HC Deb 12 December 1956 vol 562 cc571-8

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Ernest Davies

Before we leave the Clause, I should like to put one or two points to the Minister, because none of the Amendments on the Order Paper has been called except one which was debated when considering Clause 1.

Under the Clause, the road passenger transport undertakings are given authority to put their fares up by by-passing the normal procedure of the Traffic Commissioners. They are only allowed to increase fares on public service vehicles, that is, buses and coaches. It causes concern among some muncipalities that they will be permitted under the Clause to raise fares on their buses in order to meet the increased fuel charge but where they are operating trolleybuses as well, as is the case in 28 municipalities out of 96 that are still running transport undertakings, they will not be able to put up the fares in the same way.

In that case, anomalies will arise. We might well have buses and trolleybuses running along the same routes, with different fares being charged, say a 3d. fare for a stage on the bus, after the increase, and a 2½d. fare on the trolley-bus. It seems unfortunate that provision has not been made to deal with that situation. I should be interested to know from the Minister whether there is some way in which the authorities which are running both buses and trolley-buses will be able to equalise their fares. This is, of course, being done in London—special provision is made—where the increases are to cover all the separate means of transport operated by London Transport.

Another matter in the Clause which is not clear relates to increases for which the undertakings may already have applied. It seems that there can be two sets of increases, as it were, taking place almost simultaneously. Whereas in order to meet the increased tax the undertakings will put up their fares automatically, they may already have submitted an application to the Traffic Commissioners to meet other costs.

During the Second Reading there was confusion owing to some remarks of the Chancellor which rather indicated that the right to raise fares to the extent limited by the Clause would also cover any other increased costs which had been incurred, such as, particularly, the increase in the price of petrol charged by the petroleum companies. He said that the increase permitted would also go a little way to meet the increase in price which the oil companies have had to impose.

According to the actual wording of the Clause, that is not so, as the Clause permits charges to be raised only with a view to offsetting the increase in duty. That being the case, how are the undertakings to make provision to meet the other increased costs? Does it mean that they will have to submit their application in the normal way at the same time as they increase their charges to meet the rise in tax? It seems to me that the Clause, as worded, does not really cover the position as explained by the Chancellor during the Second Reading.

The only other point I wish to make now, as I do not wish to detain the Committee at this hour, is that I have some regret that it has been necessary to make the provisions for the increases in the way in which that has been done. The transport undertakings with which we are concerned enjoy considerable rights in the areas in which they operate, and the only protection which the public has against that monopoly position being exploited is the appeal to the Traffic Commissioners, the position being that before fares can be increased, before services can be dropped and before changes in stages, etc., can be made, the permission of the traffic commissioners has to be obtained. Consequently, the Traffic Commissioners look at the overall situation in regard to the services provided by the undertakings, of which fares are only one part.

Here the increase in fares is to be separated completely from the other matters. It means that the undertakers will be able to take whatever action they like in respect of the way in which they increase fares. In particular, the Commissioners have always endeavoured to ensure that the manner in which fares are raised is fair to the whole of the travelling public in the area, and that the increase is spread fairly.

There are occasions when the Commissioners insist on the retention of concessionary fares and other times when they might prefer to have concessionary fares, including workmen's fares, removed. I am a little worried that, as the undertakings themselves will be able to decide how they increase their fares, they may decide to do those things which the Traffic Commissioners have hitherto requested them not to do, or have prevented them from doing.

For instance, because it has to increase its fares up to the maximum of 1d. in the 1s. which is permitted, a bus undertaking may prefer to obtain that increase in its gross receipts by abolishing workmen's fares, for instance, rather than by raising fares equally as far as possible over the whole service. It could do that in any particular form it chose with no protection for the public through the Traffic Commissioners. I should like some assurance, from the Minister if possible, that some protection will he given in that matter.

There are many other points which arise out of the Clause, but we have to accept the necessity that, if the tax is being raised the bus undertakings will face increasing costs and must be permitted to increase their fares immediately in the way provided. However, the complete dropping of the Traffic Commissioners from the picture has some dangers. I should prefer the undertakings to be forced to consult the commissioners to get their general agreement—not through the usual procedure—so that control or contact by the Commissioners may be retained

Mr. Skeffington

Three Amendments to the Clause were on the Order Paper, but have not been called, and I hope that I shall not be out of order if I refer to three points, with one of which we have already dealt to some extent, but which I mention again in order that the Minister may know the apprehensions of London Members and the London County Council. It is the possibility that the increased fares to cover the increased petrol tax will be continued under the new procedure of this Clause for a period longer than strictly necessary.

I want to emphasise that I do not necessarily suspect that London Transport Executive would do that, but it seems Chat under the new procedure it will be possible for the Traffic Tribunal and the London Transport Executive to come to some private arrangement without the safeguard of the usual public hearing. There is thus always a danger that the public will be charged the higher fares for a period longer than is strictly necessary. I should like the Minister to tell us what steps he is taking to make it clear to London Transport Executive and to the Transport Tribunal that that would be most undesirable.

Another issue affects London Transport Executive in a special way. Under the Bill, it is entitled to increase fares by one-twelfth of its gross receipts from passenger services—with certain refinements—to meet increased costs. The Executive has already said that it will not in fact increase its charges more than about one-twentieth of its estimated gross receipts and I hope that that will be the case. If it is true that the Executive intends to charge 3d. instead of 2½d. on all forms of its transport, to cover the oil duty, the Executive will get more than it requires. It must be remembered that the Executive operates road and rail services.

In the last public inquiry, this year, the Transport Tribunal estimated that the receipts from the road services operated by the Executive amounted to rather more than £57 million a year. One-twelfth of that would amount to very nearly £5 million. The estimated cost of the new oil duty to London Transport Executive is only £2 million, so we want assurances that the Executive will certainly not take full advantage of the permitted increase under the Bill.

10.45 p.m.

There is one other point. The Executive has announced in the Press that it expects rather more than 50,000 extra passengers per day as a result of petrol rationing. Even if we make allowances for some curtailment of services and, therefore, some fall in revenue for that reason, it seems to many of us that the extra passengers carried will bring in quite considerable extra revenue. I am therefore wondering whether it is necessary for the Executive to increase the 2½d. fare on the Underground. The argument may be put forward that if this were not done too many people would be attracted to the Underground so that it might become unworkable. It seems to us that there are various reasons why the Executive should not take full advantage of the proposals in the Bill, and we hope to get some assurances from the Minister that it will not do so.

The Minister of Transport and Civil Aviation (Mr. Harold Watkinson)

I think I can clear away all the points which have been raised. I am very glad of the opportunity to do so because there are quite clear answers to them all.

First, there was the question of the trolleybuses out of London, which was raised by the hon. Member for Enfield, East (Mr. Ernest Davies). The answer is that under the Transport Charges (Miscellaneous Provisions) Act, 1954, a special quick procedure can be used in respect of trolley vehicle operators out of London, which enables the traffic commissioners to dispense with procedural requirements and dealt with an application from a trolley vehicle operator almost at once. I am advised that that will enable them, if they so wish, to recoup themselves, although I must say that it is the hope of the Government that vehicles which do not use derv or petrol will not increase their fares, except in special cases, which I will come to in a moment.

The next point raised by the hon. Member was whether there was any risk that the increase will cover more than a temporary period. Subsection (4) lays it down quite clearly that the increased fares can be charged only till the end of the following fortnight or such longer period as, for all or any of those fares, may for special reasons be allowed by the traffic commissioners. They have ordinarily to come to an end within a fortnight.

The next point about which some doubt has been expressed is under what conditions the further period might be allowed by the Traffic Commissioners. I have discussed this question very carefully with all the operators, including London Transport Executive, and I can say that the purpose of that part of the subsection is to meet, in part, the third point made by the hon. Member, namely, that some bus companies have already made applications for increases arising from quite proper increases of cost which have nothing to do with the present emergency.

I think we would all agree that it would be very awkward for any bus company—and would destroy much of its public relations—if it were placed in a situation where the tax was coming off and the fares should, therefore, be going down again but, at the same time, they had been given permission by the Traffic Commissioners to increase their fares upon quite different grounds. This provision in the subsection enables the commissioners to balance the thing out, so that a bus company need not be put into the absurd position of taking off 2d. or 1d. one week and then putting on 1d. or ½d. the next. It enables the Commissioners to cover what would be an awkward period between the taking off of one increase and the putting on of another.

It is not intended that the commissioners should be empowered to allow these increases to continue for any further period at all beyond a fortnight, except strictly under the circumstances which have outlined.

As I said, I have seen all the representative bodies covering the passenger vehicle field and they have all assured me—and I accept their assurance—that they really will try to do this as sensibly as they can. They will certainly not try to sweep away workmen's fare or anomalies, but will merely use this to try to recoup themselves to the minimum extent necessary.

That brings me to the point raised by the hon. Member for Hayes and Harlington (Mr. Skeffington). The actual figures are very much to the credit of the London Transport Executive because the full one-twelfth under the Bill would have enabled the Executive to recoup itself to the extent of £300,000 a month. I think it better to deal with the matter in months, because it is months that we are thinking about.

The additional cost which the Executive calculates that it will bear will be £180,000 a month, and, while it will certainly save something from its extra passenger traffic, unfortunately most of that traffic will come at the main morning and evening peak hours when, of course, the saving is more apparent than real, because at those times London Transport will be considerably overloaded.

As the House knows, the actual proposal of the Executive is to increase the 2½d. fare to 3d. on both buses and tubes, the reason being that the Executive is very anxious to maintain the balance between the buses and the tubes. It believes that if there is a fare differential its passenger traffic will get all wrong.

From the ½d. increase on the 2½d. fare the Executive will get £160,000 a month. That means that it has deliberately under-recouped itself by £20,000 a month. The Executive is not putting the increase into force until 1st January, 1957, so that it will lose two or three weeks' revenue any way. I think that it has come to a fair compromise, and I do not think that it will make a profit out of the increase. The Executive has, I think, behaved very well and has done what I hope other companies will do, that is, keep the increase to the minimum necessary.

I will answer the hon. Gentleman's last question by saying that this increase must cover not only the increased tax, but the increased cost of fuel. Transport undertakings must try to make up the extra cost out of savings which they hope to make by better load factors and more passengers. It is not intended that they should apply for increased fares arising from the increased cost of fuel during the emergency period.

I hope that I have answered some of the points which have been raised and that we shall now be able to dispose of the Clause.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.