HC Deb 18 July 1956 vol 556 cc1188-90
23. Mr. Ernest Davies

asked the Minister of Transport and Civil Aviation what estimate was made by Her Majesty's Government of the additional loss likely to be incurred by the British Transport Commission as a result of stabilisation of railway charges until the end of 1956 made at the request of Her Majesty's Government; and how it is proposed by Her Majesty's Government that the Commission shall meet it.

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

The undertaking given by the Chairman of the Commission on 28th June was the result of its own decision and not of a Government request. The first part of the Question does not, therefore, arise. On the second part I can add nothing to the Answer I gave to the hon. Member on 4th July.

Mr. Davies

But are not the Government acting quite irresponsibly in this matter? Is it not a fact that the Commission is accumulating a deficit at the rate of £45 million a year and that in about one year's time it will exceed £100 million? The Government cannot shelve responsibility for the difficult financial position of the Commission, which is largely due to the Government's own action.

Mr. Watkinson

I do not agree with anything that the hon. Gentleman has said. The first thing I want to make plain is that the Opposition really must consider where they stand on this matter. Do they really want prices stabilised or do they not? If they do want prices stabilised they ought to congratulate the Commission on being one of the leading industries in the country to try to do it. As to the financial position of the Commission, which has not been materially altered one way or the other by the present proposals, the fact is that we are, as the hon. Gentleman knows, working very hard on an examination of the position in which the Commission finds itself. It certainly does not arise as a result of Government action.

Mr. Davies

How can the right hon. Gentleman say that he does not agree with what I say when it is a fact that the Commission is accumulating this large deficit? He cannot deny that. The Government are responsible for this position, are they not, because they did request the Commission to take the action in regard to refraining from raising freight charges? The Government set aside the Transport Commission's advice that it should be permitted to raise its charges. Is not it a fact that the Commission will have to put up its charges even more when the standstill comes to an end than would otherwise have been the case?

Mr. Watkinson

I think it puts the matter into proportion if I say that the Government are responsible to the extent of £8 million out of a deficit which the hon. Gentleman is quite right in saying may reach £100 million by the end of the year.

Mr. G. Wilson

Can my right hon. Friend say whether satisfactory progress is being made with the railway modernisation scheme, and whether, in the long run, that will increase the earning capacity of the railways?

Mr. Watkinson

Very good progress is being made with the modernisation scheme. What we are doing during the six months is, among other things, to carry out a detailed assessment of its progress so that we can see clearly when it will pay off.