer the centres of population. The family man who wishes to drive his wife and children in the family car for a holiday may be prepared to take them from London to Bexhill but he is not prepared, in the present conditions of congestion and delay on the roads, to take them from London to Cornwall. He has a strong disincentive to going the longer distances. If he travels via Plymouth and waits two hours for the Torpoint Ferry, that is the last straw and he does not make the journey again.

It is exactly the same with goods traffic. It may be cheaper and more convenient for the farmer in the Thames Valley to send his horticultural produce to Covent Garden by lorry rather than by train, despite the traffic blocks, but when we try to do the same thing over long distances we come up against the disadvantages of being so far away from the centres of populations. Our difficulties are multiplied by distance.

This is not a debate about roads. That subject was mentioned by the Minister in opening the debate; improvements to the roads are contemplated and will be made. But it is particularly important for us in the West to have a good rail service because it is clear that the existing road service is not a sufficient alternative for us. The choice which we have at present is between a poor road service and a worse railway service. Compared with those who are nearer to the centres of population, we are worse off.

The borrowing powers under the Bill will enable a start to be made on many points in the railways plan and that is of particular interest to us in the West. The first point which is made in the summary of the points arising under the plan is that there should be higher speeds over the trunk routes, and that will be especially attractive to us for, just as disadvantages are multiplied by distance, so are advantages. We also note with interest that it is proposed to extend the automatic train control, a different form of which has served us so well in the West for many years. We note with interest, too, the proposed replacement of steam by electric and diesel traction, and this expansion is of special advantage to us because we have no collieries at all and all the coal has to be carried long distances before we can use it. Presumably it will be easier to deal with electricity or diesel oil.

I was particularly interested in the reference on page 16 of the Report to the fact that all steam working should be eliminated beyond Newton Abbot and one can very well understand the allusion at the bottom of the page to the fact that 200 main line diesel locomotives will be required to replace over 300 steam locomotives. As far as one can see from one's own observation, an express passenger train travelling from Newton Abbot to Penzance requires at least three locomotives. It is double-headed out of Newton Abbot up Daignton Bank. Then as King class engines cannot go across Saltash Bridge, one engine is taken off and another engine put on in its place. I assume that at least three engines are used to get one train over that journey. Presumably a diesel locomotive would be constructed so that one engine could do the whole job. If that is the intention—and presumably that is the sort of thing which would follow, judging from paragraph 51 of the Report—it is very much to be welcomed by us, because it should bring not only a saving of administrative expenses but also a saving of time, and time is such a vital factor for passengers in the West.

The modernisation of rolling stock speaks for itself. On a long journey it is particularly necessary to have the most up-to-date and comfortable accommodation which can be provided. If one is to sit in the train for a long time the disadvantages of any minor discomfort which might be accepted on a short journey become only too apparent.

The last point which is mentioned on page 6 of the Report is that of continuous brakes on freight wagons. I am sure that this will have a very profound effect on goods traffic from the West. The loose coupled goods wagons, clanking slowly through the night and held up by day on sidings while passenger trains go past, may have been picturesque, but in my opinion they are one of the chief reasons for which I, as an hon. Member, receive frequent complaints of slow or delayed transit for goods traffic. Any small delay on a train travelling a very long distance is multiplied time and again before the train reaches its destination. With these loose coupled goods trains, which have to be pushed into and out of sidings, travelling at night and at a slow pace, it is much more difficult to keep time and to give delivery within a reasonable time. I expect and hope that the substitution of continuous brake goods wagons will make a great difference to us.

This Bill will enable the British Transport Commission to make a start on all these things. It is true that we have been told that the Bill relates only to about £75 million of the plan, but the Minister indicated that a start would be made on all these things. I believe that the plan which has been put forward is a complete revolution in transport in this country—a revolution such as that which we had in the West when the railways first entered that area—because it will completely alter the whole set-up, speed the traffic and simplify the traffic problem. That will be of the greatest possible benefit to us. For those reasons, I particularly welcome the Bill.

5.58 p.m.

Mr. Arthur Holt (Bolton, West)

I am sure the hon. Member for Truro (Mr. G. Wilson) will not expect me to follow him into railway history or into the disadvantages of living in the West Country. As one who has to spend most of his time in a smog-ridden atmosphere, I can assure him that I could offer him plenty of advantages of living in the West Country to offset the disadvantages which he has indicated.

I should like to follow some of the remarks, particularly those in the latter part of his speech, by the hon. Member for Hillsborough (Mr. G. Darling)—remarks about stodgy management and the revolution which is required in British transport. He gave instances of the type of management which would not be good enough in this modernisation plan. I am sure he did not mean to suggest that there were not also very good managers already in the railways, and it is to be hoped that they will be sought out, encouraged and given promotion. I agree that many more will have to be brought in at different ages—not only young recruits—to help the modernisation scheme. He did not seem to finish it, because he did not say who was to do this.

In this Bill we are backing Sir Brian Robertson. If he falls down on the job this plan will be a pipe dream and the Commission's deficit, which already is large, will grow larger. I am glad that stress was put on that by the Parliamentary Secretary to the Ministry of Labour, although it got a rather bad Press and he was accused of using a lot of platitudes about management and co-operation. Whether they are platitudes, or cliches, or not, the fact is that on an economic basis no one has yet been able to justify the plan and confidence in the railways is at rock bottom, not only among those in the railway industry but outside.

Unless Sir Brian Robertson can inculcate a real determination to move ahead in a revolutionary manner, this plan will not be carried out. Now that we have had our argument over the question of how the railway system is to be run, I hope that we in this House will do all we can to assist Sir Brian Robertson in his task.

The hon. Member for Enfield, East (Mr. Ernest Davies) surprised and a little alarmed me when he said some things with which I found myself in agreement because on the question of transport, certainly in the past, we have been poles apart. He put quite bluntly the point that in the recent trouble and over the deficit which has been incurred and still further increased the Government have hidden behind this plan in their effort to avoid dealing with the deficit. The railway unions demanded an increase; they said that if they did not get it they would strike. When that was thoroughly realised they got the increase. No kind of court of inquiry or polite phrase will get round that simple fact.

The Government were then faced with the fact that the railways would have a bigger deficit than ever. They did not like the idea of a subsidy and neither do I. We have far too many subsidies, whether for agriculture or other purposes. Our job ought to be more that of seeing that an industry stands on its own feet. The hon. Member for Wolverhampton, South-West (Mr. Powell) put a case which seemed to lead to giving a subsidy. He was very much in sympathy with the speech made by the hon. Member for Enfield, East. If it were in a different context, I would agree that on this particular case there is a great deal to be said for not letting this deficit hang over for a long time, as it will.

Mr. G. Wilson

Will the hon. Member—

Mr. Holt

May I first develop this point?

As the hon. Member for Wolverhampton, South-West said, we have never faced what happens to a nationalised industry when it is of a contracting and not an expanding type, when its assets cease to have much value and it starts to become uneconomical. What do we do about the capital of that industry because, apparently, we can never write it down? There is provision in the Transport Act for dealing with the interest. The Treasury can take it over temporarily.

Mr. Wilson

May I interrupt the hon. Member in the same sense as I interrupted my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell)? I pointed out to my hon. Friend in the debate last Thursday that he was overlooking the fact that the charges scheme had not yet been published and that it would profoundly alter all these figures. We have heard today from the Minister—I think I understood him aright—that these figures were based apart from the charges scheme.

Mr. Holt

The hon. Member for Truro and the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) have great faith in the charges scheme. Many people have great faith in the modernisation scheme. I only hope that they are right. We can hardly expect even the charges scheme to bring this deficit down within five years. It is a very big deficit, £30 million a year. If the railways think that by alteration of the charges scheme they can do that they are in a fortunate position.

As I do not wish to divert people's attention from the fact that absolutely nothing but a revolution in the management of British Railways will finally put the industry on its feet, I say that for that reason I want the deficit to stay there. But there is a great deal to be said for dealing with it. If we did remove the deficit those in the railways might say, "Perhaps it does not really matter if we do not make it pay; perhaps the Government will come to our assistance."

For that reason, and for that reason only, I would say that we should leave it as it is. It is absolutely vital that Sir Brian Robertson and everyone connected with the railways should realise that nothing but their most tremendous efforts in the next few years will put the railway industry on its feet.

I wish to say a few words about what can be done at present to help the railways. The noble Lord the hon. Member for Dorset, South is very keen on modernising stations. So am I. I should like to see some big, new stations instead of some of the terrible stations we have now, but let us have first things first. If this deficit is to be abolished quickly and the railways are to be made to pay plans must be put into force which will produce the best economic results immediately. In that respect I would encourage hon. Members, now that, for good or ill, we have decided that the railways must pay their way, not to resist the attempts of British Railways to close unremunerative lines.

I suggest that the proper people to decide whether lines are remunerative or not are British Railways. The consultative committees should be used, but, if it is a case of the railways wishing to close a canal which is of great social value to the neighbourhood the job of the Member of Parliament is to find someone else to take over the responsibility—the local authority, the National Trust or a similar organisation, but not the railways. The Member of Parliament should do nothing, whether to win votes or anything else, to prevent the railways getting rid of unremunerative activities.

Mr. D. Jones

How would the hon. Member deal with a situation in which the Commission wanted to close a branch line but was prevented from doing so by the Government because of the strategic value of the branch line?

Mr. Holt

I made this point when the Transport Bill was going through the House. If it is a question of strategic value it should be done by a subsidy on the Vote of the Service Department concerned, the Air Force, or the Navy—if it is in the north of Scotland and has something to do with Scapa Flow—or the Army.

Mr. Walter Monslow (Barrow-in-Furness)

Do I understand that the hon. Member is now pleading for a partial subsidy?

Mr. Holt

That is not a subsidy in the usual sense of the term. As far as the economic activities of the country are concerned, that railway line would cease to function.

If the Navy then says that it wants the railway, the Commission can say that it would cost £5,000 a year if the Navy was prepared to pay. If not, it would be closed. The alternative is to let British Railways close the line; and if the Navy wants to start it up again, it would have to run its own line. Nothing must be done by this House to interfere with the railways putting all their activities on a remunerative basis. That is the kind of approach which railwaymen themselves want. I am sure that they would much prefer the railways to pay their way than be subsidised.

I should like also to say a word on the question of management and the size of the undertaking, to which reference was made by the hon. Member for Hillsborough. Some of the regions are still far too big to be properly managed. They are of a size that no one in industry would consider it possible to manage properly. It was said recently from an authoritative quarter to the Institute of Transport that just before the war, the London Midland and Scottish Railway was planning to decentralise its railway system. The London Midland Region could be run far better and more efficiently in, say, three groups, one running from St. Pancras and one from Euston, and the third a revival of the old Lancashire and Yorkshire lines.

Mr. Ernest Davies

As separate, as separate regions?

Mr. Holt

Yes, as separate regions.

Mr. Davies

And separate area boards?

Mr. Holt

With one area board.

The Eastern Region also falls into two natural groups, the lines running east into East Anglia and those going to the North. In effect, there would be nine regions instead of six. They could still operate under the area boards, as under the plan, but this method would provide for nine regional managers, who might then have a chance of knowing the staff who worked under them, and who were the stodgy ones and who were the bright ones. That is what it boils down to.

Sir Brian Robertson will not be able to do the job that requires to be done unless he knows who are the good men and who are the bad men and can shift the bad ones and promote the good ones. When one is responsible for thousands of men, the job becomes extremely difficult. In adopting such a method, there is no reason why certain of the centralised services which have been built up to advantage should not continue, but the smaller groups would make for really good management.

I am not competent to talk on the technical aspects of the modernisation and re-equipment plan, but I should like to know how the Government propose to decide whether, financially, its size is right or whether it is much too big or is not nearly big enough. On what basis are we considering the Bill? The Minister will know that it is up to him to justify it to the House, but after his speech I could not help feeling that had he been talking to a group of wealthy people who were to be asked to put money into the scheme he would not have convinced us that we should part with our money and give it to the railways. He did not convince us that we would get a good return, or even some return, or a better return than if we put our money into, say, electricity or roads. The right hon. Gentleman gave no economic reason whatever, but finished his speech by saying that the best argument for the proposals was that they were a morale raiser.

The Minister referred to the £75 million for the first part of the modernisation scheme and dealt with the Commission's figures, but he gave no economic justification for the rest of the borrowing. Once again, the same problem is posed as when we discussed the electricity and gas industries borrowing Bills last July. What are the criteria on which the Government decide that £1,400 million is the right figure for electricity, £450 million for gas, £600 million now for transport and a peculiar figure for roads, which nobody quite knows but which is about £200 million, although nobody knows when it is to be spent?

The right hon. Gentleman carefully chooses his words. If he intended to reveal anything it would be revealed, but he is so careful that he discloses nothing at all. There is no indication when any of the road development schemes will be started or when the machines will go on to the jobs. A date for authorisation is given, but we do not know when the work will be started or finished.

As I understand the nature of the back room activities, all these matters go before a Treasury committee, which does not include representation of Members of Parliament. I do not know whether the Chancellor of the Exchequer is a member of that committee, but he is equally vague about these matters. A Treasury committee is supposed to consider capital investment and, presumably, decide what amount of national resources should be apportioned each year to capital investment, and particularly for the nationalised industries.

I was extremely interested to hear the Chancellor of the Exchequer speak in the debate on Thursday, for I thought that he might reveal something. First, he said that there is plenty of room for competition between road and rail on terms which are fair and reasonable to both sides.

Mr. Nabarro

Hear, hear.

Mr. Holt

The hon. Members says, "Hear, hear." Perhaps he will bring up the question of why road users pay 2s. 6d. tax on diesel oil but railways do not pay tax.

Mr. Nabarro

Or why the railways raised their capital on preferential terms under a Treasury guarantee and the road operators raised their money on the open money market at a substantially higher rate.

Mr. Holt

I supported the hon. Member on a previous occasion and I still think that the principle is a good one, but I fear that at the moment the railways would not get any money at all if there was no Treasury guarantee.

The Chancellor of the Exchequer, on Thursday, appeared to try to justify the figures that the Government were accepting in the Commission's modernisation plan by comparing them with the road plan which the Minister of Transport had announced the previous day. He compared, for instance, the cost of new work on the tracks with the amount to be spent on the roads. Today, the Minister of Transport did not feel that that comparison was quite adequate and he included signalling and marshalling yards and brought the figure to a total of £340 million.

The Chancellor of the Exchequer said: 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, … There is nothing to which one could take exception there. I suppose that it is literally true.

The Chancellor went on to say: but it can be said that we have a proper balance between the two."—[OFFICIAL REPORT, 3rd February, 1955; Vol. 536, c. 1308.] One can say anything, but I do not know whether the Chancellor will say that he considers that there is a proper balance between the two.

If the Chancellor would say that, on what basis is there a balance? There is no indication from any Minister that the balance has been decided on an economic basis. No one has said, "We reckon that if you spend £100 million on tracks, it will show a return of 10 per cent. saving." No one has said, "The reason why we are going to start building a motorway from London towards Yorkshire is that it will save on an expenditure of every £100 million a sum of £10 million in expenditure on running and on maintenance compared with the old roads." We have not had these figures.

The British Road Federation pamphlet gives a number of estimates and other people also give estimates, but when they want to increase borrowing powers, why do the Government not tell us that on an economic basis it is far better to spend £100 million on the roads than £50 million on gas or £200 million on railways? We want an economic basis on which to judge these matters. If the Government did not arbitrarily decide the matter but left it to be decided by the market—as the hon. Member for Kidderminster (Mr. Nabarro) would like them to do—the market would make an assessment. The market might be proved to be wrong in a few years' time.

I do not pretend that the market is infallible, but it would make an assessment and the money would go to that direction from which those who were lending the money would expect the best return.

Mr. Ernest Davies

Irrespective of the national welfare.

Mr. Holt

Well, the national welfare—

Mr. Davies

The hon. Member does not care about it.

Mr. Holt

I care very much about it, but hon. Members who say that the national welfare is this or that are often extremely presumptuous and do not know what they are talking about.

Mr. Davies

Does the market?

Mr. Holt

The market expresses the collective view of the people who have the money.

Mr. Davies

Those who want the biggest profit.

Mr. Holt

I am not going to be drawn into a lecture on the free market system. The market still operates for ordinary industry. It does not operate for the nationalised industries and is not operating now with regard to capital expenditure on road transport and railways. What is operating in its place? I suggest that there is nothing and that these matters are being decided in a very higgledy-piggledy way and largely on political issues.

The Government must give attention to this matter. If they do not, the resources of the country will be diverted for other than economic reasons, or other than in the best interest of the country, if the hon. Member for Enfield, East likes it that way. They will be diverted to the wrong channels and in a wasteful way. It is up to us to find a method of allocating capital investment in nationalised industries in a way which is good for the country and which will make the best use of the limited resources at our disposal. That is a problem to which I hope the Government will give careful attention and on which they will deliver a considered judgment. I hope that at an early stage the Government will be a great deal more forthcoming about the activities of the Capital Investment Committee and how it arrives at its decisions.

6.25 p.m.

Mr. Frank Anderson (Whitehaven)

I wish to take a few moments of the time of the House to speak from a parochial point of view. I believe that I am the first hon. Member to speak from this side of the House who has had actual experience of the working of the railways. I am also the first to speak as a representative of an area which is classed as a special area, and it is in that context that I want to discuss the new modernisation and re-equipment programme.

As the Parliamentary Secretary no doubt knows, a locomotive shed was closed recently in West Cumberland. It was shown that in one area alone many hours' delay per week was caused in the movement of traffic which was controlled at one signal box. Unfortunately, we have in this area 11 miles of single track. The existence of that track causes discontent in West Cumberland, where new industries are being set up and developed and where traders and the travelling public experience serious delays and other inconveniences. I believe that part of the money which is to be devoted to these national developments should be devoted to overcoming the problem of unproductive services, such as those which exist in West Cumberland.

A number of exceptional types of minerals are mined in West Cumberland and these have to be conveyed to various parts of the country. Yet, because of this serious delay in the movement of traffic, traders cannot say with certainty that their goods will arrive at a given point within a reasonable time. This difficulty is entirely due to the fact that there is insufficient track to carry the heavy weight of mineral and goods traffic, apart from the passenger services which operate in that area.

Over a distance of 11 miles there is a 21 to 25 minutes' run during which no other train can travel in the opposite direction because there is only one track. In Whitehaven, there is a tunnel which has been undergoing repairs every night, except Sunday nights, for many years. A considerable amount of money has been spent on it. The railway tracks have to be closed at night for five or six hours to enable repairs to be carried out to this single-track tunnel. Surely it is the management's responsibility to see that this unproductive situation is relieved by carrying out the repairs in a way which will enable traffic to be moved much more quickly than it is moved at present.

In this area of West Cumberland large sums of public money have been invested with Government support. Huge undertakings have sprung up there recently and these have not built up reserves as older firms have been able to do. For instance, there is the atomic energy undertaking, the Eskmeals gun range, and there are the great chemical factories. All of these factories experience continual traffic bottlenecks. I hope, therefore, that it will go forth from this House tonight to the management of British Railways that here is an area which they could help to make more efficient.

I do not want hon. Members to think that this line simply serves a village. Within my Parliamentary area it covers a population of over 84,000, yet there are only 10 passenger train departures and eight return trains a day. Everyone who has travelled from Carnforth to Whitehaven has grumbled because it takes between three or four hours to cover 74½ miles. As this area is being developed considerably, the trading public and the travelling public should be given facilities equal to places such as Birmingham, Manchester or Liverpool, because our new industries have to compete with others in those areas.

Now I want to deal with the question of efficiency. When I passed through a big county borough on the main line from London to the North a few days ago, I noticed that in the goods yard there were 24 vans with their doors open ready for unloading. All that traffic has to be unloaded in the open yard without any protection from the weather and, consequently, large amounts of money have to be paid out because of goods being damaged by rain. That instance could be multiplied hundreds of times. I see no mention of that fact in this otherwise excellent Report, so I suggest that attention should be paid to the loading arrangements in our goods yards, where at least two-thirds of the traffic is unloaded or loaded in the open. Here again it is up to the management to see that the necessary changes are made.

Reference has been made to competition, of which I have had experience for many years. A lot of twaddle is talked about competition. I spent much of my time with the railway service in Lancashire. We found that the cotton mills were able to bring their cotton back from the Liverpool and Manchester docks at a rate different from that charged for goods going to Liverpool because the road hauliers charged one rate for a load going to Liverpool and quite another rate for a different type of load coming back, gaining on the swings what was lost on the roundabouts. The road hauliers used to come into the railway offices to find out the special rate charged by the railways for a certain class of traffic and then they would go to the firms concerned and offer to charge less. The result was that the road haulier would quote just under whatever rates were quoted by the railway. That is competition according to some people, but is it healthy competition?

Another case concerned paper-making machines sent from Lancashire in consignments of 2,000 and 3,000 tons. The road hauliers would offer to take a five-ton or four-ton piece to the docks, but would refuse to take those which required packing, roping, sheeting, and so on, which the railways could not refuse to accept. I say, therefore, that the sooner we get rid of so-called competition, the better it will be both for the road hauliers and British Railways.

I will give one more example. The railways are common carriers of certain classes of brittle goods. If a road haulier is asked to take such goods, he will refuse, saying that they are not remunerative enough and that they ought to be sent by rail. Thus, the road haulier picks his own traffics. Consequently, the railways are put to very serious difficulties. I hope that under the new rating system the railways will be put in a better position to compete. Consideration must be given to the situation in respect of traffic of exceptional height, weight and width which road hauliers will not carry because it is insufficiently remunerative, with the result that it has to be carried by the railways.

I hope that an improvement will be brought about as a result of my having raised tonight the question of the bottleneck at Whitehaven because of the single-line track which is there.

6.42 p.m.

Mr. Archer Baldwin (Leominster)

The hon. Member for Whitehaven (Mr. F. Anderson) joined other hon. Members on both sides of the House in condemning the management of British Railways. I hope that as a result of the spending of a huge sum of money on modernisation and re-equipment there will be a fresh spirit in railway management from top to bottom. In these days of full employment, full order books and enormous traffic, the railways ought to be able to make a profit if they are properly managed.

I want to deal particularly with the closing of branch lines in country districts and to refer to the speech of the hon. Member for Bolton, West (Mr. Holt). I do not think that people realise exactly what is happening in remote districts where railway lines are being closed one after the other. In recent transport debates the closing of such lines has received scant attention. Little has been said about the subject in relation to the money which is now to be spent; indeed, the plan mentions branch railway lines only once. The closing of branch lines is a matter of great importance to hon. Members representing agricultural constitutencies, and I am sure that what I have to say will be endorsed by most of them.

At present there is a continual movement from the more remote areas to the towns or to agricultural areas which possess more amenities. In my area three branch lines have been partly or wholly closed, and this means that the districts concerned are likely to become less populated than they are now.

I realise that there are other reasons for the movement of population besides lack of transport. One is lack of educational facilities in the remote areas. Another is the difficulty of getting deliveries of certain goods. Strange as it may seem, several remote areas in my constituency cannot get fresh milk delivered and they also have to pay a charge for the delivery of bread. This is a serious matter.

Mr. Holt

Have the very remote areas about which the hon. Member is speaking ever been fed by railways? Does not the hon. Member agree that the road system in remote districts is finer than in similar districts anywhere in the world?

Mr. Baldwin

I shall deal with that problem in due course.

I am not advocating the continuance of a service which is absolutely unremunerative and ought, therefore, to be closed. What I do say is that it is no good tinkering with the problem. The Commission should make up its mind whether or not the railways are remunerative. If the railways are not remunerative and cannot be made remunerative, the Commission should not tinker with the matter by ending the passenger services now and the goods services two years hence, leaving tracks merely to grow weeds. If it is decided that branch lines have to be closed, it is up to the Minister of Transport to ensure that some other form of transport is provided.

I am speaking particularly of an area close to my home, where I saw the railway constructed more than 60 years ago, and which I have now seen closed. It is a very sparsely populated district. It is not served by road transport. Under the present system of licensing, and in view of a certain amount of monopoly of the big bus companies, there is a skimming off of the areas where the population is most conveniently situated, and other districts are left alone. Fifty years ago those districts had local carriers, by means of which they could reach the markets and obtain their groceries. Now they have no means of transport at all. Some women have to walk three or four miles to a main road to be picked up by a bus.

Mr. Nabarro

My hon. Friend happens to be a constituent of mine, and he is talking about a railway line which runs through my constituency and his. It is all very well to tell the Minister that he must provide an alternative means of transport, but what is that means of transport to be if privately owned bus companies can operate only at a heavy loss?

Mr. Baldwin

I will deal with that point later.

Mr. James Callaghan (Cardiff, South-East)

The hon. Member intends to deal with a lot of points.

Mr. Baldwin

I am dealing at the moment with the point raised by the hon. Member for Bolton, West. I imagine that if the Post Office one day makes a loss the hon. Member for Bolton, West will suggest that it should close some of its unremunerative services, and I can visualise some country areas where the delivery of letters does not pay the Post Office being told that they must collect their mail from bigger centres. If we are to close unremunerative enterprises we must go further than the railways; we must go to the Post Office. This might also apply to some bus routes at present.

I believe that national utility services should be sufficiently well run to carry some of their unremunerative branches. That is being done by the Post Office, the banks and the bus companies. Why cannot it be done by the national railway services? If the railways are run properly in the populous areas they ought to be able to carry the burden of some of the remote districts. The hon. Member for Bolton, West, also mentioned the Isle of Wight, where the Royal Navy said the branch lines must not be pulled up, because the Navy would need them. A similar thing will happen in my district.

At a protest meeting in my district, a few weeks ago, a representative of the War Office was asked to give his views about closing these branch lines. He said that the War Office would not be interested until a proposal was made to pull up the lines. Although I hate subsidies, if these railway lines are necessary for the defence of the country they should warrant a grant from the Services. It is no good the War Office waiting until the lines are completely closed before making its protest. It should come in on the job now.

I want to pay tribute to the Minister of Education for trying to stop depopulation of the rural areas.

Mr. Speaker

Order. I do not think that that is relevant to the Second Reading of this Transport Bill. The Minister of Education has nothing to do with it.

Mr. Baldwin

I made my point, Sir, but I just wanted to say that the depopulation of the remote areas is of national importance. If we are to have increased production in these areas, we must have the labour force to do the work.

Four towns are affected by the closing of branch lines in my constituency. They are Kington, Presteigne, Leominster and Bromyard. One by one, these are having a snowball effect. Two years ago the railway line from Bromyard to Leominster was closed. It was said at the time by some people who studied the problem that if the line did not pay it should be closed.

But the effect of the closing of that line has been to close the last train from Worcester to Bromyard which was the only connection for Bromyard for people coming from London by the 4.45. I suppose that the engine driver and his mate had to take an empty train back to Worcester to go to bed. Bromyard people are very seriously affected by this, as is any passenger coming from London.

This morning I had a letter from one of my constituents who pointed out that if one wants to go from Paddington by the 9.45 a.m. train, which, in the old days, used to take one to Leominster with a change at Worcester and now takes one to Hereford, one has to change to get back to Leominster. That train arrives at Hereford at 2.4 p.m. and the connection to Leominster starts at 2 o'clock. The result is that one has to wait until 4.20 p.m. to get to Leominster.

Mr. Nabarro

I am sure that my hon. Friend would wish to complete the picture and see that the facts are checked. On the question of the connection from Worcester of the 4.45 from Paddington, it was discovered over a period of six months that the average number of passengers from Worcester to Bromyard was three per night.

Mr. Baldwin

I know that if one starts using figures, one can prove that the Bromyard to Worcester line ought to be closed and we shall very soon be left hardly any lines at all. In fact, if the method of arriving at figures adopted at the Isle of Wight inquiry were used over the whole of the railway system, it would be proved that there is no main line, or any other line, that can pay.

So far, the only argument put by the Transport Commission for closing the branch lines is that they do not pay. The Commission says that by closing the Kington to Leominster line it will save £15,000. I challenge that figure. If it is a fact that the railways are losing custom, why do they adopt this defeatist attitude? When a business man finds that he is losing business, he does not put up the shutters and sack the employees. He looks around for ways of increasing his business. That is what I am suggesting that the Transport Commission should do.

I am not prepared to accept the estimate of the loss of £15,000, which was given at the meeting which we had at Leominster to protest against the closing of these lines. I have here a letter from a retired railway official who wrote to me saying that he was Chairman of a committee set up to investigate the working, staffing and equipment of branch lines on the old G.E.R. He went on: The Post Office do not shut village post offices or telephone boxes where they do not pay, they are kept open as a public need and convenience. Chain store companies do not shut up shops … They put in a new shop front, re-dress the windows, have a sale. Do the Commission require a few of Woolworth's or M. & S. directors to show them how to put a new front on the railway and re-dress the whole semi-derelict railway? That is from a retired railway official.

I want to refer again to the question of the figures put forward to prove that a railway line does not pay. I should like to see how that figure of £15,000 is calculated. The railway is still there. I can see that there will be no saving of personnel by the closing of passenger services. The personnel are still required for goods services.

No doubt the Minister has seen the report of the inquiry which was held in 1953 into the closing of the Isle of Wight railways. At that inquiry Sir Melford Stevenson, Q.C., appearing for various authorities and associations, the county council and chamber of commerce, made this remark: The issue is now clearer than it has ever been since the inquiry began. You have been presented by the Railway Executive with a set of figures that are false, possibly by carelessness or inadvertence. It is no part of my function to assign motives, but the figures have now been demonstrated beyond any doubt quite wrong. If one wants to prove an argument with figures, one can make the figures prove anything one wants.

I want to finish by saying that during all the debates on transport affairs area boards have been mentioned on both sides of the House. How big they should be, and what their functions should be, are not agreed. I suggest to the Minister that the area boards should deal with the closing of branch lines. On that board there should be not only local people with business knowledge, but representatives of the railway personnel. They should consider all the facts and see whether they can compete with the road transport service.

I suggest that light diesel cars be introduced, similar to those which run on the Continent. Were that done, more business might be attracted and expense lessened. There could also be a saving in personnel. I have no doubt that my right hon. Friend has received literature from the Railway Development Association, which has some interesting things to say about diesel rail cars. On branch railway lines which are required for goods traffic, diesel rail cars could be used in the same way as a bus is used. They need not necessarily stop only at railway stations. They could pick up passengers wherever there were passengers to pick up. Such cars would have to be used in competition with buses, and I suggest that some of the methods employed by the bus services should be adopted.

Such a system was introduced in the county of Donegal, with the result that the mileage was increased by 86 per cent. and the cost reduced by 33 per cent. I maintain, therefore, that, with reasonable management, branch railways could be made to pay their way; but if that cannot be achieved it is no argument for closing them down. The more remunerative parts of the railway system should carry them. However, if it be decided that such branch lines cannot be kept going, do not let us tinker with the job. Let them be removed completely; the land turned back to agriculture; the roads in the area improved and an efficient road transport system provided.

Mr. Sparks

But it is said that it does not pay.

Mr. Baldwin

If that point of view is taken, the country will not secure the increased agricultural production which is called for and the responsibility for that must be accepted.

At least my speech has pleased some hon. Members opposite. I do not know whether I have pleased my right hon. Friend, but he knows me well enough to realise that I do not mind whether I have pleased him or not. I have said what I intended to say, and I am sure that in doing so I have pleased some of my constituents, who are very concerned about this matter. It is altogether wrong that remote country areas should be served so badly.

The four towns to which I referred are endeavouring to attract small local industries. But such industries are not likely to come to the towns if there is a likelihood that the railway lines are to be closed. Instead of congregating huge masses of people in Birmingham and its suburbs, and creating new towns, some of the lighter industries should move to existing towns in remote areas. That will never happen if there is a possibility of branch lines being closed.

7.4 p.m.

Mr. Percy Collick (Birkenhead)

The House has listened to what was one of the best Socialist speeches I have ever heard made from the benches opposite. It is always a little pathetic when an hon. Member opposite, faced with an urgent constituency problem such as that to which the hon. Member for Leominster (Mr. Baldwin) has referred, finds himself in a contradictory position, as he did. He has been making what, so far as I know, was a good case against the closing of certain branch railway lines in the neighbourhood of his constituency, and, apparently, in the neighbourhood of the constituency of the hon. Member for Kidderminster (Mr. Nabarro).

The hon. Member for Kidderminster did not give much support to the hon. Member for Leominster, who is a constituent of his. I should have thought that he might have served his constituent a little better. It seemed to me that his service consisted of picking a big hole in the argument of the hon. Member for Leominster—

Mr. Nabarro

He will vote for me, anyway.

Mr. Collick

Yes, it is the old story. If a broomstick were put up and called a Tory, people in some areas—[HON. MEMBERS: "Kidderminster."]—would vote for it.

As I understand, the hon. Member for Leominster was pleading against the closing of some branch lines, and I am with him all the way, because I am a Socialist. As a Socialist, I believe that the people in parts of the country such as those to which he referred have as much right to a railway service as they have to a postal service—

Mr. Rupert Speir (Hexham)

Will the hon. Gentleman give way?

Mr. Collick

No, I will not.

The dominant consideration is not whether the line will pay, but whether there is a need for the service. If there is such a need in Hereford or Kidderminster, the service should be provided. But that is not the case of hon. Gentlemen opposite—

Mr. Speir

Will the hon. Member give way.

Mr. Collick

No, not at the moment.

The case of hon. Gentlemen opposite is this, "We believe in the principle of private profit. If an industry cannot be run for private profit, close it down." I am sure that the hon. Member for Kidderminster is perfectly willing to follow that line of argument in his own case. If the railways in his constituency were not profitable, in the narrow sense in which he understands profit, he would be quite willing to close them down.

Mr. Nabarro

I am sure that the hon. Member would not wish to misrepresent the position. The railway line which was the subject of the speech of my hon. Friend the Member for Leominster (Mr. Baldwin) starts at Worcester, runs through my constituency and ends in his. The Transport Commission has shut it down because it is uneconomic. I merely interpolated that over a period of six months the average number of passengers on a particular evening train which connects with the 4.45 from London was three per night, thus justifying the decision of the Commission.

Mr. Collick

Exactly. The hon. Member for Kidderminster agrees that in this case, because the line is not profitable in the narrow margin, it should be closed. That is a principle of Toryism which I well understand. What I do not understand is why, almost every time that branch lines are to be closed, hon. Gentlemen opposite plead with the Minister to intervene, or to do this, that or something else to prevent the closing of branch lines in their own constituencies.

Mr. Speir

I am grateful to the hon. Gentleman for permitting me to intervene. May I point out that this question of closing branch lines has arisen only since the Socialist policy of nationalisation was introduced in 1947?

Hon. Members


Mr. Collick

I would not have given way had I not thought that the hon. Member had a serious intervention to make. If he knew as much about railways as some hon. Members who sit on this side of the House, he would be aware that his assertion is quite wrong. Historically, there are plenty of cases on record where branch lines have been closed. I was arguing that it is against the line which hon. Members opposite should follow to protest against the closing of branch lines while doing nothing constructive to meet the problem with which the Transport Commission is faced.

I now turn to the arguments of the hon. Member for Bolton, West (Mr. Holt). It is all very well for hon. Members such as he to say, "If the railways were properly managed they could be made economic; what we want is a breath of fresh air." I have heard such things said over and over again in this House. If the hon. Member had had a little more to do with the running of British Railways he would know that the problem of making them pay is not so easy as he presumes to think. I do not excuse any hon. Member in this matter, because anyone who talks about railways in this House ought at least, as a preliminary step, to make himself familiar with the problems of railways generally, and not merely British Railways.

British Railways have to pay from 100 per cent. to 400 per cent. above pre-war prices for products which come from private industry, such as wood, timber, steel and copper.

Mr. Nabarro

What about coal?

Mr. Collick

The average price charged by the Commission in fares, on the other hand, is nothing like 200 per cent. above pre-war. In those circumstances, how can any industry be made profitable in the capitalist sense?

Mr. Holt

If the hon. Member reads HANSARD tomorrow he will see that he does me less than justice. I never said that it would be easy to make British Railways economic; quite the contrary. I said that it would be extremely difficult to do so. I do not know whether he takes the view that the management of the Commission is right at the top and nothing can be done to improve it.

Mr. Collick

Before I sit down the hon. Member will hear me say something which indicates that I think nothing of the kind. Hon. Members are going too far when they say, glibly, that if only the Commission did this or that, or showed more enterprise, and all the rest of the sentiments which have been thrown about, it would be better off. If they paid a little more attention to the economic facts they would understand the position better.

It was the hon. Member for Bolton, West who started talking about the need for the Minister to have an economic plan—at least, I thought it amounted to a plan; I do not want to do him an injustice. He complained that the Minister did not justify the scheme on the basis of any such plan. As a Socialist I am with him the whole way, and I am glad that the Liberal Party is beginning to believe in economic planning.

The simple fact is that railways in almost every country are facing economic difficulties. Their incomes do not meet their expenditures. What are the Government doing about British Railways in that respect? What is the Minister doing? So far as I understand the position, precisely nothing is being done. The Minister knows that I would not do him an injustice, but in his speech today, as in his speech last week, I found nothing that gave any indication that the Government are alive to the financial problem faced by the Commission.

Last week I tried to elicit from the Minister what was the outcome of the conversations which took place between Sir Brian Robertson and the Minister—and, perhaps, the Chancellor of the Exchequer—arising from the recent wages dispute. The House of Commons has not been told. Not one word has been said in the House. We have tried to get the facts by a process of cross-questioning, but not one word of explanation has been forthcoming about any financial understanding which may have been arrived at between Sir Brian Robertson and the Chancellor of the Exchequer. I am interested, as I think is the whole country—and I can assure him that 700,000 railwaymen are very much interested—to know the answer to that question.

All that the Minister has done today is to introduce a simple Bill to give the Commission power to increase the amount of money it can borrow. There is no Motion on the Order Paper for approval of the scheme. Hon. Members have spoken as though we were doing precisely that, but we are doing nothing of the kind. We are concerned with a simple borrowing Bill. Although I have not the Minister's exact words, he ended his speech by saying, in effect, that this effort would, in some mysterious way, improve the morale of the whole railway service. I hope it does. I think that the plan is a good one. That is almost common agreement, and I have not heard any considered view which is very much against it.

The plan put forward by the Commission for capital development is essentially a sound one, but I am interested to know to what extent the Government are to help it forward. The hon. Member for Bolton, West was quite right in saying that the Minister was not greatly enthusiastic—as I should have expected him to be about a plan of this magnitude. The House of Commons has had before it plan after plan, down through the years. Where are those plans now? A good many have gone into dusty pigeonholes and have not been heard of since.

Before I join in the applause for the introduction of this scheme, I want to be quite sure that there is a real possibility of its being carried out, and carried out vigorously. If the House thinks that the indication which it has had today assures that, I beg leave to differ, because I have seen none of that enthusiasm, will, determination or planning on the part of the Minister that would give me reason to think so.

If the hon. Member for Bolton, West had read the two White Papers which were before the House last week he would have realised some of the Commission's financial problems. The Minister knows perfectly well, because he is very familiar with what was said in those White Papers. Because of its financial tie-up the Transport Commission finds itself in an exceedingly difficult position in dealing with the question of wages and remuneration of staff. The court of inquiry make plain how difficult the situation was, and it was just because it was so difficult that the country was threatened with a grave industrial stoppage a few weeks ago.

The existing financial basis of the Commission is such as inevitably to give rise to these recurring financial problems. What is the Minister doing about that? We have had no answer or indication. I agree absolutely with the hon. Member for Bolton, West that it is wrong for the Transport Commission to go on with a heavy indebtedness of £30 million, or £45 million—the figure will go on—unless there is a clear indication of Government policy in this matter.

I want to deal with an aspect of staff matters, and then to come back to the financial position. I do not want to weary the House with problems which are not strictly within its sphere, but to indicate the sort of idea that is in my mind. The year 1919 is a very long time ago, 36 years. The top wage of a main line locomotive engine driver in that year was fixed at £4 10s. per week. It remained there until 1938. What is his top rate today? Let us not forget that it was over this matter of the rate of pay of the locomotive men that there was the threat of a dispute a little while ago in connection with the N.U.R.

As the result of an arbitration award, the top rate to locomotive main line engine drivers was increased to £9 12s. 6d. per week. Having regard to the changed value of money, is any hon. Member willing to say that that pay is too much for a main line locomotive engine driver? The simple fact is that the locomotive engine driver has not maintained the status that he had in 1919.

Mr. Speaker

I greatly regret to interrupt the hon. Member, but I must point out that the Bill authorises borrowing powers for capital expenditure. I doubt whether all these details about wages are strictly in order on the Bill, which is for capital reconstruction of the railways, and so on.

Mr. Collick

I respect your Ruling, Mr. Speaker, but I would point out that the Minister made reference to the morale of the staff. As I understand the position, we are not merely debating the Bill but are having a wide debate which embodies the proposals of the modernisation and re-equipment plan. If that be so, I would also point out that you will find in page 28, paragraph 106, of the Report a special reference to staff matters. Some of the money to be borrowed as a result of the Bill will be spent on staff accommodation and the like. On that basis, I should have thought that my references were in order.

Mr. Speaker

There is no difference of opinion between the hon. Member and myself on this matter. Accommodation for staff and such plans for the future would all rank as capital expenditure and would be in order. But I ask the hon. Member not to try to repeat last week's debate, because we are now on different ground. As long as the matter does not go too far, and is related to the main question, I shall not intervene, but I issue a word of warning that I do not want the debate to be side-tracked.

Mr. Collick

Thank you very much, Mr. Speaker. I assure you that I shall not attempt to side-track the debate.

The Transport Commission has difficulty in getting technical staff; I am thinking of one type of technical worker, the locomotive engine driver. I wish to draw attention to the serious matter that, as the result of the inability of locomotive engine drivers to maintain their status, certain things are happening. The total number of engine drivers, firemen, motormen and cleaners is 82,000, but within the 12 months ended 12th September last, 10,795 of them left the service.

It is very important that British Railways should have efficient equipment and competent staff, but a 12 per cent. turnover of staff is much too high. It arises because the men do not find conditions sufficiently attractive today. The conditions must be considerably improved if we are to maintain our reputation for highly-skilled operating railwaymen.

This is where we come back again to finance. To anyone who pays attention to railway problems it is not so much a question of someone subsidising the railwaymen as of railwaymen subsidising almost every other industry by virtue of their own low wages. I am a Socialist, and I do not find anything objectionable in subsidising a nationally important industry like the railways. Why should I? How many tens of thousands, indeed, millions of pounds have this Government frittered away in their rearmament programme and got next to nothing to show for it—if the statements of some hon. Members are to be relied upon?

The Government would be very well advised to give real assistance to British Railways. The whole question of railway finance should be re-examined, particularly in the light of this programme. The railways are carrying far too heavy a capital debt and it would be good policy for some of this capital debt to be transferred from the Transport Commission to the Exchequer. I am not at all sure—here I may be committing heresy within our own ranks, but I do not know and I do not much care—that the time may not come when the whole financial operations of the Commission may be better carried on the Budget.

Is any industry strategically more vital than the railway industry? In my opinion, no. It gets not a penny from the Exchequer, yet it has to be maintained. Here is the case for the Government giving assistance to the Commission, which is tied up because the Transport Act says that—and I like these words— taking one year with another it must be financially self-supporting.

Let us take one year with another. Why do we cut out the war years, which were exceedingly profitable to the Government? People talk about paying lip-service to the railways; I could occupy the time of the House in telling a few of the practical things that happened to British Railways during the war. One is that the Government made more than £115 million out of running the railways during that period. I do not hesitate to say that a good bit of that £115 million represents the unpaid wages of railwaymen.

During the war, locomotive men and other railwaymen were in a position, had they wished, to have pressed forward their wage demands to complete success, but so determinedly anti-Nazi and anti-Fascist were they that they never pressed those demands. I could tell of case after case where, week after week, the daughter of a main line engine driver was bringing home from her work in a munitions factory more money than her father who was driving a main line train out of King's Cross during the worst of the blitz.

I therefore say that the Government should consider the whole basis of British Railways finance. If I had influence, I would be willing to see some of that money put back into British Railways to help forward this scheme and to tide over present difficulties. Unless that or some other method is adopted, unless the Government are prepared to pay something for the strategic value of British railways, we have not heard the last of the troubles on the railways. The men are determined not to subsidise every other industry but their own.

I want to see this great plan succeed. If it is capably handled it may be put across to get the confidence of the rank and file railwaymen—and the confidence of 600,000 railwaymen is vital to the success of any scheme like this. Let the Government show some real initiative and enterprise. They talk about private enterprise—let them show a little enterprise. They need to do a little more than they have done in merely putting this Bill formally before the House. I hope they will have second thoughts and give more assistance than their plans at present envisage.

7.32 p.m.

Mr. Gerald Nabarro (Kidderminster)

This Bill is almost exactly analogous to the Bill with which we dealt in July of last year, in which substantial additional sums were agreed to in respect of the borrowing powers of the nationalised electricity and gas industries. Quite clearly, the modernisation and re-equipment programme presented by Sir Brian Robertson only a few weeks ago would be valueless unless the financial sinews could be provided and a reasonable anticipation made of the cost of that modernisation and re-equipment, in terms of capital investment and borrowing powers combined, over a period of the next 15 years.

In his introductory remarks, my right hon. Friend said that of the total sum of approximately £1,200 million that is envisaged in the modernisation and re-equipment plan, about £400 million would be found by the Commission itself from its own resources—and I presume that is in respect of the annual depreciation arrangements made in respect of fixed assets—and the balance of £800 million would be found by new capital subscription and resort to the money market.

Those figures are of some importance in connection with this Bill—and I intend to confine myself solely to the Bill and not to stray into the irrelevancies of so many of the earlier speeches. Those figures are of considerable importance, because the ratio established as between the sum of money that may be expected from the Commission's own financial resources and the amount that will have to be raised by resort to the money market is a ratio of approximately £1 from the Commission's own resources to £2 to be raised in the open money market.

If those figures are applied to the additional borrowing powers provided under the Bill in an amount of £325 million, we arrive at the conclusion that the total capital requirements of the British Transport Commission over a period forward to 1959 are estimated to be of the order of £485 million, or an investment rate of approximately £120 million per annum. From any academic or practical point of view that figure is of importance, because it represents a capital investment rate approximately twice as great as has been the capital investment rate in the British Transport Commission taken as an average over the last few years. It exemplifies the point made by my right hon. Friend when he said that not only would the normal capital re-equipment, year by year, be provided for under the terms of the expanded borrowing powers contained in the Bill, but that there would be adequate provision for the early stages—I repeat, the early stages—of the modernisation and re-equipment programme.

That is a matter of some considerable importance. It is consonant with the speech made by my right hon. Friend the Chancellor of the Exchequer in October of last year at Blackpool, when he envisaged that over a period of a quarter of a century the ambition of the Conservative Party would be to double the standard of living of the British people. I could not believe that it is possible to double the living standard without at least doubling, or more, the efficiency of the operations of its primary transportation system—the railways.

On those grounds alone, and in generic terms, it is quite essential that we finance suitably and adequately the modernisation and re-equipment programme outlined by Sir Brian Robertson and repeated this afternoon by my right hon. Friend. The first step is the borrowing powers under the Bill which is to have its Second Reading this evening.

Further, I think it is an adequate reflection of the growing economic strength and prosperity of the nation that not only were we able last July to vote those vast additional sums for the gas and electricity industries, but today are able to contemplate, without placing undue strain upon our economy, the first link in the chain of a further £1,240 million of transportation expenditure over a period of 15 years. Parallel with that is the continuing very large-scale expenditure—to which I shall refer in a moment, because it has a direct bearing on the Bill—that is going on year by year in the development of atomic energy for peaceful purposes, commenced by the party opposite when in office and substantially extended by my party now in power.

The most important feature of the modernisation and re-equipment pro- gramme is, in my view, the second item in paragraph 7 of the Report. It reads: … steam must be replaced as a form of motive power, electric or diesel traction being rapidly introduced as may be most suitable in the light of the development of the Plan over the years; this will involve the electrification of large mileages of route, and the introduction of several thousand electric or diesel locomotives. The cost, over a period of 15 years, is said to be £345 million.

In his opening remarks, my right hon. Friend gave one justification for a programme of this type by referring to large steam coal. My purpose this evening is to endeavour to extend this massive expenditure of £345 million to boundaries far beyond the confines of transportation in this country. This very expensive item of £345 million should not be viewed as a parochial consideration appertaining only to the railways; it is of much wider significance and importance than that.

The first reason, of course, is the extraordinary inefficiency of the traditional steam locomotive, which is to be replaced, in the way in which it consumes large coal. This point was brought out very well as long ago as 1931 when, in his second inquiry into the prospect for electrification of the British Railways, Lord Weir wrote these words to the then Minister of Transport, the right hon. Member for Lewisham, South (Mr. H. Morrison): The total coal consumption on steam locomotives in Britain during 1929 was 13.4 million tons … in the event of electrification and allowing for an estimated consumption in 1950"— he was looking forward 20 years— of 1.43 1b. of coal per kilowatt hour, the total required for the railway load would be about 3,650,000 tons, so that the net reduction of coal consumption attributable to railway transport would be 9¾ million tons. Those words are an extract from the Weir Report on Main Line Railway Electrification, 1931—the second of the Weir Committee's Reports.

He said there would be a saving of 9 million tons of large coal. Nothing was done about it at any time in the 30's, and I hope no hon. Member of the party opposite will try to make a party political point out of the fact that nothing was done about it. [HON. MEMBERS: "We have said nothing."] Hon. Members should wait a minute and not bite too soon. The right hon. Member for Gower (Mr. Grenfell) would readily confirm that an economy of 9 million tons of coal in the 30's, when miners were out of work and when coal was very cheap, would have aggravated mining unemployment by 30,000 men. In pre-war years that was the primary reason that railway electrification was not proceeded with—[HON. MEMBERS: "No."]—and it was one more reason which prompted the National Union of Mineworkers in those days to oppose electrification of the railways and even to oppose the hydro-electric proposals in Scotland, because they would lead to an economy in the use of coal and an aggravation of coal mining unemployment. I am glad to see that the right hon. Member for Gower is nodding his head.

Today, nearly a quarter of a century later, the position has been completely transformed. We are increasingly short of coal of all descriptions. This year we are importing a record quantity of 4 million tons of coal. Much more serious, as each year goes we see a diminution in the amount of large coal which is available by 1 per cent.—and that large coal we desperately need for carbonisation purposes and for a number of other essential needs that are much more important than railway traction.

If we electrify the railway we replace a substantial part of the 13½ million tons of large coal at present used by steam engines by the very poorest grade of coal, the smallest grade of coal, the slurries and even the slack, burned at the modern power stations, which are equipped to consume it. Equally important, not only do they burn those inferior grades of coal but they burn them with three times the thermal efficiency with which a railway engine burns coal. I say three times because the average railway engine burns coal at a 6 per cent. thermal efficiency and 94 per cent. goes up the chimney in the form of smoke, grit, dust and waste. In an electric power station, the thermal efficiency with which the coal is burned is at present about 23 per cent., which is approximately four times 6 per cent. Of course, with an electrified railway, transmission of the electric current leads to certain losses and, in addition, there are operational losses at the point of tractive effort, which reduces the ratio in favour of coal burned at large power stations to only three to one.

Over the 15 years' programme of British Railways for modernisation and re-equipment, and including this item of £345 million for electrification, we shall see an economy amounting to about 7 million tons of coal per annum, and in terms of cash saved to the Commission that is worth approximately £30 million. That is a direct economy to be set against various other items of increased cost.

The second factor in connection with the electrification proposals which I think is of special importance is the relationship which exists between the very expensive capital re-equipment porgrammes which we are discussing as part of the Bill and the very expensive programmes being carried out, pari passu with it, by the British Electricity Authority and the North of Scotland Hydro-Electric Board. I will deal first with the second of those two nationalised undertakings, the North of Scotland Hydro-Electric Board.

This Board has at present borrowing powers up to £200 million. It has spent slightly in excess of one-half of its total permissible powers. It is building very large and elaborate hydro-electric establishments in the Highland counties and building them to last 100 years. A high percentage of the current generated is sent to the industrial areas of the South of Scotland—the Lowlands of Scotland, the Glasgow, Edinburgh and Lanarkshire industrial areas. The remainder of it, of course, is supposed to be used for electrification purposes in the Highland counties.

I am glad to see the hon. Member for Fife, East (Mr. Henderson Stewart), who represents a Fifeshire constituency and is also Joint Under-Secretary of State for Scotland, in his place and listening to me, because it has always seemed to me an archaic practice to transport coal from the Fife coalfield up to Wick and Thurso to provide the tractive effort, the motive power, for steam locomotives to haul trains all the way down to Perth and back to the Lowlands. In fact, France; in fact, Norway; in fact, Switzerland; in fact, every country in the world which has hydro-electric establishments, develops its water power in unison with the electrification of railway lines adjoining or contiguous to the sources of that water power. In Scotland we do not do that; we prefer to haul coal from the South.

I am therefore rather disappointed that the advice of Mr. Tom Johnston, Chairman of the North of Scotland Hydro- Electric Board, has not been taken in this connection and that the British Transport Commission has seen fit to omit any reference to electrification proposals in Scotland other than those for the heavily-loaded suburban routes in the immediate area of Glasgow and Edinburgh. I believe that there is a special case for the development of electrification on railway routes where they lie immediately contiguous to the sources of water power, and those conditions exist in the United Kingdom only North of the Highland line, where there are these major hydro-electric installations. Before the scheme is finally completed by the Commission I hope it will have regard to that special feature and to the words of Mr. Tom Johnston, the Chairman of the North of Scotland Hydro-Electric Board. I recall them exactly. They were: It is not a question of whether we can afford to electrify the Highland routes but surely a question of whether we can afford not to electrify them.

Mr. Ernest Davies

Surely the hon. Member is getting his argument a little out of proportion? Does he not appreciate that heavy capital expenditure is incurred on the electrification of railways apart from the erection of hydro-electric power stations, and where there is a very sparsely populated district, as is the case in the Highlands, the expenditure of capital would be out of all proportion to the gain, particularly if it prejudiced electrification in urban areas?

Mr. Nabarro

I am not arguing the North-East approaches of London on the suburban routes against the North of Scotland. If the hon. Gentleman will contain himself for one moment—he had 45 minutes this afternoon—he would see that what I am arguing and what I endeavoured to put on the Second Reading of the Electricity Reorganisation (Scotland) Bill last year is that we are proposing main line electrification at the same time as suburban electrification, and there should be special regard to the exceptional conditions which happen to exist in the Highlands of Scotland because of local resources of water power.

Mr. Tom Johnston is a famous member of the hon. Gentleman's party. If the hon. Gentleman disagrees with his views, he had better go and squabble with Mr. Johnston. I know a great deal more about electricity than the hon. Gentleman, and I am with Mr. Tom Johnston in this particular case because he is absolutely right and the Commission ought to have regard to it.

The second feature of the importance of the relationship which exists between capital investment on the British Transport Commission's scheme and that of the electricity industry is in connection with the enormously expensive power stations. Today we are investing £170 million a year in electric power development and much more than on the railways. Reference was made this afternoon by my right hon. Friend to the scale of investment of the British Electricity Authority. I believe that scale of investment is justified and is not in any way inadequate, subject to one important caveat, that the employment of the assets which are created should be used to optimum efficiency. Those assets should be occupied as continuously and as largely as is possible and practicable. That means a steadily rising load factor.

In the case of the British Electricity Authority power stations, the load factor far from rising each year is actually falling. In 1950–51 the load factor at the power stations was 47.1 per cent.; in 1952–53 44.7 per cent.; and in 1953–54 43.9 per cent.; each year it is falling, and a 1 per cent. fall in the load factor of power stations, exemplified by the figures I have quoted, means a loss of over many million pounds per annum of revenue. It means a loss of several million pounds per annum of revenue. [HON. MEMBERS: "No."] Of revenue, yes. The hon. Gentleman is nodding his head, but perhaps he will allow me to explain that the revenue of the British Electricity Authority per annum is measured in hundreds of millions of pounds and a drop of 1 per cent. in the occupational efficiency at the sources of generation creates a decline—

Mr. Ernest Davies

On a point of order.

Mr. Nabarro

If the hon. Gentleman will allow me.

Mr. Davies

Mr. Deputy-Speaker, it has been ruled that this Bill refers to the borrowing power of the British Transport Commission and that the debate should not be allowed to wander into too wide a field and deal extensively with other industries. I suggest that the hon. Member for Kidderminster is at the moment wandering a little far.

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris)

I understand the argument of the hon. Gentleman is an illustration of how money should be saved or spent. If it is limited to that it is in order.

Mr. Nabarro

I am grateful to you, Mr. Deputy-Speaker, and the point I am coming to is that there is a declining load factor which is enormously expensive in terms of lost revenue to the British Electricity Authority. The occupational efficiency of power stations is a matter of very great importance to the nation. The electrification of railways provides a unique diversified load for 24 hours, and it provides an off-peak load and call-off for electric power at all hours of the night for the operation of freight trains. That today is a matter of major importance in view of the railway investment we propose. It is going to run for £130 million a year, at an average, on the railways alone, in the next few years, coupled with £170 million by the British Electricity Authority for new power stations and associated equipment. That is £300 million between those industries, and it is not unreasonable to say that a primary consideration of Her Majesty's Government ought to be to assure proper coordination between the basic fuel and power industry—in this case electricity—and the nationalised railway system.

I had hoped that the Minister for the Co-ordination of Fuel and Power and Transport, appointed in 1951, would ultimately have attended to some matters of this kind. My hopes were dashed to the ground, however, for in the last few years there has been more evidence than ever of parallel development of these industries and little co-operation between them, which is clearly desirable.

The third reason why I so strongly support the paragraph in the modernisation and re-equipment scheme which deals with railway electrification is the prospect of eliminating the use of steam engines in our principal towns. My right hon. Friend suggested in his opening remarks that smog, which we discussed adequately last Friday, was rather exaggerated.

Mr. Popplewell

It is.

Mr. Nabarro

The hon. Gentleman says it is, but I will tell him what Sir Hugh Beaver's expert Committee had to say about it. It said that 15 per cent. of the atmospheric pollution in towns was caused by railway engine smoke.

Mr. M. Follick (Loughborough)

That is a great deal.

Mr. Nabarro

It is a great deal. Pittsburgh, one of the most heavily smoke-polluted towns in the world, 20 years ago arrived at the same conclusion, and an essential part of cleaning up that industrial city was first of all that all incoming trains had diesel locomotives attached to them on the outskirts of the city, and then eventally the lines were electrified.

The contribution to public health by the proposal of the electrification arrangements made by the British Transport Commission is, in my opinion, a very important aspect of them, and I again commend Sir Brian Robertson for being the first head of a nationalised industry to accept his responsibility in the abatement of smoke and to say that he will make his—

Mr. Deputy-Speaker

I hope the hon. Gentleman will not stray into last Friday's debate.

Mr. Nabarro

No, Sir. Steam traction as a form of motive power must be replaced with electricity. My right hon. Friend, opening this debate, specifically referred to smoke, and that is why I am following him with a few apposite comments.

May I pass on to my next point? The fourth reason is rural electrification, which in my view is very fully justified today. We are spending large sums of money on rural electrification by carrying overhead cables often very long distances across country in order to reach very remote farmsteads, cottages and hamlets. The hon. Member for Brecon and Radnor (Mr. Watkins) knows more about this problem than anyone in the House of Commons. On 8th November, during the electricity debate I said that—

Mr. Ernest Davies

Is this a transport debate?

Mr. Nabarro

Wait a moment. The hon. Member had 45 minutes.

Mr. Follick

He is a Front Bench speaker.

Mr. Nabarro

And a very poor one at that.

I said, on 8th November last, that when the modernisation and re-equipment proposals for British Railways were presented to this House, in my view a first consideration should be electrification of the main line from London to Crewe. I am glad to see that the forecast was reliable and accurate. The reason I said that was because contiguous to and alongside the main line are wide tracts of open country where electric current has not yet been made available to farms, villages and hamlets. A parallel development programme for railway electrification and the transformation down of the current provided along the main line metals for rural electrification in the areas immediately contiguous would mean that very substantial sums might be saved in capital investment—[An HON. MEMBER: "Quite right."] An hon. Member says, "Quite right." Of course it is quite right. I would not say it if it were not quite right.

The final point in justification of these large sums of money to be devoted to railway electrification lies in the counterpart to the words steam must be replaced as a form of motive power, electric or diesel traction being rapidly introduced in view of our investments in atomic energy. We are investing large sums of money year by year in anticipation of being able to produce electric power in substantial quantities from nuclear sources. It would not be possible in the view of our scientists to apply the processes of nucleonics to railway traction except through the electricity grid. The nuclear power would be distributed through the grid and then made use of by the railway system. I envisage, if this railway plan develops over the next 15 or 20 years alongside the development of nuclear power, that we may well arrive at the state of affairs by 1970 or 1980 when a major part of our electric power requirements come from nuclear sources. That means indirectly that, in a largely electrified railway system the processes of nucleonics would be applied indirectly to railway traction.

My final point is of a more parochial character, it is in connection with railway transport in the Midlands. A great deal is said about special priority for schemes in and around London on suburban lines. Evidently the greatest industrial conurbation in the United Kingdom has been omitted from the electrification considerations of the British Transport Commission. Today there are about 8 million people living and working in the industrial belt between Coventry in the South, Wolverhampton in the North, Sutton Coldfield in the East and Kidderminster in the West. In that industrial belt immediately around Birmingham the surface traffic congestion grows year by year. In my view it is valueless to try to solve the traffic problem of that industrial area, notably in the immediate vicinity of Birmingham, by providing only better motor roads. The traffic year by year—particularly commercial traffic—is getting denser at a faster rate than anywhere else in the country due to the intense and growing concentration of industry.

One of the gravest contributory causes to the congestion is the great increase in the number of passenger carrying road vehicles. I believe that around the Birmingham-Wolverhampton area very great use could be made of large numbers of disused railway lines where the services have been withdrawn. I am glad that the hon. Member for Dunbartonshire, East (Mr. Bence), who is a Birmingham man, agrees. Those lines could be used on the peripheries, and they could very easily form the surface approach routes to an electric tube railway system, going underground in the central Birmingham area.

It did not take very many years to build the London tubes. It cost a great deal of money and I have no doubt at all that it would cost a great deal of money to have a Midlands' tube, but I am quite confident that if a tube railway of the type I envisage were constructed from Coventry in the South, to Wolverhampton in the North, Sutton Coldfield in the East and Kidderminster in the West, with only the central part of tube construction, beneath the City of Birmingham, and all the outposts on the periphery using the existing railway lines, the result would be very valuable.

It would allow much more rapid transportation to and from work for millions who live in that densely populated area. Secondly, it would subtract from the surface traffic hundreds if not thousands of passenger-carrying vehicles at present transporting literally "thimbles full" of men, women and children, compared with the much larger carrying capacity of tube railway trains. In my view there is no solution to be found to the aggravated and steadily worsening surface traffic problems in that industrial area of England other than removing a lot of the passenger traffic from the surface and putting it on to underground railways, using the existing routes on the periphery.

I heartily commend the contents of this Bill—it is no use the hon. Member for Enfield, East blowing. He spoke for 45 minutes this afternoon—

Mr. Ernest Davies

I did not.

Mr. Nabarro

I commend the contents of this financial Bill to the House, as an essential concomitant of the modernisation and re-equipment programme presented to the nation by Sir Brian Robertson, which I am sure we all support. If there are any differences of opinion in regard to the programme they are only of an operational character and as to which particular schemes should be carried out first. The principles we heartily endorse. I hope that the whole House will give the Bill an unopposed Second Reading this evening and generous support in its implementation, as the development scheme of the railways gathers force in the passage of the next few years.

8.7 p.m.

Mr. William Reid (Glasgow, Camlachie)

The Government are to be congratulated on bringing forward such a gigantic development plan for the modernisation and re-equipment of British Railways. We are told that the plan will cost about £1,200 million. At first glance that seems a staggering figure, but I suggest that in the end it will prove cheaper to tackle the job in this way than to tackle it piecemeal.

I give an illustration from the Corporation of the City of Glasgow. The Corporation controls the only underground railway outside London. It did not construct that railway, but took it over from a private company which had gone into liquidation. Notwithstanding all the economies and innovations that the Corporation introduced on that underground railway, for ten years it was a colossal disaster and during that time operated at a loss of no less than £500,000.

I became Chairman of the Transport Committee of Glasgow Corporation and we tackled this problem. We put before the Corporation a proposal to electrify that underground railway at a cost of £120,000. Just as the proposals of the right hon. Gentleman have created considerable controversy, so did that proposal for the City of Glasgow. The Corporation approved of the scheme and it was completed and from that time it began to pay its way. It might be news to most hon. Members when I say that today it is the only underground railway in the world that shows a profit.

I should like to call attention to page 14 of the Report of the Commission's modernisation and re-equipment scheme. The proposal is to spend £18 million on the electrification of Glasgow suburban lines. A footnote to this recommendation states: The figures quoted for the Glasgow suburban lines are based upon the Inglis Report of 1951 on Passenger Transport in Glasgow and District. The adoption, scope and staging of the scheme are dependent upon further study and discussion with the Glasgow Corporation regarding future co-ordination of road and rail services in the area. On behalf of the Glasgow Corporation, I assure the Minister of Transport that the Corporation will co-operate with him in every way to make this scheme a success.

The scheme will embrace a very wide area in the West of Scotland. Taking Glasgow as a pivotal point, within a radius of 20 miles there is almost one-half of the population of Scotland. The electrification scheme would tap some of the most densely populated districts such as Dumbarton, Clydebank, Scotstoun, Par-tick, Maryhill, Airdrie, Coatbridge, Hamilton, Cambuslang, Rutherglen, Barrhead, Pollokshaws and the Catchart Circle.

The Inglis Report, to which my quotation refers, recommends strongly the integration of all road and rail services in that area and the equalisation of fares. The integration of the suburban lines with the Glasgow Corporation underground railway and the bus and train services in the area would result in cutting out a tremendous amount of overlapping and could bring about a general reduction in fares. The Government can rely wholeheartedly on the support of this side of the House in carrying this scheme into effect.

No one on this side of the House ever believed that when the railways were nationalised they could hope to show good results within the first ten years of nationalisation. The reason is perfectly obvious. During the war the permanent way and rolling stock were allowed to deteriorate tremendously and with the best intention in the world the Government could not overtake that work in the few short years since the war. The Government now propose to do the right thing in embarking upon this colossal expenditure.

As far as the scheme in general is concerned, there is another point which I should like to make; it has been mentioned already by different speakers today. I am one of those who look upon the railways as one of our main lines of strategic defence. If evidence is required to support this contention, it will be found in the continued operation of many of the unremunerative lines up and down the country.

The Transport Commission continues to operate such services simply because these lines might be of vital importance in the event of war. My submission is that the expenditure of continuing the services on such unremunerative routes primarily in the interests of defence should be paid for from defence expenditure. I do not ask for a subsidy for the railways. All that I ask is that they should have a square deal—in other words, payment for services rendered.

In advocating this course, I find myself in rather strange company. In September, 1950, the Federation of British Industry—which is certainly not a Socialist concern—sent a memorandum to the Minister of Transport urging that part of the cost of maintaining the railways should be regarded as defence expenditure and should be met out of taxation through the defence Estimates. The Federation went on to say that there was a margin of surplus capacity which must, no doubt, be retained for emergency use but which was idle or under-used in peacetime. The Federation said that its proposal did not call for a subsidy and that the burden should be borne by the community as a whole, and not only by the users of the railways.

I beg the Minister to give this suggestion his careful consideration. If he does so, my short intervention in this debate will not have been in vain.

8.20 p.m.

Mr. W. R. Rees-Davies (Isle of Thanet)

The past five hours of the debate have shown an air of clear discernment amongst us all in sharp contrast to the stentorious breathings and bellows of party partisanship last Thursday. I am content with that situation, because I do not want to raise party issues but rather matters of concern to the industry.

Tonight, as the hon. Member for Birkenhead (Mr. Collick) said, we are discussing a borrowing powers Bill and not, as such, a programme of modernisation. All of us in this House have shared the view that this programme of modernisation is sound in principle, but what none of us so far has reflected upon is that when the Bill leaves us we in this House may have no control over the future of the plan unless we set up some machinery to ensure that the various phases of the plan are subject to adequate Parliamentary safeguard.

I referred to this problem in the House some time ago, and at the time I was favourably received on both sides, including the Opposition Front Brench. I want to open by alluding to it again, because it is a matter which ought to have the careful consideration of the Government and of the Opposition. After all, today we are considering proposals to spend some £120 million a year of public money. We have a fine document in "Modernisation and the Re-equipment of British Railways." It can be just a plan or a pipe dream, as someone said it may be. Others have said that we shall use vigorous methods to ensure that it shall be carried out. In five to 10 years' time, there may be other people carrying out the plan, or seeking to do so, not only in the British Transport Commission and in the industry, but in this House.

I want to remind the House of the views of Lord Hurcomb, which he expressed when he gave evidence about the setting up of a Select Committee on the nationalised industries in this House. He was the eminent predecessor of Sir Brian Robertson. He was asked to give evidence, and he said: In the statement in which I ventured to put my views about procedure through Parlia- mentary questions, I hope I did not conceal my own conviction that there is a very real problem ultimately of accountability to Parliament on the part of these corporations. I have been able myself to think of no better solution than some kind of committee. Later on, he defined the committee he had in mind as, The sort of committee that it seems to me would do much to satisfy the very legitimate demand of Parliament for a greater knowledge than can be got in debate about the affairs of one of these corporations … He went on to say: One of the very greatest handicaps under which anyone in my position suffers is that he gets no opportunity of stating his own case or of explaining what are his difficulties direct to Members of Parliament. It is true I meet a great many individually, or I may dine with some group or other from time to time, but one does not have the opportunity of putting before a Committee of Parliament or a group of Members of Parliament even the bare facts. I have some reason to believe that those views would not be very different from the views which Sir Brian Robertson and his advisers would express to the Minister.

I urge Her Majesty's Government to make sure that we set up some kind of standing committee for the nationalised industries, particularly in the light of this very large sum of money which we are considering tonight. What is the position? We are, in a sense, going to vote a guarantee by the Treasury of this vast sum of over £100 million a year, stretching ahead for 15 years, and once this plan has gone forward, whatever we may think of it, we have no real control over it.

The point was put admirably by the hon. Member for Birkenhead, when he said that we have no guarantee that this plan will go through or be carried out. All that we are doing is to vote the money, but we are voting that money to the British Transport Commission, which has no ties. It is true that there is a social conscience and that there is a tie in the sense that if the Commission does not carry out the plans we shall all create difficulties for it in some way. But that is not the proper constitutional method.

Let us have a committee so that we can watch the plan grow and the Commission and the railway men can feel that they can come to us with their problems and can ask for guidance from us, and we in turn can obtain guidance from them. It is on these lines that the nationalised industries should proceed. It is in that way that they can be accountable to the public and the public also can have a direct means through Parliament of ensuring that they can let the industries know what they feel.

I pass to what I think is again a new point. We had a fair statement from the Minister that we should have a year-to-year plan which would outline the points which arose and would give some idea of priority. That is all right as far as it goes, but we must have something analogous to the roads plan. I see that work on the Dartford-Purfleet Tunnel will proceed this year and it is aimed to complete it in one or two years. Nobody expects us in this House to be contractors and to be able to give dates for starting and finishing. The hon. Member for Bolton, West (Mr. Holt) was wrong on that point. We are not contractors, but we are entitled to know each year how it is proposed to get on with the projects and approximately when they are expected to be completed.

The plan which is now before us does not begin to tell us that. I refer the Minister to paragraph 41 of the Report on Modernisation and Re-equipment, under the title "Extensions of Southern Region electrification." That is a matter of the very greatest importance throughout the South. The paragraph states: In addition, it has always been the intention that, as soon as circumstances permit, all the main routes of the Southern Region east of a line drawn from Reading to Portsmouth should be electrified. That has been so since 1938. That is no good, that gives no information at all.

Everybody knows about Margate. I am sure that all the Labour Party do, but I hope that everybody will also appreciate that the matter of electrification for Thanet is one of considerable importance to us. I am not trying to develop a parochial argument, but I hope that the Minister will make the strongest representations to Sir Brian Robertson and his advisers at the earliest moment to tell us what the priorities will be in each case and to lay down the number of years by which they seek to achieve these purposes. Unless we know that, how can we judge of the extent of the technicians and technological equipment which may be required, and of the respective priorities? Many of those are matters for this House. Let me give one example.

The question today is whether the railways will succeed in obtaining technical engineers from the universities, and it is of the greatest importance to Sir Brian and his advisers. I am told that it is unlikely, because not a single engineer has gone from the main universities into British Railways during the past year. It is not surprising that the railways are not attractive to young men of merit in view of the malaise in the industry for several years past.

With this scheme, however, there is no reason why the railways should not have a great attraction for young civil engineers, though it is of the greatest importance for them to know that we have a realistic plan. When they join, they should be told, "What we aim to do is to electrify all the south-east coast line from Thanet to Portsmouth in the next three years. We will make a start at Gillingham and Ashford in the next year." I urge the Minister to see that the British Transport Commission adopts the same policy as the Minister adopts in relation to the roads, and ensures that we have the earliest practicable information upon each phase of the plan as it unfolds, instead of being left guessing.

I hope the Minister will not take the view sometimes found in the Civil Service that schemes are best kept quiet because, if they are let out, someone may criticise them. The Ministry of Local Government and Housing love to keep everything bottled up for fear of there being poison in the bottle. Let us try to see that the public relations of this great industry are improved so that we all have first-hand knowledge at the first opportunity of each phase of the scheme.

I now turn to my third and final point. There is no getting away from the fact that there is great frustration in the United Kingdom about the railway service. In the House of Commons too many people speak from specialised points of view. I do not complain, but there are certain hon. Members who have their interests in the trade unions and there are others who have their interests in the employers. I have no axe to grind in this matter save that of the ordinary traveller on the trains, and I have no special position in this House which requires me to defend the British Transport Commission or anybody else.

We have heard about restrictive practices in general, but has anyone brought out what are the restrictive practices in any speech made during the last few weeks? No one. Has anyone suggested what is wrong with the managerial setup? No one. We all know that there is top-heavy administration, and we know the difficulties. The hon. Member for Bolton, West, in a very able speech, referred to the stodginess of the middle element of the industry where there is a lack of imagination. He was right.

This is an excellent long-term plan. If we get the phasing of it year by year over the next few years, that will go a long way to providing the necessary enthusiasm and drive, but we must have one thing more—we must have temporary palliatives, we must have something which the public will be prepared to accept over the next year or two.

In a genial endeavour to make a few suggestions, various newspapers have been making a cut at everything from level crossings to porters. Sometimes they have hit the target, sometimes they have been wide of the mark. I can think of one or two obvious suggestions. Those of us who have travelled in France know that it is unnecessary to have tickets punched before boarding a train, and that a proper check can be made by collecting tickets when passengers leave the train. All that is necessary is to have an inspector on the train itself to check the first- and third-class passengers during the journey. And even if the odd person slips through, the cost is small compared with the financial burden represented by all those people at the main line stations whose job it is to punch the tickets. That is one undesirable practice which could be amended and, if it were done immediately, the psychological effect on the public would be great. It is the psychological effect in which I am interested, because it would show that there had been a change of outlook.

I think the Press were right about level crossings. Everyone knows how infuriating it is to be held up at those crossings, and sometimes the amount of time lost is serious. There is one in the town of Westgate where people are held up for considerable periods. They have accepted it for years but now, because they are feeling annoyed with the railways, they are agitating to get rid of the crossing. That is the feeling of the public.

In conclusion, I hope that Sir Brian and the Minister will consider temporary measures which might be carried out during the forthcoming year and see what can be done with a real heave and with the assistance of the men. The men can make some of the best suggestions; it is often the inspector or the guard on the train who has useful ideas. Some of these men are terribly underpaid. One man I know who has been a guard for 35 years receives £6 10s. a week. I believe these men will be prepared to help if they are given encouragement. If temporary palliatives are employed, I am sure that the phasing of the programme will build up to a really successful future for the industry, which I am sure both sides of the House desire.

8.36 p.m.

Mr. Arthur Moyle (Oldbury and Halesowen)

We have listened to a very interesting speech by the hon. Member for the Isle of Thanet (Mr. Rees-Davies), who has dealt with one or two matters which must engage the attention of the House. It is not only a question of our agreeing that money should be borrowed with our authority; we should have from the Government some idea of how they are to proceed with the carrying out of the scheme.

The Government have committed themselves in two ways. First, they have approved the scheme, and, secondly, they stand as guarantors for the loan of £1,200 million, spread over 15 years. The scheme involves capital expenditure and will entail recruitment of labour. What degree of priority, if any, have the Government given it in relation to their general capital investment programme? This is an important point. The House is entitled to be assured that, the Government, having undertaken to guarantee the borrowing, credit facilities will be made available to the Commission. What we are entitled to know is to what extent the Government are prepared to assist the Commission by ensuring the provision of capital and labour, so that the scheme may be implemented during the next 15 years.

I ask this because the Government are already committed to a number of heavy capital schemes which are a drain already upon the nation's capital resources. There are, for example, rearmament, housing, roads, electricity, gas, coal, and new schools. Although the railway scheme is spread over 15 years, it represents a heavy charge upon the supplies of materials and labour, and unless the Government give it some priority the scheme will be in danger of remaining merely an authorisation scheme and will be little else. The Commission has no power to allocate materials and labour for the scheme, and the Government must, therefore, come to its aid.

Is the Transport Commission expected to undertake this scheme on a catch-as-catch-can basis in the hope that it may attract the necessary capital resources and the necessary supply of labour, or is it to be left purely to a policy of laissez faire in relation to the other demands on the nation's resources? I hope that the Parliamentary Secretary will say something about this when he replies to the debate.

I want to follow a point which was one of the most valid in the debate. What do the Government propose to do to help the Transport Commission to get the necessary technical staff? Unless the Commission can get the skilled personnel to carry out this work, it does not matter how much credit accommodation remains to be tapped—it will be utterly useless.

The Government are already aware of the serious shortage of technicians. I use that word in the general sense of the term. Something has to be done to make good this shortage. I am advised—I have no direct figures—on good authority that, taking the whole of the civil engineering industry, the whole of our technical colleges and our universities, the total output of civil engineers in this country is no more than 500 a year. This certainly does not match our need.

There is the coal industry, the electrical industry, the gas industry, civil engineering itself and the building industry to say nothing about other capital undertakings. To do that work we have but an intake of 500 civil engineers a year. Something has to be done about that, or is it the intention of the Government to expose the British Commission to the competition of the labour market, as in the past; or are they to be subjected to the mercy of private civil engineering contractors who employ most of the civil engineers? Are we to pay fancy prices to get this work done, simply because the national need is so great and the supply of technicians so scanty?

I suggest that the Minister, in co-operation with the Minister of Education and the university authorities, should do something about this problem. I re-echo the comment of the hon. Member for the Isle of Thanet, that with this and other schemes there is some certainty of employment in the railways and that we should expedite all our schemes for training technicians.

If I am in order, I would ask the Transport Commission to take a look at the National Coal Board and at the work the Board has done to provide its own technicians. I ask the Transport Commission to remember that promotion forms a great part of the incentive of any youngster who goes into any undertaking. I can conceive of no better means of inducing young men to enter the railway industry than broadening the prospects of promotion and helping to provide the Commission's own training schemes, its own staff colleges and all means of technical training.

Mr. Deputy-Speaker

The hon. Gentleman may touch on that point, but I do not think that to develop it would come within the scope of this Bill.

Mr. Moyle

I think the Transport Commission itself might very well provide the means to meet its own needs.

The hon. Member for Leominster (Mr. Baldwin) asked about the functions of these new area boards. I wish to know how they will fit in. I see that the North-Eastern Area Board held its first meeting yesterday and its functions, as outlined by the chairman, appear to be vague. I have yet to be convinced of the necessity for these boards, having regard to the existence of the transport users councils. I should like the Parliamentary Secretary to be precise about the functions of these boards; whether they have any executive powers and if they can recruit employees.

I was glad that the Minister referred to the importance of morale in the industry, and in that connection I wish to refer to a point which is based on my own trade union experience, extending now over many years. I suggest that the Minister consult the Minister of Labour about the setting up of joint consultative machinery between management and staff. Such machinery should be completely separate and distinct from the negotiating machinery for wage and salary rates and conditions of service, and the terms of reference should be as wide as the service itself.

I suggest that such machinery be devised in a three-tier arrangement, with consultation at the centre and at regional and local levels, so that any decisions taken by management about changes in equipment or actual travelling arrangements, the displacement of railway employees, the provision of new accommodation, or new supervisory appointments, will be fully understood by the staff.

I am convinced that the decline in the morale of railway workers is not due entirely to low wages. I am referring now to such people as porters and platform-men. I consider that it is due in part to the fact that they do not know the reason for decisions which are taken, and they are entitled to know. I ask that the Minister consider this with his colleague at the Ministry of Labour and that joint consultative machinery be set up, so that everyone who earns his living in the service may understand what is being done and they may become, as a result, an intelligent employee and not merely a cog in the wheel.

8.50 p.m.

Mr. David Jones (The Hartlepools)

We have had an interesting debate upon the bold and imaginative plan for modernising British Railways which has been submitted by the Transport Commission and I join in the chorus of welcome and congratulations to the Commission and its officers for the boldness of their plan.

I would call the attention of those hon. Members who offered some criticism of the amount of money involved to paragraph 119, in page 31, which says: Certain basic considerations govern the investment of resources proposed under the Plan. It would, for instance, be useless, or worse than useless, to limit the Plan so that the investments incurred would do no more than enable the railway services to continue in more or less their present shape and form. This would still require almost half the investment now proposed… This suggests that even if existing railways were merely brought up to modern standards half the sum proposed in the plan would be required. I am sure that nobody would deny that in an effort completely to revolutionise the operations of the railways the doubling of the figure of £600 million is not unreasonable.

I make no claim to be a technical expert, but there are one or two features of the plan about which I want to ask some questions. Paragraph 15 deals with bridge renewals and, I presume, the earthworks connected with them. Those renewals are estimated to cost about £20 million. Will that be enough to strengthen and improve the clearances and other features of the many hundreds of bridges on main and branch lines, many of which are well over a hundred years old?

It is generally known among those who follow the progress of the Commission fairly closely that its bridge improvement programme has been slipping back over the last few years. It has not been keeping pace with its original intention to renew and improve bridges. Do the Government consider that £20 million is sufficient to modernise, strengthen and widen all these bridges—having regard to the heavier type of locomotive that is to be used and the higher speeds at which they are to run—and, at the same time, to maintain the high standard of safety for which British Railways have been famous for a very long time?

I was interested to hear the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) refer to the London termini. I do not dissent from the criticism which he offered of the buildings, but I am more interested in these termini from the point of view of their inefficiency. It does not require a railway expert to find at any of the termini hundreds of engine hours, as well as engines, wasted every day of every week, standing against the stopblocks waiting for trains to depart.

I am told that it takes a crew of men, working 7 hours and 20 minutes at a busy period, to haul two sets of empty coaches from Old Oak Cross to Paddington. They have four shifts a week. Paddington, King's Cross, St. Pancras or Euston, are all alike. Every one of them occupies the time of scores of engine drivers and firemen, day after day, standing against the stopblocks waiting for the departure of trains.

I understand from the plan that, in the course of time, steam engines will be completely eliminated from our main cities, which, I presume, include London. Are we, then, to have the spectacle of valuable electrical diesel engines standing for hours against the stopblocks in the platforms at London termini because no method has been devised of freeing them once they have brought the trains in, so that they can get on with the job? Most people concerned with the success of the railways are far more interested in this aspect of the work at London termini than in the aspect referred to by the noble Lord the Member for Dorset, South.

Now I turn to another criticism of the plan and I will ask some questions. Paragraph 27 of the Report says that no more new express passenger or suburban locomotives will be built after 1956, and that in a few years' time the building of steam locomotives will be terminated. If the figures in the plan are to be believed, one assumes that in 15 years there will be at least 2,500 express diesel locomotives, about 10,000 shunting and trip diesel engines, and many hundreds, if not thousands, of diesel-powered two and three unit trains.

My information is that the diesel units which are now being put into the existing engines and which are being built for British Railways, are constructed by outside firms. I understand that the diesel units put into the new light-weight three-car sets now in operation in Yorkshire and which, in the new winter timetable, will be introduced into the part of the country in which I am particularly interested as a Member of this House, are built by outside firms and are supplied in that form to the Transport Commission. The frames are built in the railway shops and the engines are inserted.

If this big programme of express passenger engines and diesel shunting engines, and an extended programme of three-car units, are to be embodied in the plan, is the Transport Commission to continue to purchase diesel engines from outside firms, whether in this country or abroad? I agree with my hon. Friend the Member for Hillsborough (Mr. G. Darling), who said in his admirable speech that some of the best diesel engines of all forms are built by British firms.

I am sure he would agree that, given the opportunity, these units could be built just as effectively, as cheaply and as well in the railway workshops as outside. I therefore ask what is to happen to the steam engine building shops at Doncaster, Swindon, Crewe and Eastleigh—employing many thousands of skilled men—when the steam engine building programme comes to an end?

Mr. G. Lawson (Motherwell)

May I take it that in that list my hon. Friend includes St. Rollox?

Mr. Jones

Yes, I would include St. Rollox, too.

These railway shops are now engaged in the construction of steam engines. When the steam engine programme comes to an end are they to be completely abandoned, or are they to be used to construct the new form of tractive power to be employed on British Railways?

I turn to the financial provisions. In its plan the Commission estimates that the programme cannot be started for approximately five years and that it will take about 15 years to complete. The Chancellor began the story in the debate last week, but he did not tell us enough and I want to ask one or two questions about this particular matter. The Chancellor then said: 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."—[OFFICIAL REPORT, 3rd February, 1955; Vol. 536, c. 1313.] We got very little more information from the Minister of Transport today. According to my estimate there is something quite wrong with the Chancellor's mathematics. I am told that that is not unusual, but in this case I am certain there is something wrong. He has overlooked that it will be at least five years—that is 1960—before the plan begins. In the meantime, the Transport Commission has a substantial deficit. I think that it was the Member for Wolverhampton, South-West (Mr. Powell) who came nearest to the point in his speech last week.

I should like to put this to the House—and I hope that the Parliamentary Secretary will say something about it when he replies. According to the Transport Commission's 1953 Report there was a deficit in its accounts of £27.3 million at the end of 1953. It estimated that its deficit in 1954 would be a further £15 million. In paragraphs 42 and 43 of the Court of Inquiry Report the Commission's 1955 deficit is estimated at £25 million. It has been assessed that additional wage claims which have been met since the beginning of the year will amount to a further £10 million. According to my calculation, therefore, by the end of 1955 the Commission will be £77 million in the red.

It is assessed that unless some other circumstances change—and I will deal with them in a minute or two—there will be a deficit of £35 million a year from 1956 onwards, because the wage increases are a recurring expenditure. If we assume that, as a result of the new co-operation which is to take place—and I want to say something about that, too, before I conclude—new methods of working and reductions in personnel, a saving of £10 million a year can be achieved, there will still be a deficit of £25 million a year from the end of 1955 onwards. If any advantages from the scheme are not to be derived for five years, it follows that there will be a deficit of £125 million to add to the £77 million, making a total of £202 million or, in round figures, £200 million "in the red" by the time the Commission begins to reap the advantages of this modernisation scheme.

In that figure no account is taken of the added cost of servicing the new loan, as explained by the Minister earlier. I know that he interrupted my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) to call attention to the fact that no account was taken in that figure of the new charges scheme. I want to take account of it. It has been estimated on good authority that a 10 per cent. increase in charges by the B.T.C. would bring in a net increase, after deducting some losses, of about £15 million per year. Of that, £10 million would be from heavy traffic or monopoly traffic and the other £5 million would be derived from other traffic which, because of the increase, might be lost to road transport. At any rate, taking the best possible view, a 10 per cent. increase would give the Commission £15 million additional revenue.

If, therefore, its loss is to be between £25 million and £30 million a year, it will be necessary to increase the freight charges by at least 20 per cent. Does the right hon. Gentleman believe that it will be possible for the Transport Commission even to contemplate a 20 per cent. increase in charges without dire consequences falling on the economy of this country and another round of wage increases as a result, not to overlook the fact that for a large proportion of this traffic the Commission will have to compete with road services run, in the main, by private hauliers, who, if we are to judge from their behaviour when they were in the industry previously, do not pay overmuch attention to agreements which are made about rates of pay and conditions of service. One has only to ask any road haulier who was engaged in road haulage before nationalisation what were the circumstances under which he was employed.

If this scheme is to start with all the good will which is necessary to its success it is not likely to be advantageous for the Commission to start the scheme by being about £200 million "in the red." This is part of the problem which the Chancellor of the Exchequer slipped over quite lightly last Thursday when he dealt with the matter in the House.

He said—and I have already quoted from HANSARD—that the economics of the scheme in increased traffics and saving costs would balance the revenue and expenditure when advantages of the scheme accrue, but what is to happen in the meantime to the deficit which it is carrying? We should like an answer to that, because, as my hon. Friend the Member for Birkenhead (Mr. Collick) said, over £100 million was reaped by the Government in the war years, and, therefore, it is not unreasonable to suggest that if this scheme is to begin with all the good will which everybody wishes it something has to be done by the Government of the day about that deficit which hangs over the Commission and is likely to do for many a long year.

At the Press conference which the Chairman of the Transport Commission gave to the Press on the publication of this plan, he made reference to this interesting fact. He said: May I remind you that the first of the objectives which the Commission put forward in their last report is a loyal, contented and keen staff employed in the most productive manner. In page 61 of its 1953 Report the Commission had this to say: The main objectives which the Commission seek to gain at this time to enable them to fulfil their mandate are: (a) A loyal, contented keen staff employed in the most productive manner. I suggest that without the good will and co-operation of the staff, whether they be locomotive men, traffic men, permanent way men, signal or telegraph men, or whatever department they may find themselves employed in, this plan is not likely to be a success. This afternoon we heard a speech from the noble Lord the Member for Dorset, South which was not very helpful. Fortunately, I would prefer to trust to the judgment of men who know the railways from practical experience and who do not judge the railways mainly from what they see out of the window of the first-class compartment in which they are travelling.

Viscount Hinchingbrooke


Mr. Jones

No, I will not give way. Sir John Elliot, who, I am sure the noble Lord agrees, knows a little more about the railways and railway men than even the noble Lord, at the termination of his chairmanship of the Railway Executive in 1953, had this to say: Railway men in the years since the war have shown that they yield to no one in their sense of public responsibility. He also paid tributes to the railway trade union leaders for their sense of responsibility when pressure from their members was greatest. I quote from his speech: I should like to acknowledge the broad outlook the leaders of the trade unions have always shown in the last six years of trial and error. It has been a real pleasure to work with them. They are good citizens and fine men. I refer the noble Lord to a speech delivered by his right hon. Friend the Minister of Transport on 1st November, 1954. The Minister said: Anyone who knows anything about our railways knows that they have been through a rather difficult time. War and the aftermath of war, political changes, and so on, have created their problems. None the less, we have the asset of the finest technical knowledge and of the best railway staff in the world."—[OFFICIAL REPORT, 1st November, 1954; Vol. 302, c. 152.] The right hon. Gentleman has been at the Ministry of Transport sufficiently long, I hope, to realise that when he said that he meant it. I ask tonight how this co-operation is to be achieved? The Parliamentary Secretary to the Ministry of Labour, speaking in the debate last week, had this to say: During consultations with the Minister of Transport 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 he has reason to hope that agreement will be reached on effective machinery."—[OFFICIAL REPORT, 3rd February, 1955; Vol. 536, c. 1293.] So far as it goes that is all right.

This afternoon the Minister spoke of the morale of the industry. I think that the most important ingredient of the morale of the industry is the morale of the man on the job, who has to do the job in all kinds of weather and at all times of the day and night. The ordinary rank and file railwayman, whatever his grade, is a proud man and a skilled worker and expects to be treated as art intelligent person.

Unfortunately—here I echo something said by my hon. Friend the Member for Hillsborough—there are far too many men left in the railway service, in the middle ranks of authority from divisional level down to station master, who still have written above their beds at home, "Managerial functions." In the old days, when joint consultative machinery was set up after the passing of the 1921 Act, there were sectional councils on all the railways and what were called local departmental committees—committees of officials and men elected by the men at the station—which met periodically to deal with staff matters raised by the employees.

Whenever such matter were raised they were told by the officials, "You cannot deal with that. That is a matter of managerial function." There are far too many men still in authority, some great and some less, who still believe that the shibboleth of managerial function ought to prevail.

If this plan is to be fully and finally implemented it will mean re-deployment and the transfer of large numbers of men from some stations to others. Work will diminish or be abolished at certain stations and expand and increase at others. Many hundreds of railwaymen will be torn up from their roots, sunk deep in many towns and villages, and have to transfer to other parts of the country. That will involve a sacrifice and, in many cases, loss. If, in addition, they are to be subjected to the kind of thing I am about to read to the noble Lord we can hardly expect normal, decent human beings to tolerate such treatment. I hold in my hand a letter from a branch secretary, written not many miles from here, who says: A few weeks ago the productivity commission were present "— at his station— with a view to reducing the staff. The report of their observations, together with recommendations, was handed to the members of the…L.D.C. on 20th January and they were asked to attend a meeting on 25th January to discuss same. At this meeting, the chairman of the L.D.C. "— that is, the local departmental committee— at once made it known that, whilst they agreed that some reduction of staff could take place, they wished to place before the meeting suggestions, as they felt that it would not be possible to work the station if the proposed 'cuts' were put into operation. The chairman of the commission at once made it quite clear that they were not prepared to accept this, and stated that these would be put into operation despite anything the L.D.C. had to say…

Viscount Hinchingbrooke

Hear, hear.

Mr. Jones

The noble Lord says, "Hear, hear."

Viscount Hinchingbrooke

Quite right, too.

Mr. Jones

If that kind of method is to be conducted, this plan is doomed to failure before it starts.

Viscount Hinchingbrooke

Not at all. It is the only way it will ever succeed.

Mr. Jones

I repeat, the plan is doomed to failure before it starts. Let me give the noble Lord one or two examples.

Viscount Hinchingbrooke

Utter selfishness.

Mr. Jones

The reorganisation of goods and cartage arrangements in the Greater London area resulted in the abolition of a large number of posts. When the scheme had been finally worked out, Mr. David Blee, the present traffic adviser for the Transport Commission, in a letter dated 6th October, 1953, notifying the termination of the committee because it was no longer needed, said: In conveying this decision, I should again like to thank you for your co-operation in setting up the committee which has done useful work, and to ask you to express to the members of your union who served, my thanks for the services they have rendered. I should like to quote one or two other examples of co-operation over the years which have resulted in the abolition of a large number of posts and the saving of large sums of money. The abolition of invoicing, introduced on 1st March, 1954, saved 2,250 clerical units and 150 wage units and resulted in a saving of £900,000 per annum—with the co-operation of the trade unions. The mechanisation of Bristol Temple Meads goods shed was carried out with the co-operation of the trade unions, and then there was the co-ordination of goods terminal facilities in Manchester. All these schemes of reorganisation resulted in many men losing their jobs, transfers to other stations and the transfer of men's homes, and was done with the co-operation of the trade unions.

I hope that the plan will succeed. Unless it does succeed, our railways are doomed, and if the railways are doomed, our economic life is doomed, also. Therefore, I say tonight to the Minister, to the Commission and its officials all over the country, from divisional level downwards, that if they want the maximum co-operation for the plan, they must treat the railwaymen working on the job as people who know their business and as honourable men who ought to be consulted and given a chance to express their point of view about the alterations. If that is done in a spirit of co-operation, the plan will succeed.

9.25 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Hugh Molson)

My right hon. Friend the Minister of Transport and Civil Aviation, in commending the Bill to the House, has been anxious to ensure that the House will approve the great modernisation scheme which has been prepared by the British Transport Commission. It is all in the day's work in the House of Commons that the Government of the day should bear the responsibility and receive all the criticisms. We make no complaint about that at all, and we are grateful to hon. Gentlemen opposite for the way in which they have received the plan.

The hon. Member for Enfield, East (Mr. Ernest Davies) was good enough to say in his opening speech, which I thought set the tone for the debate, that the plan was "imaginative, courageous and skilful." I am very glad that he said that. It is a tribute to the Commission to which it was entitled. We are, nonetheless, grateful to him for having said it on that account. He asked whether the Government accept the plan. I thought that it was made plain in the speech of my right hon. Friend the Chancellor of the Exchequer that we did so.

The hon. Member will remember that under the Transport Act, 1947, which was passed by the party opposite, and under which we are still operating in these respects, the control of the Minister of Transport over development schemes is provided for in Section 4 (2). I think that the measure of control is different in the case of capital development from what it is in the case of the ordinary administration.

The words of the subsection are: In framing programmes of reorganisation or development involving substantial outlay on capital account, the Commission shall act on lines settled from time to time with the approval of the Minister. I think that that means that whereas the general lines of development must receive the approval of the Minister for the time being, it is not intended that the Government should accept any close or detailed responsibility for any particular part of the development programme. On the other hand, since the money has to be raised with the consent of the Minister and the approval of the Treasury, it is naturally appropriate that as the programme is put into operation and the money is borrowed for it, the purposes to which that money is to be put shall be subject to the general approval of the Government.

My right hon. Friend the Chancellor of the Exchequer has already paid tribute to the imaginative nature of the Commission's plan for the modernisation of the railways. This plan is the condensation in a very well written Report of months of intensive work by the Commission and its officers, and behind it lies an immense amount of detailed technical study. The Commission has been able to draw upon the experience gained by railway administrations in other countries, and, as we believe, the result is a balanced scheme, promising a high standard of service for both passengers and freight with a much more economical operation than we have had in the past.

We have examined the general programme and we are satisfied that the Commission are proceeding on the right lines. The Government, of course, will wish—and I am sure that it is only right that this should be so—to give further consideration to some of the main components of the plan before these can be approved in detail. The entire scheme, however, is essentially flexible in its detail, and capable of adjustment in the light of experience and of changing needs. Suitable opportunities to scrutinise more closely the major works to be undertaken under the plan, and the financial scope, will occur from time to time when the Commission seeks authority for the necessary borrowing powers.

Mr. Popplewell

Will the hon. Gentleman be a little more explicit as to what he means by subjecting certain main parts of the plan to further consideration?

Mr. Molson

No, I have dealt with the matter fairly fully and it would not be advantageous for me to go into it any further. I must register a mild protest—and in my mood tonight any protest I make is of the mildest kind—because the hon. Gentleman the Member for Enfield, East reiterated what the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) said about "a poor bag of assets."

Mr. Callaghan

Physical assets.

Mr. Molson

The phrases of the right hon. Gentleman are generally very well rounded if, indeed, not rotund. May I point out that the first sentence of Part III of the plan of the British Transport Commission states: The 20,000 route miles of British Railways rank among the greatest of our national assets? It should be realised that our inheritance from the Victorian age is a railway system built up at a time when money bought a great deal more than it does at present. It should also be realised that what the State has taken over from the investors of the past is a fairly good bargain from our point of view.

In order to enable this scheme to be carried through, my right hon. Friend the Chancellor of the Exchequer stated quite clearly that a Treasury guarantee will be available. Several hon. Gentlemen opposite have asked what would be done to enable this plan to be carried out. The answer is that there will be the Treasury guarantee which is provided for in both the Acts of 1947 and of 1953. Actually the timetable of the modernisation scheme is much more likely to be set by the number of technicians whom the British Transport Commission will be able to employ to carry out the electrification schemes rather than by the supply of capital.

The hon. Gentleman the Member for Enfield, East, in opening the debate, and the hon. Gentleman the Member for The Hartlepools (Mr. D. Jones), in concluding the debate from the opposite side of the House, put to me plainly and bluntly the question whether the Government are facing frankly the prospect of a period of deficit. We are of the opinion that the calculations put before the House by the Chancellor of the Exchequer last week are the best guess we can make of the deficit that the British Transport Commission is likely to incur. It is obvious that we are only making estimates, and it would be wrong for us to say that the deficit in the next two or three years will not exceed a certain amount.

However, we take the view that the estimates which have been put forward by the two hon. Gentlemen opposite are more than they need be and more than we think they will be. We are relying upon an improvement in the position as a result, first, of the modernisation scheme coming rapidly into operation. I am sure it was due to a misunderstanding that the hon. Member for The Hartlepools suggested that the modernisation scheme will begin only after five years. One or two things are in process of being put into operation already. In order to answer that point, I should like to give the hon. Member a list of works which figure in the modernisation plan and are likely to be begun during the next five years. We hope that as much as £75 million will be spent on these projects in the next five years.

Mr. D. Jones


Mr. Molson

I will give way when I have finished the point, but I should like to make it first. The list is as follows: first, some engineering work on extra bridge renewals and track strengthening in preparation for higher speeds and electrification; second, preliminary expenditure upon automatic train control; third, other signalling schemes; fourth, additional cost of building multiple unit diesel trains, diesel shunting locomotives and diesel main line locomotives.

I interrupt my list at this point to say that we have been asked why there has been some delay on the part of the Commission in introducing diesels for main line services. The answer is that there have been teething troubles with some of the diesels which have been used for long main line runs. However, for at least two years past the Commission has been buying multiple unit diesels as fast as it has been able to obtain delivery of them, and it will now increase its orders.

Fifth, there is further electrification in the Eastern Region beyond Chelmsford to Ipswich; sixth, a start on the fitting of continuous brakes for wagons; seventh, a small amount of work on a limited number of main line passenger and freight terminal reconstruction schemes. That means that the modernisation programme will be put into operation as rapidly as possible beginning at the time the Bill receives the Royal Assent.

Mr. Ernest Davies


Mr. Molson

I will give way in a moment. It is difficult to give way to a lot of hon. Members at the same time. We expect to begin to obtain increased returns almost as soon as the expenditure is incurred.

Mr. D. Jones

The schemes which the hon. Gentleman has described, perhaps with the exception of the air-braking of goods vehicles, were already part of the plans before the master plan was devised. Indeed, the plan itself refers to a scheme for the building of diesel shunting engines which terminates in 1957. Paragraph 2 of the plan says: This Plan aims to produce a thoroughly modern system, able fully to meet both current traffic requirements and those of the foreseeable future. It is based on the premise that its main components shall be capable of being started within five years, and completed within fifteen years.

Mr. Molson

As the hon. Gentleman now knows after reading that long extract, it arises within the first five years.

Mr. Ernest Davies

Before the Parliamentary Secretary leaves the question of finance, will he explain the statement of the Chancellor that the Commission would be coming into balance over the 15 years? The Parliamentary Secretary is being more optimistic about the finances than we were. Can he say when he expects the Commission to come into balance?

Mr. Molson

I said at the beginning of my speech that it was obviously extremely unwise to commit oneself to any particular date, but I have pointed to three ways in which it is likely that increased revenues and decreased expenditure can be obtained. They were not mentioned by the hon. Member for The Hartlepools, nor by the hon. Member for Enfield, East. A more optimistic view than they put forward is therefore justified.

At the same time, I do not in the least want to overstate my case and we recognise—and we have been perfectly frank with the House about it—that it will take some time before the full benefits of the modernisation scheme can come into operation. During that time the British Transport Commission will no doubt be operating at a loss. Not only is that our view, but the British Transport Commission believes that it can pass through this period of deficits and come through to solvency and to a time when it will be beginning to make a profit.

In answer to one hon. Gentleman who asked for a specific reply, I am authorised to say that the British Transport Commission has never asked for, nor sought, a subsidy from the Government.

Mr. Callaghan

I am much obliged to the Parliamentary Secretary for giving way so readily. He will appreciate that the solvency of the British Transport Commission is important. As the Commission apparently expects at some stage to break even, can the Parliamentary Secretary tell us whether the Commission also expects, within a reasonable period of time, to overtake the accumulated deficits that will be increasingly piling up? Can he give some period? Surely he can say that the Commission expects to do this within five years, or three years. Can he not give some sort of order of time which is likely to elapse before the Commission will be both solvent and have overtaken the arrears?

Mr. Molson

No, Sir. I do not think that it would be wise for me to mention a period of time. One of the reasons I could not do so is, as the hon. Gentleman will be aware, that negotiations over wages are not yet concluded and it would be most unwise to hazard a guess when the outgoings are not finally fixed.

Mr. Callaghan

On this side of the House we do not believe that the Commission is likely to achieve solvency, if the Government leave it in its present state, within a measurable period of time. Some of us think that is why the Parliamentary Secretary will not give us a date.

Mr. Molson

I have heard what the hon. Member has to say. Interventions are usually to elicit information, but his was to give information.

My noble Friend the hon. Member for Dorset, South (Viscount Hinchingbrooke) asked a question about diesels. As my right hon. Friend said, the British Transport Commission will shortly be calling for tenders for diesels. It will, of course, be open to anyone to tender, but from what we know of British industry there is no reason to doubt that the British engineering industry, which is already exporting diesels to railways in all parts of the world, will be successful in tendering for orders in competition with foreign firms.

My noble Friend also asked where is the £400 million to be found by the Commission for the £1,200 million of this development scheme. He had searched through the accounts to find concealed or liquid assets amounting to £400 million. In the case of any trading concern, such as the Commission, out of the gross revenue is always set aside a certain amount for depreciation. That amount is approved and recognised by the Inland Revenue, and such concerns do not pay Income Tax upon the amount which can fairly be put to depreciation. That £400 million is the amount which, in the view of the accountants of the Commission, should be put aside from the annual revenue in order to make good the depreciation of capital assets. That amount will be made available for investment in capital resources, and will not be regarded as available, for example, for the reduction of the deficit which it has incurred.

The hon. Member for Hillsborough (Mr. G. Darling) followed up this question of where the £400 million was to be found, and I can only say to him that this figure was arrived at after a careful estimate of what was the proper amount to be set aside for depreciation out of the gross revenue of the railways.

Reference was made to the question of gas turbines. There is a widespread opinion that in due course the gas turbine, already such an extremely effective and efficient engine for aircraft, will become a most efficient engine for terrestrial propulsion. I am advised that, as things are at present, the diesel is a good deal more efficient than the gas turbine.

I discussed this matter with one of the leaders of the motor industry who, while he was quite sure that the gas turbine will come, said that owing to the very difficult technical problems of cooling and so on, he thought that it will be 10 years before it replaces the diesel. I am quite sure, therefore, that the Commission is justified at present in going ahead with the introduction of diesels, provided of course, as is the case, that it is looking out for the possibilities of gas turbines. One of the gas turbines with which experiments are being carried out has been produced in consultation and co-operation with the Ministry of Fuel and Power.

I was glad that my hon. Friend the Member for Truro (Mr. G. Wilson) gave general approval to the scheme, especially in the interests of the distant county which he represents. The hon. Member for Bolton, West (Mr. Holt) asked how the Government allocate priorities as between one nationalised industry and another. I would say that we do our best—but we do not do it in quite the same way that the Socialist Government did it. We do not believe that it is possible for some all-wise planner sitting in Whitehall to decide what should be the optimum allocation of capital resources to the railways, roads, electricity, gas, or whatever it may be. Before deciding how much was to be spent upon the roads and how much upon the railways, the matter was naturally considered by the Departments concerned, particularly by the Treasury, which is primarily concerned with keeping the economy of the country in equilibrium.

I was glad to hear once more from the hon. Member for Whitehaven (Mr. F. Anderson) of the difficult problems of the railways in his constituency, which he has already discussed with me. I apologise to the hon. Member for Birkenhead (Mr. Collick) for not being present when he spoke. At that time I had gone out for some refreshment, having heard all the previous speeches. He was in some agreement with my hon. Friend the Member for Leominster (Mr. Baldwin) about the undesirability of closing down branch railways, although I am not sure that the reasons which those hon. Members put forward for arriving at that conclusion were entirely the same.

I was asked what understanding there was about finance between the Commission and the Government, and if we were going to help the modernisation plan. I think that I have answered that question in saying that the Commission has not asked for a subsidy and that the Chancellor of the Exchequer has given an assurance that there will be a Treasury guarantee of the funds which the Commission may find it necessary to borrow in the open market. The matter was fully covered by the Chancellor of the Exchequer on 3rd February last, when he said: The Government … consider that funds for this plan must be found."—[OFFICIAL REPORT, 3rd February. 1955; Vol. 536, c. 1313.]

Mr. Ernest Davies

There is one point in connection with financial aid to the Commission which the hon. Member has not cleared up. He states that the Commission has never asked for a subsidy, and we obviously accept that. But could he state definitely that on no occasion was the Commission given to understand that if it made the necessary wage awards consideration of assistance would be given by the Government?

Mr. Molson

I do not know what the hon. Member means by "consideration of assistance." We intend to give the Commission assistance of every kind.

Mr. Davies

Financial assistance?

Mr. Popplewell

Let us have a straight answer.

Mr. Molson

I shall give a straight answer. There has neither been a request for nor an offer of a subsidy.

Mr. Popplewell

That is not a straight answer.

Mr. Molson

I do not know how I can give a straighter answer. The money has neither been asked for nor offered.

Mr. Popplewell


Mr. Molson

I cannot give way again. I have given way a great many times and I want to conclude my speech. The hon. Member for Camlachie (Mr. W. Reid) referred to the electrification of the Glasgow suburban lines. As my right hon. Friend indicated, a committee which is now sitting under the chairmanship of Sir Ian Bolton is considering this matter. Upon that committee there are representatives both of the Commission and of Glasgow Corporation. He was an extremely fair controversialist. When saying that the assets of British Railways were in an unsatisfactory state, he emphasised the sterling service they had given to the country in time of war. He did not seek to attribute that unsatisfactory condition to the private enterprise which only had them up to September. 1939. His speech will not have been in vain. The British Transport Commission is anxious to arrive at a settlement with Glasgow in order to provide satisfactory passenger transport arrangements for that great conurbation.

My hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) referred to the control of nationalised industries, a subject in which I have taken a great interest for a long time. I cannot usefully add anything upon that subject tonight. He asked for fuller forecasts of the work; I do not think it is useful to give forecasts for more than one year ahead, and it is not possible to give an accurate forecast for a longer period than that. He referred to the need for abandonment of restrictive practices on the one hand and reform of top-heavy administration on the other.

The hon. Member for Oldbury and Halesowen (Mr. Moyle) asked what we were going to do about priorities for the British Transport Commission, in the first place about capital. Capital is likely to be available to the British Transport Commission as rapidly as it is able to spend it, having regard to the limited number of technical experts at our service. As regards the availability of labour, there is no power of direction of labour, and this Government have no desire to exercise it. He asked what priority would be given, but all I can say is that finance will be made available through the market and that we shall do all we can to help the Commission in every way.

The hon. Member asked me the powers of the regional boards. We had two debates upon this subject, in which my right hon. Friend and I made lengthy speeches to explain this matter. I can only refer the hon. Gentleman to those debates. As regards joint consultative machinery, as the hon. Member for The Hartlepools pointed out that has been in existence ever since 1921, and is provided for in Section 95 of the Act of 1947.

I hope I have given explanations of the various points raised by hon. Gentlement opposite. There has been a general consensus of opinion that this is a sound imaginative and courageous proposal for modernisation of the railways and I ask with some confidence that the House will give the Bill a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. Kaberry.]

Committee Tomorrow.