HC Deb 02 April 1958 vol 585 cc1201-2
29. Mr. Ernest Davies

asked the Minister of Transport and Civil Aviation what was the level of advances to the British Transport Commission under the Transport (Railway Finances) Act, 1957, for 1958 and 1959 contemplated by the White Paper proposals for the Railways, Command Paper 9880; and under what authority he informed the Commission, in his letter of 22nd October, 1957, that the advances for 1959 would be reduced in accordance with the forecast on which the White Paper was based.

Mr. Watkinson

The 1957 Act authorises the Minister to make advances up to £250 million in total, leaving him free to determine what sums shall be advanced within this limit. The White Paper contemplated that in 1958 the deficit would be rather less than £60 million and would be substantially reduced in 1959.

Mr. Davies

Is this not the first time the House has been informed that the Minister proposed to limit the amounts on an annual basis rather than keep them within the total £250 million? Does this not put the Commission in a ridiculous financial position, as part of its deficit will be financed by the Treasury and part must be carried forward in its accounts? Would it not be better to meet the total deficit in the way originally intended under the Act?

Mr. Watkinson

No. I think that the hon. Member misunderstands me. I am saying that the Transport Commission must cut its costs by economies in order to meet the reduction which1 have indicated.

Mr. Davies

Is not the Minister putting the Commission in an impossible position? On the one hand, he says that it must keep its deficit within a certain limit and, on the other hand, he withholds the means for the Commission to reduce the deficit, first, by imposing capital restrictions and, secondly, by not allowing the Commission to put up its charges to meet wage claims.

Mr. Watkinson

The House must judge whether £1,500 million devoted to modernisation, spread over a number of years, I agree, and £250 million to finance a deficit is not as much as the country can at the moment afford to devote out of its scarce capital resources to this most important task.