BRITISH TRANSPORT COMMISSION (ANNUAL REPORT)

HC Deb 17 July 1958 vol 591 cc1447-505

3.59 p.m.

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

I beg to move. That this House takes note of the Tenth Annual Report, Statement of Accounts and Statistics of the British Transport Commission for 1957. As our time is necessarily short, and I am sure that there are many hon. Members on both sides of the House who take a deep interest in this matter, I will try to confine myself to a brief statement. I am sure that it would be the wish of the House that I do not go into details about the Report and Accounts of the British Transport Commission. They are fully set out in the two volumes which hon. Members will have read. The first volume is the report of the year's work and the second contains statistical and financial accounts.

I wish shortly to give my best estimate of present and future prospects in this great industry. I think it right to take note of the quite different relative positions of the Government and the Opposition about it, as, indeed, to all the so-called nationalised industries. I consider that important. Sometimes these matters are misunderstood because it is not clearly realised that the difference of approach is quite fundamental. The Opposition still believe in the full scope of a concept of complete nationalisation, not only for coal and railways but for iron and steel, long-distance road haulage and many other industries.

The Government do not believe that nationalisation, as such, as a political doctrine or, much more important, as a method of management, is a good way of running a business. We believe it to be outmoded and not applicable to the highly competitive times in which we live. While I do not for a moment impute any insincerity to those who claim that nationalisation is the right doctrine for the second half of the twentieth century, any more than I think they would claim that we are insincere in rejecting it, I think it right to start this debate by taking note of the quite different approach that we bring to it.

Having said that, I think it equally fair to say that I believe we both want this great industry to be a success. It is vital to the commercial future of our country. We cannot have a prosperous country without a modern and efficient railway system, with all its ancillaries. Although it is common to say, in these days, that railways do not pay, I am not at all sure that that is a doctrine we should accept if we want to have a modern and efficient transport system. Although our approach may be very different, and it is right that it should be so, none the less I think we both want to try to do the same thing.

Successive Conservative Governments and my predecessors in this office have tried not to denationalise, but to create a structure which, while it retains this accountability and responsibility to Parliament, tries to apply the most modern methods of business management and does not shrink from learning from those private enterprise industries on whose success the whole prosperity of our country still depends. So it is from that point of view that I want to examine the present position of the Commission and its future prospects and then to say a word about further developments of policy that the Government would like to see.

If I may be permitted one other general comment, it is a bad thing, in business as well as in life, to be always taking one's pulse. I do not know whether I shall carry the House with me, in present circumstances of Select Committees and questions of Privilege, but we are in danger of making hypochondriacs out of the nationalised industries. We are always invigilating them, examining them, questioning them and talking about them in Parliament and, as a result, they are always getting knocked about in public. How often must their chairmen long to get on with perhaps the comparatively simple tasks of running their own industries?

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

The right hon. Gentleman's party started it.

Mr. Watkinson

All parties are equally to blame, if blame is to be applied.

My opinion may be shared by the Chairman of the British Transport Commission that this great industry, which is still the largest employer of labour in our country, ought to be able to get on with its own essential task. It is only eleven years old and has not had very much time in which to do so. Whether I carry the House with me or not, I think too much of that eleven years has been spent in controversy and perhaps not enough in constructive preparation of a modern, forward-looking railway system on which, as we all know, the future prosperity of those who work for it depends.

Before leaving that point, I should like to pay my tribute to Sir Brian Robertson. He serves his country well. He has a very difficult task, as we all recognise. He is trusted and respected by all those who work for the Commission and for all its variety of enterprises. I think that the House agrees that we wish him and his colleagues and the unions well in their task.

I wish to take a brief look at the present position. It is very difficult to produce any accurate comparative results at present because the earlier months of this year are being compared with the early months of last year, when the position was distorted by petrol rationing. It is no use burking the fact that traffics, particularly commercial traffics, are down. I shall come back to that in a moment. The 1956 deficit was £54.4 million and the 1957 deficit £9 million more, £63.5 million. None the less, it should be pointed out, as can be seen from the White Paper, that this did not greatly exceed the forecast made at the time when the White Paper was constructed and, therefore, the Commission is still within the framework of that financial plan.

As to the present trading position, perhaps the only figure with which I need bother the House, and I think it a fairer figure, is that of tonnages carried by British Railways in the first half of 1957 compared with the first half of 1956, which was a normal year. On that basis the decline is 7.8 per cent. Transport statistics are a barometer of industrial activity and to look for the reason for this decline we might, for example, look at the home consumption of coal. It fell by 5 million tons in 1957 and it is already 1 million tons down in the first half of the year compared with the first half of last year.

As we all know, coal exports have fallen very much as well. We cannot have that situation without affecting the figures of the country's largest carrier of this basic commodity. So the railway results reflect to some extent the changing pattern in an industry like coal, which today, partly due to competitive sources of fuel, is finding it extremely difficult to market and distribute its total production.

The Commission's other activities have also been somewhat obscured by the bus strike, for example, and other difficulties such as the meat drivers' strike earlier this year, but it is not all a picture of decline. Traffic on British Road Services is running at last year's level, on inland waterways it is a little down, on the docks it is a little less, which is not surprising, but the hotels and catering service has excellent results. On the tourism side, I am delighted to say that the business of Thomas Cook and Son, particularly in dollars, is holding up very well indeed. So there are bright aspects as well as aspects which show the pattern of change in the economy.

Against that it is right to note, as we try to make this survey of the activities of the Commission, that the Government have decided—it is well known and I need not labour it—that they are not going to increase the size of advances to the Commission which have been and are being given under the Transport (Railway Finances) Act. People say that that is something which is wrong and which the Commission dislikes. I do not take that view and I believe that I speak for the Commission when I say that it does not wish to be relieved of the necessary financial disciplines under which any great business must work, particularly a great business in debt to its bankers—in this case, Her Majesty's Government—to the tune of many millions of pounds. Any business in that situation would be under severe discipline from its bank, or whoever had advanced money to it.

It is right, and I think the Commission accept it as right, that the Commission should have its own financial discipline. Of course, that does not make life easier for the Commission, particularly as it has not asked—again, this should be made clear to the House—to be relieved from its commitment to break even by 1961–62. Although the estimates which were set out in the White Paper necessarily had to assume certain things, and necessarily had to be general in their nature, I am advised by the Chairman that he and his colleagues still believe themselves on reasonable ground in keeping within the terms of the White Paper and thus to break even in 1961–62.

Mr. Popplewell

While we appreciate what the Minister has said, will he assure the House that he is allowing the Transport Commission to go ahead, for instance, with the development and application of the continuous brake, which he curtailed a little while ago, and with the development of marshalling yards, which also was curtailed a short time ago? Will he help the Commission to break even?

Mr. Watkinson

I shall have some good news about that later, but I hope that the Committee will forgive me if I do not give way very much. It is not that I wish to be discourteous, but I know that other hon. Members wish to speak, and I want to sit down as soon as I can so that they may do so.

The Government are encouraged by the very welcome fact that, wherever one examines the progress of modernisation on the railways, one finds that it is paying better than anybody thought. If one considers dieselisation or any other phase which is really beginning to make progress—I know that hon. Members who know about these things will agree—one finds that it is paying off extremely well. There is very real hope for the future and, when Sir Brian Robertson said, at his Press Conference, that the results had fully justified expectations, I think that he was being, on the whole, rather modest.

There is another aspect to this broad survey which is not, I think, sufficiently recognised and which I hope the House will recognise. Eleven years ago, the Commission inherited a railway system which had been designed when this country did not contain a single motor car. The railway system which it then inherited was practically exactly as it had been designed in a carless age. Now, the railway system has to compete with 7 million motor vehicles on the roads and an enormous extra number of motor vehicles which come on to the roads every year. It would be the wildest folly to imagine that one could maintain a railway system designed for the Victorian era in exactly the same state in the motor car age.

I think that it is wrong, therefore, to suggest that cutting down or shedding some parts of the railway service is really either strangling it to death or cutting off its arms or legs. It is really an effort to fit it to live in the second half of the twentieth century, to live with the motor vehicle, I hope in a complementary sense and not necessarily in the sense of each trying to destroy the other.

This is the task which the Commission and the House face. The object of the capital investment in which we are placing so much of our money on Government capital account is not to maintain the kind of railway system which would be the wrong one for the years to come but to streamline it, to make it more efficient and thus more profitable, although, inevitably, smaller in its total size.

There has been some misunderstanding about the capital investment position, and I want to say a word or two briefly about that, because we should have the facts clear. I shall speak here only of the railways, because they are the important matter. When the capital cuts were made in September, 1957, the Transport Commission decided that it would allocate £145 million each year to railway modernisation. That, in itself, was a great deal more than the White Paper figure, but, of course, it was somewhat less than the Commission had originally planned to spend.

It was probably a good deal less than the notional budgets which the regions brought forward and which were based entirely, I am advised, on the sort of theoretical maximum which a region could spend if it could get all its deliveries, buy what it liked and spend what it liked. That is quite a useful internal exercise, but those budgets were never approved by the Commission, either in the amounts stated, or indeed, in any amount at all. Any idea that we are talking about an enormously larger figure than £145 million is, frankly, quite incorrect.

What proves that the Commission has not suffered a major cut-back—it is important for the House to know this—is that when we had the reconsideration, in the spring of this year, of the capital investment programme and when the Government agreed, as part of the wages settlement, to make an additional £25 million available for this year and next, the Commission said that it now had as much money as it could usefully spend. I have been most carefully into this with the Commission and its Chairman, who advises me that, with this extra £25 million, the Commission now has as much money as it can usefully spend in this year and next year on capital investment. If the Commission cannot ask for more, I do not think that the Government can do more than give the sums of money which the Commission itself says is as much as it can usefully spend. I hope that I shall be able to give the House some proof of that a little later.

I do not say that it is wrong that the Government should be generous to the Commission. It has a vast task to perform and we need a modern railway system. But it would be quite unfair to say that the Government have not been generous to the Commission, because, for the next two years certainly, they have been. Some proof of this is shown by the fact that I can announce today that with the extra capital authorised the Commission is placing orders for another 90 main line diesel locomotives for delivery in 1959. This is on top of the 200 already planned for delivery in 1959, and should greatly improve the railways' revenue earning ability.

This is not at the expense of the great electrification programme in which, of course, is the real future. Diesels are the interim phase. Electrification from atomic power, we all hope, will provide the final solution to the railway problems. In the Styal section, between Manchester and Crewe, the overhead equipment is and complete and testing will start very shortly on the high 25 kilovolt system. Last Sunday, the whole section between Wilmslow and Slade Green Junction was changed over from semaphore to colour light signalling, which will cater for the greater speed. Stage 2 of the Crewe—Liverpool section is now being surveyed. I need not trouble the House with the many surburban electrification programmes which are ahead of schedule, because they are, I think, well known.

To sum up on modernisation, I can say that we have done what the Commission wanted. We have given it the money it asked for. It is capable of spending the money to the best advantage. I was delighted, also, to see further evidence of something that I have always believed, namely, that the Commission carries the trade unions with it in the belief that a more modern and more efficient railway system is the right policy not only for management but for the men as well.

Mr. J. T. Price (Westhoughton)

I appreciate that the question of how the moneys available to the Commission shall be employed is a highly technical one, but would the right hon. Gentleman care to spend a moment or two dealing with something which concerns my constituents particularly? To what extent are the smaller sums of money being justified because the railway workshops are not being used for capital rebuilding and orders are being handed out to outside contractors?

Mr. Watkinson

That is something which concerns many hon. Members. My hon. Friend the Joint Parliamentary Secretary will wind up the debate, very briefly, and I thought that it would be more convenient if he were to deal specifically with the railway workshops and any of the points raised by hon. Members.

I want to make the position quite clear on the subject of fares and charges. As I said in the House in answer to my hon. Friend the Member for Truro (Mr. G. Wilson) on 30th June, the Chairman of the Commission told me on 2nd May that, in his view and that of his colleagues, there is not at present scope for obtaining a large increase in receipts by raising fares. That is why the bulk of the current wage increases in London and on London Transport will have to be met from economies. This is in the best interests of the business and of everybody who works in it. That is why the Commission does not propose to make any fare increases in the near future, except to clear away the last of the sub-standard fare anomalies, which, I am sure, is absolutely right.

The other thing that the House should be quite clear about, although it has already been told in answer to a Question, is that, as the Commission at the moment has no authority to increase fares because it has exhausted its present charging powers, it will be making an application to the Transport Tribunal for the necessary authority, I believe, early in September. If it obtains that authority, what use it makes of it is another matter. I believe, in any case, that any alterations which were agreed probably could not come into effect until next year, because a date next year is, I think, the earliest date that the Transport Tribunal would fix.

To those who are bothered about fares, I would say that the issue is not really a very real one until at least next year. That is why economies are so important. I do not think—if I may again try to deal with policy—that the relatively few people who have said that this great drive for economy is adverse to the future of the Commission are right. It would be only adverse to its future, in my view, if two things were true—if the men were being treated badly, recklessly sacked, and slashing cuts were made in that sense, which is something which I would never defend; and, equally, if quite ruthless cuts were being made in essential services that, too, would be wrong. But that is not so.

As I think most hon. Members know, the Chairman of the Commission has given very clear pledges to the trade unions, and rightly so, that any redundancy will be properly handled through the proper redundancy agreements. Most of this will be done by cutting down on recruitment. I wanted to say that because I wish to tell the House that by the end of June, 1958, a reduction of over 12,500 was made in the numbers employed on the year previously—a very large reduction indeed.

Similarly, recruitment has been heavily cut down, but this has been done within proper limits and as a good employer should do it. Equally, London Transport has to face painful cuts, and the new schedules in the autumn will involve a reduction of about 9 per cent. on top of the original 4 per cent. planned. It will mean the closing of garages as well as the cutting of routes. Of course, there are those who say that London traffic will move more easily if there are fewer buses. I do not necessarily hold that view, but whether we do or whether we do not, there will have to be cuts, and I think that, on the whole, they are not cuts which will result in the breaching of the general position which London Transport has to face, and that is providing adequate services.

Mr. David Jones (The Hartlepools)

Do I understand the right hon. Gentleman to say that there has been a reduction of 12,000 in the railway staff since the beginning of this year? If that is so, will he tell me why it was necessary for the Commission to increase the staff between 1st January, 1957, and 31st December, by nearly 3,000 and then within six months cut it by 12,000?

Mr. Watkinson

The hon. Gentleman is quite right in saying that the staff employed on British Railways, as I said, have been reduced by 12,500. He knows quite enough about the railways to know that, normally, there is a pattern of recruitment against wastage caused by people who leave the industry, those who retire, and so on.

As to why the total figures went up last year, if there is a reasonable answer my hon. Friend will give it at the end of the debate. All that I am concerned with at the moment is to tell the House that the Commission, in co-operation with the unions, has done what it said it would do, and that is to make large reductions in staff as a necessary measure of economy and to make them properly, as it should.

As the House knows, many other economies are being made. One hundred thousand wagons are being dealt with, locomotives are being cut down and the total operating stock of steam locomotives at 15th June, 1958, was 17,610 compared with 18,009 a year earlier, a reduction of nearly 400, although in that period a great many new diesel locomotives were introduced. So one has this pattern of sensible, practical economies which, I believe, will improve efficiency.

There is the question of branch lines and the unremunerative services. I think it right that I should tell the House that I have seen the chairman of the central and area consultative committees and have tried to explain to them—and I think I have obtained their agreement to this—that the railways are not obliged to provide unecomonic services quite regardless of their operating efficiency.

Of course, they are obliged to do all that they can to meet the transport problems in their areas, and I believe that as a result of what we in this House know as the "Bluebell Line" inquiry great improvements will be made in the kind of case which the Commission bring forward, which, I think, will be better from the point of view of public information, easier for the consultative committees and, perhaps, better for the railways.

I hope that we shall have a better procedure and I am grateful to that inquiry because it has ironed out some of the difficulties, but, at the same time, I have made it plain to the consultative committees that it is not their job to maintain completely uneconomic services merely because the public need may show some justification for them.

The yardstick must be: can the services one day be made to pay? If the firm answer is that it cannot, then that is not a service which should be allowed to stay. [An HON. MEMBER: "What about alternative services?"] It is the duty of the consultative committees to study alternative services and satisfy themselves as far as they can that they are available.

I want to say a brief word about railway workshops. I have discussed this with the Chairman and he wants me to say that he recognises and the Commission recognises that it has a moral obligation to act, with special concern for its employees in those towns where railways are the main industries. I do not want to develop that now and my hon. Friend will deal with it later. I want, however, to make plain that that is the Commission's considered policy.

What about the future? On the passenger side, I am delighted to tell the House that it is really a good story. On the whole, the passenger side has held up extremely well. The new diesels are gaining new customers and keeping them, and, generally, if one judges the success of the railways by their passenger traffic they are doing remarkably well.

It is, of course, on the freight side that the difficulties arise. I want to say a brief word about what the Commission is aiming at. It is trying to provide a quite new type of service for freight. This will be a road-rail service in some cases. In other cases it will be a door-to-door through service of pallets, containers and the demountable body which, I think, is showing possibilities of great development.

That is really the box body which can be lifted off a lorry on to a railway truck and quickly off again on to a lorry, giving a through service from door to door, without any difficulties of breakage or pilferage, and which can be used on ships, as I saw recently in New York, as well as on the railways. I believe that that offers great possibilities. What the Commission want is "freight liners" on the railways which will be made up of fast, fully-braked flat or well wagons carrying demountable bodies and running to time-table service at very high speeds.

When that happens, businessmen, who are themselves contributing to this very large sum of public money which we are investing in the railways, must take careful account—I hope they will—of the services that the railways offer. But they must be competitive services, and I am certain that these competitive services are coming. All I ask is that if they do come, the business world will take advantage of this very fast method of travel which, however many motor roads the Government may be able to build, will still offer greater advantages in speed in transit between London and Manchester or Edinburgh and many other large centres over anything that can be done by road.

I could talk about many other fascinating developments. There have been very interesting developments in coal handling. For example, the first fully-mechanised coal handling plant for domestic fuel was recently opened in North London, which again cuts out labour and makes for greater efficiency. I am delighted to see that the Association of British Chambers of Commerce has commented favourably recently on the way in which the railways are operating the merchandise charges scheme.

The other thing which would interest hon. Members who have studied the matter is the new development within the regions of line management, better commercial management and more decentralised management which is nearer to the customer. I attach great importance to these developments, because I believe that the future of the railways lies in developing the regional pattern. We owe a debt of gratitude to those men who serve on the regional boards. Many of them are local businessmen who can bring business to the railways.

Now that the regions are an established success, it is right that within the regions we should have new efforts to create closer and better local management which is more in touch with the customer and, therefore, able to give a better service. The studies that I have been able to make show great promise. As the new freight trains Dome along the men will be there not only to manage and operate them, but also to sell the services to the business community.

I apologise for not speaking about some of the other activities of the Commission, such as the canals, docks and British Road Services. My hon. Friend will have something to say about them when he winds up the debate. I thought it right that I should concentrate on the railways, because it is on the railways that the main problems arise and where the main money of the Commission lies.

To sum up, what of the future? The Government believe that the regional pattern is right, that it should be further developed and that the regions should gradually be given greater autonomy. They should be encouraged within themselves to decentralise and given as much managerial autonomy as is proper. That is certainly the wish of the Commission, and the Government believe that the process of decentralisation if it is not denationalisation, is a method of making the railways more efficient, more sensible to local needs and gives a better service to local industries and brings back that sense of pride and esprit de corps in the Commission's own service which was one of the great foundations of the railway service before nationalisation. That is what the Government wish to see. They do not want to see the industry thrown back into the melting pot, but a sense of practical and businesslike evolution from which much commercial advantage can be gained.

We are considering a year of great difficulty, and results which, in some senses, are very encouraging, but in others much still needs to be done before one can be sure that the White Paper forecasts will be fully realised. However, the people who run the railways matter perhaps much more than anything else. From what I have been able to see of them, they seem to be in very good heart and work well together, and there is a much greater feeling that there is a real future for the railways as modernisation begins to pay off.

In these circumstances, the great sum of money which is being wagered on new development is right. It will pay a national dividend, and, therefore, we should wish well to the management, to the Chairman of the Commission and to the trade union leaders who, I think, play a great part. It is not easy to co-operate in an industry that is having to cut away parts of its service. The House should recognise that and pay tribute to the union leaders who co-operate in a thankless yet necessary task.

All I can do, as the Minister responsible for this great industry, is to say that I believe in it. I believe that it will succeed. I wish all those who work in it well, and I will, together with my colleagues in the Ministry, do my best to serve it.

4.35 p.m.

Mr. Ernest Davies (Enfield, East)

I am sure that the House will share the sentiments which were expressed by the Minister in his closing remarks. Some of the facts which he presented, particularly about modernisation, were most encouraging. It is regrettable that, for reasons which we all appreciate, the debate will be curtailed, and I, too, will try to follow the example of the Minister and discard many of the notes I had prepared.

There are, however, a number of things which require to be said which will, to a certain extent, be political. The Minister made it clear at the outset that the difference in approach between the Government and Opposition regarding transport policy is fundamental. That is perfectly true, and he will find us quite incorrigible in this respect. He suggested that the nationalised boards were tending to become hypochondriacs and that we were invigilating them too much. He said that we have had eleven years of controversy, and he expressed, as he frequently has done before, the wish that this controversy should come to an end.

We cannot, however, absolve him of blame for the continuance of this controversy. What I cannot understand is the mentality of Members of the Government who consider that to reverse the policy of the Opposition does not cause political controversy. In their view, that is perfectly legitimate, but when the Opposition threatens to revert to the status quo and to sick to its own policy in which it believes, that is interpreted as being controversial and illegitimate. It appears to me that it is not considered by the Government to be party political for the Government to attack the Opposition, but if we attack the Government for attacking us then we are accused of playing party politics.

The Minister also stated that he wanted the Commission to succeed, and I accept that. I do not accept, however, that he is going the right way about it. In the debate on 22nd April, I outlined the disastrous steps which had been taken by the Government since 1951 and which have wrecked the planned and balanced transport system which the 1947 Act was designed to create. I do not propose to repeat the accusations which we then laid at the Government's door. But the Annual Report and Accounts and the serious financial state of the Commission, with which, I regret, the Minister did not find time or did not wish to deal, must be viewed against the background of the Government's record.

I do not think that the present state of the Commission can be divorced from Government transport policy. On this side, we hold the Government responsible for today's state of the Commission and consider that their general economic policy, combined with their political partisan handling of transport affairs, is the main cause of the desperate state of the Commission's finances.

Having said that, I should like to proceed to consider the Annual Report itself. It shows that, in the economic and efficient operating of its undertaking, the Commission continues to make very satisfactory progress, for which all engaged in it deserve congratulation. The financial statistical summaries published at the back of Volume II of the Report show the ten years of progress since nationalisation. We can be proud of the operational results. Whatever yardstick of efficiency be taken, it shows a steady improvement over these ten years. The efficiency of the Commission has undoubtedly been rising throughout that time, and there is, therefore, a great deal on the credit side.

The other side of the picture is, of course, the one to which the Minister referred—the falling off in freight traffics, which is having a very unfortunate effect upon the affairs of the Commission. This is mainly due to the general trend for traffics to drift from rail to road. For that, there are probably two main reasons. The first is the technical development of road transport and its generally greater convenience for a very large amount of traffic. Secondly, there is the growth of private transport, which is causing a drift from the public sector. That, of course, cannot be halted. It would be foolish to take a Canute-like attitude to the growth of road transport, in which I also include the increased number of C licence holders.

Although that trend cannot be halted, it can be controlled by planning the public sector of transport and keeping it in balance. That, I think, is where the Government have failed. By scrapping the planned transport system and reverting to a system of competition, instead of bringing about some order in the industry, they have brought about disorder. The result is that there has been a growth in transport facilities generally that is now definitely excessive.

The fact that we have excessive transport today, however, does not mean that the answer is to be found in ruthless cutting down of the public services, although some may be inessential today and could be cut out, as in London. Evidence produced during the bus strike shows that the fleet can certainly be redeployed to better advantage. With the railways, the position is different. One of the favourable features of the Report is that during the last year there was an increase in passenger traffic. There was the largest number of passenger journeys since nationalisation.

That is due, I am sure—and as the Minister himself has said—to the modernisation that has taken place. But, at this time, when we are beginning to reap the benefits of dieselisation and electrification, faster, more frequent and more comfortable services, it is most unfortunate that there should be a cutback in those services in order to attempt to make these economies. Not only are we running the risk of losing some of the gain we have already reaped from modernisation, but in my view there is the second and greater danger that if we are to apply this standard of whether a service is paying or not and of eliminating those services that are not paying, we destroy that element of public service that is essential if the community is to have an adequate and efficient transport system.

There is the danger of that happening today. The transport system must be regarded as a whole. There will always be some services that do not pay, and they have to be supported by those that do. Very often it is those unremunerative services that are the most essential; that is to say, they are in those areas that require transport, particularly in the sparsely-populated and rural areas. They can never pay, but if the transport system is regarded as a whole there can be some averaging of costs and cross-subsidisation, and those services can be saved. If, on the other hand, the Government continue to pursue this fetish of competition, it will be necessary for some of the remunerative services to be cut down, and the unremunerative services will be driven out.

On this side, therefore, we stand by our original policy, that whatever economies are introduced, however many unremunerative services are cut out, and however successful modernisation may be, the final answer must still be found in the common ownership of the main means of transport; that is, their ownership and operation as a single entity, so that a balanced system can be provided. I have fears that the Government's policy of competition within the industry is driving transport towards insolvency, and only co-ordination along the lines advocated by the Labour Party can save it.

This shows clearly in the results of the Commission last year. Although the overall picture is very frightening, individually, except for the railways, there have been gains. The outstanding achievment of course is that of British Road Services. With less than half the fleet that it had as its maximum, it succeeded in increasing its earnings last year by over £1 million. Because of Suez, and for other reasons, it carried 14 per cent. less general haulage than in the year before, but increased its parcels traffic by 6 per cent. and succeeded in winning from competitors twice as much as it lost to them. It earned £2.8 million with this reduced fleet, against £1.8 million in the previous year.

Compared with peak profits of practically £9 million in 1953 and 1954, that is a very fine achievement. Despite this denationalisation, despite cut-throat competition within the industry, despite the breaking of rules by its competitors, and despite the great growth in C licences, B.R.S. has had a very good year and is continuing to prosper, as the Minister pointed out. If ever nationalisation were justified, it is justified by the results of B.R.S.

Nevertheless, one cannot but reflect on how many millions more would have been earned by the Commission if the Government had not, for purely party political reasons, sold off half of the B.R.S. fleet, restricted its operations and brought anarchic conditions to the road transport industry; how much more would have been available to offset losses on other of the Commission's undertakings. It is in that that I think lies the justification of the Labour Party in treating the industry as a single undertaking, with revenues going to a common financial pool.

One has only to look at the figures to see that. Last year, British Railways lost £27.1 million. On the other undertakings of the Commission there was a surplus of £23.4 million, which reduced the net loss of the Transport Commission—before central charges, of course—to £3.7 million. In other words, this £27 million deficit of the railways was offset by more than £23 million. That shows how, if we balance one against the other, we are able to maintain our unremunerative services. Actually, when one takes into account the central charges, these other services more than earned their central charges and had an overall balance of £4.6 million.

That is not only a justification of the Labour Party's transport policy but, equally, it is a condemnation of the Government's policy. It is a condemnation because, as a result of this disintegration of the Transport Commission in the way that the Government have followed, the Commission is continuing to accumulate a very large deficit which is getting it into an extremely serious financial position, and I wish that the Minister had found time this afternoon at least to refer and, to some extent, to dwell on the very serious nature of the finances of the Commission. The accounts show that £202 million has been transferred to the special account, which consists of the accumulated deficits and accumulated interest of the last two years, and on that liability, that deferred liability, as it were, interest continues to accumulate to a very great extent as the Commission is borrowing at between 5 per cent. and 6 per cent.

But this special account is only the beginning of the story, because the permitted limit of borrowings of the Commission against deficits is £250 million. When the Bill proposing that measure was introduced we considered that it was inadequate and that greater flexibility in borrowing should be allowed to the Commission. How right we were. So far in only two years £118 million has had to be borrowed against a maximum limit of £250 million, and yet there are still five years to go and there is only available £132 million for these coming five years. Surely, in view of the present position of the Commission, it is very unlikely that this residue of £132 million will be adequate to meet the deficits which will accumulate between now and 1962, which is the year that the Commission expects to break even.

It is terrible to contemplate the total accumulated liabilities and indebtedness which will accrue to the Commission by 1962. It reaches astronomical figures, and it is quite unrealistic to burden the Commission with this very heavy liability and to consider that it will ever be possible to repay it. I suggest, therefore, that the financial outlook for the Commission is very grave indeed today. The Government have not declared what they intend to do about it, nor, apparently, are they doing anything about it—certainly nothing of which we in this House are aware. They are tending to shirk their responsibility.

As for the steps which the Government have taken to help the Commission, there is the modernisation plan with which the Minister dealt, though in passing I would say that I think the Government take upon themselves a little too much credit for this modernisation plan. After all, the plan was drawn up by the Commission early in 1955, and it was only after a series of disastrous interventions by the Government, in preventing the Commission from increasing its charges, for which it had authority, against the advice of the Transport Tribunal, that it was considered essential that there should be a general review of the Commission's finances. The White Paper appeared in October, 1956, and subsequently the Government had to make arrangements for meeting these deficits by loans.

The modernisation plan, however, is being financed as to more than half by the Commission itself. The Commission itself is financing this modernisation plan to a large extent from its reserves for depreciation, replacement, renewals and so forth. According to the Report last year, half was financed by the Commission; that is to say, £73 million out of £137 million of capital investment came out of the funds of the Commission itself. When I hear the Minister taking credit for this, he sounds to me as though he has put his hands into his own pocket to assist the Commission.

Having approved the modernisation plan, the Government then unfortunately cut back on the total permitted, with which the Minister dealt this afternoon. There is evidence in page after page of the Report of delays which have taken place in the modernisation programme as a result of those cuts. They are referred to in many paragraphs to which I could refer, but as I do not want to take up the time of the House, I will not do so now. The Commission thought that at this time when there is a relaxation of capital investment by the private sector of industry, the least that the Government could do in the case of the railways, where the absolute maximum capital investment is essential if they are ever to pay their way, would be to give them freedom now to go ahead to the full extent of which they are capable. The Minister suggested that they could not go further ahead, but the regions hold a different view, as he more or less admitted in the statement that he made about the plans which they put forward.

If they are given greater freedom to accelerate their capital investment if it is possible to do so, there is the safeguard that they are always limited by technical availabilities of both materials and manpower, and they cannot run away because of that. The Government have been inconsistent in their policy in this respect. They have accepted all along that modernisation is the only cure, but on this occasion they held up modernisation quite unnecessarily, and this cannot but have had a deleterious effect upon the Commission.

As to what the Government are doing about the finances, the Minister referred to the limitation on the amount of borrowing for deficits, and one accepts what he said, subject to the qualifications that I have already made. But at the same time, though they did that, they imposed restrictions upon the Commission to prevent it from trying to meet its increased costs by higher charges. I agree with the Minister and the Commission that there are certain limitations to the extent to which one can increase charges and bring in extra net revenue. What I do say is that if the Minister is imposing limitations on the amount of the deficit and costs go up, the Commission must be free to act as a commercial concern and, if it considers it necessary to increase the charges, it should be permitted to do so and the Government should not intervene unless there are very good reasons for doing so.

In the past there has been intervention which, in my view, was not justified. The Minister said this afternoon that the Commission is to apply to the Tribunal for authority to increase its charges. If that authority is granted, I hope the Minister can give an assurance that he will not again intervene and go against the advice of the Tribunal to the Commission if the Tribunal says that the Commission is entitled to increase its charges. That is to say, when the time comes when the Commission considers that it is both necessary and practicable to raise the charges, we hope that the Minister will allow the Commission to do so and will not intervene once more.

I have cut my remarks because of the short time available for this debate. I will conclude by repeating that I consider that the Government's transport story is a sorry one. What the country needs is a consistent and realistic transport policy. The Government have not got one. They were first guided by their partisan approach to try to destroy the integrated system which was being built up and they ran up the flag of competition in its place. They tried to sell off the profitable sector of road haulage. They found they could not complete the transaction because there were not enough buyers and because industry valued the publicly-owned service and wanted it maintained. But damage was done. None the less, the B.R.S. could not be destroyed and it rose again to make these excellent profits this year.

However, as a result of the Government's policy, the British Transport Commission has run into a period of very heavy deficits, and the Government had to seek Parliamentary authorisation to meet them through loans during the transition period of modernisation. Then, having accepted that modernisation was the only salvation, they handicapped the Commission by cutting the programme unnecessarily, and indeed they are being forced to restore those cuts some six or more months later. They order the Commission to keep within the permitted deficits, but they deny it the right to increase its charges to enable it to meet higher costs. I suggest that this series of contradictory decisions and confusing interference in the Commission's affairs is not a transport policy. This policy cannot lead to solvency but only to bankruptcy, and that means, ultimately, subsidisation of the transport industry. There is only one way to avoid that and to get the Commission out of this distressing situation. That is to return to the plan of a cublicly-owned transport system, which remains Labour's policy.

5.0 p.m.

Mr. James Dance (Bromsgrove)

There can be very few of us at the moment whose minds are not filled with anxiety at the events now taking place throughout the world. Yet I feel that it is very right and proper, and very British, that we should shelve those anxieties for a short time and discuss internal affairs which are of such importance.

I was extremely pleased to hear my right hon. Friend paint such a bright picture for the future of British Railways, and I wish them well. But the picture at the present moment is not, I am afraid, so bright. There can be very few of us who do not wish to see more and more goods traffic being taken off the roads and sent to the railways. There are two reasons for this, I think. The first is to relieve the congestion on our roads. Indeed, I believe that if some of the heavy loads went back to the railways many of our existing roads would, with certain modifications, be adequate to take the lighter motor traffic which would go on them. It would also mean a great saving in not having to acquire valuable agricultural land for the purpose of constructing new roads.

The second reason, which is also vitally important, is to see that the railways pay. I am informed that the goods traffic is the bread and butter of the railways. We have not to look very far to see why these goods do not go on to the railways at the present time. The first reason is the very heavy charges imposed by that service as compared with road transport. The second reason is the appalling uncertainty of when goods sent by rail will arrive.

If a private enterprise business is going badly, there are two things which can be done. Prices can certainly be raised, but that is a short-sighted policy, and any business that did that would soon go smash. The other way is to make the business more efficient and to reduce prices. That is what I believe we have got to do.

I have some figures which I received from a large industrialist in the Midlands. They are not old figures—indeed, they were obtained only last Monday—and, quite frankly, I find them staggering. The cost of carrying 1 cwt. of goods by goods train from my constituency of Bromsgrove to London is 10s. 6d. whereas by road transport it is only 9s. 5d. When we go higher up the scale the contrast is even greater. For example, to carry 5 tons of goods by rail would cost 97s. 4d. compared with 40s. 9d. by road.

I must make it clear that there are two forms of goods carried by road classes A and B. Class A consists of normal packaging which is not inconveniently carried and Class B of bulky, awkward packages. I must admit that for the latter class the road transport charge for 5 tons of goods is 62s. 5d., but that still represents a great difference when compared with 97s. 4d.

One firm in the Midlands wished to send 4 tons of rubber hose to Yorkshire. It was quoted 157s. 9d. a ton, which represents, roughly, £31 10s. for the four tons. British Road Services the same company and certainly the same shareholders—quoted £16 for the lot. I believe that the difference between those two prices bears out the wisdom of the Government in allowing competition on the roads. As long as this sort of discrepancy in price continues, I cannot see some types of goods ever going back to the railways.

There is another point I wish to make, and that is the appallingly long time it takes to get a firm quotation from the railways. I am informed that if one wants a firm quotation it may mean waiting two or three weeks. The result is that the goods have usually been sent by road and delivered before the quotation is received and that the railways lose the traffic.

A second point is the uncertainty about when goods sent by rail will arrive. I was speaking the other day to another industrialist who sends a certain amount of goods by rail. He told me that he never sends any goods for export by rail because he could not tolerate the uncertainty of when the goods would arrive at the port. He said he could not risk the goods not being delivered to the foreign country to which they were consigned and thereby, perhaps, lose a contract.

One must bear in mind that when one sends something to a client and it does not arrive that client does not blame British Railways but the consignee. That may easily lead to losing a very valued client. I was speaking to a big wholesale wine merchant the other day. He told me that whilst his firm sent quite a lot of goods by rail if there was no particular need for them to arrive at a fixed time, when it was a question of sending goods wanted for a specific party or function the firm never sent them by rail.

Mr. Percy Collick (Birkenhead)

Does not the hon. Gentleman know that at the moment British Railways have a guaranteed 24-hour service of acceptance and delivery from the main towns in this country to the ports? That being so, I cannot understand the incidents to which he is referring.

Mr. Dance

I can assure the hon. Gentleman that I am not referring to just one individual. As a matter of fact, there was a conference of industrialists in Birmingham and this was the conclusion at which it arrived.

I have been a little critical. I do not want to be destructive, but constructive. I fully realise that this programme of modernisation and reorganisation is going on, but I want to suggest—it may be that I shall be told that when this programme has been carried out we shall find a great improvement—that we should have a goods time-table. I do not mean a time-table which states exactly the hour at which goods will arrive. But if I want to send goods from London to Perth, why cannot I have a time-table showing the day when they will get there? As far as I can make out, one really has no clue as to when goods sent by rail will turn up. That is just not good enough, and I really do not see how we can expect the railways to pay when there is this type of inefficiency.

I recently re-read an article which I wrote a year ago when we raised the salaries of certain executives in nationalised industries. I said in that article that what we did was in no way a reward for inefficiency, but that its object was to induce go-ahead business brains to enter these industries. So far, I have not seen much evidence of that taking place. There is no doubt that in the examples I have quoted to the House much inefficiency exists, and I hope that in the near future my right hon. Friend will consider recommending some change.

In conclusion, I do not want in any way to say a word against the actual people working on the railways. Far from it. Indeed, I am full of praise for them. They are first-class chaps. However, I think that the time has arrived when the Executive should make the railways more efficient and allow these first-class men to prove their efficiency.

5.10 p.m.

Mr. Leslie Spriggs (St. Helens)

I have read Volumes I and II of the British Transport Commission's Report and have found them to be very good reading. They are set out in detail not only for us as Members of the House of Commons, but for the public, our competitors and our critics. I hope that all those who have taken the trouble to criticise railway transport will also take the trouble to read the Report. Do not take anyone else's word for it; read it. I hope that hon. Members will compliment the British Transport Commission on the way in which it sets out the details in the Report. I think it is splendid.

The most important thing about nationalised transport, is its accountability to Parliament, so that we, the representatives of the nation, may look at what is happening in British transport and do what we can to help and better it. The type of man we have in the industry, as well as in the House of Commons on both sides, will do his best. On behalf of the railwaymen—I was with them only a few weeks ago—who are working in the marshalling yards that we read about, I would call attention to the fact that they are using stock that is unsuitable for men to work with. This is a subject which we have taken up with the management, whilst appreciating at the same time the difficulties caused by the restriction of capital expenditure. This equipment is unsuitable for the men, but because of the limitations upon capital expenditure there are difficulties in the way of the British Transport Commission's modernisation plans.

To those hon. Members who say that we should pay our own way in the railway industry, I reply that we in the industry also want it to pay. We do not want to have to rely upon subsidies. Hon. Members must devise a system whereby the British Transport Commission can meet its costs. New marshalling yards are being built which have a far greater earning potential and enable a speeding up of traffic. Trains can get to their destinations faster and faster. This will bring about not only a more economical means of transporting goods, but redundancy for many of the staff. My union, the National Union of Railwaymen, has looked at this matter, in co-operation with the British Transport Commission, in a very sensible way. We are prepared to go ahead with modernisation. I hope that the public do not expect that anything will be done for them or for anyone else at the expense of those who are working inside the industry.

There are twenty-seven new marshalling yards planned, but owing to the restriction upon capital expenditure that programme has had to be slowed down. When they are completed, the British Transport Commission will be able to close 153 old marshalling yards which are looked upon as wasteful and obsolete. With alterations of a further twenty-seven, another thirty-seven yards can be partially closed. There will be saving of many hours for the working of trains at those new marshalling yards.

The British Transport Commission must be given credit for what it has done on the railway stations. I remember saying that we needed a new station at Shaw Street, St. Helens. Our station is minus part of its roof. I believe that St. Helens deserves a far brighter and larger station. Because of the economic situation, we must look at what the British Transport Commission has done, and not only at what we think it ought to do.

The restriction on capital expenditure is slowing up one of the most vital objects of the British Transport Commission, and that is safer signalling on the railways. Nothing hurts a railwayman more than to hear of an accident in which people have been killed or injured. I believe that all hon. Members feel the same way. When accidents happen and the inspectors of the Minister of Transport report that faults were found in the signalling apparatus, it takes our mind back to the relative values of life and capital. I hope that the House will look at the situation through the eyes of the men who are on the job. We want new marshalling yards and we are prepared to play our part. If there is an international emergency in which we cannot get oil, the railways will run and they will do what they did in the last war, which is to see that the goods are delivered.

I want to bring the attention of hon. Members to the position in my constituency, which is in a big transport area. Most hon. Members know St. Helens because of its famous glass industry. Others will know it because of its railway transport works, and others because of its coal output. Some will know of its famous technical college, whilst hon. and gallant Gentlemen will know of its famous Territorial Army Regiment. I had the honour of seeing that regiment given the freedom of the borough last Saturday I was proud of those men, and their officers.

When we talk of transport charges, most of us try to be honest. I know that businessmen do, because it is no use being dishonest with yourself if you are trying to run a business. If you are in management, it is most difficult to make your prices meet your costs. Yet, in the record, for all of us to read, we find the prices of the chief commodities used by the British Transport Commission, including timber for sleepers upon which the tracks are laid. I was astounded upon reading the figures to discover that the price of timber sleepers had increased over the 1939 costs by 550 per cent. The price of coal for the British Transport Commission has risen by 410 per cent. from the same date. August, 1939, to 1956. Copper tubes, of which we use many on the railways in the construction of locomotives, have gone up by 270 per cent. and copper plates by 275 per cent.

I will not bother the House with any more figures. It is wise for a Member making a maiden speech to make it as short as possible, and I feel that I can close by appealing to the Minister, to hon. Members opposite and certainly to my hon. Friends to see that the British Transport Commission and the railway worker are given a fair chance. If we cannot come to any decision in relation to subsidies or grants, I appeal to the House to set the British Transport Corn-mission free. Give it a free hand. If it wants to put up prices, let it take the risk. If it wants to bring down prices, give it that right. Thank you.

5.21 p.m.

Mr. W. F. Deedes (Ashford)

It is my pleasure to follow what I believe has been a maiden speech by the hon. Member for St. Helens (Mr. Spriggs). We can all agree at once that it has been a pleasure to listen to that speech. It so happens that I made my maiden speech from exactly the same place in the House, and I have a very clear idea of what has been going on inside the hon. Member since about 2.30 p.m. He may rest assured that it has all been very well worth while. He spoke with assurance, with sincerity and with humour. If anyone had strolled in to listen to his speech, he would never have guessed that the hon. Member was doing it for the first time. I am sure that the Opposition have acquired a very valuable recruit to transport debates.

The hon. Member adjured us to read both Vol. I and Vol. II of the British Transport Commission's Report before speaking in the debate. I can claim to have read Vol. I, but Vol. II only in part. If we read only Vol. I, we can see that it gives just a little more than an account of stewardship for 1957. Between the lines there is a very clear delineation of the transport revolution which is going on. There is no need for me to stress the significance of that. I know that my right hon. Friend is seized of it. We should know in any case, after his speech this afternoon, his feelings on it, but there are always before the House so many pressing, immediate day-to-day transport issues that I think there is some danger of our missing significant trends.

This reshaping of the railways, the decline of the bus, the advent of the 44 million motor vehicles—according to this Report the number has doubled in a decade—and the 1½.million motor-cycles and the like, all these spell a very big transition, and a great deal of it is still ahead of us. I think—and no one can read this Report without realising it—that there is no field in which public taste, desires, and trends have gone further in outstripping our capital resources. That is one of my right hon. Friend's major problems. It is very difficult to see one year ahead, let alone three years ahead. I am sure that he does his best and I have no wish in any way to be captious, but there are two aspects on which I want to dwell which cause me disquiet.

First, the railways. Seeing all that has happened since Stephenson, and particularly in the last 50 years, I personally remain amazed that the railways run as well as they do. As my right hon. Friend stressed, the second half of the twentieth century has brought to the railways perhaps a far greater change and a far greater need to change than some of their critics are prepared to accept. In the light of what has happened, I believe that they have very little of which to be ashamed in this Report. I think that there are some who are a little too premature and perhaps a little too clever in their estimate of the railways. It is painfully easy to take the view that this is a declining industry and that it must cut its losses, and so on. Many people take that view. The fact remains—and perhaps this debate gives us an opportunity today to dwell on it—that we shall need first-class railways for goods and passengers for a long time ahead.

In terms of capital development, we are clearly doing our best to meet this need. I confess that I have no feelings of anxiety in this field at all. I may be alone in doing so, but I do not take the very large capital deficit, the debt to Her Majesty's Government, as the Minister put it, in any way tragically, nor do I grudge the capital that is given. It is a relatively small sum in relation to the vast historical operation which the railways are being asked to carry out.

I am much more worried about personnel, because in the long run it will be the men at the top and all the way through who will be decisive, and we have here a very big problem of morale. Nobody can live in a railway town or take an interest in railway affairs without realising that what a problem it is. It is very difficult to attract at any level the best and the brightest to what people realise is a contracting industry—and, goodness knows, we still need both.

All who are connected with the railway towns know that the old hands are the salt of the earth, but, to be realistic, a great many of the young men who have come in since the war are not of the same calibre. The very ablest young men are not attracted to the industry. The giant express at King's Cross, bound for the distant north, which still strikes a chord in me when I look at it, is no longer the stuff the young man's dreams are made of.

Mr. Crollick

Why not?

Mr. Deedes

Because aviation and other technical developments have taken its place in his heart.

Returning to the question of morale, the approach to the affairs of the British Transport Commission of very many who should know better is utterly destructive and discouraging, and I regard that as a very serious matter. The pursuit of this industry and one or two others has for some sportsmen taken the place of what big game hunting and pig sticking was to our ancestors. I am a little tired of the armchair directors who sit back and indulge in endless denigration of the British Transport Commission, of everything it does and everyone connected with it. There are a great many of them who could not run a coffee stall in their own right.

It is fashionable to run down the Commission and its members. I think that we are extremely fortunate to have kept the members of the Commission as long as we have, and I am glad that my right hon. Friend has now renewed the term of office of the chairman for a further period. Someone said to me the other day, "What is the good of having a soldier in charge?" At least we can be sure that a soldier will remain at his post, and I am not certain who else would have remained at the head of the British Transport Commission's affairs under the kind of fire which has been directed at Sir Brian Robertson in the last three or four years. Military qualities are indispensable to one or two members of the Commission.

There are many other industries—I will not specify any, because it would be much too dangerous—who are not markedly more efficient than British Railways, and they are not criticised—at least, not so publicly. Why riot? I say bluntly that I think the attitude of a great many is affected by nationalisation. I think there remains the undercurrent of hostility to that arrangement. It is like the fool who says he can forgive but he can never forget. We can argue till the cows come home what else might have been or what else might be now, but that will not bring the trains in on time. I think that the waters in which the British Transport Commission are compelled to fish have been very heavily polluted with politics. That may partly account for the size of its catch.

The only sensible attitude, which I know my right hon. Friend takes, is now to show an inflexible will to make work what we have by all means in our power. Regional autonomy may do a certain amount, but a change in the attitude of informed public opinion must do more. The railways have an indispensable rôle to play still. They will depend in great measure on support and some historical perspective from informed opinion in going through their future courses. I make a most urgent plea for that.

The rôle of the railways ahead is very unenviable. They will spend a great deal of public money on modernisation, and at the same time close a lot of public services which people feel they can ill afford to lose. Unless we understand what they are trying to do in relation to the gigantic events of the last 50 years, they have little chance of getting the sympathetic attention and consideration which they really must have.

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

I have been following with keen interest and agreement what my hon. Friend has been saying. He has immense experience on the question of informing public opinion. What steps would he suggest that the British Transport Commission should take in the field of public relations to try to get the public on its side?

Mr. Deedes

I would say what I began by saying, and I would ask my hon. Friend to note this, that a great number of people of informed opinion, who should know better, take an attitude about the Commission which is really indefensible. It is from that standpoint that I am making my remarks. What the Commission can do for itself is another story. In the course of a short debate I do not want to enlarge on it, though I could do so.

The railways are not the only victims of this very rapid change. My right hon. Friend knows the profound concern felt by some of us about the trend of affairs described on pages 54 and 55 and 72 of the Commission's Report in the case of the public road services, particularly in the rural areas. In essence, we have the same problem here. We must maintain for a long time yet not only efficient railways but efficient public road services. Like the railways, the public road services have been greatly affected by the revolution in transport.

My right hon. Friend suffers from the fact that in a free economy the motor engineers have a free rein to turn out what they like but the road engineers encounter many obstacles. That gap is widening. One of my right hon. Friend's worries is that he will never be able to produce the roads to meet the expanding demand, nor get the vehicles in the proportions that he wants them.

We have been over the rural bus problem before. The Commission's Report makes very clear, particularly in paragraph 175, the extent of the decline in its public road services. On the other hand, it says that the maintenance, let alone the extension, of public road passenger services is much more of a problem. Indeed it is. I hope that no hon. Member—I know that my right hon. Friend does not—underrates the problem. This is not a farm lobby mourning local bus services to go to whist drives. It is much more serious than that. We are threatened in many parts of the country with a collapse of the whole system of road transport, leaving rural England more isolated than it has been at any time since the advent of the internal combustion engine. That is a solemn thought, and I wish to stress it.

There is here—it is part of a very big problem—an urgent need for long-range thinking. I do not want an inquiry, although, apropos of the debate, the National Association of Parish Councils, no doubt for a very good reason, has advocated it. My right hon. Friend's Ministry should know the facts, and I dare say that it does, but I sometimes wonder how far it can anticipate them. Goodness knows, the day-to-day problems are quite sufficiently pressing, but one cannot solve this situation on a day-to-day basis. I should like to think that my right hon. Friend had a top class statistical, planning and intelligence department which would be able to give him, say, a three-year guess of possible trends in all branches of transport. He needs to be able to get some comprehensive picture in respect of rail, truck, bus, private car and this mass of small personal transport which is catching up on us.

The consequent action on that is not his alone. I will not dwell on this, but I would say in passing that the Chancellor of the Exchequer will have a very big rôle to play here, for he has to consider whether the present pattern of taxation, imposed piecemeal, in entirely different circumstances in present days takes sufficient account of our present transport needs and trends. There is a great deal to be done there. It is a cardinal factor.

Lastly, I should like to feel—I always hesitate to recommend any additional body of any kind—that there was some standing advisory body on which rail and road, motor makers and road makers, bus operators, and others could get together in order to give the Minister the benefit of their collective thinking. So often they seem to think and act apart, even in opposition. To anticipate this, my right hon. Friend must have a first-class intelligence staff.

We cannot yet see the end of this huge transition. It vitally affects the prospects of British railways and railway modernisation, and it will not be gone through without tears. Perhaps some people fail to give it sufficient historical perspective. I know that my right hon. Friend does not. Others may be too detached and take too fatalistic a view. We have got to keep up with it. It is not merely a social convenience. It is also a prime element in industrial success. Industry cannot do without the best transport system that we are able to offer.

What my right hon. Friend has to do is what all good motorists have to do—try to anticipate what is coming from over the hill. Upon his being able to do this a very great deal depends.

5.36 p.m.

Mr. James Harrison (Nottingham, North)

These are what we call transport debates when we yearly consider the Reports of the British Transport Commission. The hon. Member for Ashford (Mr. Deedes) has left me little to debate because I think I can honestly say that I agree with everything that he has said on this occasion, which is most unusual. Nevertheless, I think that we can endorse every word he uttered in his short speech. Consequently, I must proceed along other paths. I shall draw to the attention of the Minister one or two items in the Report which I think merit his attention.

I feel that I might preface my remarks by saying that I have had a long, intimate association with the transport industry. Going through all the sections of the Report—rail, docks, inland waterways, road services and catering and hotels—and observing the amount of development which has taken place and the money which has been spent to modernise much of the antiquated equipment of those services, it seems to me that we should all say what a good thing it was that we nationalised these services when we did.

Without nationalisation, I do not see how these services could have attracted sufficient money through ordinary market channels to carry out the improvements described in the two Reports. I cannot imagine what the position of the railway services and some of the kindred services would be at present if nationalisation had not taken place. Most of us appreciate the far-seeing wisdom of the right hon. Member for Woodford (Sir W. Churchill) when many years ago he recognised that in order to make transport a going concern we had to make it a nationalised institution. That was my first impression on reading the Report this year.

When speaking of nationalisation in connection with the Report, I include the road services. Hon. Members will remember the tone of the arguments that were used when part of British Road Services was being denationalised a short time ago. We had the argument from hon. Members opposite that the industry required the entry of the robust, lively, businesslike little man, with his one or two lorries, possibly garaging them in a back yard, but nevertheless supplying to the industry all the energy and robustness of private enterprise. That was the picture that was painted to excuse the denationalisation of a substantial part of British Road Services facilities.

Paragraph 132 of the Report describes something of what has now been done in British Road Services. Quite apart from developments with mechanical loading and in other directions, there is one feature which has been developed in British Road Services which could not possibly have been developed by any form of organisation in private hands. One of the greatest problems in road haulage is the tilling of the often empty lorry on its return journey. The Report tells us that the British Road Services traffic organisation has developed a country-wide teleprinter network to give advance information of consignments and to arrange return loads and meet other operational needs.

For the economical running of road transport, that is one of the greatest developments of recent times. The return journey by an empty or light lorry almost always entailed a complete loss to the operator. We should pay tribute to this form of organisation which has been made possible under the direction of British Road Services. It dispels completely the fanciful pictures that were drawn on many occasions when we were discussing the disposal of part of British Road Services equipment and facilities.

The second point in the Report to which I wish to draw attention is the introduction of the diesel services, mainly the local services, and to reinforce the view which has already been expressed concerning the development and continuous success of these services. I have gone to much trouble to collect the figures and can, therefore, speak with some authority of the area around Leicester, Derby, Nottingham, Lincoln and Newark. Since the introduction of the local diesel passenger services on those routes, the number of passengers has risen in some districts by 100 per cent. and in others by 400 per cent. That should give us greater confidence in feeling that there is still a substantial future for the British rail services.

My next point concerns the restriction of the services, to which several hon. Members have referred. My hon. Friend the Member for St. Helens (Mr. Spriggs) referred in his maiden speech to the effect upon the staff. The Minister also referred to the effect of the restriction of services upon the staff generally and he appreciated substantially the attitude of the staff concerning the great reduction in their numbers. That is something else which we should note and appreciate, because the reductions in staff all over the country will be a substantial matter in the affairs of the unions and of the Commission in the few months ahead. We should appreciate the co-operative attitude of the unions and the staff generally in this direction.

The next part of my comment on the restriction of services is not so happy. We have recently been informed that the closure of the old Midland and Great Northern line will shortly take place. The closure of this line, running from the Midlands to the Eastern ports of Yarmouth, Lowestoft and elsewhere, will mean the loss of employment for about 1,100 railwaymen. The closure of this and of many branch lines and the restriction in a large number of the ordinary main lines services that we enjoy today represents a restriction in totality to the service generally.

Coupled with those restrictions in rail services, we must consider also the restriction of road services, because, as the hon. Member for Ashford mentioned, many road passenger services are being cancelled or substantially curtailed. This will become a serious problem in the near future and, for the first time since about 1850, it will completely isolate many people in the remote communities who do not possess a private motor vehicle.

I do not, however, suggest that the Transport Commission should be responsible for financing services that do not pay; that could not be done. I do not suggest that private bus companies should finance services which do not pay their way. I do, however, suggest that before many more months have passed this will be one of the Minister's major problems. I suggest that special arrangements will have to be made with the Transport Commission to run services to these uneconomic areas.

Mr. Norman Cole (Bedfordshire, South)

What kind of services has the hon. Member in mind—bus or rail, or something else?

Mr. Harrison

Either of those. If, for example, a small private bus company is operating a service to an isolated village, I imagine that it could not be arranged for the Government to subsidise a company of that kind. I am certain that the only possible method would be a subsidy or special financial arrangement with the Transport Commission to run services which normally are run at a loss among our isolated communities. I cannot see any other satisfactory financial method.

I know that in most road passenger services the usual aspect of the transport industry comes into play. In all forms of transport by air, water and road there is this factor of skimming off the cream. It has applied ever since there was private enterprise in transport. An operator skims off the cream and runs services which pay abundantly, but he will not run those which do not pay abundantly. This basic economic principle underlies the problem that is developing increasingly in sparsely populated districts. I am sure that my hon. Friends who represent Scottish and Welsh constituencies will support that point very strongly. The Minister will have that problem very much on his hands in the near future.

In spite of the fact that only hotels and catering and British Road Services have made money within the orbit of the Transport Commission, and in spite of a general loss, this year's Report is one of the most encouraging that we have had of late. It is worthy of the efforts which have been made by the Commission and the people engaged in the industry. It deserves the appreciation which the Minister has expressed of the efforts which the Commission has made.

5.56 p.m.

Mr. Ray Mawby (Totnes)

I find myself very much in agreement with the hon. Member for Nottingham, North (Mr. J. Harrison). It is a great thing that when there are so many of us on both sides of the House with different degrees of experience there is such a measure of agreement on the Commission's Report. It is a great pity that the debate will be curtailed to a certain extent and that probably not all hon. Members who would wish to speak will be able to do so. I therefore will not delay the House unduly in making a few points.

I was particularly impressed by a point in the first-class maiden speech by the hon. Member for St. Helens (Mr. Spriggs) on the whole question of signalling and general safety, and the feeling of all who are engaged in the railways that safety must always be maintained in the most highly efficient working conditions. Because I agree so much with that remark, and because I am a Member for a West Country seat, I read with great gratification paragraph 117 of the Report about the developments which are continuing and the orders which have been placed for automatic train control on regions other than the Western Region.

The Report points out quite fairly that automatic train control can never take away the responsibility which the driver of a locomotive must always accept, but we know that it has been of very great assistance to the drivers in the Western Region. They have been very glad of the boon it has been to them. While many technical problems are encountered in trying to adapt some form of that system for use in the rest of the country, there are many people, and I tend to be one of them, who feel that there has been a certain amount of foot-dragging in the adoption of this A.T.C. system.

Mr. D. Jones

Is the hon. Member aware that there are many dozens of miles of Western Region main line which still do not have automatic train control? Is he aware that even the Commission's Report contains a frank admission that the Great Western system of automatic train control is not suitable for either electrified lines or for lines where there is a high degree of snowfall?

Mr. Mawby

I am prepared to admit all that. I have said that I agree that there has been and there will be many technical problems, but over this whole period there have been investigations and I, along with others, feel that there has been a certain amount of foot-dragging. All that, however, is in the past, and I welcome the fact that we have moved so far in developing the system and solving many of the technical problems of adaptation so that A.T.C. can be operated in other parts of the country. No doubt lessons will be learned from developments in the Western Region and applied in new developments in other areas.

I do not claim that A.T.C. in the Western Region is the last word and that necessarily it can be adapted for use in all other parts of the country. As the system is developed elsewhere, I hope that it will always be remembered that the objective should be to see that it is maintained at as high a standard as possible. Steps should be taken throughout the country to make sure that every locomotive has its A.T.C. system in full working order when it enters service.

The Report also notes continuing development in the use of the long welded rail. I was one of a party of hon. Members who went over to France to study the French railways. Most of us felt that we had no great knowledge of the technical problems, but I certainly had the impression that one enjoyed a great deal more comfort in trains which were running on long welded rails. I found later from the British Transport Commission that developments were proceeding over here, and I notice from the Commission's Report that it is hoped to install about 75 miles of these rails during the present year. The French said that there were problems connected with the sleepers used and with track circuiting and that they had found means of using a new type of rail fastening. That, again, is a lesson which we now have learned as a result of developments and mistakes made by others.

This is an example of one of those occasions where we tend to have the impression that we in this country are always behind in everything, whereas at the end of the day we come along with a far more efficient system. I hope that the 75 miles of rail which are now being installed will operate very successfully and that as a result of the extra experience gained we shall be able to do a great deal more by way of this modern development, so that more comfort will be provided for passengers and there will be less "hammer" on the vehicles than there is at present.

I agree with the hon. Member for Nottingham, North that if we adopt a modern approach and put over properly the use of diesel traction we can not only keep the traffic which we now have on the railways but attract a great amount of traffic by proving that a very much better service can be operated.

A change-over to diesel traction would have a great deal of influence, of course, upon many of my constituents in the Newton Abbot area. Of course, the gradual reduction of the need to service steam locomotives which is now taking place in Newton Abbot sheds will be replaced by the more modern depot of Plymouth, which will be specially designed for servicing diesel engines. This will entail many changes.

At this point I would like to extend my thanks to the officials of the British Transport Commission, with whom I have been in touch, together with local authorities and so on, who have made it obvious that they want to take all the facts into consideration to try to ensure that, wherever the change is necessary, it will be as painless as possible to the inhabitants of the Newton Abbot area. I am glad to pay that compliment because at all stages they have tried to be as accommodating as possible in the balance they have to maintain in running an efficient service. It is virtually impossible, for instance, to convert completely out-of-date sheds into modern buildings.

Another thing which causes a great deal of distress to many of my constituents is the general policy about closing branch lines. I would be the first to admit that in these modern days there are branch lines which can never hope to be profitable to any undertaking. On the other hand, we all agree that we must try to do our best to serve rural communities, and in that light we ought to be as novel as possible in our approach to the problem. If we are, we can probably attract more traffic to those local branch lines.

I noted with great interest the lightweight rail buses, of which a number have been ordered and will be put into operation. I concede that it is rather difficult because, as the Report states, the capital cost of each bus will work out at about three times the cost of a normal equivalent road bus. That is a great problem, but I believe that by adopting a novel approach much could be done to to reduce operating costs to a minimum. I see no reason why the lightweight rail bus, which is running on a branch line through a large number of halts, could not carry a conductor and thus, in many cases, dispose of the need for ticket offices and all the usual services at present maintained along the route.

There is general understanding between all those engaged on the railways. That has been the case throughout this period, and it is continuing to be so. There is no Ludditism. Everybody appears to be working together to try to provide a good service in the interests of those who use it and work in it. I would go a little further and say that in my opinion, with the development in electronics that has taken place, there is no reason why we should continue to have manned level crossings, especially on branch lines. A safety system of photo-electric cells would ensure that in emergencies, and in the case of vehicles breaking down on the crossing, the signalman would be informed. That also would tend to reduce the costs. There are difficulties, of course, because many people say that if freight trains are running on the same line, under the present system the freight train will be unable to pull up, but in view of the modern development of the vacuum brake system throughout the train the problem is not insoluble.

This is not completely in the hands of the Commission because there are rules and regulations laid down which are outside its control and to which it must conform. Therefore, I ask my right hon. Friend to do whatever he can to ensure that the rules and regulations are at least brought up to date and into line with the needs of this second half of the twentieth century.

May I also point out that the branch lines must always be considered as feeders to the main line services? There is always the problem that, if a branch line is closed, one may lose main line traffic, because if there is no way of reaching the main line station on the normal bus or train route, people may decide to travel the whole distance by road. Therefore, in all these cases I feel that where it is decided to close a branch line, a novel approach should be made to the problem to find the solution.

I realise that, even after all considerations have been taken into account, it may be found impossible to keep the branch line in being, and in those circumstances the responsibility then passes from the Commission to this House to take whatever steps are necessary to ensure that rural communities are properly served.

As I said that I would not speak for long, I will close by saying that it is a good thing that in this House we should show so much unanimity. We are, in fact, showing the same unanimity which has been, and is being, shown by all engaged in the industry, from the top to the bottom. This shows that the industry is being run by human beings for human beings, and so long as we continue along those lines we cannot go far wrong.

6.8 p.m.

Mr. Sidney Dye (Norfolk, South-West)

First, I should like to express my appreciation of certain improvements which British Railways have introduced in their services, particularly those which meet the needs of the eastern counties. The new diesel electric engines used recently on some of the faster trains between Norwich and London, and also for goods services between Norwich and Peterborough, will no doubt speed both passenger and goods services for the public of Norfolk.

I notice, too, that the success of the diesel passenger service on the smaller lines, both in other parts of the country and in Norfolk, is much appreciated by the general public. As regards a large part of Norfolk, however, it is felt that the recent decision of British Railways to close the old Midland Great Northern Joint Railway is something of a disaster to a county like Norfolk. This is not just a case of closing a branch line but of cutting off a whole limb. There are 180 miles of railway which are to be closed in sections in the next year or two. As I understand it, this railway was built and operated under Acts of Parliament, under which those who owned it were under an obligation to maintain a service, both passenger and goods, regularly over that track. Now the Transport Commission has said that the line must be closed because it is estimated to lose £500,000 a year.

This is part of a very large problem of rural transport, since this line connects the Midlands with King's Lynn, Yarmouth, Cromer, Norwich and other places. Agriculture and industry have adapted themselves to using the railway. If the line is closed, what is to happen to the area which it serves? It may be financially necessary for British Railways to close so large a section of line, but the Government should not escape their responsibility to maintain some form of public transport for a community which has previously been served by a railway.

Mr. R. Gresham Cooke (Twickenham)

Does not the hon. Member agree that there are only about 150 passengers a day on the 180 miles of line?

Mr. Dye

The hon. Member is talking the most utter nonsense. On one small section of the line, between Lenwade and Norwich City Station, the new diesel cars are crowded every morning. The railway carries thousands of tons of coal, coke and other materials. The hon. Member is completely misinformed. If the Government are relying upon such a source of information on which to base their attitude towards rural transport, they had better wipe the hon. Member off their slate straight away. Many passengers use the line daily, and it also carries much goods traffic.

I do not deny that the line loses money, but those who operate the railway could clearly show that over recent years traffic has been diverted to using a more roundabout route. When the line is closed, passengers who want to travel from Norfolk to the Midlands and who would have used the line will have to pay a higher fare, since fares are now based on miles travelled. If the shortest route is closed, those who would have used it have the additional disadvantage of having to pay a higher fare.

What is to happen to the 1,100 railway men—and the number concerned may be nearly 2,000—who will lose their employment, and what of the other factors which are concerned in an area like this? What is to be the position of farmers who send their produce to the Midlands and to the North? The hon. Member for Twickenham (Mr. Gresham Cooke) referred to 150 passengers using the line, but there are farmers who produce vast quantities of mushrooms all the year round and who supply the mushrooms, which are perishable, to the Midlands and northern markets, regularly using the line because a road service would not be satisfactory. Mushrooms are among the smallest commodities. Potatoes are far bigger and there are many other commodities which are sent to the Midlands and the North by this railway.

It may be the duty of British Railways to say that the line should be closed and it may be the duty of the Transport Users' Consultative Committee to hold an inquiry into the matter, but that is not sufficient to deal with the consequences of such an important closure. Most people in Norfolk hope that the line will not be closed, but if it is, what alternative service will be put into operation? Will the Government merely expect small local bus companies to provide a service to meet local needs? Will such services be integrated with railway timetables, so that passengers who have to travel via Norwich or Lynn will be able to catch main line trains?

Rural transport must be regarded as essential to an agricultural community. Many bus services have been discontinued because they have not paid and many branch railway lines have also been closed for the same reason. Yet we cannot allow a rural community such as that in Norfolk to be devoid of adequate public transport. Does the right hon. Gentleman have a policy for meeting the needs of rural communities? Will the Government at some time announce, as my hon. Friend the Member for Nottingham, North (Mr. J. Harrison) suggested, that because rural transport services are essential, they shall be maintained, even if they have to be run at a loss for a time? If so, why do not they advance that as a policy now instead of deferring it to a later date?

Mr. Collick

I understand that it is the Government's policy deliberately to close all those lines which are unremunerative.

Mr. J. Harrison

They cannot do it.

Mr. Dye

They have already closed a number of lines, but this is the biggest so far. If it is the policy of the Government that vast sections of line should be closed because they are unremunerative, what is to be put in the place of those lines? The Government cannot leave large areas without public transport.

The Norfolk area served by the line of which I have been speaking has roads which are very narrow and winding. If a road service is to be put into operation, there will have to be considerable expenditure on the roads. If the Transport Commission gets out of its liability to maintain the line, will Norfolk ratepayers, through the county council, have to bear a large share of the cost of bringing the roads up to the standard which will be needed to deal with the increased road traffic, or will the Ministry of Transport agree, as it did in the case of the closing of a small railway, the Wissington Railway, to give a greater grant to enable an alternative road to be made?

If we are to take that as a precedent for the grants given to improve the roads in the neighbourhood, the Ministry of Transport will have to visualise making very much bigger grants towards raising the classification as well as the standard of the roads. Norfolk County Council is greatly concerned about the matter, as are the parish council associations which have had to consider the matter. From many points of view we feel that it is time the Ministry made a clear statement of its policy about the position that will develop not merely in Norfolk but in rural transport as a whole—for agriculture must continue to develop. It needs the services of a good public transport system and it must have them. If the railways are to go, and we are to have something better in their place, we shall have to accommodate ourselves to the position, but we want to know what will be done, and when Her Majesty's Government will make a clear statement of their policy on this growing problem of rural transport.

6.21 p.m.

Mr. Norman Cole (Bedfordshire, South)

My time is limited, and so, like hon. Members before me, I shall be more brief than I intended. I want to make three points. We are happy to see the encouraging Report of the modernisation which is going on in British Railways, to which reference was made by my right hon. Friend. If I may make a constitunecy point, I hope that the claims of the towns in the southern part of Bedfordshire—Luton, Dunstable and Leighton Buzzard—will not be overlooked in this developing modernisation plan, and that the Commission has those towns and that area in mind.

No reference has yet been made to paragraphs 176 and onwards of the Report. These paragraphs display what I can only call a complacent attitude on the part of the Commission to the present fuel tax. It seems strange that an organisation like the Commission, which has the largest road haulage fleet in the country and a considerable number of buses under its direct or indirect control—nat to mention its other activities—should view with equanimity the fact that it has to pay 2s. 6d. per gallon in fuel tax.

I would point out that, not improperly, the Commission has closed a number of branch railway lines, but if we are to find a solution to the problem in the provision of rural bus services it is wrong that the Commission should be agreeable that the fuel tax should be continued to be paid by those unremunerative bus services in areas where the branch lines have been closed. On the general issue, in regard to both the road haulage operators and the bus operators throughout the land—whether or not the buses are owned by the Commission—some of us have been anxious for a long time to have the fuel tax reduced so that the working costs and road haulage costs may be reduced, but I am sorry to see that in paragraphs 1766 and onwards the Commission appears to take the opposite view. I would have hoped it would join us in trying to get the tax reduced.

What is the attitude of the Commission to the hundreds or thousands of buses owned by London Transport? Would the Commission not like to see the fuel tax taken off, with a corresponding lowering in passenger fares? I cannot find any reason for the Commission's apparent happiness about the fuel tax, and I am sorry that this reference to it should appear in this Report.

Mr. Collick

Surely the Commission has had enough trouble with the Government without raising that essentially political issue. The question whether or not the fuel tax is reduced is one for the Chancellor of the Exchequer. I can imagine hon. Members opposite being the first to protest if the Commission said anything of the kind in its Report.

Mr. Cole

In that case the quickest answer I can give is that it would have been better if the Commission had left out any reference to the fuel tax. I am cavilling at the fact that it appears to support the continuance of the tax. I am sure that in this large organisation, which affects many different aspects of transport and public amenity, the Commission realise, as, indeed it has, that it cannot adapt the circumstances of public life and the welfare of the people to the facilities which the Commission can provide; it must be the other way round. The Commission must adapt its provision of facilities to the needs of the people and I commend it for doing this. In short, the Commission must above all things maintain a flexible organisation to meet the needs of the people, and not expect the people to accommodate themselves to the services provided by the Commission.

6.26 p.m.

Mr. G. R. Strauss (Vauxhall)

Unfortunately, we are all limited in our remarks today, and as many hon. Members have been cut out of the debate altogether I should like to mention that some of my hon. Friends who are specially associated with the railways have asked me, on their behalf, to express appreciation of the reference, in paragraph 62 of the Report, to the Commission's deep regret at the loss of Mr. Tom Hollywood and Mr. James Campbell in the deplorable accident in which they were killed. Their loss is a very real one, not only to the railway unions but to the whole railway organisation.

The Minister of Transport started by saying that there was a great deal of agreement among Members on both sides of the House about the work of the Commission, and a general desire that it should succeed. He also rightly said that there were considerable political differences in our approach. I would put the situation in this way. Hon. Members on this side believe that there should be the maximum practical co-ordination under public ownership, whereas the right hon. Gentleman and his colleagues feel that there should be the minimum of public ownership and the maximum competition. We put far greater emphasis upon the public services aspect of the Commission's work.

We have always opposed the Government's policy of harrying, restricting and disrupting the Commission in its many activities. The latest example was the Government's decision, not so many months ago, to cut the capital available for the modernisation plan. We know that the cut was small, and that it has recently been restored, but that action was typical of Government policy for many years past. That is the kind of action that we always have strongly opposed, and always will.

It is inevitable that the main feature of the Report should be the continuing losses of the railways. This is a great pity, because it gives so much weight to the one aspect of its activities for which the Commission is not itself responsible, and it loses sight of its many fine achievements over a wide range of other activities.

Anyone who reads the Report can see what remarkable progress the Commission has made. It is only on the railways that it has to record—I will not say failure—an inability to meet its costs. That is not a phenomenon peculiar to this country; it is world-wide. It is worth while glancing for a moment at what is happening in other countries, particularly those comparable with ours. The European country most capable of comparison is Germany. Last year the German railways had almost the same deficit as the total deficit of the British Transport Commission, namely, £64 million.

The German Federal Government have been doing all sorts of things to try to remedy that situation. They have been restricting the licensing of road haulage concerns and they have taken other steps, such as preventing the movement of heavy road vehicles on Sundays. They have made road transport rates conform with railway rates. They are also embarking on a modernisation plan for the railways, rather more ambitious than ours, under which £2,000 million will be spent in ten years. But their difficulties are the same as ours and we find that similar difficulties are apparent all over the world. Owing to the great increase in passengers and freight carried on the roads, the railways cannot meet their costs. The Germans are optimistic that the steps they are taking will prove successful in solving their problems before the ten-year period is up.

Even more interesting is the situation in the United States where, though some railways pay their way, many of them show substantial losses and a serious situation is developing. The road-beds in that country are not being properly maintained and there is little replacement of the inadequate rolling stock of most railway concerns. The Federal Government have had to take drastic action to deal with the situation. As our Government are doing, they are granting substantial loans to the railways. Were it not for that fact, some of the railways would not be able to raise the money needed to carry out the necessary renovations.

Another thing they are attempting, which is rather surprising in a country which believes so much in free enterprise, and I commend this to the notice of the House, is—I quote from an American paper— to eliminate unfair competition from private truckers and from agricultural truckers who are exempt from regulations. Many similar steps are being taken to try to remedy the serious situation resulting from the complete bankruptcy of many of the American railways.

Of course, the Americans are at a disadvantage compared with ourselves. They have a law which prevents the merging of any railways and which prevents any railway company from carrying on any other form of transport. It is largely for these reasons that some of the railways there are in such a bad way. I would also draw to the attention of the House the policy being advocated in responsible quarters in America for dealing with the problem. There was a powerful leading article in the New York Herald Tribune recently demanding that Federal funds—which go into building airports, highways for trucks, and dredging rivers for barges—muss also maintain railroad rights-of-way as vital to national defence. That is an attitude which has always been resisted in this country, but it is something which we shall have to consider one of these days.

In this country, the situation is different. Fortunately, we have, largely as the result of the nationalisation Act of the Labour Government, a Transport Commission in which many forms of transport and ancillary services are co-ordinated. The working losses on the railways have almost been made up by profits made elsewhere; and we have a modernisation scheme which we hope will make the whole transport system of this country viable before very long. But we are anxious to know to what extent the railways are in future to be helped by the Government or to what extent they may be hindered, as so often they have been in the past. I hope that we shall not get any repetition of Government cuts in capital expenditure on the railways. The previous cutting down should never have happened. If ever there was an industry which in the national interest required capital expenditure on a big and progressive scale it is the railway system of this country.

We have been told recently that a number of economies are to be carried out. We have also been told that the Government will help the railways in one way, and I hope that the Joint Parliamentary Secretary will give us some information about this. The communication, issued after the discussion on the recent claim for increased wages, stated officially: The Government recognised that the Commission had for some time felt that their obligations in these respects"— that is, regarding their inherited obligations in relation to bridges carrying roads over railways and level crossings— ought to be adjusted in the light of modern conditions, and they"— that is, the Government— would accordingly examine the question on its merits and as a separate matter, with a view to seeing whether any changes were justified. What does that mean? It may mean a great deal or it may mean nothing. It may mean that millions of pounds a year that are now being improperly borne by the Transport Commission, will in future be borne by the Government. I would be grateful if we could be told whether they have come to any decision on this matter, and, if so, what it is, because it is a subject of very great importance.

Now we come to the question of economies. We are told that the Commission is to carry out considerable economies. Proper economies are all right and everyone likes them, but one can go too far. It is always possible to save money by economies. The Post Office could effect great economies if it shut down a large section of its services and did not deliver letters in rural areas, or delivered them less frequently. We are worried by the possibility that because the Government are putting so much emphasis on the need for the Transport Commission to balance its Budget in 1962, so-called economies will be made which will render the railways far less of a service than they are today, or, alternatively, that the position of the railwaymen will be seriously damaged. We say it is wrong that either the railwaymen or the travelling public should suffer because the railways, temporarily and for reasons which are world-wide in their application, cannot pay their way.

We shall therefore watch with interest what economies the Commission is being asked to carry out. We have been told by the Minister today that any branch line which cannot be made remunerative will be closed down. That is an entirely wrong principle. Perhaps the Joint Parliamentary Secretary will qualify that statement. This is a public service that we are discussing. It is essential that some lines should be operated even though they do not pay, just as the Post Office or any other public service provides facilities which do not pay. To cut down a service solely on the grounds that some parts of it do not pay is wholly wrong, unless the Commission is satisfied that there are alternative facilities in the area which can conveniently meet the public need. We fear that far too much cutting down of the service may be done and that the national interest will suffer.

I have not the time to say anything further except that, while inevitably we are in doubt about Government policy during the next few years—if this Government remain in office so long—particularly about what future cuts in the service they will make, we all welcome this annual Report and congratulate those responsible for it. In spite of what has been said, I believe that the staff on the railways is not only very good now, but that the best technicians are being recruited into its ranks. There is no doubt that on the railways in particular there is a loyalty, keenness, enthusiasm and family feeling among the men working on the lines which is probably greater than in any other industry in the country.

We have in this Report a record of magnificent technical progress and achievement. It gives us a promise of even greater service to the nation by the Commission and by all who work with it in the years to come when the modernisation plans have been completed.

6.42 p.m.

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

Had it been possible to have a longer debate, many hon. Members would have wanted to mention other activities of the British Transport Commission than railways. I shall place emphasis on many railways matters in the time at my disposal but, in fairness to the Commission and to those who work in the docks, on inland waterways and in British Road Services, I shall mention that work. I do not think that many hon. Members have made points about it, but I hope that the House will accept the reasons why I shall do so.

Most of the economic problems of the railways have been widely covered but there are questions which I intend to answer such as those dealing with railway workshop policy. I will talk also about the closing of unremunerative services and in particular about certain new procedures for the Transport Users' Consultative Committees, which I wish to announce. The right hon. Member for Vauxhall (Mr. Strauss) raised important points about maintaining bridges and roads over level crossings. I will try to deal with that subject.

We had the pleasure today of hearing for the first time the hon. Member for St. Helens (Mr. Spriggs), who made a most excellent and agreeable speech. He will be a great addition to our transport debates because of his personal knowledge of the work that is done on the railways. I felt very strongly that the House was very much with him, and most certainly regarding the sensible attitude that his trade union is taking up to the economics of modernisation on the railways. Of course, he made some good constituency points as well, very properly. We noted that he needed a new railway station at Shaw Street. He referred to the Royal Regiment of Artillery, which certainly appealed to me.

There has been mention of differences of political approach. I feel that I ought not to go into that now, but that I should deal with the severely practical details which I hope will be of interest to the House in winding up this debate. Generally speaking, the Opposition restated their belief in nationalisation while my right hon. Friend the Minister of Transport stated his belief in a businesslike approach and structure for the railways and the British Transport Commission generally, and in competition.

The other thing I want to mention before I start on other matters is the tribute paid to Sir Brian Robertson. I am sure that the House will join with me in saying that Sir Brian Robertson, as somebody else has said, has always stuck to his guns under heavy fire and that he has been doing an excellent job together with all those who work for him.

The results of 1957 contained a number of disappointments. It is much too early to be pessimistic about the Commission's ability to break even by 1961 or 1962, as I think some hon. Members have been. There are two main ways in which the Commission can tackle its problems. The first is by pressing ahead with modernisation. Chapter 4 of the Report for 1957 on Research and Development is worth examining because it is crammed with detailed evidence of progress in modernisation, which will be welcomed. The second way, on which controversial points have been made today, is the elimination from the system of what might be called "uneconomic elements" that have no place in a modern system.

In relating that point to the detailed points which I said I would mention, I would ask hon. Members to bear certain things in mind. We are not dealing with the twilight of the railways; nothing of the kind. We are concerned with a period when economies will have to be made as a preliminary operation to jumping off into a new and, we hope, successful era.

I was asked about the workshop policy of the Commission. It is always the desire of the Commission to see that its railway workshops are as fully occupied as possible, consistent with changing requirements as to repairs and new construction. In 1956, the Commission published a statement of its intentions and gave a forecast of the position over the ensuing five years. Up to the present the position has not changed. It is worth noting that roughly as many people are employed in the railway workshops as two years ago. The number is 126,129, against 126,233. The Commission realises that although some redundancy may arise it must be a good employer. It has already said that it is willing to train men for other crafts within the railway industry if this will help to absorb them.

As to new construction, all or most of the railway works will be kept busy to the limits of their existing resources for some time to come. In the longer term, as the total volume of work begins to fall the Commission will have to be more selective in placing orders. It will have to pay more regard to variations in costs. In regard to the number of vehicles that will be required, such as freight wagons and service vehicles, this programme may be subject to cuts in 1958 and 1959 by reason of the Commission's decision to reduce its wagon fleet. We are well aware of these problems and they are being tackled.

The hon. Member for The Hartlepools (Mr. D. Jones) asked me to deal with staff questions in general and to answer the point which he made that the Report showed an overall increase in staff of 3,033. That reflects the filling of vacancies in certain key operating grades, where shortages had persisted for some time. At the end of June, 1958, the staff employed on British Railways was 566,500, a reduction of roughly 12,500 on the total employed a year previously. The explanation was that there were recruited into certain key grades 3,033 staff to fill that special type of vacancy.

The closing of unremunerative services naturally attracted the attention of the House. We have in the past had criticisms of the procedure of the consultative committees. That is an important point, although has not been mentioned today, and I would ask for time just to say that the consultative committees are in the process of some fairly radical changes in their procedure.

The changes in procedure, which we have introduced with the full co-operation of the British Transport Commission are as follows. I cannot give them in very great detail but they are, briefly, that the Commission will, in future, submit, in support of proposals to withdraw services, a break-down of the figures of the direct, actual savings to be achieved, so that that position is made clear. That will remove the suspicion that a withdrawal is based on any false appreciation of the economics. Every possible information will be supplied to the committees. Secondly, the committees will form, panels to deal with cases between their regular meetings, and recommendations will be sent to the Central Transport Consultative Committee and to the Minister.

Thirdly, the time for objections to this committee will be limited to a maximum of two months, which should be ample, in our view. The Central Transport Consultative Committee is issuing a booklet. I know that there have been comments about the work of these committees and I thought I should mention those matters.

One particular line affecting the constituents of the hon. Member for Norfolk, South-West (Mr. Dye) is the Midland and Great Northern. I do not think that I should state a view on this matter at the moment because it may come to my right hon. Friend for decision, but the hon. Gentleman will be aware that proposals for each stage will go to the appropriate area transport users consultative committee, and the position here—I will state the view to this extent—is that this line is largely duplicated by alternative services. However, as I say, the matter may come eventually to my right hon. Friend, and I do not think it right to say anything further about it now.

The right hon. Member for Vauxhall asked me to say something about the pushing forward of modernisation of road bridges and level crossings, in particular the maintenance of road bridges over railways and level crossings. The examination of this matter is going on very actively. I cannot now make a further statement beyond what has been said already. The Government have recognised the need to accelerate matters. The whole question is being examined in relation to our general policy of highway modernisation and making it easier for modern railway standards to be applied to these bridges and crossings. There is no question of relieving the Commission of its legal liabilities in this respect, but we shall have to consider the cost of the whole process. That is as much as I can tell the right hon. Gentleman at this stage.

Rural transport figured in a number of speeches, as indeed it properly should. My right hon. Friend has rural transport under very active consideration and he realises the importance of it to rural communities in general. I wish I could pursue the matter further, but I think that I really ought now to tackle some of the subjects which have not been raised in the debate.

A great many people, of course, will be concerned with the British Transport Commission's docks. There was a profit in 1957 of £2,433,000 on the Commission's docks, harbours and wharves, which is to be compared with a profit of £817,000 in 1951, which was the first year in which the Commission's docks and wharves showed a profit. Compared with 1956 the main increases in imports, in ores, particularly iron ores, in oil and mineral and motor spirit, were partly offset by reductions in imports of coal. Exports, particularly of coal, decreased, as no doubt hon. Members particularly concerned with the Welsh ports will know. The total trade of each group of the docks, except the Scottish and North Eastern group has somewhat decreased. I answered an Adjournment debate about one of the South Wales docks, Cardiff Docks, last night.

There is a number of schemes in progress in the Commission's docks, and, during 1957, there were many cases of new installations, for instance, new cranes and grain elevators at the King George Dock, Hull, and the reconstruction of the Riverside Quay and the south side of Albert Dock. A good deal of work has been put in hand at Newport and also at Swansea and Barry. It is the Commission's policy to proceed as far as it can with the development of these docks.

There are two other matters which I ought to mention, although they have not been raised, because I think they are of great importance to those who work for this fine organisation, the British Transport Commission. British Road Services was mentioned a good deal by the hon. Member for Enfield, East (Mr. Ernest Davies). The tonnage carried by the British Road Services group of companies in 1957 was slightly less than it was in 1956. This was partly due to the loss of traffic during the early part of the year, when, as we know, fuel rationing was in force. The road haulage capacity of the country in 1957 was, in fact, greater than the total volume of goods offered for transport by road. The rates were, consequently, kept at a low level, which, I think, will arouse a certain amount of satisfaction. In this fiercely competitive climate, the British Road Services group did well, I think, as the hon. Member for Enfield, East said, to earn net receipts of £2.8 million, subject to interest and other central charges, which is £1 million better than it did in 1956. It represents 2 per cent. more of gross receipts than in that year.

This result reflects the tightening up of the organisation following the end of disposals and the stabilisation of the size of the fleet. It does credit to the improved efficiency and economy of operations by the British Road Services companies in meeting the challenge of competition. I do not think that I need go into the political argument which is involved in this question of competition, but I want to answer my hon. Friend the Member for Bromsgrove (Mr. Dance). My hon. Friend mentioned one or two matters and the particular point I wish to make in reply to him is that goods services timetables have been introduced in all the regions. I do not know whether I was expected to answer some of the other things he said, but that was something specific which I had in mind to answer at this time, and I hope that what I have said will satisfy him.

The Commission's inland waterways, another of its freight-carrying activities, have reacted a little, I am afraid, to the falling off of activity in the heavy industries. All classes of traffic on the waterways are running below last year's level in terms of tonnage, being 8.7 per cent. down on last year in the four weeks ended 15th June, 1958. But some hauls must have increased in length, for the net ton miles of coal class traffic and general merchandise show a small increase over last year in that period. Future policy for the waterways will have to be considered in relation to the Bowes Committee Report, of which some hon. Gentlemen will be aware. When the Bowes Report has been further studied—it is to be published next week—no doubt something will follow in the way of decision in regard to our waterways.

I wish now to say a word about the hotels and catering services, because this is one of the things in which the British Transport Commission has done very well. It had a good year in 1957. The number of visitors in the Commission's hotels was above last year's level. In the four weeks ending 15th June, 1958, the number was about 1.4 per cent. more than last year. I am sorry to say that meals served in refreshment cars are now running below the level of last year, when the total business increased, but considerable advances have been made in the catering services. I am glad to report also, since this is something else with which the British Transport Commission is concerned, that Messrs. Thos. Cook and Son had very good results in 1957.

I have to close very shortly a debate which is important and of interest to all of us, though we regret that it has had to be curtailed. We all feel a sense of good will to all those who work in the British Transport Commission and we certainly do not feel that there is any cause for despondency about its future. With a fair wind and opportunity, there is no reason at all why the British Transport Commission should not develop as a financially sound organisation. The framework is now set for it. There are signs that the revolution on the railways will be accomplished quickly and smoothly within it.

Financial difficulties for the railways, after all, are not peculiar to this country. All over the world, with few exceptions, railways have had financial difficulties. The nation also must play its part in these matters and, as my right hon. Friend said, it must have a proper regard for transport economics. I say that particularly to businessmen and people who are concerned with the standard of service being offered by the railways. We would ask traders to look very closely at what the railways can offer before embarking, perhaps, on other arrangements which may prove expensive. The railways organisation is in no sense a lame dog to be helped over a stile. The railways have great opportunities. Their way ahead is clear, and the Commission does not itself regard the course as too stiff for it or its prospects as unpromising. The debate has been a very useful one, although we now have to consider other and more urgent matters. I thank all hon. Members for the suggestions they have made about the future of the British Transport Commission.

Question put and agreed to.

Resolved, That this House takes note of the Tenth Annual Report, Statement of Accounts and Statistics of the British Transport Commission for 1957.