HC Deb 26 October 1960 vol 627 cc2358-495

3.43 p.m.

The Minister of Transport (Mr. Ernest Marples)

I beg to move, That this House takes note of the Annual Report and Accounts of the British Transport Commission for the year ended 1st December, 1959 (H.C. 226), and of the Report from the Select Committee on Nationalised Industries (H.C. 254) relating to British Railways. The House has before it two basic documents, the Report of the Select Committee and the Annual Report and Accounts of the British Transport Commission for 1959. Today, we are debating those two documents. The Annual Accounts reveal a difficult financial state, so difficult, in fact, that we have appropriated £105 million to meet the Commission's likely deficit in 1960. I shall expand on this later.

The Select Committee's Report is an illuminating and, if I may say so, extremely well-written exposition of the problem of the railways, and I would congratulate my right hon. Friend the Member far Blackpool, North (Sir T. Low) and his colleagues from both sides of the House on this Report. I am sure that the House will share my admiration of the grasp that they have shown of the fundamentals of this intricate and difficult subject. They have drawn attention to past difficulties and indicated future problems. Their Report was published in a remarkably short time and this makes it all the more valuable because their help and guidance is available to me and my colleagues at precisely the time we need it. I will deal with this Report later.

At this stage, I should like to make two points about the Special Advisory Group under Sir Ivan Stedeford. First, the Group has been supplementary to rather than merely duplicating the work of the Select Committee. It took evidence from a large number of witnesses from many quarters in the whole field of the Commission's activities and the scope and contents of its recommendations reflect this.

Secondly, we have received a number of recommendations, the final one being received just three weeks ago. The recommendations cover finance, statutory restrictions, modernisation and reorganisation, which is not a bad harvest for six months' intensive work. We are considering them carefully, and as soon as we have formulated our proposals we will place them before the House in the form of a comprehensive White Paper. This will be done as quickly as possible, but, of course, it is too soon for me to say anything in this debate. However, on behalf of the Government I should like to express my warmest thanks to the Group. It took a vast amount of evidence, including evidence from trade unions, and gave freely of its time, thought and experience, and we are indebted to its members.

I have seen some Press reports about statements made by union officials, and I want just to give the facts without any comment. First, the trade unions were given and have taken the opportunity to give evidence. They were consulted and expressed themselves on a wide range of subjects. Their contributions—I have a summary of them here—were interesting and helpful. The Group gave full regard in its recommendations to those suggestions. Secondly, if the unions have had second thoughts, or if they have any additional evidence, I would like to receive them either orally or in writing before the Government finally determine their own proposals. Therefore, if the unions would wish to make further representations they are free so to do. Thirdly, although the Government will give full consideration to the unions' suggestions they cannot ignore suggestions made from other quarters and they must take into account all suggestions.

Finally, I want to clear up any misunderstanding. There have been speculations about the Group's recommendations, and the unions have added some additional speculations, and because so many of the speculations in the Press have been completely remote from the truth I would hope that people will wait till the Government produce the White Paper. I would not like it to be assumed that there would be a wide gap between the unions' views and my own on many subjects under discussion—

Mr. Francis Noel-Baker (Swindon) rose

Mr. Marples

I am sorry that I cannot give way. I have a very difficult speech to make. I want to give the House a coherent exposition of this complicated, vast industry as I see it.

Mr. F. Noel-Baker rose

Mr. Speaker

Order. If the Minister is not prepared to give way the hon. Member must resume his seat.

Mr. Marples

It is not through discourtesy I do not give way, but merely because this is an intricate subject of great magnitude and I want to make a coherent statement to the House so that it may have a basis on which the debate may proceed.

One more remark of a general nature before I deal in detail with the Accounts and with the Select Committee's Report. We must have a railway system. There is no doubt about that. [Hon. Members: "Oh."] Well, I have received evidence from a group which says that the whole of the railways should be made into roads and that that will solve our problem. I want to deal with their suggestion straight away. We have to have a railway system. It shape, size, pattern may alter, but whatever happens we cannot, in this congested island, do without a railway system.

Our task is to decide what to do in the future. The Select Committee which examined recent history helped me a great deal and the Special Advisory Group which formulated proposals based on an analysis of past difficulties has also been of great assistance. I hope that in this debate—because this may be the last on this subject before the Government make their proposals—hon. Members on both sides of the House will make very constructive proposals for the future, because they will be helpful to me. The unanimity of the Select Committee on this Report gives me hope that our railway debates, from now on, will be as constructive as possible.

I want to turn now to the financial situation. In considering the future, it is essential to be clear about the dimensions of the present financial problem. The Commission's Annual Report says: Paramount among the Commission's objectives for 1959 was to improve their financial position by the end of the year and progress in that direction was achieved. According to the Report, the working deficit of British Railways was reduced from £48 million in 1958 to £42 million in 1959. This is a step in the right direction, but two adjustments must be made to arrive at the true final railway deficit.

First, central charges bring the loss on the railways for 1959 to a total of £84 million. Secondly. the 1959 revenue account was relieved of interest burdens totalling £26 million. This brings the true deficit for the railways in 1959 to £110 million, made up of £42 million working deficit, £42 million central charges and £26 million further interest charges. This is a very formidable total.

In 1960, the Commission's financial difficulties will be increased by increases in pay starting from January, 1960, agreed as a result of the Guillebaud Report on railwaymen's pay. As my right hon. Friend the Prime Minister said in his statement on 10th March, the Government accept the objective underlying the Report of the Guillebaud Committee—that fair and reasonable wages should be paid to those engaged in the industry. We all agree with this, but the fact is that the increases add £40 million each year to the Commission's wage bill. To help, the Government have provided £105 million above the line, which is, in effect, a subsidy.

What is the significance of this subsidy? The first point is that the provision of £105 million disguises the extent to which the Commission's other activities, such as the buses, assist the finances of the railways themselves. These other activities are expected to produce £10 million net surplus after paying their share of central charges, including interest. Therefore, the provision made on my Vote assumes that the railways will lose about £115 million on revenue accounts in 1960.

It is not easy to grasp figures of that magnitude but to show these losses in true perspective I should like to make three comparisons. First, in 1959, gross receipts—and I emphasise "gross receipts"—of the railways were £457 million. The loss was £110 million, which is almost 25 per cent. of the turnover. It means that to break even the railways would have to increase their gross receipts by nearly one-quarter without any increase at all in expenditure.

Secondly, let me compare gross receipts with the number of men employed. In 1959, 519,000 men were employed on the railways and the gross receipts amounted to £457 million. This means that the gross takings per man per year were only about £880. This is a very startling figure. This certainly shows that there is every need for efficiency. The British Railway Productivity Council has been looking at what can be done by extension of work study. Both sides agree about the need to intensify efforts in this field and they are issuing a joint-appeal for co-operation from all within the industry. The nation will await results with great interest. As the third comparison, let us consider the taxpayer. He is providing a subsidy of £105 million above the line. This is equivalent to 4d. in the £ on Income Tax. Another way of putting it is that about £200 per year of each railway worker's pay may be regarded as coming direct from the taxpayer.

So much for annual revenue expenditure. I turn now to the capital cost of modernisation. As the House is aware, expenditure on modernisation of the railways has been running at the rate of about £160 million a year. In 1961 it will be £140 million. There is a curious system of accounting at the moment in the Transport Commission which we may look at when the Government make their proposals. Much of this sum has to be borrowed from the Exchequer. Let us assume that borrowings for the next five years between now and 1965 are at the rate of about £100 million a year. This will increase the interest burden by 1965 by a further £30 million per annum. The only way of meeting additional burdens of this sort, if they are not to remain indefinitely with the taxpayer, is by economies, efficiency and increased revenue.

These are the essential facts on finance and it is against this background that the Government must examine the Select Committee's conclusion, in paragraph 419 of its Report, that … there is no doubt that a large-scale British Railways system can be profitable. I now turn to some other points made by the Select Committee. It made a searching examination of the fundamental questions but it left me and the Commission—and understandably left us—with more questions than answers. I am glad to say, however, that the recommendations from the Special Advisory Group bear to a remarkable degree on these questions and in many ways reinforce what the Select Committee had to say. The House will not expect me, so soon after receiving the recommendations of the Special Advisory Group, to put forward the Government's considered proposals for improving the present state of affairs.

Mr. Percy Collick (Birkenhead)

Can the right hon. Gentleman tell us when the House is likely to be in possession of the Stedeford Report?

Mr. Marples

I am afraid that I shall have to ask the House to wait. I promise that it will be as soon as possible, because I realise that the period of uncertainty must be as short as possible. I can assure the hon. Member that I have this very much in mind and that there will be no waste of time.

Mr. F. Noel-Baker

Will it be published?

Mr. Marples

The White Paper certainly will be published.

Mr. Noel-Baker

Not the White Paper, the Stedeford Report.

Mr. Marples

The White Paper will be published. My right hon. Friend said so when he made the original statement in the House.

I welcome this debate as an opportunity for me to acquaint myself with what hon. Members think of the Annual Report and Accounts of the Commission. It might be useful if I discussed the problems which will have to be considered by the Government in framing their proposals, but before I do that I should like to touch on the measures which the Government have already taken since the last debate in July 1959.

What have the Government already done? The Times recently referred in a critical way to the examination by my Department of projects and schemes costing more than £250,000. This examination was started in February this year and I am taken to task for "Government interference in detail". Why did I introduce this control? If the railways are to progress towards viability, one of the first steps to be taken is to see that their investment, which is necessarily limited by the funds available for the public sector of the economy, is invested in the wisest way. I was neither sure nor satisfied on this point. I was worried by the way in which railway receipts were not only failing to cover costs, but seemed unlikely to show adequate returns on the large amounts of capital being invested in particular projects under the modernisation plan.

Proposals for investment have been coming in for some months now. This has been of great value to the Department and perhaps also to the Commission in assessing the needs and settling the priorities and so forming a picture of the need for investment in the Commission's undertakings in future. Certainly, none of the submissions from the B.T.C.—if I may use initials at this stage of the debate in order to shorten it—or the advice given by the Special Advisory Group makes me doubt that I acted reasonably in requiring the submission of these projects. A quarter of a million pounds in any context is quite a big figure. But the truth is that most of the proposals that we have been receiving are for far bigger amounts of investment, sometimes running into millions of pounds. Moreover, one railway project can easily affect another. They tend to be complex and interrelated.

In fact, the railway regions themselves authorise schemes totalling about £9 million a year which do not even go before the Commission, let alone my Ministry. In any case, some knowledge of major individual projects—and I think that £250,000 is a fair definition of "major"—is necessary if I am to get a picture of investment as a whole.

After all, I act as the Commission's banker for most of its investment. I am responsible to this House and to the country for the advances made, and I am responsible through my Vote for its deficit. I think that the Select Committee—I have read its Report very carefully—would agree with me when I suggest that few bankers would allow their clients to invest this sort of money without wanting to know more about whether they would pay off. This is particularly so when the client already has a large overdraft. I do not know how long it will be necessary to keep the control, but, frankly, I envisage closer relations in this area between the railways and my Ministry. Much depends on what is decided about the level of investment in the railways generally and their future organisation.

Now I turn to modernisation for a moment. The examination of capital expenditures exceeding £250,000 is only a part of the whole story. There is not much sense in looking at individual projects unless we are reasonably clear about the basis and sense of the whole problem, including the future size and shape of the railways. But when one looks into the railway problem one must, as far as possible, relate railway investment to investment in transport generally.

For example, will more people travel by road and, internally, by air? We have List had an interesting announcement about aircraft travel between London and Glasgow, London and Manchester, and so on, starting in April next year. If so, is any of this additional traffic generated by new forms of transport, or will the growing popularity of road and air rob the railways? What sort of traffics are really the most suitable, and hence the most profitable, for railways? What new traffics are likely to emerge in our rapidly changing economy?

I must take into account the needs of all forms of transport as well as the public demand. This public demand shows itself in increasing measure in the demand for road transport, not least for private cars. We are only at the beginning of the impact of the internal combustion engine on our society and on our economy. In May, 1957, the number of cars on the roads was 4 million. By May, 1960, the number had grown to 5¼ million, an increase of over 30 per cent. in three years.

Turning to freight, the traffic being carried on rail in July and August this year was lower by one-seventh than in the comparable period in 1957. The ton mileage on the roads in 1960, however, is likely to be about a quarter higher than in 1957, and road transport now accounts for nearly three-fifths of the combined total of road and rail. These are the sort of things about which we must take a considered view.

I have, therefore, set up a committee—a compact study group, as it were—under my own chairmanship to consider what sort of and how big a railway system we need in view of these factors.

The Commission is represented on this group and is co-operating in preparing a revised modernisation plan.

We shall not only look at railway modernisation projects, but also try to satisfy ourselves about the modernisation programme as a whole. We cannot underwrite such a programme until the size and shape of the problem have been tackled in this way. We know the Commission's difficulties; it has told us its views.

Mr. Wedgwood Benn (Bristol, South-East)

As I understand, this is a totally new announcement of an entirely new committee under the right hon. Gentleman's chairmanship. If not, will he tell us whether this has been announced before, and, also, whether it has any relationship to the Stedeford Committee?

Mr. Marples

This has not been announced before, and it has no relation to the Stedeford Committee. It is entirely between my Ministry and the Commission. We are going into the whole aspect of travel so that we can relate what happens on rail to the rapidly changing technical developments in the transport field, which I should have thought was a reasonable thing to do. I am sure that if I had not taken the step the House could have accused me of not doing my duty.

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

I do not know whether the trade unions would be interested in serving on the new committee, but would the right hon. Gentleman extend an invitation to them. because if the size and shape of the industry is to be considered by the committee I suggest that organised labour within the industry should at any rate be invited to say whether it would wish to serve?

Mr. Marples

We will certainly take any evidence that it cares to give on this matter, just as was done in the case of the Stedeford Committee. It was entitled to, and took—I am very glad it did—the opportunity to give evidence to the Stedeford Committee. If it has any views to express on the size and shape of the industry, we shall give it facilities.

Mr. A. C. Manuel (Central Ayrshire)

This is a most important announcement. The right hon. Gentleman has made it entirely in the context of the new committee of which he is to be chairman, but he has not told us its terms of reference. It seems to be a profit and loss account basis. Along with that term of reference, will the new committee give definite consideration to strategic factors for the retention of certain stretches of railway and branch lines, and also the industrial potential in areas which could be knocked out by knocking out the railways?

Mr. Marples

I can assure the hon. Gentleman that we shall give consideration to almost every factor that we can relating to the railways. This study group was set up in the summer, and this is the first time that the House has met since the summer. I am now told that I ought to have announced it previously. If I had announced it outside the House, I should have been asked why I did not wait until the House met.

Mr. Collick

Perhaps I might get this clear from the Minister, because it is important. Does he recognise—I think he should—that this indicates a complete departure from what has hitherto been the policy of the Government? Hitherto, the Minister has come to the House with various transport Bills and said that the railways and the roads must compete and do the best they can in the situation. Now he announces this committee. I am not dissenting from it for a moment, but what I should like him to recognise is that this represents a complete departure from what has hitherto been Government policy.

Mr. Marples

I do not know. It is a compact study group, and we were certainly justified in setting it up.

The Commission itself—this is one of the things which have emerged from this—has difficulties. It is handicapped, for example, by not knowing how much money it will get for more than a year ahead. This is a real problem, and we are trying to find an answer to it. We found it on the roads in the case of urban areas, where we now give a three-year rolling programme. If we can make things easier for the Commission, we must try to do it, but we must be a lot clearer about the general direction of, the content of and the justification for the railway investment programme. We hope that we shall go with the Commission into the size and shape of a revised modernisation plan.

Meanwhile, it has been necessary to slow down to some extent the rate of investment. This is not to say that there has been a total stop, but expenditure has been concentrated in the main on projects on which expenditure was already committed and on projects where the urgency was manifest. The Commission agreed that this slowing down was appropriate in the circumstances. I must emphasise that, while we are looking again at the plans for railway modernisation and investment, there is no question of stopping modernisation. The ceiling laid down for 1961 is a very big figure from whatever point of view it is regarded.

The Government, like the Select Committee, have been very much concerned at some features of the modernisation scheme, notably the increased cost of the present estimates as compared with the original ones. A particular case is the London Midland electrification scheme. The Special Advisory Group, early on, expressed doubts about the economic aspects of the project as it had been explained to it, and the Transport Commission has prepared a reassessment of the scheme in the light of its experience elsewhere as well as in the light of recent development, and this is under urgent examination by the Ministry. The Commission has agreed, pending the outcome of this examination, not to place new contracts, but there is no question of the cancellation of existing contracts, and work under them has continued.

Against this background I have needed to review the modernisation plan in fixing investment ceilings for the Commission's undertakings in 1961. In particular, the maximum for expenditure on the railways will be £140 million, as compared with about £160 million originally agreed for the current year. For the Commission as a whole, there will be a ceiling of £175 million, as compared with £200 million in 1960. More information about this will be given in the White Paper on investment in the public sector which, I understand, is to be published at the end of the month, but I have the permission of my right hon. and learned Friend the Chancellor of the Exchequer to inform the House of the figure I have mentioned.

As the House will readily understand, I am not yet in a position to commit myself beyond 1961, but I would hope for general agreement that it would be imprudent for me to have fixed higher totals for the railways in 1961 pending the outcome of our reassessment of the modernisation plan. What we have already done is just a start. Other and far-reaching measures are necessary to meet the emergency with which the House will realise we are faced. The reason I asked the House to bear in mind the facts and figures I gave in my opening remarks, and I have emphasised the great but changing part which the railways play—

Mr. Scholefield Allen (Crewe)

Will the right hon. Gentleman—

Mr. Marples

I have a long speech to make. I am sorry, but I cannot give way.

Mr. Scholefield Allen

Will the right hon. Gentleman—

Mr. Speaker


Mr. Marples

Because there is a sort of technical revolution—and I do not think that the word is too strong—we must plan accordingly. The impact of the changes in transport will affect our economy and our society and will be felt by the railwaymen who are part of that society. Their morale and well-being is of the utmost importance and I want it to be quite clear that my proposals will take the fullest account of this. I am well aware that a new deal will need the understanding and active co-operation of all within the industry and that there will be problems which can be solved only by all pulling together.

There will be no change for the sake of change. I should like to see an end of major measures every seven years or so. The changes we make will be changes for the sake of the community, in the interests of the community as a whole and not of any particular group or interest. At this stage, I should like to list what seem to be the basic questions with which the Government and the Ministry are faced.

What problems have we got to solve by our proposals? First, organisation; what is the best organisation for the railways and for the Commission's other undertakings and for their relationship to one another? Secondly, management; what improvements can be made in management? Thirdly, modernisation; do we still pin our faith to modernisation and, if so, how much of the system must be modernised to carry traffic suitable to the railways? Fourthly, restrictions—I mean by this, statutory restrictions. Ought the railways to be freed from the restrictions put on them when they had a monopoly? Fifthly, property; how can the best use be made of the Commission's property? I do not think that it is being made at the moment because of certain restrictions. Sixthly, are fundamental financial changes required? It has been suggested in many quarters that they are required. Seventhly and last—and this is where all these questions lead us—how can we achieve viability?

I want to devote a little time to each of these questions which will be dealt with by the White Paper. First, on organisation, the Select Committee's views are in paragraphs 356 to 363 of its Report. The Report says: it cannot have helped to achieve efficiency in the higher direction of British Railways that there should have been no one authority whose only duty in the field of transport was to ensure an efficient system of railways. This is a point to which we shall have to give further thought in the light of what the Special Advisory Group has said about organisation.

Mr. Benn

It was the abolition of the Railway Executive by the 1953 Act which denied the railways the central organisation which the Select Committee recommends should now be restored.

Mr. Marples

I hope that the hon. Member is now satisfied that he has made his intervention, but I am trying to tell the House what I think the position is.

We shall pay particular attention to repairing any weaknesses which may exist on the financial and commercial sides. The Commission has expressed no particular views on what the Select Committee said about organisation, but, broadly, it agrees with the Committee. Looking at organisation, however, means looking not only at the railways, but also at the Commission's other activities. Many operate efficiently and it can be argued that more independence would make them all more efficient We shall consider all the activities—both their relationship to one another and to me as Minister.

On railways themselves, we shall have in mind the extent to which experienced railway managers are given enough opportunities. We must be sure that technical skills and experience are used to the best advantage. Should the Government conclude—and I am not myself able to say today what we will decide—that there should be changes, a new deal will take many months to bring into being. Assuming that legislation will be needed, we shall have to think about what can be done in the interim period.

I do not want to delve too deeply today into the question of management. The relationship between a nationalised industry and the responsible Minister is a delicate one. We have to watch our step very carefully about interfering with management but, as my right hon. Friend the Prime Minister said in his statement, all will have to co-operate in the new approach to the problem of the railways. The Commission and the Ministry are already carefully considering what the Select Committee had to say about management problems, especially productivity and work study, traffic costing and regional accounting.

On modernisation, I have already mentioned a good deal about what we are doing. I now proceed to the fourth point, statutory restrictions. The Commission is restricted in its freedom to adjust its fares and charges. The Special Advisory Group has given special attention to this as, indeed, it has to all other restrictions on the activities of the Commission. The Commission, of course, has made its views known to me. I shall hope to cover these matters in the proposals which will eventually be made.

The inability of the Commission to develop its property was commented upon by the Select Committee. I am concerned about the contribution which the development or disposal of property not needed for transport purposes could make to solving the Commission's financial difficulties. An interesting point is whether the Commission should be allowed to construct pipelines. At the moment it could not. There are many other practical points which ought to be considered. We are looking at all these to consider what can be done for a suitable organisation to release benefit from all these sources.

The sixth point was financial structure and viability. Here we have two big questions to tackle. First, there is the Commission's burden of debt. This was made apparent by the figures I quoted at the beginning of my speech. We must examine this carefully. The Special Advisory Group has made recommendations to me so the material on which to base a decision is with us and we hope to include that in our proposals. It is sometimes suggested that the Transport Commission's debt burden is excessive. I can understand that point of view, but the House will realise that the debt can only be transferred through the Exchequer to the taxpayer. It cannot be wiped out.

The second question is this: if unprofitable services are to be provided on grounds of social need, should this be decided by the Commission or by the Government? This question does not affect the Commission alone. The Select Committee said that … a service may be justified on other than economic grounds… and went on to say that … account may need to be taken of social considerations. also said: if decisions are to be taken on grounds of national economy or of social needs then they must be taken by the Minister and submitted by him for the approval of Parliament. The Commission has at the moment a statutory duty … to have regard to the needs of the public, agriculture, commerce and industry. The interpretation of these words may be the nub of this problem. Any transport undertaking must consist of some profitable and some unprofitable services, and the first problem is how far the taxpayer should be expected to pay for any uneconomic services.

A second problem arises where a Government decide that certain action should be taken by a nationalised body in the national interest, action which that body itself would not have proposed to take, and which will significantly affect its finances. How far, if at all, should the taxpayer be expected to pay for this? I will do no more this afternoon than pose these two facets of the question of uneconomic services. It would not be reasonable to expect me to say more at this stage, but it would have been wrong for me, in the light of the Select Committee's remarks, not to have made that distinction.

At all events, I am clear that all these financial matters need reviewing in the light of the present circumstances. We may have to make certain changes. Another point that I must make is the effect of financial changes on the morale of the railwaymen. It is disheartening and disappointing to work for an undertaking that is losing vast amounts of money for many and varied reasons. Can we devise arrangements which will let them see exactly how the financial system is going, and how their efforts can be measured in better financial results? We should need targets in time and money. What should those targets be? This problem must be faced fairly and squarely. I have my own views, and I have those of the Special Advisory Group, and I hope that hon. Members will air theirs this afternoon.

All that I have said leads to one end. The measures we take, whether by Statute or administratively, whether they concern organisation, financial reconstruction or the better use of assets, have this single object—in the end, the railways must be viable. That is, first, they must be able to meet operating expenses. Secondly, and perhaps this will have to come later, they must be able to meet the full interest charges on the capital debt which it is reasonable to attribute to them. The present situation is depressing for the people in the industry.

I have spoken at great length, but I wanted to give the House the hard facts, very carefully prepared, because this is a most important subject. There is probably no entirely right solution. My first step must be to digest the advice I have already received, and begin the necessary consultations. I am glad that the debate is taking place at this time, as it gives me a chance to listen to what hon. Members want to say; and I intend to take what they say fully into account. When we have had a little time to weigh the advice we have received, we shall put our proposals in a White Paper.

I hope that the hon. Member for Bristol, South-East (Mr. Benn), who is normally most helpful and constructive in our debates, will not think it discourteous of me not to discuss his Amendment, but I have not yet listened to his argument in support of it. My hon. Friend the Parliamentary Secretary will deal with the Amendment after listening to the hon. Gentleman's speech. I hope that we shall get some constructive suggestions from the hon. Gentleman on the future of the railways.

Finally, I want to make three points. First, our examination into the railways has been searching, meticulous and thorough, and it has been done speedily. Secondly, the White Paper will deal comprehensively with all the matters to which I have referred. In the meantime, I hope that the vivid imagination of some of the Fleet Street journalists will be discounted by this House and by the public. Thirdly, as I said before, this will probably be the last debate on railways before the Government decide on and publish their proposals. I hope that on this occasion the House will be constructive and that hon. Members will let me have their views. They did so on roads in our debate in November last, and I think that I can fairly say that I took account of that debate.

I can promise that if the House makes constructive suggestions this afternoon I will again consider them, and it is with confidence that I ask the House to approve the Motion standing on the Order Paper in the names of my right hon. Friend the Prime Minister and others of my colleagues.

4.25 p.m.

Mr. Wedgwood Benn (Bristol, South-East)

As the Minister said in opening the debate, this will be the first of a series of debates on the railways in the coming Session, and I should like, on behalf, I think, of most Members of the House, to draw attention to the new climate of opinion that there is in the country about the railways. It arises from three things which the Minister did not mention or, if he did, mentioned only very briefly, but they are of the very greatest importance.

First, the fruits of modernisation are beginning to be obvious to the ordinary passengers on the railways. As I travel to Bristol on the diesel Pullman, or go about on a branch line by railcar, or see at Euston the new tickets being stamped, I notice that the farsighted work of the Transport Commission is beginning to bear fruit. We no longer hear the jokes about the railways that we heard years ago before modernisation began.

Secondly, there is the growing chaos on the roads which, as I pointed out at Question Time, is getting steadily worse. That state is driving people to think more and more of the possibilities of British Railways, not only as passenger carriers but as freight carriers. The 10 per cent. increase in road haulage rates, announced only a few days ago, will be an added attraction to those contemplating using the railways.

Thirdly, intelligent people outside who consider the problems of our cities and society are coming more and more to realise the rôle of public transport in the solution of the problem of moving people and goods. That is the atmosphere in which we shall be conducting these debates, and I hope that I there command the support of the House.

As the Minister said, we are discussing two documents. The first is the Annual Report of the Commission, and I want to deal for a moment in greater detail with the technical advances recorded there, because it will be the technical advances that will decide the attraction of rail travel in the future. There is the news of the Manchester-Crewe electrification. There is the news of the Kent electrification, which has brought about a 36 per cent. increase in passengers over the previous steam traction. There is the development of new tracks, yards, signals, stations, research and work study; and also the figures announced a few days ago—which the Minister did not think important enough to mention—of a £21 million increase in traffic receipts in the first 40 weeks of this year as against the same period of last year.

What disheartened me most in the right hon. Gentleman's speech was that he made no reference whatsoever to the Chairman of the Commission, Sir Brian Robertson. He thus broke a tradition established by every one of his predecessors that in debating the Commission's work a tribute should be paid to the man currently responsible for it. I should like to quote, and so put on the record, what the right hon. Gentleman's predecessor said in July, 1959, which explains not only why this should be done but why the Minister should do it.

The then Minister of Transport and Civil Aviation said in that debate: — the House should be grateful to Sir Brian Robertson and his colleagues. They do a very fine job under very great difficulty. When I say 'his colleagues' I hope the House will accept that by that I mean every man and woman working for the British Transport Commission. They are all trying to do the same job."—[OFFICIAL REPORT, 29th July, 1959; Vol. 610, c. 618.] By failing, and by so obviously failing, to pay tribute to the Chairman of the Commission I think that the Minister has, by implication, insulted those who work under him. At any rate, the Minister cannot escape his responsibility for the affairs of the Commission. The nationalisation Act provides that the Chairman can be appointed by the Minister and that, at any time, the Chairman can be given a directive by the Minister, and if the railways are in difficulties as, of course, they are, the Government, being responsible for appointing the Chairman, and giving directives are equally involved in those difficulties.

I come to the Select Committee's Report. I want to pay a most sincere tribute to the right hon. Member for Blackpool, North (Sir T. Low) and to my colleagues and his colleagues who worked on that job of studying the railways over the last Session. I do this very sincerely because I believe that this was a job for Parliament and not just a job for the Committee. This was Parliament doing its job as it should. This was Parliament not attempting to interfere with the management of the Commission but reviewing the work of the Commission and presenting its findings for the benefit of the whole House. I think that it shows how accountability can work between a nationalised industry and Parliament without making the task of management impossible.

When I think that the News Chronicle with 1¼ million readers could be closed on the decision of two businessmen, and I contrast that with the degree of accountability that exists in the nationalised industries, it confirms my belief that public ownership is the only way in which we can bring responsibility to great industries in the service of the nation.

I also want to draw another contrast—

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

The hon. Gentleman should address that remark to the Liberals.

Mr. Benn

I am in the middle of dealing with the hon. Members of the Liberal Party. I will deal with the hon. Gentleman in a minute.

After reading year after year the leaders in the News Chronicle demanding co-ownership and consultation with the workers, and hearing the Liberals praising the News Chronicle at their conferences, when I find, at the end, that it was a decision of two men to close the News Chronicle, it confirms my belief that there must be structural changes in society, and not just good intentions on behalf of individual Members of Parliament, if we are to bring these great centres of power to a position where they are accountable to the people.

Mr. Rees-Davies

Has the hon. Gentleman been good enough to read the evidence of the Select Committee on Nationalised Industries? If he has read that document, does he appreciate that it shows, first, that there is no accountable system whatsoever within this industry, and, secondly, no proper yardstick of efficiency to which attention has been paid.

Mr. Benn

I am in the process of paying a tribute to the Select Committee. I hope that the House will believe me when I say that I have read the whole of the massive tome. I found it intensely rewarding, and I recommend the Report to the House, and to the hon. Gentleman if he is able to stay and listen.

I want to draw another contrast of the greatest importance to the House. It is a contrast between the Select Committee's Report and the Stedeford Report. The two Reports will be set side by side in the House during the next twelve months.

First, the Select Committee under the right hon. Member for Blackpool, North was free to recommend anything it chose. When it began its work—at the request, incidentally, of Sir Brian Robertson—it was free to decide anything that it chose, and it was not in any way bound by terms of reference of the kind the Prime Minister laid down for the Stedeford Committee.

Secondly, the Transport Commission, when given a hearing before the Select Committee, was able to produce evidence, answer questions, and defend itself, in contrast to the Star Chamber methods of the Stedeford Committee.

Thirdly, the evidence and Report of the Select Committee is published for the House to read, whereas, of course, the Stedeford Committee Report is secret and is not available for anybody, so that even if the Stedeford Committee has come out in favour of the Commission we shall never know because all we shall know is what the Minister chooses to put before Parliament in the White Paper. Without any disrespect to Sir Ivan Stedeford, I can only say that the methods under which he has been forced to work by the Government will make us very doubtful of his recommendations, because we shall not have any way of judging whether they are right or wrong.

The problems to be faced are the financial position of the Transport Commission, the growing deficit, which is a cumulative deficit, and the fact that the estimates in the modernisation plans have turned out to be over-optimistic. What I missed from the right hon. Gentleman's speech—and perhaps it was done on purpose, but if it was I do not know why—was that he made no attempt to analyse the reasons why the deficit had accumulated. Until one knows why there is a growing deficit on British Railways, one cannot reasonably come out with a solution to the problems.

The first reason given in the Report is the chronic underinvestment before the war, the wear and tear of the war years, and the fact that after the war one had to get back to pre-war levels of safety and wagon-building before one could start modernising. Secondly, the growth of road competition, to which the Minister referred. Thirdly the delays in awarding fare increases to the Transport Commission by the Transport Tribunal. When we talk in millions of pounds, as the Minister has done, let us not forget that the Transport Commission recently asserted that it lost £100 million because the Transport Tribunal delayed granting increases in fares which the Commission needed to meet rising costs. The Report refers to direct Government interference. The Government are entitled to interfere if they like, but the Report says that Government interference meant losses of between £15 and £23 million in fares and charges and that the Government should refund losses directly. I support that view.

We then come to the legal restrictions to which the Minister referred, but the main point which he omitted was the character of the Transport Commission and the way in which it has interpreted its responsibilities since it was set up by the House. This came out time and again in the evidence, and it reflects no discredit on the Transport Commission. It has not interpreted its function as being solely to make a profit. It has interpreted its function as being that of performing a public task.

I will now go quickly through some of the things the Commission has done—whether rightly or wrongly is for the House to decide, but each of which could reasonably explain a part of its financial difficulties.

There is the point made by Sir Brian about the use of railway workshops. The Commission has not exercised its responsibility in regard to railway workshops in a strict economic way, saying that a change in the traditional work of railway workshops should not cause excessive suffering for the workers in the industry. When the Commission bought diesels it bought them from British manufacturers, because it felt that it had a responsibility to do that instead of going to the United States, where diesels were available. The Commission would, perhaps, have reaped a better bargain there, but it felt that would not have been in accord with its responsibilities.

The Commission kept its fares low, and time and again—I think wrongly, in this case—the Chairman of the Commission said that he felt it his duty not to interfere with the costs of cheap season tickets which had resulted in a spread of populations round the big cities even though the Commission ran into difficulties as a result. It is true to say that the wages of the railway workers have subsidised commuters and others who enjoy low fares when travelling in and out of cities. Then, again, there is the story of the Commission subsidising bus services by keeping uneconomic lines so that the public will not suffer.

Finally, the maintenance of uneconomic services which have been maintained, for example, on Sundays, or Scottish services to take another very obvious example, have led to losses to the Commission. The Minister says that it is the responsibility of the Transport Commission to operate in an uneconomic way. Who then assesses social needs?

The right hon. Gentleman the Minister of Health put a question to Sir James Dunnett. The Minister of Health—he was then a back bencher—asked: … do the Ministry consider that it is the function of the Commission to identify and appraise social purposes? Sir James Dunnett replied: My own answer to that would be: No, I think that is a matter for Ministers. The question is: has the Minister's Department been considering the social aspects of transport?

The right hon. Member for Blackpool, North asked a question on this. At question 182 he asked: That does not mean that you yourself put forward to the Commission proposals that are in your opinion justified on social grounds? Sir James Dunnett replied, "No". That means that although the Ministry of Transport objects to the fact that the Commission has exercised its responsibility over a wider area than purely financial considerations would allow, the Ministry of Transport itself has not assumed any responsibility for doing this.

As a result of all this, we have come to a most unrealistic capital structure. The historic costs of the railways, a vicious circle of growing deficits on which interest has to be paid, has had a bad psychological effect on the recruitment of workers to the industry.

The Select Committee makes one recommendation which I applaud most sincerely and recommend to the House. It is that in future the B.T.C. should operate on economic criteria and then, if the Minister says that there must be railways north of Perth or that there must be another non-economic service, let him make the case to Parliament. This recommendation by itself would have justified the Select Committee's Report.

The question now is: what should be done about it? The Minister mentioned some points. I shall try to deal with them as best I can in a few minutes. I want to state what, in our view, are the major priorities to overcome this difficulty. My hon. Friend the Member for Southwark (Mr. Gunter) made these points very powerfully in a speech at the Scarborough Conference. First the Government should take over the capital and finance the deficit of the Commission until 1963. As Sir James Dunnett admitted in his evidence, there is a necessity for financial reorganisation of the Commission. We believe that that would be the best way to do it.

Secondly, the Commission should then operate on an economic basis. It might be necessary for the Commission to pay a rent to the Government for the use of track. As was pointed out by the Committee, there should be a subsidy if the Government want to maintain non-economic services. Thirdly, the Transport Tribunal should be abolished. Fourthly, there should be a full development of sites. Fifthly, the modernisation programme should be speeded up.

I suppose the right hon. Gentleman realises the effect of his speech today. He said that there is to be a new reappraisal of the modernisation plan. He said that there is to be a new committee. No increase of confidence will arise from people knowing that he is to be its chairman. He said that there will be a new review of the modernisation plan, which has been reviewed and re-reviewed, appraised and reappraised, and commended to the House by his predecessors at the Ministry.

We believe that the modernisation plan should certainly be allowed to go forward. Indeed, there is a strong case for speeding up modernisation in order more rapidly to reach the point where modernisation can bring in the economic results which we know it brings in.

The Minister said that he was making no announcement of policy today. We understand that very well. As there is the Stedeford Committee, which has just reported, and the new Committee which the right hon. Gentleman has just set up, which will not report for some time, we shall have to bide our time and wait until the final decisions can be announced.

What we can do is to judge the Prime Minister's policy towards the railways by the Select Committee's Report. I want to refer to the announcement made by the Prime Minister on 10th March, 1960, in which he set out his view about the future of British Railways, and see whether his view is sustained by the Select Committee. On 10th March the Prime Minister said this about the railway industry: I know a little about it; I was in it for many years myself. We looked into that and found that he had been in it himself.

The Prime Minister laid down certain principles. I want to examine what he said in the light of the Report of the Select Committee. First, the Prime Minister said that there must be reorganisation. His actual words were: … the Commission must accept a radical alteration of its structure … Measures of reorganisation should include decentralisation of management. …"—[OFFICIAL REPORT, 10th March, 1960; Vol. 619, cols. 644 and 649.] This is what the Select Committee says on this point in paragraph 360: … Your Committee believe that the general lines on which the Commission are now working—both in central co-ordination and in decentralisation of managerial responsibility—are right. Therefore, on the first point raised by the Prime Minister he is totally contradicted by the Report of the Select Committee.

I come to the second point made by the Prime Minister on 10th March. He said, speaking of the Commission: … it tends to become a top-heavy structure which, however good those at the top are, are not really the people to control it …"—[OFFICIAL REPORT, 10th March, 1960; Vol. 619, c. 646.] I looked through the Report of the Select Committee in an effort to ascertain whether there was any evidence of this. This is what it says in its recommendation in paragraph 362: … the Chairman of the Commission is very much alive to this problem of the size and complexity of the central organsation … The Committee goes on to say: … as modernisation proceeds and the Area Boards further develop it "— that is, the central organisation— will be simplified and pruned. But the rightness or wrongness of this kind of organisational decision can only be tested inside the Commission. Therefore, on this issue also the Select Committee shoots the Prime Minister down and proves that his argument does not bear examination.

I come now to what the Prime Minister said about another aspect. As the House may by now have guessed, on all his major points the right hon. Gentleman was destroyed by the Select Committee. The Prime Minister said this about regional management and accounting on 10th March: … individual undertkaings, including the regions of the British Railways, should, as far as practicable, be made fully self-accounting and responsible for the management of their own affairs."—[OFFICIAL REPORT, 10th March, 1960; Vol. 619, c. 644.] The Select Committee returned to this point again and again. It said, in paragraph 359: … the British Railways are, to an important degree, a single integrated system. It said in paragraph 37: … it must be the Commission which remains responsible in chief for relations between Parliament and the railways This in itself imposes a limit on the decentralisation that is possible within B.T.C. Therefore, on the case for decentralisation, the Committee comes down against the Prime Minister.

I come back to the modernisation plan which the right hon. Gentleman mentioned today. The Prime Minister said on 10th March: … the railway system must be remodelled to meet current needs, and the modernisation plan must be adapted to this new shape"—[OFFICIAL REPORT, 10th March, 1960, Vol. 619. c. 643.]

Mr. Geoffrey Wilson (Truro)

What is the hon. Gentleman's observation on this statement in paragraph 420 of the Report of the Select Committee: But if the Commission are to know which of their services are justifiable on grounds of direct financial return, they must have some form of account by which the profitability of Regions and services can be judged."? Is not that in favour of regional accountability?

Mr. Benn

There has never been any doubt in my mind that the Select Committee was right to say that there should be better cost accounting for the railways, but cost accounting of particular services has nothing to do with going back to the idea of regional accountability. The hon. Gentleman knows better than I that before the war several hundred people worked in the Railway Clearing House and that 70 per cent. of railway receipts were based on assumptions. They were pooled and, therefore, had no relation to the real cost of railway operations.

The Select Committee says two things about the modernisation plan. It says, first, in paragraph 198: The Modernisation Plan is a whole. One can take a part of it, look at it, and say if it seems to be making a profit or a loss; but that is not a wholly satisfactory exercise because it overlooks the effect the part is having on the rest of the railway system at large. The Commission is saying that to remodel the modernisation plan would be to harm the railway system as a whole.

When I heard the right hon. Gentleman announce today that London-Midland electrification was to be cut, my mind turned to paragraph 393 of the Commission's Report, in which it criticises the way in which it was introduced, but says: The right policy now seems to Your Committee to be to complete this scheme as soon as possible. To sum up Government policy after all this, we have had seven months of inquiry by a Select Committee; we have had full documentation; we have had careful cross-examination of witnesses; and we have had an all-Party Committee. In all the main essentials, the all-Party Committee has blown the Prime Minister completely out of the water on the arguments which he advanced to the House on 10th March.

This is not the first occasion on which this has happened. After all, the Prime Minister set up the Devlin Commission, and it blew up in his face. The Prime Minister set up the Monckton Commission, and it blew up in his face. Now the House has set up the Select Committee, and it has blown up in the Prime Minister's face. This confirms the suspicion I have always had of advertisements. Careful investigation proves that the claims will not bear examination. This applies to the advertisement that the Prime Minister gave to the House about his own prowess as a railway executive and administrator. The presence of the Prime Minister's name on today's Order Paper, inviting the House to take note of a Report which entirely destroys the basis of his railway policy, only confirms me in my belief that he has not read the Report.

I come now to our Amendment. I appreciate fully that it cannot be dealt with until the end of the debate. The first reason why we censure the Government is that we believe that they are attacking this problem in the wrong way. Then we come to a much more important consideration, namely, the work the Select Committee did in throwing light on the Ministry of Transport. The Select Committee did not only discuss the railways. It also discussed the operation of the Ministry.

As is known, after the war, in 1947— I do not want to reopen the old arguments—an attempt was made by the Labour Government to tackle the problem of transport by means of an integrated system. I do not want to reopen that now. But the Commission that was set up then had an overall responsibility, and in 1953, when the Ministry restored competition to British transport, it was its patent duty to take back upon itself responsibility for national transport policy. I can very well see that if we establish a monopoly, like the Transport Commission, as we did in 1947, we can say that it is its responsibility to co-ordinate transport. When we break that up and restore competition, the responsibility for co-ordination must be assumed by the Ministry of Transport.

If there is one thing that is absolutely crystal clear from the Select Committee's Report it is that the Ministry of Transport does no co-ordination whatsoever in the field of transport policy. I should like to read paragraph 335 of the Report of the Select Committee, which confirms this: In the competition that then ensued that is, after the 1953 Act— the functioning of the railways did not have to be regulated for any needs of strategy. Nor, it seems, was there an attempt to co-ordinate, in any hard and fast way, the development of national transport resources; capital investment, whether in a road or in a railway project, was considered in each individual case on its merits, including the amount of public pressure for it. There was no national planning of how the competition should develop;… The only people who could conceivably have done this national planning was a Government Department, the Ministry of Transport. But it turns out that, in the ten years since the Conservative Government have been in power, and particularly in the seven years since the 1953 Act, it has been left to a hotch-potch of public pressure to decide our national transport resources were to be developed.

I will go into that more carefully. My hon. Friend the Member for Edmonton (Mr. Albu), in the Select Committee, put a telling question to Sir James Dunnett. I know that we do not attack civil servants in this House, and in saying this I am only quoting the evidence and not referring to him in any way personally. But I want to draw the attention of the House to three critical questions put by my hon. Friend.

In question 41, my hon. Friend said: I want now to know whose business it is within this estimate of the country's general economy to make estimates of the return on capital invested in the railways, in the light of the traffic they can expect to receive or, to put it crudely, whether the return on building more roads or modernising certain lines of the railway is likely to show the better return. Sir James Dunnett replied: That is a very difficult thing. The problem does not, in my experience, arise in quite that form. That is absolute confirmation that there is no work in the Ministry of Transport on the return from different types of transport investment.

The second question is this. My hon. Friend returned to this in question 44. He said: In either the Treasury or the Commission is there any group of economists or people continually dealing with this sort of thing? Sir James Dunnett said: We have a statistical branch in the Ministry with statisticians in it. Quite honestly, I think it could be stronger and I would like to take action in that direction. Later, my hon Friend, in question 86, returned to it again and said: You are saying that it is not the business of the Treasury or the Ministry to have a transport plan? I do not mean forcing everybody to travel a certain way, but a structure based on the consideration of giving the best economic returns. Sir James Dunnett began his answer by saying: What kind of thing would you have in mind? The fact of the matter is—

Mr. Rees-Davies rose

Mr. Benn

I must be allowed to finish this before the hon. Member intervenes. The Ministry of Transport, for six years since the break up of the integrated transport system, has not had a co-ordinated transport plan.

Mr. Rees-Davies rose

Mr. Benn

I am sorry that I cannot give way yet. I must be allowed to develop this point.

We come to question 160, which was whether the Ministry ever was in a position to judge the proposals of the modernisation plan. My hon. Friend the Member for Houghton-le-Spring (Mr. Blyton) asked if the Ministry had any technical experts when discussing major projects. Sir James Dunnett replied: We certainly have no technical experts at all. We could not check what the Commission were telling us technically. We could check questions of finance and economic returns, but we could not check what they were proposing to do technically. That is to say, the Ministry of Transport did not really regard it as its function to review the technical work of the Commission, but only to examine the financial and economic structure.

We come to the hon. Member for Scarborough and Whitby (Sir A. Spearman) who asked about pipelines, which are, of course, not a function for the Commission. He said to Sir James Dunnett: Do you think that pipelines for carrying oil and chemicals are going to have any serious effect on the profitability of freight carrying? Has that been taken into account at all? Sir James Dunnett replied: This is a matter about which the Commission have been thinking. … It is very difficult to make a judgment of how fast it will develop … There was no staff or equipment or thinking by the Ministry of Transport about the development of pipelines and the likely effect on the national transport policy. Therefore, our charge against the Ministry—on which I shall sit down and take the hon. Member's intervention—is that seven months of work have proved that there is not even equipment for a transport policy in the right hon. Gentleman's own Department.

Mr. Rees-Davies

On this point I am indebted to the hon. Gentleman for keeping me waiting, for this reason. Sir James Dunnett put this question. He said—

Mr. Benn

What is the reference.

Mr. Rees-Davies

I am afraid that I cannot give it at the moment, but I will give the exact quotation from the Report of the Select Committee. He said: We find one of the most difficult things in the Ministry is to discover where the money is actually being lost in the Commission. It is very difficult to get any answer to that. Surely the hon. Gentleman realises that if we are unable to oversee the financial responsibility of another Commission, and if we are unable to have any information on which the Estimates exist, because there is no accountable system and no efficient yardstick, we cannot be in possession of the information we need to gauge its powers. That is why the Ministry is unable to control the Commission.

Mr. Benn

After hearing that "trailer" of the hon. Member's speech, I hope that he will have an opportunity of catching your eye, Mr. Deputy-Speaker, but an intervention is normally to elicit a word of information about the argument.

The social responsibilities taken by the Commission under the 1947 Act have been one of the major factors, in addition to the others which I went through stage by stage, for the present deficit.

It is our charge that the reason that our transport in this country is in chaos is because the Ministry of Transport has totally abrogated its responsibility for national transport planning. We have the paradox in the Annual Report of the B.T.C. of the double wastage—the terrible wastage—due to the fact that our roads are congested, and then the extra wastage due to the fact that our railways are not used. An example is the Victoria tube line. It is now eleven years since the Committee recommended this as a matter of urgency because it would do more to relieve the streets of London than any comparable road development. Time and again it has been recommended and reviewed, but it is said that it would lose money. Therefore, the decision has to be taken by the Ministry of Transport: is it more economical to build an under-pass at Blackfriars or to build the Victoria line tube—and there is no equipment in the Ministry to allow it to judge between the two things.

Take another example, one which was mentioned by the Minister. Does it make sense that the B.E.A. should subsidise its domestic air services out of its profits on the Continent in order to under-cut the railways between here and Manchester and Glasgow? I am not expressing a view. It may be right, but it should be right only if the Ministry has co-ordinated its work. We recognise and we welcome the late conversion of the Minister to the necessity for some forward planning. On our side there was no objection when he said that we shall try to look ahead at different types of transport. Our complaint is that this has been tied up with another review and modernisation plan, and our even greater complaint is that it comes ten years too late.

There are, of course, many criticisms of railway administration in the Select Committee's Report. I believe that those criticisms deserve close attention and I very much hope that the Ministry and the Commission can deal with them. But the simple fact is that we must have faith in the Commission and allow it to get on with the job. If the Minister does not believe that the Chairman of the Commission is competent it is his plain public duty to dismiss him and to appoint another man whom he thinks is competent. What is intolerable is to appoint a chairman and set up an organisation by Parliament and then to interfere all along the line so as to make the job utterly impossible.

I wish now to deal with what seems to me to be the great tragedy of the Ministry of Transport, which is that we have a Minister who really does not like railways. This is the simple fact about which there is absolutely no dispute. I should like to draw attention to the very proper comment made in the Railway Gazette. That is not a party organ. It reviewed the Minister's Scarborough speech in which he dredged up from ten years back the case of a part which was lost when he was in private industry and had sent a crane by rail. The Railway Gazette finishes with words which I should not have dared to say myself, but which I think I can quote: It is the Minister's duty to be objective and not objectionable. It is a very great tragedy that the only statement that the Minister should have made of any significance today in his speech was that there was to be a cut—in effect a cut—in the modernisation programme and an entirely new review of the finances of the Commission.

I quote what his predecessor said on 17th July, 1958, when speaking about 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. He added: 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 task."—[OFFICIAL REPORT, 17th July, 1958; Vol. 591, c. 1449.] It is because I fully support the right hon. Gentleman's predecessor in that view that I now move the Amendment on the Order Paper, at the end of the Question to add: but regrets the failure of Her Majesty's Government to pursue a consistent national transport policy within which the British Transport Commission could operate effectively; and calls upon it to do so forthwith

5.3 p.m.

Sir Richard Nugent (Guildford)

I am very glad to be able to take part in this extremely interesting debate on the present condition and future fate of our railways. I listened with interest to the speech of the hon. Member for Bristol, South-East (Mr. Benn) in moving what amounts to the Motion of censure which he and his right hon. and hon. Friends have placed on the Order Paper. Although the hon. Gentleman had some interesting things to say in some parts of his speech, which I think and hope will be helpful to my right hon. Friend. I am bound to say that I felt that the substance did not add anything very new to the arguments which we have heard before.

I do not want to go further into political controversy. I feel that my contribution may perhaps be more useful if I speak on general lines of technical and commercial needs. But I think it fair to make that point. I wish to add this on a point which was advanced by the hon. Gentleman about the policy—or lack of policy as he saw it—of the Government in having no proper policy on transport generally for co-ordinating road and rail. Policy in the days when I was at the Ministry—indeed, it is the same today—was the development of modes of transport, whether rail, road, air or sea, to meet public demand and to avoid a system of tight planning such as hon. Members opposite prefer; to leave it to the consumer demand to decide what is needed. So far as possible, we have taken the forward view about what would be needed in the future and there is every sign that that policy has commended itself to the nation.

On the question of the particular policy of the Transport Commission, the policy we were following, my right hon. Friend the present Minister of Defence and myself, until 1958, was that we accepted the broad modernisation plan proposed by the Commission. It was submitted in the form of a White Paper and approved by the House, and after a broad general study it was allowed to go ahead. So far as possible the Commission was given capital payments year by year to meet its capital quota. It was not until events showed that the prospect of solvency in the early 1960s for which the Commission was hoping was unlikely to be achieved—and that began to be made apparent two years ago, towards the end of 1958—that we felt it necessary to take a closer look at exactly what was happening.

My right hon. Friend then asked the Commission to commence a reappraisal which it subsequently submitted about a year ago, and to say whether the modernisation scheme was really rightly designed to meet the needs of the present day. I think that in part this is an answer to a query put by my right hon. Friend the Member for Blackpool, North (Sir T. Low), who was Chairman of the Select Committee, in one of the comments which he made when taking evidence in the Committee. Once the original prospectus which was put before us appeared to be falsified by events, it was a different matter, but up to that time it appeared that the Commission would meet its commitments; that the prospect of solvency was there and that we were fully justified in going on advancing the money which was asked for.

It is typical of the problem of the railways—there is a Motion of censure on the Order Paper today—that it contains a considerable political element. One of the difficulties in dealing with the railways is that they have been set against a political battleground for the past fifty years. Here is a huge industry, here is a commercial undertaking affecting the lives of hundreds of thousands of men, and it has a political battleground, which puts a haze over the whole thing, making even more obscure something which, by its nature, is very complicated. Therefore, it is not surprising if from time to time wrong decisions are taken.

In my view, the success of the modernisation scheme depended on three factors, first on equipment, the right equipment; secondly, on the rationalisation of the existing system, and, thirdly, on manpower economy. In the event, I think that the Commission should be commended for a fair measure of success on the first point. The results of last year and of this year are showing that considerable increases of revenue are coming in as a result of the new equipment which we see about the country, and so the Commission should be credited with a high measure of success, despite the criticism now going on about the pros and cons of the electrification scheme on the old L.M.S. It is when we come to the other two factors, rationalisation and manpower economy, that I believe we find the rooks on which the modernisation plan has foundered. I listened with great interest to the speech of my right hon. Friend and his plans for dealing with these problems. It is this particularly about which I wish to speak today.

The Select Committee has given us a most valuable Report, and I should like to add my thanks to those already expressed for a monumental piece of work by those who sat on it, took evidence and produced a compact and constructive Report. If I do not agree with every detail, I agree with a very large part of the Report and have found it very helpful.

I particularly wish to stress one of the Committee's findings, and that is the present absence of costings on the railway system and the difficulty, therefore, of telling what is profitable and what is not. My right hon. Friend the Member for Blackpool, North, and his Committee paid particular attention to this. We are all groping in the dark until that can be devised. It is a very difficult thing to do, but it is quite clear that it is one of the vital problems that must be solved if we are to take a clear view of the future.

The Select Committee found that, in its view, the Commission had paid not enough attention to economic considerations and too much to social considerations. I shall say more about that later. In considering the broad picture of rationalisation, I mean the streamlining of the existing system to make it fit for the needs of 1960, and I am sure that everybody would agree with that. The huge deficit is bound to give us all enormous anxiety when we know that the taxpayer has to pay, and we must face it and find a way to get it right. My right hon. Friend the Minister of Transport is right there. Again, considering the wagon turn-round and the passenger load factor, one sees signs of many resources of British Railways which are under-used at the present time.

So far as I have had a chance of looking at these matters and taking some part in the affairs of the railways in recent years, I have the impression that the broad policy that has been followed is to continue to operate the existing Victorian system—a comprehensive railway system operating broadly in the traditional and fine way of the common carrier who is there to meet all demands at all times. Broadly, that is the way in which the system is worked. Some bits have been cut out, but in the main twat is the way in which it works.

Today, however, conditions are completely different from what they were in 1860, when this system was laid down. Then, the only alternative form of transport was by horse and cart, and thus the railway system had to be brought wherever it could be in the country. I agree that if we had no railway system today we should have to build one, but its primary purpose would be not to carry trade but to carry commuter passenger traffic. Fortunately for us, the Americans have proved that there is no way of carrying people in and out of cities in huge numbers except by railway and we are fortunate enough to have a system with which to do this. That is undoubtedly the primary purpose of the railway system today.

The problem of rationalising this Victorian system which we have inherited is immense. It is the drastic one of streamlining the existing railway system to meet the needs of the nation today and the anticipated traffics that may be attracted to the railways. It is a very big operation indeed. The signs are that up to date that has been one of the primary rocks on which the modernisation plan has foundered. There is a great tangle of social, political and economic factors all wound up together which the Commission has been trying heroically to deal with, while being not entirely helped by us throughout the whole of the period.

Where is the loss? In evidence to the Select Committee the Commission said that it had, in the main, lost on passenger traffic. It is an astonishing state of affairs, when the primary rôle of the railways today is to carry passenger traffic, particularly commuters, that the main loss should be on passenger traffic. My guess is that there is a good deal of dead wood in the living wood, such as old-fashioned marshalling yards which need new equipment. Gradually the Commission should be able to cut out this dead wood.

Mr. Collick

What the hon. Gentleman is saying is most interesting. He is deploring the fact that the railways were unable to increase passenger charges, but he bore some responsibility in the Ministry at that time. I am sure he understands that the Commission was prevented from doing that for reasons which he well knows. He cannot fairly blame the Commission for that.

Sir R. Nugent

I am not blaming the Commission for anything in particular. The hon. Gentleman's intervention, although put in his customary lucid manner, is not directly relevant to my point, which is that it is an astonishing state of affairs that the primary rôle should be the one which is causing the main loss. I believe that there is loss in many other aspects of the system—in branch lines, perhaps in some of the main lines which are duplicating others in part of the freight system and in freight depots. Some of these depôts are having new equipment installed, but I feel that the picture is one of the widespread waste of resources there.

Here again, we come to the need for a system of costings which will show what is making a profit and what is making a loss, so that if there is social justification for maintaining a remote branch line somewhere, then this Parliament, as proposed by the Minister, is the place to decide it. That such a thing should be carried in the broad picture of the whole of the railway finances is unsatisfactory, however.

Mr. Popplewell

The hon. Gentleman is implying that there is very little in the way of a costings system in the industry. That is somewhat wide of the mark. There is, indeed, a very extensive costings system, but the question of costings in a given direction is one of the most difficult of tasks. Has the hon. Gentleman read the Select Committee's Report? It states that certain regions are trying to get a different way of costings in order to convey the picture which some hon. Members are desirous of knowing. It is, however, most difficult and they are bringing in outside accountants for advice. To suggest, however, that there is very little costings is not giving the Commission a fair crack of the whip. There is a very complicated system.

Sir R. Nugent

I am well aware of what the costings system is. If I have not put it into proper perspective I am glad to acknowledge it now. There is a complete system of costings from year to year in the general operation of the Commission, but the system which I want is one which will show which operations are profitable and which are loss-making. I agree that it is very difficult to do but it is essential.

Turning to the other point, that of manpower, it is inevitable in a system where a large part of the resources are under-used, as they are at present on the railways, that a great deal of manpower is also under-employed. Where we have a picture of over half a million employees it is disappointing to find that only 35,000 of them have been covered by works study. I hope that there will be a general response to the appeal to extend this study throughout the railways generally, because I am certain that, following the example in other sections, particularly that of track maintenance, there are very great rewards to be got for the railways from that activity. I believe that these are the two rocks—rationalisation of the existing system and the better use of manpower—on which the modernisation plan has foundered.

I am not—as some people have done—putting the Commission in the dock in the matter. I am happy to say what I have often said before. It is that I have a great gratitude towards Sir Brian Robertson and his colleagues for the work which they have done. We have set them an heroic task to run the railways at all, and to undertake their modernisation as well is really one of the most formidable tasks which any body of men could be asked to undertake.

We have only to look at the personnel on the Commission to see that among them is to be found the "top brass" of management, men who have been running top industries in this country in which they have been successful and are still being successful in a variety of ways. There is no lack of men of talent. It is bound to make one think, and think again, whether their terms of reference have been completely right and whether they have been given a job which it is really possible to do. Has this problem of rationalisation really been something which they could successfully tackle?

The point has already been made several times, and was made to me again in an intervention, that previous Ministers have interfered with the course of management by the Commission and thereby lost it money. They have, and the Select Committee computed a little bill for them amounting to about £20 million. I do not know what share an ex-Parliamentary Secretary is expected to pay of that. However, I admit that it is a fair point.

The point I wish to make is that throughout these years there have been something of the order of 200 Questions a year and dozens of Adjournment debates concerning the Commission, most of them dealing with management. All of us, when we speak about the matter generally, are in favour of rationalisation and of cutting out redundancies, branch lines that are not paying and of solvency for the Commission, but when it comes to our constituencies it is a different matter. There are very few hon. Members on both sides of the House who do not object in the form of Questions or Adjournment debates if it is proposed to close a branch line in their constituency, to raise fares which will affect their constituents or to close down something which will cause redundancy in the constituency. The total effect of all this over the years has really been that the House has been speaking with two voices.

What has happened to the Commission? It is struggling manfully with the most difficult job of rationalising the railway system which should mean, and will eventually mean, a very substantial and drastic streamlining of the whole system. Those who have proposed schemes of streamlining have been opposed by others inside the system who say that people do not really want this, that public opinion is against it and that we must not go so fast. The natural conservatism of the railwayman when it comes to changing the system which he has inherited has had the effect of applying the brakes and preventing the rationalisation which should be taking place.

I feel that my right hon. Friend has taken a practical step in setting up a group to study the problem. With all the ability and talent that there is in the Commission, its members have not been able to go fast enough with rationalisation and cutting out the dead wood. If my right hon. Friend, in consultation with the Commission, can revamp the rationalisation plan so that it will meet the needs of traffic today, he will be doing a great service to the community. That is the only way in which we can get the railways out of their present difficulties. At the present time we are running the risk of modernising things that will not be needed in the future. I wish my right hon. Friend the best of luck. I am sure that something is needed that will strengthen the centre so that the Commission can cut away what is no longer wanted.

As far as Parliament is concerned, in the early days of the nationalisation of the railways Questions were limited to policy, but gradually, owing to our intense interest in these matters, we have swept away those barriers and Questions now delve into every aspect of management. We simply ask the Minister to give a direction about this or that. That sort of thing is bound to handicap the railway system and discourage men from showing initiative. It is bound to weaken management and make its task more difficult. Therefore, I ask that in the fresh look that is being taken at the railway problem my right hon. Friend will consider asking the Select Committee—if it is not already worn out with all its labours—to look once more at this problem. Is it possible to establish a convention which will limit our Questions and inquiries to policy and keep them out of management? I am sure that that would be a very great help to management in the future.

Finally, may I say a word about the Commission itself? I have seen rumours in the newspapers about what is intended concerning the Commission in the future. I am glad that my right hon. Friend gave no substance to them today. I hope that the Commission will continue as at present. I am sure that the members of the Commission, with their great qualities, are the people we want, but I hope that in the future they will have the power at the centre to proceed with rationalisation in a wider way.

I am not at all sure whether it is right to have chairmen of regional boards on the Commission. I want to see regional boards functioning and having regional accounting; let us have the clearest picture that we can get and give all the autonomy that we can to the regional boards. There must be central direction and my right hon. Friend's thought on the matter seems to me to be broadly right, but let us make quite sure that there is sufficient strength there to carry out the essential functions which have to be carried out. Whatever we do with the regions, a great many functions must remain at the centre.

I was very glad to hear my right hon. Friend say that he intended to reconstruct the capital structure. I am sure that it is most depressing and discouraging to all the workers in the railways everywhere to be borne down by a levy on capital reconstruction which they cannot possibly service and to be con- tinually in the red. I congratulate my right hon. Friend on his proposal about the capital structure and I hope that we can keep the political controversy really clear of this picture so that there may be a chance that, with the drive which he is putting into the matter and with the help of our friends on the Commission, we can really get our railways on to a sound and viable basis and get them off the backs of the taxpayers.

5.30 p.m.

Mr. Ray Gunter (Southwark)

It is a great pleasure to follow the hon. Member for Guildford (Sir R. Nugent), because he speaks with such understanding of the industry, but I am sure that he appreciates that the speech which he has just made has been made in different forms over the last forty years, and, while I thank him very much for his kindness and his interest in our industry, I must say that his speech does not get us much further.

I propose to be brief, because there is an air of complete unreality about the debate. We are talking in general terms about an excellent Report by the Select Committee, but hanging over the debate is a Report about which we know nothing—the Report of the Stedeford Advisory Group. In opening the debate the Minister referred continually to this Report, but at no time did he reveal what is in the minds of Sir Ivan Stedeford and his colleagues. Until we know what is in the minds of the members of the Advisory Group and how the Government propose to act upon their recommendations, I do not see that we can do much more, and I will, therefore, be brief.

May I, however, put the Minister right on one or two facts? In the first ten minutes of his speech he seemed to delight in the marvellous machinery of consultation which apparently exists between the Advisory Group under Sir Ivan Stedeford and the trade unions. I must confess that I have never noticed it. It is quite true that we have met the Advisory Group twice. The first occasion was immediately following its establishment, and I regarded that rather as a courtesy visit. We have met the members once since then, but at no time has that Group conducted its proceedings in the manner which we generally expect from a committee of this charac- ter. As far as I know, there has been no transcript and there have been no notes; there has simply been question and answer across the table. If the Minister regards that as adequate consultation and the right form of relationship between the unions and a committee of that sort, we do not.

As I understand the Minister's speech, we are to have a group to study the problems which Sir Eric Geddes studied forty years ago and at which we have been looking over the last forty years. We are asked by the Minister. again, to submit evidence from the unions to this further summer school or study group, or whatever it is to be called. We shall be most happy to do so, but, first, I ask the Minister to tell us what Sir Ivan Stedeford intends to say so that we may reflect on it and then offer evidence to the study group in the light of Sir Ivan's recommendations.

I hope that the Minister appreciates that the unions are not at all happy about the Group which he appointed. It is an astonishing story. The story must be almost unique. It was first thought that the Group was to be appointed as a planning board. It then became an Advisory Group. The Minister then referred to the terms of reference, but a junior minister said that the members had no terms of reference, only a remit. No one has understood what the terms of reference were. Indeed, I do not think that I am telling tales out of school when I say that there was some confusion in their minds at the end of the road, when they had taken evidence, as to what exactly were their terms of reference.

Three times in his speech the Minister referred to the necessity of maintaining the morale of the people in this industry. He cannot do it this way. He cannot continue to expect union leaders or the Commission to keep pleading with the men and cajoling them into the paths of discipline and duty when they are in a state of insecurity.

This debate is exactly the same as that which we had earlier in the year. The Government have not yet made up their mind as to the part which railways have to play in the transport industry, and it is only when this is determined that the railwaymen and the Commission will be able to say, "This is our task and we will do it".

We have had the Stedeford Group and we are now to have another study group, presumably into what are the best means of transport for different kinds of freight. I agree that studies have to be undertaken, because they ought to have been undertaken in the past and were not, but I hope that the Minister will give consideration to the need for speed.

There have been Press reports that Sir Ivan Stedeford will make recommendations about breaking down the Commission's authority and autonomy for the regions. I was very happy to read that the Select Committee came to the conclusion, which every transport man knows is the right conclusion, that the review of the administrative machinery of the transport industry must be a continuing process, but that there must always be a central body to deal wit the railways. While we must have decentralisation and co-ordination, it is obvious to anybody engaged in transport that we must also have regard to the integration of transport and that there must be a central authority of some sort to deal with it.

I hope that when the Minister looks at the Stedeford recommendations—I will choose my words with care, for they are not uttered in ignorance and we have a right to speculate in these matters—he will have regard to the fact that while we have had four eminent industrialists on this Group, whose ability I do not doubt, we have not had one so far who has revealed that he knows a great deal about the real problems of the integration of transport in this country. I hope that he will give due regard to the evidence of transport men in this country, and particularly of the Transport Commission.

In a remarkable statement, the Minister said that there had been a technical revolution in transport. We have been arguing that for years. It is because there has been a technical revolution in transport that there is a need for a completely new outlook upon transport as a whole. If the Minister has just discovered this revolution, I am very glad he has done so but I must tell him that he is a little late. This technical revolution necessitates a new look at how transport is to be organised for the future. I emphasise that there is an air of unreality about the debate. Until we can see what Sir Ivan Stedeford has at the back of his mind and what the Minister intends to do about his recommendations, we are in an atmosphere of unreality. The Transport Commission has been kicked about for too long. I have quarrelled with it in the past and shall do in the future, but by and large its members have done a great job. They have had no help or direction from the politicians. All that the politicians have done is to impede their progress. The politicians have not given them the advice and the help to which they are entitled.

I hope that with this new understanding of the technical revolution there will be a more human understanding of the Commission's problems and of the Commission as persons and as a collective body. We have quarrelled and we have argued, and we propose to go on doing so, but, by and large, the Commission has tried to do the honourable thing not only by the country but by the people employed in the industry. As far as has lain within its power—and there have been great financial difficulties—it has clone a good job in respect of pensions and conditions of service.

I want to pay this tribute, as a trade union leader, to the Commission—as one who is sick to death of their being kicked around and unable to answer for themselves. I hope that proper regard will be paid to the work of the Commission and to the contribution which it has made in the past. In any further survey of the industry I hope that full account will be taken of the opinions of members of the Commission before the ideas of four industrialists who, as far as I can see at the moment, have not a profound knowledge of transport problems, are implemented.

May I leave any further remarks on the subject until we know what is in the Minister's mind about Sir Ivan Stedeford's Report? But I address a last word of warning to the Minister—and I am not given to threats or coercion in these matters, as the Minister knows full well. If any thought is to be given to regionalising the Commission, to giving the regions greater responsibility and perhaps direct responsibility for administration, I hope that the right hon. Gentleman will consult the Minister of Labour before there is any question of the wage structure as we know it being altered and being put on a regional basis.

5.40 p.m.

Mr. Leslie Thomas (Canterbury)

I entirely agree with the hon. Member for Southwark (Mr. Gunter), who said that there is an air of unreality about this debate. I hope that the Government's proposals based on the Stedeford Report will not be too long delayed, so that we can know where the Government propose to take action and then have another debate in order to get the future programme settled quickly.

I was in two minds about this new committee which the Minister has told us he is to set up. I hope that the Joint Parliamentary Secretary, when he winds up the debate, will clarify the position and tell us the functions and objectives of this committee in a little more detail than the Minister has done. Is it to be a permanent committee within the Department—a committee of civil servants? I am not clear whether the Commission or anyone else would be involved, and perhaps the Joint Parliamentary Secretary can clarify that point when he winds up this debate.

As others have done, I must congratulate the Select Committee on the job which it has done. Within the necessary limits of a committee of this sort it has done a very thorough job. The fact that it is an all-party committee and is unanimous will give weight to its conclusions. Having said that, however, I must add that this Report is indeed a very critical one. It is critical of the British Transport Commission, and my personal interpretation of it is that it is a severe indictment of the Ministerial approach to the problems of this great industry and the problems involved in this great modernisation plan. I include the Treasury as well as the Ministry of Transport.

To follow up that point, I would say that in the light of the evidence that has been given and of the Report, it becomes increasingly clear, as one goes through that evidence and the Report, that the Government were completely justified in setting up the Stedeford Committee. My complaint against them is that they were probably too tardy in setting it up. For the past five years— unfortunately I did not make a note of the figures which the Minister gave in his opening speech—the Treasury will have found about £500 million or even a bit more to meet revenue deficits. The Commission's capital expenditure was about £700 million. These are enormous sums of money.

The capital expenditure in the past appears to have been justified on certain assumptions which annually appear to be failing to materialise. I do not think that anyone would say that the railways will be out of the red by the anticipated time in 1963. I do not think anyone seriously thinks that, but I do think, and I am sure many other hon. Members on both sides of the House think, that a large-scale modernised system, which British Railways are, can be profitable. I think it is a devastating thought, in the light of the hundreds of millions of pounds that have been poured out and are involved, in view of the vast number of men and women who are dependent for their livelihood upon this great industry—and here I am taking up the thought of the hon. Member for Southwark, who said that it was no good cajoling people who have no sense of security—that they will not reach a high standard of morale unless they can obtain a real sense of security. It is a devastating thought that it is only in the past few months that the British Transport Commission has taken positive steps to initiate an inquiry and tried to devise a method of getting a costing system as it affects inter-regional services and special services and operations.

I should like to know how much of the capital expenditure already expended—and here I am dealing with a point which has been raised by previous speakers—on meeting certain social needs and services, and the deficits which have to be met from public money, result from the Commission's decision to meet certain social requirements and needs, as mentioned in the Report, in which they are given great prominence, and what impact those figures would have had on rates and charges, season tickets and fares generally. Let me say in fairness to the British Transport Commission that it has never disguised the fact that it was pursuing this policy of meeting certain social needs and was financing unremunerative services. This matter has been mentioned in several Reports and is given prominence in the reappraisal.

Mr. Rees-Davies

May I interrupt my hon. Friend on that very matter? At no time has the British Transport Commission ever indicated to the Treasury, the Ministry of Transport or the Minister anything of the precise loss which it suffered in respect of running any of its manifold unremunerative services.

Mr. Thomas

That is the very point I am making. Whether the Commission has indicated that to the Treasury or not we cannot say. It does not come out in the evidence, and we have never been advised either by the Treasury or the Ministry of Transport.

The Commission gave prominence to this, and any hon. Members interested in transport know the prominence that was given to it in the reappraisal. I am certain that it was in paragraph 62. Undoubtedly, the Select Committee was right to come to the general conclusion which it did—that the moneys required for social needs must, in the event, be sanctioned by this House. It is fair not only to the Commission but to the public, and especially the travelling public. I agree with the hon. Member for Bristol, South-East (Mr. Benn) that there is undoubtedly a new climate in public transport. The amount of modernisation that has already taken place has undoubtedly made a decided impact upon the travelling public, and the more it does so the larger will be the Commission's receipts and the greater its number of customers.

In the past there has been a lack of any common approach between the Treasury and the Commission in regard to modernisation. In the light of the sums involved I criticise the Treasury more than the Commission. There has been no common approach in respect of the economics of the individual schemes which make up this great modernisation plan. It is now five years since the great plan was started, but only in the last eighteen months or two years has any real criticism of a scheme within the modernisation plan been made either by my right hon. Friend's Department or the Treasury.

In the last debate on transport, before my right hon. Friend was in his present office, I said that the railways were bankrupt. The then Minister said that he was not quite sure whether they were bankrupt, but they were certainly in the hands of their bankers. Only from the moment that the Ministry of Transport and the Government appreciated how dire was the financial position of the railways have they started to function in the interests of the taxpayers and customers.

I have road quite a lot of the evidence given before the Select Committee, but I am still not absolutely clear whether there is yet a ruling or agreement between the Treasury or the Ministry of Transport and the Commission as to the way in which the results of any new expenditure are to be assessed. I do not know whether it is to be considered entirely upon a profitability basis. There seems to be same argument as to what portion of the total amount of capital expended on a scheme is to be set aside as replacement or for new capital. I am not clear how the profitability is to be assessed. I hope that my hon. Friend the Parliamentary Secretary will at least tell us that there has been some getting together between the parties concerned on that aspect of the matter.

The Commission is a vast organisation, with a variety of interests. The greatest section consists of the railways, which we are now discussing. If the railways are to be profitable the organisation of the railways and of the Commission in relation to them must be streamlined. Many parts of the Report reveal a tardiness to take advantage of the existing economic conditions and climate. My right hon. Friend mentioned the question of land. I know that there are certain statutory restrictions on the manner in which the Commission can deal with this question, but the evidence given before the Select Committee shows that the Commission has now set up certain commercial companies to exploit land which is not required for operational purposes. This land has been standing in its books at a figure of between £27 million and £28 million, with an annual revenue of about £7 million. I should like to know why it has taken the Commission so long to take steps to exploit the tremendous property needs which have existed since the war.

In my constituency there are a few acres which have been derelict since the end of the war. Although post-war development has gone on in the city it was not until a few months ago—I believe that it was the result of certain letters—that anything was done. As far back as 1953 the Commission was asked if it would be prepared to sell the land if it did not require it. Its reply was, "We must see exactly what our developments are. We will let you know in a few months." That was seven years ago, and it is only recently, as the result of correspondence in the last few months, that the Commission has put a development plan before the local authority. That is an example of the Commission's sudden awakening to its responsibilities.

There has obviously been a great shortage of technical staff, and there still is, as the Select Committee emphasises. This may be a reason for the fact that some of the equipment now being used in these modernisation schemes is not up to the high standard that has always been maintained in the past. For example, the North Kent line has been electrified. There has been a great improvement in the service, with trains running more frequently. It seems to me that the timekeeping is 100 per cent. Instead of trains being regularly half an hour late they are now getting in a minute or two early.

But travelling in the rolling stock on this line has to be experienced to be believed. [Interruption.] If my hon. Friend wants to make a speech perhaps he will do so later. His remarks are a little diverting at the moment.

Mr. Rees-Davies

I was agreeing with my hon. Friend.

Mr. Thomas

It is a confession of failure that the Pullman Car Company, which operates on these trains, has had to devise lids for tea and coffee cups, because their contents are continually being spilt and thrown over the floor while the trains are moving. The rolling stock is now being slowly improved but it is a confession of failure that hundreds of thousands of pounds must be spent to adjust this brand-new rolling stock, which has been operating only for about 18 months. I feel that there must be some lack in technical supervision, which may be due to the lack of technical staff.

At present the functions and responsibilities of the Commission are too great and too varied to ensure the efficient particular concentration which is required to make it a viable unit. The organisation itself is too vast to permit this. There should be a considerable scaling down in its powers.

I do not know—none of us does—what the Government proposals will be when they have read and digested the Stedeford Report. I would like to see, when a new and adequate costings system has been devised, each regional board completely autonomous and responsible direct to the Minister of Transport. There is all the evidence in the Report of the Select Committee to show that—increasingly rapidly in the last few years—his Ministry has had to take more and more interest in the affairs of the Commission. I would like to see the regional boards directly responsible to the Minister for modernisation and capitalisation.

I would like to see a hiving-off of all the other vast interests which are the responsibility of the B.T.C.—the canals, hotels, surplus land and, now, the docks, which have ceased to be ancillary to the railways, which they once were, since half the traffic now going into the docks comes by road. Much tighter management would help in that direction. I would like to see the London Transport Executive an entirely separate entity. It is big enough for that.

I would like to see the B.T.C. itself with a small central organisation for such purposes as pooling arrangements among the regions. Such a body would consist of the chairmen or general managers of the regions and would be responsible for negotiations about wages and conditions over the whole of the country. I agree with the hon. Member for Southwark that in this day and age one cannot have different wage agreements within the same industry in different parts of the country. Such matters are national problems.

I have been critical of the B.T.C., but in all the circumstances, having had to look over his shoulder at the House of Commons, at various Ministries, over a period of years, I have nothing personal about which to criticise Sir Brian Robertson. Indeed, I congratulate him and thank him for the grand job which he has done in the difficult circumstances aver the past few years. The Select Committee's Report is first-class and completely justifies the Prime Minister's statement when he agreed to set up the Advisory Group. However, I hope and pray that the Government will not be as tardy as they have been in the past about bringing forward their conclusions for debate in the House.

6.4 p.m.

Mr. Austen Albu (Edmonton)

As the first member of the Select Committee who has spoken in this debate, perhaps I may be allowed to thank the House for the reception given to the Report. It may interest hon. Members to know that the Report has already gone into four printings and may even be making a profit for the Treasury.

I also express my thanks and pay tribute to the Chairman of the Select Committee, the hon. Member for Blackpool, North (Sir T. Low) for his chairmanship of what at the beginning seemed likely to be a highly controversial Committee, and which was, in fact, an extremely onerous one—the most onerous Committee on which I have ever served—and on his success in producing a unanimous Report. Obviously, unanimous reports must contain something of compromise, but there is not a great deal in this Report.

I have also to pay my tribute, as we do in the Report, to the courtesy, seriousness and extremely hard work which had to be put in by the chairman and members of the British Transport Commission and their staff in their evidence to us. I hope that they, as other boards of nationalised industries, will feel that the task of preparing such evidence is made worth while by the greater information which is available to the House and the increased factual basis on which Members can make speeches. When Members have been selected to undertake a task of this sort, it is not then possible for other Members to make the sort of wild statements which have sometimes been made about nationalised industries in the past.

There are two main matters which concern Parliament in the control of this industry. The first is that the railways shall take their correct place in the transport structure of the country in the light of such forecasts of economic development as it is possible to make. The second is that they shall have the right organisation and be efficiently run.

The first of these tasks is undoubtedly the responsibility of the Government. Transport policy is determined by a number of Government decisions, irrespective of whether transport policy is to be carried out by some system of integrated planning or some system of regulated competition. Although the hon. Member for Canterbury (Mr. L. Thomas) said that he was criticising the Commission, I thought that he made a most severe indictment of all recent previous holders of the office of Minister of Transport—and, incidentally, of the Treasury as well.

There is no doubt that at present there is no co-ordination of transport policy. After all, investment in the railways is only one aspect of such policy—investment in the roads is another, of course. There are many other aspects of Government policy which affect the forecasts which any transport undertaking is able to make about its prospects. For instance, the relative levels of road and fuel tax, which may be arbitrarily changed by the Government from year to year, the level of Purchase Tax on motor cars and even the rate of hire-purchase restrictions must affect the calculations which anyone trying to construct an investment policy for any form of transport must make.

These are matters which are absolutely beyond the control of the Commission, and they are not the responsibility of the Advisory Group, as the hon. Member for Canterbury seemed to think. The Advisory Group was set up to study organisation. It is interesting that the Minister has at last come to the same conclusion. Perhaps that has something to do with the remarks made by the Select Committee, for he himself has had to set up another committee to study the whole problem of transport planning—at least, I hope that it will.

However, that is not a committee for the chairmanship of the right hon. Gentleman, because it is a committee which should sit permanently. This is a matter for continuous economic study and not for an ad hoc committee. If we have ad hoc committees set up every two or three years we shall have such a zig-zag in investment policy that no industry could possibly carry out its task efficiently. That is exactly what is now happening with all the stopping and starting leading to inefficiency, demoralisation, and so on. This is a subject for continuous study, for, although policy may vary according to Governments and according to various Ministers, the study of the economics of transport problems must go on. Our evidence clearly showed that no serious assessment of future demands for various forms of transport had been undertaken by the Ministry whose task it should be, as my hon. Friend the Member for Bristol, South-East (Mr. Bann) so clearly pointed out.

We were told that the 1954 modernisation plan was a hotchpotch, but in the circumstances it could not have been any other. The railways did not know in which climate of transport economics it would have to work. The road transport plans are, presumably, also a hotchpotch. The witness from the Ministry admitted to the Committee that all these plans were, in fact, the result of a series of pressures. We in this House are aware of the pressures of our constituents, and so forth. The strongest lobby that I have known daring the twelve years that I have been in this House is the British Road Federation. Is the policy of the Government determined by a whole system of pulls and pushes without any consideration for the economics of the country or its transport requirements? It seems to me that at present this is the way in which transport policy emerges under this Government.

The Select Committee was not capable of making its own assessment, any more than the Advisory Group is. This is a continuing task to be carried out only within Government Departments, including the Ministry of Transport and, of course, the Treasury. We could only express a view and indicate some sort of basis on which decisions about the railway investment programmes should be made.

We started, I admit, by making some serious criticisms of the degree to which the railways costed their services and the way in which the return on investment was calculated. I am not entirely satisfied with the evidence that we received from them, and I believe it is even the Case that further figures could now be produced showing that the evidence we received was not correct. It only shows in what a muddle the whole situation really is.

We must start with some basis, some datum line and that should be the return on the capital invested. But this is not a separate undertaking in private industry selling goods. It is part of the general transport economy of the country. We have, therefore, to consider the whole national economy and the relation with the road system and other forms of transport, all of which may either be subsidised or taxed. We then have to decide what is the most economic way, given consumer preferences, of carrying out the whole undertaking. This may involve running the railways, as they are run at present, at a loss, and we have to determine what is that loss.

Thirdly, there are social considerations—not economic ones—for one has to consider where people live, what they will suffer if a service should close down, and so on. We say that these are correct considerations for the Minister and not the Transport Commission, but they are not such that the costs should be borne by the Commission itself. For that reason, we said that where considerations of the national economy or social considerations arose, these should be determined by the Minister who should give the Commission a direction and should pay the bill.

Of course, everything is something of a compromise. We are not suggesting that every estimate of cross-subsidisation should be eliminated. But we say that it is not possible to have a system which is run for national and social considerations and expect it to pay its way. What is more, if this is done, there is no Parliamentary accountability. I do not like a system whereby my constituents subsidise another Member's constituents unless I know what I am doing and I am able to debate it in the House and vote upon it.

This is the whole system of our control of Government expenditure. This does not mean that I want the railways to be run at a loss. It may well be that they should receive some subsidy for the purposes that I have been describing, but I want it out in the open. I do not want this continual hiding of the true facts. We want the facts and then we can judge whether the railways are efficient or inefficient.

On the question of organisation, I am convinced, as I am sure the Minister is, that no group of outsiders, however brilliant businessmen or Parliamentarians they may be, working for a short time, can come to a conclusion on the correct organistion of a vast commercial undertaking. I draw the attention of the hon. Member for Canterbury to this point. The concept of autonomous regions is absolute nonsense. We can arrive at the profitability of a particular service—a goods service or some service of that sort—or of a certain flow of traffic, say, from Glasgow to Plymouth. But it was shown clearly that nearly half of all the traffic of British Railways passes from one region to another, and the cost of the attempts made before the war by means of the clearing house and pooling systems to arrive at the true profitability of individual lines was not only inadequate but very wasteful of effort. We want the most extensive costing system possible for every service and we want to get as close as we can to the economic efficiency of the regions.

Without financial autonomy there is no autonomy. If these regions are unable to act as separate entities, with their own profit and loss accounts and revenue and expenditure accounts, autonomy is nonsense. Without it, there is only a delegated authority; not autonomy. I do not believe it is possible to have such independent economic systems in an organisation like this, particularly the more it becomes streamlined.

There, is, however, one field in which even stronger central control, at any rate in the short-term, may be desirable. This is in the field of engineering and the attitude of the Commission to its technical staff. Magnificent achievements have been made in a very short time by very small staffs, particularly in electrification. I think that the Commission, which has at the top some outstanding electrical engineers, made a courageous decision to introduce the 25 Kv. alternating current system and to order a large number of electric locomotives straight from the drawing board. I am told that a Russian railway engineer in this country recently was surprised that the Commission had gone ahead so quickly. He asked, "Did you not order one or two prototypes first?"

The progress made in this field was recognised by the representatives of over 40 countries who attended the recent British Electrification Conference. Here was a real social service, an imaginative idea by British Railways and the electrical manufacturers, which gave us an opportunity to show what we can do in matters of electrification. I understand that six countries have already adopted British standards and that more are likely to do so. There is no doubt that this will greatly help our exports of electrical locomotives and traction gear, but we must not forget that if we slow down our plans these opportunities may well be lost.

Having said that, I must say that I have no doubt that mistakes and delays were made and are still taking place due to the failure to recruit an adequate professional engineering staff. The hon. Member for Canterbury referred to the riding qualities of the stock on the Southern Region. Of course, this is a most extraordinary story. It is incredible that in this day and age no research has been carried out into the problems connected with bogies and similar problems. The truth is that the railway systems in the world, including the British railway system, have never done much research. The Transport Commission is only now beginning to build up a proper research staff. The railways have worked in the past on the basis of adding a bit here and taking a bit off there and seeing how the thing works. This is exactly the sort of problem which is susceptible to laboratory scientific research and it is a scandal that it has not been carried out in the past.

Of the employees in British Railways only 0.3 per cent. are qualified scientists or engineers, an incredibly low proportion for an industry which is undergoing rapid technological change. Between 1956 and 1959 the number of professionally qualified mechanical engineers on British Railways declined from 598 to 484. This happened at a time when there was this great change-over in the traction system, particularly to diesel locomotives. In that year, the whole of the Transport Commission employed only 277 qualified electrical engineers. In particular, the number of graduate engineers and scientists employed by the Commission is far too low. In 1959, there were only 512 graduate scientists and engineers employed in the whole of the Commission.

What frightens me is that witnesses before the Select Committee showed no awareness at all of the level of professional staff needed for the revolutionary technical changes which are taking place on British Railways.

It is a tragedy that the Transport Commission has never recognised the need to pay to professional engineers salaries comparable with those paid in British industry. The figures we were given showed that the salaries for professional engineers were 15 per cent. below the average level shown in the Report of the Royal Commission on Doctors' and Dentists' Remuneration, which gave a great deal of information about comparable professional salaries.

If one looks at the evidence we received, one can see that the Commission has not begun to understand the educational revolution which has taken place in this country since the end of the war. The Commission expressed surprise that it could not get its craft apprentices on the shop floor and in the workshops to proceed to professional qualifications, just as if it had never heard of the modern system of secondary education, of free secondary education at grammar schools and of university grants. It is impossible in this day and age to expect that more than a very small proportion of those now on the shop floor will be able to acquire professional qualifications. The Transport Commission is providing a quite inadequate number of scholarships to universities and colleges of advanced technology by comparison with, shall I say, the Electricity Generating Board, or most private industries.

The truth is that our railway system throughout has, in the past—I believe it is changing at last—been dogged, as so many other of our industries have been, by the George Stephenson tradition of mechanical engineering. After all, mechanical engineering in this country was built on the railways, and it is suffering from that. Of course, that tradition produced magnificent results, in the past. It was on it that the Industrial Revolution was made in this country and it was on it that British engineering supremacy during the last century was established. Now, however, it is out of date. It was the system through which professional engineers received, as Robert Stephenson did, their training by apprenticeship, eventually attaining corporate membership of one of our professional institutions; but that system was out of date at the beginning of this century, and it is completely out of date today in an age of rapid scientific and technical development.

Modern industry needs infused into it a scientific spirit not only among its technical staff but throughout its whole organisation. Indeed, so much do I feel the need for change and for a new attitude that I would like to see one or two of the general managers on the railways engineers with a modern university educational background. I feel that this would infuse a much needed revolution into traffic operation and general railway management, which is just as badly needed there, I think, as it is in technical matters.

Meanwhile, the Transport Commission ought to consider whether it can achieve greater co-ordination between the various branches of its engineering staff. I suggest that there ought to be a chief engineer for the whole of the engineering staff, not a mechancial engineer, a civil engineer, or an electrical engineer, but a chief engineer as such. One cannot today separate one kind of engineering from another; they are all very closely related, and all the tasks which have to be carried out on the railways today are tasks in which they are all involved. The various separate branches should all be responsible directly to such an engineer, and he, in my view, should be a member of the Commission.

Such radical changes, of course, need for the time being very strong central direction. I should like to see such strong central direction although it may well be that, when the changes have been made, further decentralisation can come later. But, to achieve such centralisation, the present arrangements, I believe, are wrong. I agree with the recommendations which our Committee made, that there ought to be a strong Railway Executive. Given the circumstances, and given the fact that the railway system must fit in with the general economic policy of the country, it is inevitable that it should be subject to a great deal of Ministerial interference and, therefore, it had better be responsible to the Minister directly.

I do not want to break it up into regions, and I do not want the regions to be responsible to the Minister. I should regard that as quite wrong. But I do want a strong Railway Executive responsible to the Minister, the Minister being in charge. If we can achieve that, then, of course, we shall need a Minister interested in all forms of transport, including the railways.

6.25 p.m.

Sir Toby Low (Blackpool, North)

I am very glad to have the opportunity of speaking immediately after the hon. Member for Edmonton (Mr. Albu), who has been a colleague of mine on the Select Committee for more than three years, I think. I believe that he is the longest "time-server" on the Select Committee. All of us who have served on the Committee know how much we owe to his very incisive brain and to the experience and study which he can bring to bear on engineering and industrial matters. With a great deal of what he said I agree, and I shall try not to repeat it, though I shall, I think, have to repeat some. He will not expect me to agree with everything he said about the importance of co-ordination. If I did, I should be sitting on the Opposition benches. I think that there has to be a balance in these matters between the free play which is given to economic forces and a certain element of co-ordination so that national resources can be properly used. I shall not pursue that subject because, if I did, I might rather more quickly than I should like break down the amity which exists between the hon. Gentleman and myself.

I join with the hon. Member for Edmonton in thanking the House for the kind things which have been said about the Committee's Report. Kind things have been said about the excellent drafting of the Report, and I should like to say here that we are served by two excellent Clerks and we are grateful to the House for increasing the Committee's establishment of Clerks during the past year. I must remind the House that we are also considering the Report of the British Transport Commission up to 31st December, 1959. This is a very remarkable document also for the clear expression of the case which it puts to us and it contains a quantity of extremely useful information. All of us should be grateful for that.

I had hoped that this debate would be exploratory and constructive. Despite the foray of the hon. Member for Bristol, South-East (Mr. Benn) in speaking to his party's Amendment, I think that the contributions so far, including his, for the most part, if I may say so, have stood up to the hopes which my right hon. Friend expressed. I congratulate my right hon. Friend for the manner in which he introduced the debate. I welcome very much the fact that he is in a listening mood and he did not, before he had heard the opinions of the House, including those of hon. Members opposite, commit himself to a line at this stage. I feel that we all should be grateful to my right hon. Friend for that.

I shall not take up some of the challenges which the hon. Member for Bristol, South-East threw across the Floor. I expect that my hon. Friend the Joint Parliamentary Secretary will deal with those much more ably than I can. Nevertheless, I wish to refer to one point which the hon. Gentleman made. He had much fun in trying to build up a fictitious case that there was a great split between what the Select Committee had recommended and what the Prime Minister stood for in his statement of 10th March. Clearly, the hon. Gentleman enjoyed trying to drive a wedge between the Prime Minister and my hon. Friends and myself. This really comes very strangely from him. I thought that he had just resigned from his National Executive because he believed in unifying people.

I think I can speak for my hon. Friends as well as myself when I say that if we had, on the basis of the evidence, come to conclusions which were contrary to what the Prime Minister had said, we should so have reported. We are perfectly honourable and courageous in that matter, but there is nothing inconsistent between what the Select Committee has reported and recommended in very general terms and the very general terms of the Prime Minister in his statement on 10th March. That is my opinion. The hon. Member for Bristol, South-East can go on trying to drive his wedges, but that is my opinion and I think that we can leave the matter there, although, when I come to the accounting point, I will try to explain in more detail why I hold that opinion.

The House is right in saying that it is helpful to have a unanimous report from a Select Committee on a matter as important to the nation and to the people who work on the railway as how best the railways can be run. I quite understand that in expressing appreciation to Select Committees of all kinds the back benchers of the House and the Opposition Front Bench are usually warmer in their appreciation than the Treasury Bench. That is in the nature of things, because a Select Committee's report is bound to be critical of authority unless it is complete whitewashing. I believe that my right hon. Friend takes the view that, however critical they may be, it is useful to have a Select Committee's views. It is particularly useful at present, because it is my belief that we cannot expect the question of how British Railways can best be run to be properly answered until we have right the relationship between this House and Ministers on the one hand and those who are running the railways on the other.

It is on that point that I wish to concentrate my remarks. I agree with some of the things which the hon. Member for Edmonton said about that. We in the Select Committee have had experience of this concerning three of the nationalised industries—the Airways Corporations, the National Coal Board and British Railways. I think that all the members of the Committee would agree, with some humility, that we have not found the right relationship between the House and the Government, on the one hand, and those who run the nationalised industries on the other. Points about organisation, payment for modernisation and how quickly it should be done, about fares, and the worry about the control over the enormous amount of money which has to be invested, in my view rightly, in the railways are directly affected by the relationship chosen between us and the Ministers and the Commission.

I should like to begin with some general paints. The first is one of background. I stand by what the Committee said, namely, that a large-scale British railway system can be profitable. I emphasise the "a". I was very glad to hear the Minister say that he has no doubt that in this crowded island there is and for some time must be a place for a large-scale railway system. He also said that in the plan which he put forward he would see that the system was a viable one. I think, as I will try to show, that there is not very much between us.

I take the view that the evidence shows that there is plenty of ground for saying that a large-scale railway system could be profitable. After all, the fact that there is much room for improvement is a justification in itself. Modernisation is beginning to show results. Both passengers and people who send their goods by freight are enjoying some of those results. However, we are also at a stage when modernisation is extremely expensive because there is duplication of systems—steam and diesel, and, in some cases, steam and electrification. We must bear that in mind in making up our minds how much improvement there can be on the financial side.

The improvements in freight are only just beginning to show themselves. The mistake over the brake was rather regrettable and took up some time. I have also been very impressed by the irrational nature of the fares policy which the Commission has been running, not, I think, wholly due to its own fault. And I have been greatly impressed by the possibilities of work study as well as by the progress made as a result of work study. I remember the evidence about work study results on Reading Station and how beneficial they were in reducing the number of staff employed there and, at the same time, increasing efficiency. That sort of improvement, with the co-operation of the unions, which I am sure can be attained if matters are explained properly, will also give a good financial return in future. There is also the question of the closing of uneconomic services.

It is not, however, only because of those improvements that I say that a railway system can be profitable. If we work out the shape of the railways for the future on the proper principles, applying public money where it has to be applied, then I think that we can get a large-scale profitable railway system. It will not be profitable at once because great changes are involved, but I am sure that it can be profitable.

Mr. Arthur Holt (Bolton, West)

Will the right hon. Gentleman be a little more specific about what he means by a "large-scale" railway system in the light of the rate at which the deficit is running at the moment? Surely he must be frank with the House. He referred to a large-scale railway system being profitable. If that is to come about it must be of a much smaller size than it is at present. Will the right hon. Gentleman agree with that?

Sir T. Low

By "large-scale" I mean not a small-scale. I think that that is what we all meant. I see the point of the hon. Gentleman's intervention, but this is a rather intricate subject and I think that the Committee had a fairly clear idea of what it meant. It wished to safeguard itself against confusion that might arise when people said, "You have to reduce the railways to practically nothing in order to make them profitable." I think that I would be right in saying that we do not take that view. We take the view that a large-scale railway system can be profitable. If the hon. Member will bear with me while I explain just how that could be worked out, he will see what I have in mind.

First, I think that the economic test should be applied, and the right body to do that is the Commission. It should work out what services can be run at a profit, anti it is important that it should have accounts to enable it to work that out. This is where my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies), who is nodding and is not always silent in his nodding, may not wholly agree with me. I think that the way that the Commission has been developing its accounts will give it the information required for that purpose if it has not done so already.

After that exercise has been done, one will find that some routes which are important for national economic or social reasons ought, according to that exercise, to be cut out. Then the Minister comes in. He eventually has to decide the shape and size of the railways. When he has so decided I hope that he would agree to make a payment, fixed in ad- vance, to the Commission for the specified services which he wished it to keep and which it could not justify on economic grounds.

I hope that that subsidy, as it might be called, would be paid for specified services in advance, and that it would be done through the Ministry's Vote so that Parliament could consider it. That is a little different from other proposals which have been made that the finances of the Commission should be put in order by writing off a large chunk of its capital. I do not exclude the possibility that some of its capital might have to be written off, but I hope that it would not be done unless the assets represented by it had been put out of use. It would be a bad way to start a commercially-run and commercially-accounted sound British railway system by fudging the capital side of the balance sheet. That is what I am trying to say.

I do not put out of account that to start right, there may have to be some writing down of past capital. I hope, however, that the subsidy given by Parliament will be given in the way suggested by the Committee rather than through a large-scale writing-off of capital. After all, the Commission or the railways must go on borrowing money in the future and it is desirable that they should establish a tradition that having borrowed the money, they service the capital. That is important if we are to get strict financial control in the Commission.

There is one advantage of this system that I and the hon. Member for Edmonton have put to the House. It is an advantage which we should see particularly at this time. On both sides of the House, a special interest is now being shown in the control of expenditure and it would seem to me to be right that at this time the House should consider whether the present methods of allowing subsidies to be paid for certain purposes by nationalised industries without discussion in Parliament, and, indeed, without any control, is consistent with the stricter attitude that we are now, happily, adopting towards the control of Government expenditure.

That is not a new point from the Select Committee. We made a similar recommendation concerning the Airways Corporation a year ago. Nobody in the House took it up. The House was content only to debate that Report for about half an hour—and it was not even that, because the Opposition had an exciting row with my right hon. Friend the then Minister of Defence. That question has been left out of account. The Government have not yet acted as though they accepted that recommendation. In the case of the Airways Corporations, it was about the Highlands and Islands services of B.E.A.

At the moment, there are some special shipping services—the MacBrayne shipping services in Scotland—which are acounted for through the Vote of the Secretary of State for Scotland and it seemed to us that Highlands and Islands air services should be dealt with in the same way. That is much better accounting and much clearer and the point about the constituents of the hon. Member for Edmonton—and mine in Blackpool, would, I have no doubt, have been the same—could be covered in that way.

My next point concerns the relationship of the Government with the industry. How much information should the Government ask for before agreeing to put up these large sums of money? I find myself very much in agreement with my right hon. Friend the Minister. Here again, this is not a new question. Again, I speak as Chairman of the Select Committee and I hope that my hon. and right hon. Friends will excuse the somewhat pungent criticism which comes from us, but it is right that I should state it in this way.

In the case of the National Coal Board Report, the Select Committee recommended in 1958 that more information should be asked of the National Coal Board before it was granted the large sum of investment money needed to pay for new coal mines. That recommendation was promptly accepted. We have made the same recommendation now and I know that my right hon. Friend had anticipated it. That was clear from what Sir James Dunnett said to us.

We want to make clear, however, what we have recommended in either case. We were not suggesting that the Government should usurp the functions of those operating the coal mines or the railways. We were merely suggesting that in lending money for these industrial purposes, the Government should act as a banker and ask the proper questions. Therefore, my hon. Friend the Member for Guildford (Sir R. Nugent), who noted this point of criticism, will find if he looks carefully that he is mistaking the target of the criticism. We are dealing with the Government as banker more than with my hon. Friend and with his right hon. Friend.

It is important, too, that in getting the information, the Government should be able to work out what kind of return is anticipated on this large investment. Anybody who has read the Report about the London-Midland electrification will have seen the sort of difficulty that can arise even inside the Commission, between the Commission and the Select Committee, between the Commission and the Government and the various Government witnesses about how one tests what the yield on an investment will be. It was, however, rather disconcerting to us that we could not get any consistent advice from anyone as to the proper way of working it out. One hopes that that sort of thing would be put right.

I do not know whether the machinery of Government has yet developed enough to take these difficult industrial investment decisions which they are now required to take as looking after the nationalised industries and providing the money in this way, but I would hope that. at least, consideration is being given to the possibility of strengthening the machinery by introducing, with a purely advisory function, a nationalised industry investment advisory council, consisting of men experienced in finance, in industry and, perhaps, in science; and as is done with the Export Credit Advisory Council, I would ask for the co-operation of the T.U.C. I do not put that forward as a recommendation about which I feel strongly, but it is certainly something which should be considered. After all, the kind of decision that is needed in approving a scheme of £160 million is foreign to the ordinary training of members of Government Departments. I therefore hope that that might be considered.

There has been comment in the newspapers about my right hon. Friend's decision to ask for details of schemes costing £¼ million and above. I well understand why he has done that at the present juncture, but I hope that it will not be a permanent part of the relationship between the Government and the railways. I hope that the limit will be higher in future. That, however, must depend upon how the British Railways and their profitability develop.

In closing on this issue, I should have thought that there could be no doubt in anybody's mind that before approving a scheme of £160 million electrification, far more details should be asked for in future than were requested in those days, if only for the reason that if it is not done at the beginning and something goes wrong, it has to be done later; and if we do it later, we get into the sort of difficulty that my right hon. Friend is in now in slowing things down.

I wanted to confirm what the Select Committee said on that scheme. It is certainly my strong opinion that the scheme having gone as far as it has, whatever might have been the arguments at the outset, the sooner we get on and finish that electrification, the better. Anybody who has a constituency along that line—and my right hon. Friend is one—will sympathise with me when I say as a frequent traveller on the London to Crewe line that the sooner all these operations are finished, the happier we shall be. I therefore hope that my right hon. Friend will quickly approve further and quick work. If he could use his great and undoubted zeal and energy in hurrying it up we should all be grateful.

I want now to turn to one or two particular points which have been made. The first concerns organisation. This was one of the points about the wedge between the Commission and my right hon. Friend the Prime Minister. The Prime Minister referred to the organisation of the British Transport Commission. We were referring to the organisation of the railways, and there is a difference. There really is a difference. That is not just dialectical reasoning.

I am quite convinced in my own mind that British Railways, in one sense at least, are and must remain an integrated system, because nearly half the rail traffic lies between the regions, so that there must be some central co-ordination. For that reason I am afraid I disagree strongly with those who say that the new organisation should be a series of regional boards responsible direct to the Minister. I think that that would be quite wrong, and I can only ask my hon. Friends who think that to re-read the evidence. Every bit of evidence in the Report drove those of us who had tendencies in that direction to begin with to the conclusion which I have just announced.

I do think that much of the pressure for this kind of greater decentralisation came because it was not generally understood how much decentralisation there already is inside the Transport Commission. That brings me on to the second thing. We were much impressed by the degree to which decentralisation not just had gone but is now moving. That is important, because there is movement all the time in decentralising on this and that.

The next point I want to make about decentralisation is that it is a great mistake to think it should stop at regional level. If there is an argument for decentralisation to regions there is just as strong an argument for decentralisation from regions to line and traffic managers. That is exactly what Sir Brian Robertson has been achieving.

Here I would break off for a moment to say that I think it was quite unworthy of the hon. Member for Bristol, South-East to attack my right hon. Friend for not having put into his speech words of tribute to Sir Brian Robertson—words which all of us who know my right hon. Friend have heard him using in private and in public many, many times. I am going to pay tribute to Sir Brian Robertson, as we all do in the Report, to his great breadth of mind and the distinction of it, and to the way in which he has handled this very difficult problem over many years—seven years now.

Mr. R. J. Mellish (Bermondsey)

In the absence of my hon. Friend the Member for Bristol, South-East (Mr. Benn) I think I ought to explain that the point which, I think, he was making was that Ministers of Transport, when we are debating the Annual Accounts of the Commission, do refer to the chairman, to pay some sort of tribute to him, and that that has become a traditional practice, which the present Minister broke today. I think my hon. Friend had every right to mention it.

Sir T. Low

I will leave that to my right hon. Friend to deal with, but he is eccentric in some ways and does not always stick to practice; but to impute a bad spirit to him seemed to me to be falling far below the level of debate. Let us end it like that.

There is still doubt about how much further decentralisation there should be. On that I would say to the House that I believe that the right decision is the decision of management, and the right decision may well change from time to time and from person to person, and that we should leave that decision if we can to those in authority over British Railways. If we think they are capable of running British Railways that is a decision that we ought to expect them to take, and to take aright, and I think we should be making a great mistake to impose a rigid, statutory structure of decentralisation of one particular type on the Transport Commission, or on any of the nationalised industries.

This brings me to this point on organisation. I do think that when we in this House talk of and advise more decentralisation we should remember that the advice to decentralise, like charity, should begin at home, and the first thing we have got to do is to make quite certain that we are not interfering too much in decisions which ought to be taken by the Transport Commission. Here I agree with what my hon. Friend the Member for Guildford said about Parliamentary Questions, and I would add to that that if a Minister interferes too much with nationalised industries he does so because the House of Commons drives him to do it. So I hope that in considering this whole problem of the future organisation of the railways we in this House will help the railways and those who run them by looking to our own action in interfering. It is, of course, true that the Minister is bound to interfere in the affairs of nationalised industries. That is one of the reasons why they were nationalised, but what I think we have got to do is to try to get a much clearer line between what is the Minister's responsibility and what is the Commission's.

My final point on organisation is one of management too. I want to make it quite shortly because I stand by everything which is in the Report. The system the railways had up to 1958 to 1959, under which they really could not tell whether particular services or even regions were being run at a profit or a loss, they really could not tell what was financially good and what was financially bad, I really do not think can be justified at all. It only existed because, as the evidence shows, they found it very difficult to move forward to a system of profit and loss account. There were arguments about having a pool or a clearing house, and so on. However, they gave us plenty of evidence that they have now got a system in various parts of the regions which give them a rough guide to the profitability or the loss of particular services. I think they will go on to develop the system further, and if they can find any way, as a result of the accountants' report, of improving it still further, I hope it will be done. It is really a matter of good management. A manager should know whether that which he is managing is profitable or is not.

There are many other things which I should like to say, but I shall not because I have taken far too long already. I should like to finish with just two pleas, and the first is about the Select Committee. This is not the first time a Select Committee's Report has been widely welcomed. Many sweet words have been spoken about it from all quarters of the House, but what most of us who spend a great deal of time and effort and energy on this work want to know is whether the House thinks we have been working on the right lines or not, because if we have not been working on the right lines—and, as I have said, our main recommendations have been consistent over the last three years—we should like to know before we spend a lot of time working on the same lines in the future. What we should like, of course, is broad acceptance of all the main recommendations which we made, but we should like to know as quickly as possible what the House and the Government think of what we have recommended.

The second thing is about the railways themselves. The crisis there is not just one of money and trains and machines. It is now a crisis of morale and confidence and men, and they are inextricably bound up together. I say with great humility that I think a return to confidence must begin here—in this House. It can begin only when there is a clear-cut plan for the future of the railways on an efficient and generally profitable basis, as, indeed, the Minister has promised us. None of us would ask the Minister to rush that over hastily. We want a good plan. But it can begin then.

My right hon. Friend himself has special qualities of mind which will help him to play a special part in the restoration of confidence of the railways and in the railways and in the railways' customers, because of his inexhaustible energy and his infectious vigour—and some of his eccentricity, too—and he has a decisive mind which will help. But it is not just the Minister who can help in this. I believe that all of us Members of the House of Commons can help to get this return of confidence. I think that we have tried today, but let us remember that we cannot manage the railways. What we can do and what we must do is not to prevent others from managing them well.

7.0 p.m.

Mr. Percy Collick (Birkenhead)

I should like to join with previous speakers in paying a compliment to the Select Committee's work. I sometimes wonder whether there are many people outside the House who recognise the tremendous amount of work which Members of Parliament do when they serve on these Select Committees. The right hon. Member for Blackpool, North (Sir T. Low) and my hon. Friend the Member for Edmonton (Mr. Albu) and others have done the House and the country really good service in the work which they did over a long period in taking the evidence and in hearing all that was said to them.

I believe that the greater attendance in the Chamber today is some indication of the interest which hon. Members have taken in reading these two Reports. They are full of factual information which is enormously helpful to every hon. Member. It is also to me one of the most satisfactory features of this matter that Members of the Select Committee themselves, in taking the evidence and hearing the case, have been disposed in many cases to change some of the opinions which they previously held. I am glad that the Chairman of the Committee, the right hon. Member for Blackpool, North has been the first to say that that has been the case. It has been remarkably good to hear it.

Nevertheless, I feel that today the House is to some extent at a disadvantage. The debate is rather like "Hamlet" without the Prince of Denmark. We are discussing railway transport, yet the most important matter dealing with railway transport—the Report of the Stedeford Committee—is not available. No hon. Member knows the first thing about it. This makes the position extraordinarily difficult. It makes me forbear, at this stage at any rate, from saying what I otherwise would have been willing and disposed to say about the actual recommendations of the Select Committee. I find it difficult to discuss those recommendations intelligently without knowing precisely what the Stedeford Committee has told the Minister and exactly how that harmonises or otherwise with what the Commission says in its Report.

One must recognise one simple fact. It seems to me that the transport problem of the country is not as complicated as everybody seems to assume it to be. On the one hand, we have a railways system working under capacity and, on the other, road transport piling up casualties at a rate which should be a cause of shame to every hon. Member and to all who are interested in transport. We have a perfectly appalling situation of casualties and of killing and maiming because existing roads cannot deal adequately with the traffic problem whilst, at the same time, there is, on the railways, traffic inadequate to keep them going in the way that we would all wish.

The Government must face the fact that for the last ten years at least we have not been able to get any Government composed of right hon. and hon. Members opposite to face this transport problem and the question of what traffic is right for the roads and what traffic is right for the railways. Until today we have not had any indication from any Minister opposite that the Government are in the least interested in this aspect of the problem. That is why I intervened when the Minister said that a study group was now being set up and that apparently in some way some attention is at last to be paid to this problem. This is the first indication that we have had since the advent of the present Government that they are in the least interested in any sort of action which would influence traffic by road or rail in one way or another.

It would have been better and a little more gracious, to say the least, if the Minister had frankly recognised that this was a distinct change from the Government's attitude towards the transport problem. I am glad that at last some attention is being paid to this aspect of the problem and I am certain that the House will be most interested to see what comes of it.

I am a little sorry that one over-riding fact about railways generally has not been faced and that there is not much reference to it in the Select Committee's Report. I probably know the reason why that is so. One has only to think of almost any railway in Europe or in the United States to realise that the fact that British Railways have been running at a deficit during this last post-war period is nothing new. It is in harmony with what has been general railway experience in almost every country. The House owes it to itself to recognise that fact and to recognise why it is a fact.

If one discusses this matter with those on the Continent who are interested in the problem—and I should like to see the relevant figures—one discovers that every country in Europe has found it necessary during the post-war period in one way or another to make subventions to its railway system. The journey on the Sapphire from Ostend to Frankfurt on Main is the most comfortable rail journey I know, because the whole of the permanent way has been renewed, the whole of the signalling system has been attended to, and the railway completely modernised, very largely from scratch. In many places in Europe there is this tremendous advantage that the railways are up-to-date in the really modern sense.

We are often unfair to the Transport Commission and we cast aspersions against it which are not its due. The Select Committee itself states that the Minister's intervention in the Commission's work has created difficulties for it and has caused it to face losses. I am very glad that there is now a tendency to recognise this fact.

Therefore, we must not be too ready to put the whole of this on the Commission on the assumption that in some mystical way somebody will make British Railways—to use the term of the right hon. Member for Blackpool, North—profitable. It may be so. I have always had my own close reservations about this. Whether that is or is not possible remains to be seen. We certainly know that the enormous modernisation which is going on—it is an attraction to traffic—with the increased revenue which it brings in is bound to make that possibility at least a little greater, but whether, in the end, it will be possible I do not know. I am glad to know that the right hon. Member for Blackpool, North and the Select Committee are so confident. I have some doubts about it. I do not want to go any further than that today.

However, I am glad that the Select Committee now faces up to the realisation that—it puts forward its own ideas—whether the Commission is compelled for one reason or another to keep railways in being, either as it does at the moment, at its own choice or, as the Select Committee suggests, at the choice of the Government in future, the Government themselves should be responsible for the financial deficits that follow.

We hear a lot about accountancy. I think that there is some case for it, but I believe that it is very much overstated. Railwaymen and those who know anythnig about railway history appreciate that the railways north of Glasgow are not a commercial proposition. Is it to be suggested that the North of Scotland should be deprived of a railway service?

Mr. Rees-Davies


Mr. Collick

I can at least give the hon. Member for the Isle of Thanet (Mr. Rees-Davies) credit for one thing. There is the typical Tory mind personified. What he is, in effect, saying is what I understand to be the Tory philosophy, that if a service is profitable it can run, but if it is not profitable it must be closed down.

Mr. Rees-Davies

I shall try to deal with this matter on another occasion, but, as the hon. Gentleman has referred to me, I would ask him to address his mind to this proposition, that whatever is the best method of transport which is the cheapest and most efficient should be used instead, and that in the case mentioned it would almost inevitably be road.

Mr. Collick

I think that the hon. Member is wrong. I do not agree that one has to accept profit as the determining factor. He is, in effect, saying that the North of Scotland should be deprived of a railway service because it will not be profitable. He should say that to the hon. Members representing the North of Scotland. I am sorry that the Leader of the Liberal Party is not present, because I imagine that he would have something to say about whether we should keep the railways in the North of Scotland going or not.

Mr. Rees-Davies

What railways are there in the Orkneys?

Mr. Collick

I am not aware that anybody said that there were railways in the Orkneys. This shows the lively imagination of the hon. Member when he is caught out on his own argument. I do not believe that anybody, least of all hon. Members opposite, would subscribe to the proposition that wherever railways are not commercial propositions they must be closed down. As the Minister rightly said a little while ago, there is hardly a branch line I can think of which has been closed down in recent years without our having had a Prayer from hon. Members opposite objecting to the closing down.

Mr. J. A. Stodart (Edinburgh West)

I understood the hon. Gentleman to say that every railwayman knows that the lines north of Glasgow are not a commercial proposition. I am sure that the hon. Gentleman is right about that. However, what the Select Committee has emphasised, and what is of importance to every hon. Friend of mine, is that one should not just be told that they are not a commercial proposition, but that one should know exactly how much money is needed to balance the books

Mr. Collick

I have no objection to that at all. All I am saying is that I think the House would be unwise to imagine that any system of accountancy can solve the problem. The question arises—I believe that many hon. Members opposite agree with me—whether we should extend the labours of hundreds of people in gathering statistics the general result of which is already known.

I agree with the statement by the right hon. Member for Blackpool North that one of the most important things now is to maintain the morale and to obtain the confidence of the men. I could not agree with him more. Why have we lost their confidence? As a friend put it to me the other day, what have we had in the matter of railway transport in the last ten years? We have had the railways organised, we have had them reorganised, we have had them centralised and we have had them decentralised.

Mr. Rees-Davies

And disorganised.

Mr. Collick

Yes, and disorganised by hon. Members opposite.

We had started on a basis of unifying the transport system, and hon. Gentlemen opposite broke it up. They know that to be the fact. I am glad of this belated repentance. It looks, from what the Minister said today, as if there will be an attempt to get some co-ordination into rail and road. I hope that is so. because therein lies the only possibility of solving our transport problem. We could not expect to maintain the morale of the staff all the time these abrupt changes have been going on year after year. In such circumstances one cannot expect to hold a highly skilled staff.

The hon. Member for Guildford (Sir R. Nugent) talked about the staff prolem. I hope that he noticed the figures in the Select Committee Report. In 1948. the railway staff totalled 649,000, and in 1959 it was down to 519,000, a fall of 20 per cent., and in the conciliation grades there has been a fall of 24 per cent. As everybody who is in touch with the railways knows, at present there is great difficulty in finding the necessary highly skilled staff to do certain jobs. I feel that the Commission has gone perhaps a little further than was wise in cutting down the staff to such an extent that in many cases it has not now the highly skilled personnel which it finds to be necessary.

Far be it from me to quote my own speeches, but in transport debates years ago I called attention to this possibility, and the regrettable thing is that today it is a fact, and, as a result, in certain cases we are not able to carry all the traffics that we should like to have. I long for the day when we handle our transport problems more freely than we have done in the past—more freely from all sorts of political axioms from one side of the House or the other. Whatever happens in the Stedeford Report, I should like the Minister to be able to look objectively at transport problems, for I am quite certain that we shall have to do that whether we like it or not.

Are we to go on starving the railways of traffics they rightly should have, to make the congestion on the roads far worse than it is now? Will we not in this way ultimately find ourselves in the position in which the public transport services go to the wall, with a road transport problem quite beyond management? We are nearly in that state now. Any Minister of Transport who knows his job must, in the light of current happenings, devote himself to this task of trying to get a co-ordinated form of transport by which the freight and passengers which it is possible and convenient for the railways to carry are carried by the railways, and those unsuitable for railways go on the roads.

I recall what the President of the Institute of Transport was saying the other day—that we should look at this matter objectively and try to do what is best for the interests of transport as a whole and of the nation.

7.22 p.m.

Mr. James Dance (Bromsgrove)

I speak as a lover of railways—and I mean that. I am not, however, a lover of our railways as they are run at present. Basically, I am fond of the railways, and I believe that they can, as they have in the past and will in the future, provide a fine service.

We have heard a great deal today about the developments about to take place in the future. These are, indeed, great and fine, and so they should be. We heard about what went on many years ago, but we should look to the present a little, for if we are to pump large sums of money into this great industry we should see that that money is used to the best advantage. I disagree with my right hon. Friend the Member for Blackpool, North (Sir T. Low), with whom I normally agree almost entirely. I am diametrically opposed to what he has said. I am only a layman. I am not an expert. I am merely a man who travels, who sends goods—or tries to—by railway, and has friends in industry who also endeavour to use the railways.

I believe that one of the reasons why the railways are losing money—although, of course, there are other problems—is inefficiency, not by the railwaymen themselves, but by the British Transport Commission. I would like to see the B.T.C. done away with. I am not saying that we will not have to have some central organisation to deal with finance and with wage claims that are general to all the railways, but the B.T.C. must go. We must get back to the "Great Northern", the "Great Eastern", and the "Great Western". They can be made great again. They will not be great as long as they are parts of big nebulous regions such as they are today.

I want to pay tribute to the magnificent work which the railways did during the war. They did a grand job. They were only able to do it because they had been kept in good order by private enterprise, which had run them before and during the war. I feel that at the moment there is a complete lack of understanding in the B.T.C. of the problems facing the public. We have cases of businessmen with vital engagements upset because the trains run late. I have with me some of many examples of late running trains, and it is quite fantastic. I do not want to go into great detail, so I will merely go back to March to show that delays are not only recently. A train from Leamington to London was 65 minutes late. As recently as 14th September it was 20 minutes late; on 20th September it was 50 minutes late; on 23rd September it was 1¼ hours late.

I am given various reasons. One is that the water trough at Ruislip had run dry. Why? This is the sort of excuse I get—fatuous excuses—but nothing is done. Let us allow the railways to get on with their own job. Let us have the railways running themselves. I know many of these fellows on the railways; and hope we will be allowed to give them back their own railways. The morale and the men are there, and I am quite certain that they would do a first-class job if allowed to do so. At present, however, there is frustration because they feel that people who do not really understand railways are running them.

I want to see promotion within each railway region going to the men who work on them. I have travelled on the old Great Western Line for many years. There are first-class men there and they assure me that they are frustrated under the present regime. I welcome the words of my right hon. Friend the Minister of Transport suggesting that these proposals, which I feel strongly about, may come into being.

I have had some information from various businessmen in the Midlands. One reason why British Railways are not making money is that people will not send goods by railway. For instance, a large tyre firm in Birmingham was quoted by British Railways, for sending four tons of rubber hose from the Midlands to Yorkshire, £31 10s. British Road Services were prepared to send the goods for £16.

There must be something wrong there. I believe that this is one of the reasons why our railways are not making money. People are not prepared to pay these high prices to have their goods carted. Another and even more important factor is that one can never get a quotation in time. It takes some three or four weeks. One also never knows when one's goods will arrive.

I am a director of a small wine business. Last March I wrote to the Western Region asking for a quotation for taking cases of wine from London to Leamington Spa. I know that they received my letter for they telephoned me with a query. But I have not yet had a reply to my letter which was posted in March. Can one visualise private enterprise as inefficient as that? Of course not. That is what is so soul-destroying to the people who work on the railways and to those who would like to use them if they were given a chance.

I want to quote the case of a friend of mine who bought a horse. He bought it in Kent and made arrangements for it to be sent to Banbury Station. That Saturday afternoon, he was told that the horse was arriving at 4 a.m. on Sunday at Stratford-on-Avon, not Banbury. Horses being live things, and requiring people to look after them, my friend sent a man to collect it, but when the man arrived at Stratford-on-Avon he found that the horse was not there. Thinking that he should do something about it, my friend rang up British Railways and was told that the horse was going all the way round through Southampton from Kent and would arrive at 4.12 at Banbury. He sent a man along, but there was no sign of the horse. Finally, he was told that it would arrive at Banbury, so he sent someone to meet the horse at Banbury. Some hours later it arrived—at Leamington Spa.

That sort of thing is not good enough. But, nevertheless, I know that there are good men on the railways. I want them to be given back their pride in the lines and I do not see why we cannot once again have railways with names—"The Great Northern", "The Great Western", and so on. I believe that that will restore to the men who work on the railways a proper sense of pride and it will conjure up to all of us the greatness which our railways had in the past.

I hope that as a result of this debate we shall see a change, coming soon, and that we have decentralisation and that our railways become great once again.

7.33 p.m.

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

The House will not expect me to follow the hon. Member for Bromsgrove (Mr. Dance) in what he said about his love for the railways. That love was hardly apparent from his quoting of the instances of which he spoke and, although he said that he admired railwaymen as a fine body of men, the whole of his speech was devoted to condemning them.

Mr. Dance

indicated dissent.

Mr. Popplewell

The hon. Member—

Mr. Dance rose

Mr. Popplewell

The hon. Member has made his speech and must accept the reply. It was evident that he has a typical Tory mind. He spoke about decentralisation and going back to the old private enterprise system, which he did not take the trouble to analyse. Instead of leaving an efficient system private enterprise left an almost derelict bag of tricks, to say the least. We all know the difficulties which were faced at that time, and the hon. Member will remember that no payment was made on much of the stock of the old private enterprise railways. It was a remarkable performance that within three years of nationalisation transport generally began to pay for the first time for many decades. That is a fact which has not been mentioned by hon. Members opposite today.

There has been much talk about the low morale of railwaymen, and I agree that there is low morale. The Minister spoke of the deficit, but nothing was said about what happened when there was a fully integrated system of transport, a system which does not need subsidies. At Scarborough hon. Members opposite criticised high taxation. Here is an object lesson for them, for the whole policy of the Government compels the taxpayer to subsidise the railway industry.

Given a co-ordinated transport system, there is no need for subsidies, as was proved in 1951, 1950 and 1953, when a profit was shown after all interest and central charges had been met. Each year since the Tory policy became operative, a huge deficit has been piling up. There have been certain extraneous circumstances, but the major reason for the deficit of £330 million and the suspense account of another nearly £50 million has been due to the switch in policy which has taken place since the Conservative Party was elected to office. Do not let us be mealy mouthed about this issue: that is where the difficulty and trouble have arisen.

The Minister made such play with the £105 million subsidy, in effect, which will have to be paid for 1960. He said that that was equivalent to 4d. in the £ in Income Tax. There is no need for the taxpayer to pay that amount if only the Tory Party will regard transport as an integrated whole. I was present at a function with the last Minister of Transport some time ago when the chairman of the function introduced him as the Minister of Roads, and then corrected himself. The present Minister will go down as the Minister for Roads.

I ask hon. Members to get down to the root causes of the difficulty. Transport is an essential service to the nation and, with the congested state of our roads, much of the traffic on the roads ought to travel by rail. We have the rail network and in our densely populated island both types of transport are needed. Air transport is now developing, but the Government are preventing the British Transport Commission from entering air services. The setting up of a comprehensive transport system would be much more beneficial than all the pouring out of hypocritical sympathy about the railway industry by hon. Members opposite.

Mr. Holt

This point has cropped up before. When the hon. Gentleman speaks of freight being forced on to the railways as a result of the congestion on the roads, does he mean, as in the example given by the hon. Member for Bromsgrove (Mr. Dance), in which it was said that the cost of sending rubber from a firm in Birmingham by road was half that of sending it by rail, that firms should be forced to send goods by rail, even at twice the cost of sending them by road?

Mr. Popplewell

I do not, and I should like to investigate that case a little more before making any comment on it. There are outstanding cases which are quoted as typical, but that is not the sort of thing which is general. We found with the organisation of British Road Services that fewer people were employed in administrative work than was the case with private enterprise, that there was a bigger operating staff, speedier delivery and costs which bore no comparison to those of private enterprise. In no circumstances would I deliberately force traffic on to the railways except in the case of C-licence holders carrying freights of more than 2½ tons unladened weight over long distances. Such freights are a menace not only to rail services, but to legitimate A-and B-licence holders. That is the only compulsion I would use.

Mr. Mellish

Would my hon. Friend also agree that the railways are handicapped because they are compelled to publish the actual rates and are not allowed to go in for the sort of free competition advanced from the benches opposite?

Mr. Popplewell

That was the position, but there is now latitude in publishing prices.

Mr. Marples

Is the hon. Gentleman proposing the abolition of the C licences for vehicles over 2½ tons in weight?

Mr. Popplewell

I am proposing that C licences for unladen vehicles over 2½ tons carrying capacity over certain distances should be co-ordinated into a fully integrated system instead of being allowed to run as they are today. The number of vehicles involved would probably be less than half a million.

Mr. Marples

I want to know the proposals which the hon. Gentleman is making about C licences. Those proposals may be good or bad. I want to know precisely what they are.

Mr. Popplewell

This does not need to be followed any further. This is where the real challenge comes. By such a system there would be no need for the taxpayer to subsidise the transport industry. Greater efficiency could be given for less than it costs now to use the services.

Like my hon. Friend the Member for Southwark (Mr. Gunter), I consider that the debate has taken place in an unreal atmosphere. Overshadowing everything is the Stedeford Committee. If we look at the composition of the Stedeford Committee, we find four outside people who know nothing about the industry but who have come to advise the industry about what should be done. We must not overlook the fact that the Minister's voice can be heard in the Stedeford Committee all the time through one of his permanent officers. We must not overlook the fact that the Treasury is represented by a permanent officer, serving not as an adviser or as an assessor, but as a full member of the Committee.

Knowing the attitude adopted by the Government and by the Minister as regards the railways, it is no wonder that we are dreading what is taking place. The Minister set up this Committee as a Departmental Committee. The House is entitled to know the Committee's recommendations. I hope that when the Minister publishes the White Paper he will set out the recommendations in full.

The railways are an integral part of our national life, and the Commission should be allowed to run this industry. Today the Government and the Minister, not only by directives, but by day-to-day discussions with the Commission, interfere not only with the general policy of the railways but with minute detail. The evidence for that statement is in the Select Committee's Report. There is evidence of the daily discussions between the Minister and the Commission.

What has been the effect of such daily discussions? We have seen the Commission having to face obstacle after obstacle. First the Commission is told to go ahead with a £1,200 million modernisation scheme. Plans are laid, forward contracts are entered into, and suddenly there is a switch of Government policy and public expenditure has to be reduced. The Commission then finds itself having to pay compensation to contractors for work which they have had to cancel.

Then another little spurt takes place. The result is that the Commission is faced with additional costs, because when work has to be restarted after a postponement one finds that additional costs are always involved. It is difficult to estimate how much of this increase from £1,200 million to £1,600 million is due to the increase in costs because of the changes in plans, but the figure is substantial.

We find that the Commission is taunted and told that a more efficient railway system is required. It is asked why it has not made progress. It is the Government who are preventing the Commission from moving ahead and giving an improved service.

There was talk about building new marshalling yards, and about the electrification of the east coast from London to Newcastle. What happened? Plans were laid, but suddenly the dead hand of the Government intervened and stopped everything. The Commission incurred large expenditure in preparing the lines and raising bridges, and the Government decided instead to concentrate on the electrification of the lines from London to Crewe and elsewhere.

What has happened now? We are having second thoughts. The L.M.S. electrification scheme is to be looked at again. The Government are not satisfied that the revenue which will come from that scheme will meet a certain percentage obligation.

How is it possible to divorce one thing from another? We now find that there is to be a further appraisal. All this prevents the Commission carrying out its legitimate job, and assists in lowering the morale of the railway staff.

Mr. Rees-Davies

Was not the hon. Gentleman one of the critics who complained that the original estimate for this scheme was £74 million, and that it had now gone up to £161 million without there being any adequate or proper estimate with regard to that increase?

Mr. Popplewell

The cost will rise still further if postponement takes place. This scheme should be gone ahead with as quickly as possible.

Mr. Rees-Davies

Was not the hon. Gentleman a critic of this tremendous extra expenditure?

Mr. Popplewell

I was not at that time. The hon. Gentleman is confusing me with someone else.

The Government allow the Commission to plan only a year ahead at a time. How can a business undertaking of such a magnitude as the Commission carry on with the degree of efficiency it would like to attain if it is working on such a tight shoe string? The Select Committee recommends that, instead of this business of planning for a year ahead, the Commission should have authority to plan five years ahead. I hope that the Government will look closely at this and that when they give the O.K. to go ahead it will be on a long-term basis so that proper planning can take place and the Commission will know where it stands.

Let me quote an example. In Darlington in the North-East we have a great locomotive works. There are strong rumours in the town that the railway workshop will close by 1963. The men are anxious about the situation. There is general uncertainty about what is to happen, and this uncertainty is found in many other railway towns and centres.

What happens? The men ask the Commission what is to happen. The Commission is powerless. It replies, "We are limited on expenditure. We are so circumscribed that we do not know what will happen by 1963". This is the nonsensical position into which the Government have forced the Commission. What is happening in the railway workshop towns is happening in various other branches of the industry.

Let us consider the Midlands area. The hon. Member for Bromsgrove probably knows something about this. In spite of Guillebaud, who did a wonderful job of work for railwaymen, responsible men such as signalmen, drivers, shunters and guards are leaving the industry. The Commission is forced to cancel trains and then pay very high road charges to deliver traffic which it cannot carry by rail because of the number of men leaving the industry. That is the kind of thing that is lowering morale, and it is taking place simply because of Government policy. The Commission does not want this situation to continue. Very many of its members have advanced ideas and would like to give the right type of lead, but Government policy has prevented them.

The hon. Member for Bromsgrove is one of those Members opposite who want to see a return to regional autonomy. If he will take the trouble to read the Select Committee's Report he will find that that Committee, of which I was a member, investigated the need for area boards. The various chairmen of the area boards tried to defend themselves, but all they could say was that they, as chairmen, might do two days' work a week on area board affairs, and other members of the boards would probably do two days' work a month. What justification is there for that sort of thing?

Mr. Dance

I was not advocating area boards; I was advocating regional railways. They should have their own boards of management.

Mr. Popplewell

I shall come to that point shortly.

There is a lot of loose talk about the costing system of the railways, by people who have not given the subject much thought. They allege that the arrangements are very loose. If they would read Appendix 39 of the Select Committee's Report they would find a very comprehensive review of the meticulous costing system which operates. It is difficult to cost services on the railways. They are not like a single undertaking, carrying out a single operation. They have to deal with the cost of the installation of the track; the cost of signalling, of yard marshalling and running the lighting system, and all the various other costs, so that they can weigh up and apportion them per individual transit. The railways are not like an ordinary commercial undertaking. In Appendix 39 the Select Committee gives a very full background to the picture.

Even so, the Commission does not object to regional accountancy if it is possible to bring it in. It has employed outside people to advise it upon how this should be done. Many of the arguments about costing raised by hon. Members opposite are nothing but loose talk. That answers the hon. Member for Bromsgrove. It is utterly impossible for the railway system to have anything like separate entities. That fact was discovered before 1921. To attempt to do anything like that we should have to establish a railway clearing house, with all the dead wood that is involved.

I want to refer again to the question of investment, because it is very important. Men in the industry want it to go ahead, and know what is required, but the programme of the Government prevents them from following the necessary course. In 1954–55, following the launching of the modernisation plan, the Commission asked for an advance of £74 million. That was granted. But what has happened since then? In 1956 the Commission asked for £103 million; the Government granted £91 million, but only £87 million was allowed to be spent. In 1957 the Commission asked for £123 million and was given £120 million, although it managed to spend £124 million.

So the story goes on. At the end of this modernisation programme, although the Commission has made requests the Government have prevented it from speeding up its work. This accounts for the losses since the Tory Party policy became operative.

I was extremely interested in the Minister's statement that he is establishing a new committee. He says that its purpose is to determine the size and shape of the railway industry. This is a rather belated effort. One would have thought that the Government would know by now the necessary size and shape. If it be that this is the first weakening of the Government's doctrinaire policy, and an indication that they are prepared to return to a sane approach to transport problems, I welcome the Minister's observation, but I look with some scepticism upon the establishment of any further committees. More inquiries have been carried out in respect of the railway industry than in respect of any other industry, including the mines. There has been legislation galore—and still we find transport in a very difficult position.

Hon. Members opposite often clamour against the closing of branch lines. I hope that the Government will take note of the Select Committee's recommendations on this matter. I agree that they are unprofitable services, but people living in remote areas are entitled to some consideration in relation to transport. Even road services are unprofitable in those areas. In the North-East, the Weardale branch line was closed down, but no adequate bus service has been provided because it is not profitable. There is also a clamour against closing down branch lines in the north of Scotland.

The Select Committee says that in such circumstances the Government should undertake the responsibility of reimbursing the Commission for any loss entailed in providing a social need. One of the faults of this Government is that they took the words "adequate transport system" out of legislation when they brought in their 1953 Act. Those words were incorporated in the 1947 Act. The Commission was then charged with certain obligations in that direction and was given compensation in return. It was a mistake to take that monopoly away by removing those words from the legislation.

If we had a fully integrated system we would not be met by the cries now coming from hon. Members opposite. When they go back to their constituents and receive complaints about the closing of these branch lines they should be honest enough not to blame the B.T.C. but, instead, to admit that they are responsible, as supporters of Tory policy. That is the naked truth.

There is also much talk about the need for the Commission to hive off its unprofitable undertakings. I was glad of the indication we got today that this suggestion is not going to be followed up, in spite of the strong clamour for it. It has been found through the ages, even when there were 112 railway companies, that they had to embark on certain ancillary undertakings as distinct from carrying passengers from point to point. Some of these services are profitable today. The Commission should be allowed to develop them; they should come within the umbrella.

In the city that I have the honour to represent with three other hon. Members, there is an outstanding cry for a new hotel. I know that the Commission would have been interested in building an hotel to serve the North-East where there is an overwhelming need for further hotel accommodation. In the old days, the Commission would probably have gone ahead. Now the dead hand of Government stops this kind of thing. Instead of playing its part by providing amenities in that way, which would have been profitable undertakings, it is not allowed to do so. I hope that it will be allowed to do so. I hope that the nonsensical talk of hiving-off its property will not be heeded.

If the Commission has valuable land in the centre of the city, why in the world cannot it be allowed to develop it, as any ordinary business concern would be able to do? Part of a building erected could be used for the Commission's purposes—there are an overwhelming number of cases where that could apply—and the rest could be used as an ordinary commercial proposition. It is time that we gave a publicly-owned undertaking a fair deal.

I remember that some time ago the Government indicated that there was to be a further cut in public expenditure. I dread to think where this will fall. I sincerely hope that no great axe will fall on the railways. The railways are essential to the nation and they should be given the green light to go ahead to undertake any efficient project which they know they are capable of doing.

8.2 p.m.

Mr. Charles Longbottom (York)

I am sure that the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) will agree with me that the subject of railways contains the seed of more ideas, more arguments and more wishful thinking than almost any other topic. That is why I am pleased to welcome the excellent Report of the Select Committee which contains many wise suggestions on this subject. I hope that it will answer many queries of hon. Members about decentralisation. Surely, the British Transport Commission has proved, through the Select Committee, that it has done its best to decentralise the facilities and operations of its work to the area boards, to the regions, and even below them. Indeed, on the question of supervision, the authority of the region is paramount in regional activities today. Yet, in all the discussions that have taken place on this subject, one single fact must emerge, that this country vitally needs a most up-to-date and efficient railway system.

That automatically brings me to the modernisation problem. The Select Committee's Report points out some facts which are often forgotten in discussing modernisation. For far too long the railway system of this country has been neglected, not only in pre-war investment, not only in war time, when obviously capital investment could not take place and the industry was thoroughly overstrained, but also later by the post-war restrictions on investment and—I am sure hon. Members on both sides of the House will agree with me on this—the unwarranted low priority which the railways were given after the war.

Modernisation, therefore, is not a programme for a new investment. Much of it should have been spent twenty or thirty years ago. Half of the modernisation programme is devoted only to trying to bring into line the development of the railways which should have been done long ago. It is true that a sum is needed for present running costs as well as future needs. I agree with the Select Committee when it states that we should look at modernisation and the programme of modernisation as a whole and not try to prejudge what is only a half done job. These are two of many points I should have liked to mention but I know that other hon. Members wish to speak in this debate on modernisation.

The 1947 Transport Act places upon the Commission the duty of providing an efficient, adequate, economical and properly integrated system for passenger and goods transport with due regard to the safety of operation. There are rigid safety standards. There is an enormously involved rules book which every employee of the British Transport Commission must know thoroughly. There are standards of track, standards of rolling stock, standards of signalling and standards of behaviour by men on the job which must apply whether a train carries one or 400 passengers.

The facts are that in 1959 one passenger was killed in a train accident whereas in that year on the roads 6,520 people lost their lives. British Railways and the British Transport Commission are justifiably proud of their standards of safety, but these standards of efficiency will be maintained only if the modernisation programme goes ahead to ensure that we have the most up-to-date signalling and track equipment possible. One example of this is the new type of signalling system now being put in, which has eradicated much of the hideous difficulties which railway men previously found in fog.

It is indisputable that the railways also play a vital part in our export drive. The speech and efficiency with which raw materials reach the factories and with which the finished products reach their destination is vitally important, not only for our home industry but particularly for our exports. This efficiency today is often hampered by old-fashioned, disjointed marshalling yards. One perfect example is in the area where there has been perhaps the greatest amount of industrial development since the war. That is around Tees-side. There are seven marshalling yards all totally disjointed. The modernisation programme will ensure that there is one huge marshalling yard for Tees-side. That development is starting now. It would be detrimental to industry on Tees-side if that type of development was cut down in the modernisation programme.

These are but two instances of the vital necessity for speed in modernisation. I cannot but feel concern about my right hon. Friend's statement on cutting the 1961 provisional figures. The neglect on the railways has gone on for too long. For too many decades we have watched the deterioration of the working efficiency of our rolling stock. This has had a devastating effect on our rolling stock but it has had an even worse effect on the morale of the employees of British Railways. This country, which pioneered railways and exported railways to other countries, had the finest rail system in the world and it was a source of pride to railway workers. "I am an L.N.E.R. man", was a thing which was often said, even though the public might have said that that was the "late and never early railway". Railway workers got used to that sort of gibe and they had a tremendous pride in the job they were doing. They had a status and security of their own.

In war time they well understood that there was no money for investment, and after the war they were prepared to sacrifice their industry to other priorities. But they witnessed a deterioration not only of their working conditions but also of the prestige of their industry. Priorities were given to this and to that industry, but never to the railways. They saw their status falling, and no longer was there so much pride in the job that they were doing. Their security and their very occupation was affected by the uncertainty of the future and, I may say, it still is.

The wages structure on the railways dropped far behind the wages structure in other industries, but the railwaymen worked on while all around there were ideas, suggestions and vacillations about their future. Can we wonder that the morale of the British Railways personnel declined?

The modernisation programme gave the railwaymen fresh hope and a new incentive and the Guillebaud findings and actions have also helped tremendously. But railwaymen still expect a realistic drive forward with modernisation, and they wish to know that the security of their system is assured. I cannot claim to be an expert on railway management; few can. But I can claim to represent nearly 10,000 railwaymen and their families. I have talked to many of them and I know the deep and serious concern they feel about the future. They are looking to this House and to this Government for some assurance that the future of their industry is secure. The fact is that we are working to get back to the position where not only have these people a pride in their job but a knowledge that they are working in a great industry and in a railway system second to none in the world.

8.12 p.m.

Mr. Arthur Holt (Bolton, West)

As usual in a debate on British Railways we have had a considerable amount of sentiment. I am sure that that is quite appropriate from a person like the hon. Member for York (Mr. Longbottom), who has so many people in his constituency who are connected with the railways, but I think that such sentiment often draws a kind of curtain over some of the brighter minds in our debates and so often clouds the argument.

However, there should be no sentiment about the fact that, while all the railway troubles have been going on, for the past nine years we have had a Tory Government. To me, it is absolutely astonishing to contemplate how the Government continue to get away with blunder after blunder and how often hon. Members on the back benches opposite allow them to do so. I was not in Parliament at the time of the groundnuts scheme—I was a fledgling on the political scene at that time—but I remember the £35 million—was it?—which was wasted, and that figure went round and round the country. Yet the deficit of British Railways or of the Transport Commission, the Minister tells us, will this year be over £110 million and possibly next year will be £150 million. Apparently, there is nothing about that which woud make any hon. Member opposite "flap".

There is a figure mentioned of £150 million, and probably more, because any forecast about deficits has always been on the wrong side. Such forecasts have always been too low. It is time somebody grasped this nettle, but we shall have to wait for the next Committee to know whether the Government will grasp it. I say to the hon. Members on this side of the House who are lovers of the railways, and who have spoken in the debate, that it is no use talking about the terrible casualties on the roads and the tremendous amount of freight which is now carried on the roads and which should go back to the railways. It will never go back. As many hon. Members who have written to the Transport Commission about freight problems will know, in many cases—and the number is growing—it is cheaper to send goods by road than by rail, despite the congestion on the roads. Nothing short of an edict that people shall send goods by rail at twice the cost will alter that situation.

I suspect, and there is no reason to think otherwise, that the situation will become worse as far as the railways are concerned. We must recognise that not only is it cheaper to send goods by road, but it is more convenient. Many firms are actually prepared to pay more to send their goods by road, and it is quicker. These are facts which it is no use denying—

Mr. Leslie Spriggs (St. Helens)

I think that the hon. Member has not got his facts straight. Is it a fact that goods travel quicker by road? Millions of tons of goods go by rail every year because they can be moved cheaply and speedily. I am sure that if he reads up his figures again he will find that he is completely wrong.

Mr. Holt

I do not deny that there are still some goods which can go by rail more quickly, but the proportion going by road is increasing the whole time and the reason is not because of a piece of quixotry on the part of some people, but because of pure economic facts. More freight can be moved cheaply and conveniently and quicker by road. There is no gainsaying that.

Mr. G. Wilson

If that be so, how is it that there has been no marked increase in the number of A and B licences for lorries, but an increase of 500,000 in C licences?

Mr. Holt

Because of the increase in C licences. In this case, the C licences have increased because of the convenience. I suspect that many manufacturers are prepared to pay the extra cost involved in running their goods by C licence because of the convenience and speed.

Mr. Wilson

If the hon. Gentleman will read the report of the T.R.T.A. for 1959, he will see that that is not so.

Mr. Holt

That is why I am concerned about the general conclusions of the Select Committee, although with much of what the Committee says I am entirely in sympathy and largely in agreement. In paragraph 418 and 419, the Select Committee says: … your Committee have also considered whether the losses of the railways arise mainly from the fact that they are railways. … I do not think there can be any doubt that they do. I think that the Committee is quite wrong when, in the next paragraph, it says that it is convinced that that is not so. The Report states that On the evidence they have received there is no doubt"— This is absolutely extraordinary, after the experience of the last nine years, and I should have thought that the one thing we might know about railways is that there is some doubt that they will be profitable— that a large-scale British railway system can be profitable. I say, fair enough, but let us know what is meant by a large-scale British railway system. After all, some of us have been trying to get this House to face the fact that if we really set about cutting out the uneconomic services it is just possible that there would be left a quite considerable section of the railway system which could actually be made to pay. We ask that it should be done, but progress has been so slow.

Such an authority—academic, I agree—on transport matters as Professor Gilbert Walker said in the Westminster Bank Review, in May: Railway route mileage to be closed cannot be less than 60 per cent. The proposition may be as high as 80 per cent. I believe that even in the Transport Commission it is recognised that it must be 25 per cent., yet it is not moving on that line at the moment, but talking about 10 per cent, in the next five years. When the Select Committee talks about a large-scale railway system which will pay, the House is entitled to ask what is meant by "a large-scale railway system".

I feel that the problem has to be divided into three. We know from the accountancy system of the railways, crude though it may still be, that certain activities do clearly appear to pay. Let us get this part, if it is possible to isolate it, into group A, the part of the railway system which clearly may be seen to pay. Then put into group B the services which may be described as commuter services round London, or between some of the big cities and the kind of things of which it is very difficult to say at the moment or in the near future how life could go on without them although the railways suspect, if they do not know for certain, that they do not pay. Those uneconomic services which at the moment remain essential should go into group B and then we should put into group C those which are definitely uneconomic. Group C should go out as quickly as possible.

If that kind of approach is accepted, the problem, as I see it, is how to divide group A from group B from an accountancy point of view. I entirely accept what the Select Committee said, that if we are to ask the Transport Commission to continue to run some services for social purposes those services should be clearly shown and Parliament should be asked to express its view. If Parliament says that a subsidy should be paid, the railways must have a subsidy, but how is one to divide these different activities? That is a question which does not appear to have been answered by the Select Committee and I do not know of anywhere where it has been answered.

The investigations of the Select Committee into the problems of regional accountancy and of cost accounting are very interesting and it is interesting to see the different types of development going on. I urge the Minister to press the Commission to do all it can to forward this line of development as much as possible. I cannot see either how this House can make a proper judgment on the expansion, the modernisation of the system unless there is proper accountancy behind it, nor how we can make our decisions on the question of what we are to do with those services which still remain essential, and have been found to be essential in other countries such as America, and are definitely uneconomic. How can we say, "All right, £20 million or £30 million for this, but these other services are definitely uneconomic and must run on their own"? I hope that the Committee which is still to report will have something to say on that.

I must warn the House that the problem is something in the nature of £100 million. I cannot see this House in future agreeing to continuous subsidies of that kind. We might agree to subsidise the commuter services around London up to a few millions, but not to over £100 million. For the rest of the services there has to be a rigorous pruning of those which are uneconomic and then complete freedom given to the economic services to run in proper competitive conditions. That means winding up all the consultative committees and the Transport Tribunal so that the railways will be really free to alter their charges and their rates per mile as they think fit as a commercial undertaking in connection with those services which are recognised as potentially economic. I cannot see how we as a House can satisfactorily deal with the others until the accountancy methods have been radically altered.

Mr. Mellish

The hon. Member is obviously speaking for the Liberal Party. Is it still the policy of his party that there should be complete abolition of A, B and C licences and free competition, as he as a Liberal terms it, between road and rail?

Mr. Holt

The answer to that is, yes, and that is the end of my speech.

8.25 p.m.

Mr. A. Bourne-Arton (Darlington)

I am grateful to the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell), who is not now in his place, for the interest he showed in the special problem of my constituency. I hope the House will not think it a waste of about five minutes for me to pursue that matter a little further.

The sad problem of the railway workshop towns is referred to in the Report and is one which is very much in the minds of those who represent them. We in Darlington are as anxious as anyone to see a railway system which is modern and efficient and one of which those concerned in it can be proud. We are adult enough to know that it is not possible to make an omelette without breaking eggs. I at least can claim that I am one, described by my hon. Friend the Member for Guildford (Sir R. Nugent) as a very few, who has been realistic enough to resist very strong pressure locally to head a campaign against the closure of branch lines. No doubt I have made myself unpopular in many quarters, but I feel strongly about this and at least I am consistent. I hope I shall be forgiven if I appear parochial and speak from what I know, but I am sure that our experience must be reflected in other railway towns.

We have a great locomotive shop in Darlington. For several years that great loco-shop has been working under the threat of closure. All attempts to try to find whether or not it is to be closed on the stated date in 1963 have been unavailing. I should be wrong to give the House the impression that it has been all unrelieved gloom, but all hon. Members will know what effect that has on morale—a word which has been used. I think significantly, by every hon. Member who has spoken in this debate. Hon. Members will understand what it is like for men to go home from work week after week and for their wives to ask, "Is it going to happen to us?" and the answer is. "We do not know."

We have seen—and the Commission acknowledges it—good men leaving the industry. No one would pretend that the quality of work can be so high in a shop when a statement has been made that either that shop or another may well be closed in 1963.

The gloom has been relieved in the last year The Commission has spent large sums of money there. The workshop at North Road, Darlington, has been converted to diesel. The success of men who have worked all their lives on steam locomotives in converting to new skills on diesels has surprised themselves. New developments and new tools have been introduced. Diesels are being manufactured. Best of all, I give the greatest credit to the Commission for establishing and going ahead with the development of the apprentices school.

That is something which does one's heart good. Yet on 16th August the Commission said that there was still doubt whether it would have to close this shop or another in 1963. The Commission used the word "dubiety", which I am told means that there is a doubt. It could not say either whether the shop would remain open or when it would be able to make a decision. Nor, indeed, can the Commission say whose business it is to decide.

My hon. Friends the Ministers at the Board of Trade, the Ministry of Transport and the Ministry of Labour know only too well the natural anxiety which I feel in this matter, and I should like to pay tribute to the patient sympathy with which they have treated me. I wrote to my hon. Friend the Parliamentary Secretary to the Board of Trade asking how much notice he thought would be required by the Government before a decision was taken in order that the provisions of the Local Employment Act could be brought into effect. His reply was, "Twelve to eighteen months," which seemed to me to be unduly short.

It is significant that, having written to him and to my hon. Friends at the Ministries of Transport and Labour in those terms, I received a Government answer saying, among other things: The decision rests, of course, with the British Transport Commission". The chairman of the Commission, Sir Brian Robertson, in a most courteous and helpful acknowledgment of a copy of the same letter, said: The decision rests with the Government because"— and there may be some trut0068 in this— it is for the Government to decide what is the level of capital investment". I should be wrong to give the impression that Darlington is wholly dependent on the railways, but my hon. Friend knows only too well what would be the effect of the closure of a shop which employs 10 per cent. of the male working population. Our employment figures are extremely good, and we have a diversified industry, but those of us who remember thirty years ago, particularly in the North-East, know only too well the effect of suddenly finding 10 per cent. of the male working population out of work. All the bills are sent out. There is a shrinkage of credit. For the moment nobody spends more than he is obliged to spend. A cold blight falls on the town, and it is that which it takes time to cure, not the matter of putting 3,000 to 4,000 men back into jobs of some kind or another.

All we know about the situation—and I am sure that this is reflected in other parts of the country—is that no decision has been taken. We do not know whether the shop will be closed in 1963. We do not know who will take the decision. We know for certain that no one knows who will take the decision. All I ask is that we may at least have this decision—who is responsible for deciding?

Mr. Spriggs

The Minister.

Mr. Bourne-Arton

That is the matter which is in dispute. Having walked round this great shop and seen the great development and the magnificent work done by the Commission and by the men, who have surprised themselves by the speed with which they have learned new skills in diesels, I cannot believe that it is anyone's serious intention to close this shop. If that is so, why should it not be said?

It should, however, be borne in mind that the adaptability of a craftsman inside his own works, where he is known and has worked for many years and where he knows his way about, is one thing, but that it is a very different thing to ask such a man to go outside the place where he has worked, perhaps, for twenty years, to go to a new shop, to a new employer, to work among different people, and to learn new tricks in strange surroundings.

I have no imputation to make about the concern and humanity of the British Transport Commission or of my right hon. Friends and the Government in this matter. All I ask is that, as a first stage, in order to restore confidence and raise the dangerously lowered morale, we should at least be told now and have it decided whose job it is to make the decision.

8.35 p.m.

Mr. Francis Noel-Baker (Swindon)

Despite the very thoughtful speech of the hon. Member for Darlington (Mr. Bourne-Arton), with which, naturally, as Member of Parliament for Swindon I feel very great sympathy, and despite several very useful contributions, I find this a profoundly unsatisfactory debate. We have been asked to debate two Reports, the Annual Report of the British Transport Commission and the Report of the Select Committee, to which the Government have made it quite clear they do not attach any real significance at all. We have been told that we may not debate the one Report, to which, apparently, they do attach real significance and on which they propose to base their legislation. The contents of it have not been mentioned art all today, and I conclude from the Minister's refusal to answer the question that it is not even proposed to publish the Stedeford Advisory Group's report or the evidence on which it is based. This seems to be a thoroughly ridiculous situation.

I represent a famous railway town created by the Great Western Railway. a town in which nearly half the working men are still employed on the railway and in our great locomotive, carriage and railway wagon works. Those men are now thoroughly unhappy and disturbed about the future and about the present state of their own region and their own workshops. Their fears, incidentally, have been very much deepened because another principal industry in which many people are employed is itself going through difficult times. The Pressed Steel Company, which should be employing 4,000 men quite soon, does not now know, because of complications in the motor industry, what is going to happen.

Already, there is talk of Swindon becoming a "ghost" town. Hundreds of workers are already feeling the pinch. Traders in the town are feeling the effect, and we are very worried about the future. The morale of our railwaymen, like that of railwaymen throughout the country, is very low indeed. After nine years of Conservative Government they are deeply suspicious of the Government's intentions. They fear that the Minister of Transport proposes now to dismantle and destroy the railway system as we know it, including their region and their factory, for reasons ranging from narrow ideological prejudice to straightforward political corruption. The railwaymen of Swindon express themselves very bluntly indeed about the hon. Gentleman the Joint Parliamentary Secretary and his right hon. Friend and about—

Mr. James Watts (Manchester, Moss Side)

What does the hon. Gentleman mean by "political corruption"?

Mr. Noel-Baker

In a moment or two I shall develop that point. I hope that the hon. Gentleman has noticed the way in which the Minister of Transport has treated questions to him and will not expect me to be too lenient.

Mr. Watts rose

Mr. Deputy-Speaker (Major Sir William Anstruther-Gray)

If the hon. Gentleman wishes to raise a point of order, he is at liberty to do so. Otherwise, when another hon. Member has the Floor of the House he must not interrupt.

Mr. Noel-Baker

I was saying that the railwaymen of my constituency express themselves very bluntly and frankly about the Government's policy, about the Minister and about his hon. Friend the Joint Parliamentary Secretary, in language which it would not be proper for me to use in the House. But I shall try to reflect accurately their opinions, because I believe them to be entirely reasonable and well-founded.

In the first place, they take a very gloomy view of the present Minister of Transport. They see in him a Minister who is entirely disaffected, who has apparently no understanding of the railways, who hates them and the B.T.C. and wants to write the whole system off, and whose whole attitude towards the railways is one of utter frivolity and irresponsibility. If the hon. Member for Manchester, Moss Side (Mr. Watts) wants me to illustrate that point, I draw his attention to the speech made by the Minister at the Conservative Party Conference. In the whole of that Conference he made only one brief contemptuous reference to the railways. I have the text of that part of his speech here; it must have lasted about a minute, I suppose.

The right hon. Gentleman made two points. One of them was quite ludicrous and the other highly offensive. The ludicrous one was that there was no real point in trying to divert traffic from road to rail because it would not ease congestion in the cities. On that, I think, one can legitimately make two comments. Firstly, if the Minister thinks that road congestion exists only in cities he must be the one motorist who has never been on a congested main road in the countryside. Secondly, if he is so preoccupied with urban congestion, what has he been doing during the last year, and why, for example, has he treated with such extraordinary levity the urgent need for a new tube railway in this very town?

The Minister's offensive sneer came at the end of his speech—it was mentioned by my hon. Friend the Member for Southwark (Mr. Gunter), who is president of the Transport Salaried Staffs Association—when he spoke about a small incident which happened when he was in private business more than nine years ago. If that is all that the Minister can say about the railways at the annual conference of his party, is it really very surprising that railwaymen at all levels, and railway managements and members of the Commission too, should think that his attitude to the railways is basically hostile, irresponsible, ignorant and flippant? Certainly that is what Swindon railwaymen think about the Minister of Transport. If he goes on like this he may in the end succeed in breaking the hearts of the many thousands of loyal men working for and trying to run the railways.

I wonder if the Minister realises how deeply demoralising and wounding his whole attitude has been to the men in the railway service, how unsettled they are, from general managers to porters, how strong is the temptation to get out of the industry altogether and how few are the inducements for good men to come into it. Had the Minister been here I should have liked to ask him a direct question—if a son, nephew, or male relative of his was going into employment for the first time would he encourage that boy to go into the railways at present?

The railwaymen in Swindon, like us on these benches, do not know what part the Minister of Transport plays. We do not know whether he plays any effective part at all in the formulation of policy. We do not know whether he is another of the Prime Minister's "yesmen". If he were, I think that the Swindon railwaymen would be still more worried. They would suspect that behind all this hankering after decentralisation and so-called regional autonomy, which they and we think is a lot of political claptrap, there lies an antiquated Edwardian nostalgia to return to something like the days of the old private companies, of one of which, incidentally, the Prime Minister was a director, when more railwaymen and managers touched more caps to more local big shots and more holders of gold passes.

It is difficult not to believe that the Prime Minister and many of his colleagues, like far too many men still in senior jobs in the railway service, have never accepted the need for a single nationally-owned railway system and that they still imagine that competing units can do the job, despite the fact that in every modern industrial country experience has shown precisely the opposite to be true. A national system and not a regional company is the modern answer. Even in North America, where incidentally the railway service is about the worst and least profitable in the world, the private companies are moving very fast towards larger unified systems.

Behind the personal idiosyncrasies of the Minister of Transport—I warned him that I proposed to say something about him; I am only sorry that I had to say it while he was not here—and the possible prejudices of the Prime Minister lies the much more important fact that with the exception of a certain number of hon. Members—and some of them made speeches this afternoon—the Conservative Party, by and large, hates our national railway system and wants to dismantle and destroy it, for two main reasons.

Mr. Marples rose

Mr. Noel-Baker

First, it is because of ideological fanaticism and secondly, I believe, because of straightforward political corruption. I will explain what I mean by that.

The Tory Party hates the nationalised railways because we nationalised them in 1947. Incidentally, we saved them from bankruptcy and utter collapse. The Minister knows that had we not taken the railway system over in 1947, it would have had to be sold for scrap. He knows very well that the L.N.E.R. would have been in the hands of the Official Receiver but for the war. It may be even a further element in the Tory Party's prejudice against the nationalised railway system that the Labour Party has traditionally been stronger among railway workers and Tory Governments and Ministers have often publicly expressed their contempt for them.

Moreover, if you were—as, indeed, you are—Mr. Deputy-Speaker, a Conservative politician, and, a big part of your propaganda case was that nationalisation does not work and that it will always be associated with incompetent managament, inefficient bureaucracy, bad service to the public and big financial losses, how convenient it would be to have a permanent ready-made Aunt Sally in our present demoralised and struggling railway service, even though it is demoralised and struggling, not because there is anything wrong with the principle of a single nationally-owned system—one has only to look at France, Germany, Switzerland, Scandinavia and any other up-to-date country in this part of the world to see that the opposite is true—but because, for nine long years, prejudiced Conservative politicians have hampered, dismantled and threatened it, have interfered with it, have kept it in constant uncertainty and have starved it of funds while they have been playing political football with it with their directives, their inquiries, their fact-finding boards and their front men from the City of London.

I wonder whether the Minister really has any conception of the deadly, demoralising effect upon railwaymen of all this uncertainty and of all these constant inquiries. He has just told us that he now has another study group on top of all the other ones investigating the position of the railways. Businessmen, chartered accountants—all these people the right hon. Gentleman keeps loading on to the long-suffering Shoulders of the Transport Commission.

I used the words "political corruption" advisedly and the hon. Member for Moss Side tried to raise a point of order. If one looks at the relation between the Conservative Party and the road haulage interests, one cannot come to any other conclusion than that they have had a dominating influence on the policy of the Government and their attitude towards the railways.

I should like to ask the Joint Parliamentary Secretary one or two specific questions. Does the statement which we had from the Minister this afternoon mean that the Select Committee's Report, a penetrating and excellent document, will now be totally disregarded? If not, what will happen to it? Has the Minister noticed in that Report the grave criticisms of his officials and of those of the Treasury? Has he also noticed the performance of some of those officials before the Select Committee? If so, what action in his Department does he propose to take?

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Hay)

I am sorry 10 have to interrupt. Will the hon. Member give way?

Mr. Noel-Baker

I hope that the hon. Gentleman will reply to these questions at the proper place in the debate, which is at the end of it.

Mr. Hay

On a point of order. It is a long-standing tradition of this House that attacks are not made on members of the public service in this House. My right hon. Friend the Minister is responsible for the actions of his Department. My right hon. Friend takes full responsibility for everything that was said, and I urge the hon. Member to withdraw what he has just said.

Mr. Noel-Baker

If I have said anything offensive about the public service, of course I withdraw it. What I did was to ask whether the Minister would have a good look at the performance of the civil servants who came from his Department and from the Treasury before the Select Committee and take the appropriate action.

There is one specific point arising out of the recommendations of the Select Committee, in paragraph 368 relating to work study, which has been mentioned elsewhere in the debate. There is implied criticism that these methods have not been sufficiently applied elsewhere. We had some local difficulties in Swindon, and I ask the Joint Parliamentary Secretary whether he does not realise that the reason is that if there is an expanding, prosperous industry with good prospects of full employment and promotion there is no difficulty about work study at all, but that when there is a contracting industry in which every man is looking over his shoulder to see if he is likely to become redundant then we inevitably have difficulties of this kind. It seems to me that the attitude of the work people and of the trade unions has been very reasonable indeed.

I should like to ask about the chartered accountants. The Minister sought to give the impression that they were wanted by the B.T.C. and that the chairman hired them of his own volition. I am bound to say that we do not believe that. We believe that he compelled the unfortunate Commission to employ those chartered accountants after driving the members of the Commission mad by constant nagging about their accounting. We should like to know who wanted the accountants, if they have yet reported and to whom they reported and when? Has the Department studied their report, and what does it say? Does the Joint Parliamentary Secretary realise that any serious attempt at regional accounting is going to be very difficult and very expensive, and that it must almost certainly involve a return to the old railway clearing house which we had before the war?

I want to turn to the Stedeford Group. Of its recommendations and method of working the House is going to be kept in total ignorance, not only now but for ever. In Swindon some of the railwaymen call the Group "Marples' Gestapo", and others concluded that it is merely a front to enable the Government to dodge their responsibilities for policies they had not the courage to put forward themselves but had decided upon before the Group was appointed. I hope that the Joint Parliamentary Secretary will confirm or deny the fact that neither its report nor the evidence, nor the names of the witnesses from whom evidence was taken are going to be published, and I hope he will justify that extraordinary decision. I should like to ask him whether the Group has yet finished its work. If not, how much longer will it go on for? What are its plans for finalising its activities? Are the recommendations which have already reached the Commission complete, or are there more recommendations in the hands of the Minister which have not yet gone to the B.T.C.? And, of course, we should like to know what its procedure was, who its witnesses were, and how it took evidence.

Finally, we should like to know a little more about these mysterious civil servants who are apparently members of the Stedeford Special Advisory Group. What was their rôle? Were they full members of the Committee? If they were, then this fiction that this was an independent outside body does not, of course, stand up for a moment. Does the appointment of the Group mean that the Minister of Transport not only has no confidence at all in the Select Committee, which was already three months into its work before the Group was set up, but also in the large numbers of qualified, experienced businessmen who are members of the Commission itself and of the regional boards?

The Joint Parliamentary Secretary knows very well that some of us on this side are not particularly enthusiastic about the regional boards. We wondered whether they did a useful job and whether they were not an expensive luxury, but at all events we admitted, and this claim the Government have made over and over again, that they constituted a remarkable recruitment of outstanding industrial talents and had a number of very good labour representatives as well.

If that was so, what was the need for the Stedeford Group? Was the Minister of Transport telling all those business men on the boards and on the Commission, "You are no good. You do not know what you are talking about. You are a wash-out."? If not, the right hon. Gentleman ought to say so, because that is the impression that he has given to them and to the workers in the industry who think that by appointing the Stedeford Group the Minister has said, "Your bosses are no good."

Many of the business men who are associated with the Commission and with the area boards are saying, "All this, of course, is party politics", by which they mean it is Conservative ideological prejudice, and my railway friends in Swindon are asking, "Is the Minister merely trying to break Sir Brian Robertson's heart so that he can put someone like Mr. Clore in charge of running the railway system?"

The Joint Parliamentary Secretary ought not to imagine that there are not people who can put two and two together outside his Department and outside the Government and the British Transport Commission. There are, and the conclusion that many of us have reached about the Stedeford Group is that what happened was that the civil servants in the Minister's Department and in the Treasury got cold feet.

When they saw the railway deficits mounting and they saw the Guillebaud Report, they lost their heads. They then realised that things were in a mess and that if there was a row they might not get proper backing from the Minister of Transport because he had always wanted to sell out on the railways anyway and that therefore to shift responsibility and to protect the Government and protect Ministers, who had not the courage of their own convictions the Stedeford Group would provide an amenable and respectable-looking front and incidentally make it easier to ignore a good deal of the serious and factual reporting of the Select Committee.

No doubt the Parliamentary Secretary has noticed the very sinister last sentence in the first paragraph of the Select Committee's Report which explains that after the Committee started its work the Stedeford Group was set up: … a non-parliamentary planning board was later set up to cover much the same ground for the government's own purposes.

Mr. Hay

What were they?

Mr. Noel-Baker

Indeed, what were they?

Mr. Hay

To learn the facts.

Mr. Noel-Baker

The railway service is now a demoralised and declining industry out of which thousands of skilled and experienced men are drifting and into which very few ambitious and competent men at any level are attracted. In my own constituency hundreds of men have gone out of the railway workshops. I even know cases of main line drivers with years of experience who have gone out of the industry to make motor car bodies or something else. In Swindon, as in other railway workshop towns, we are trembling at what the future may hold for British Railways factories.

The Transport Commission has done its best, in spite of apalling difficulties—and this is reflected in the Annual Report—a hostile Minister, rattled and ill-informed officials, and a prejudiced and malevolent Government party. The Commission's position and the position of the chairman himself must be very difficult indeed. It was astonishing that the Minister should have thought it right not even to mention Sir Brian Robertson in his opening speech today. Whatever explanation may later be given, many of the railwaymen at many levels will draw their own conclusions from that.

Yet the modernisation programme has been going forward and has already met with some very promising results. The tragedy of it is that in present-day conditions British Railways could and should have a promising and useful future. If we do not have a war, technical and scientific progress will give us a rapidly rising living standard over the next twenty years. National output may be nearly doubled, the average income per head will greatly increase, and during the period there will obviously be an immense expansion of passenger traffic and freight, the great bulk of which, unless political prejudice drives it else-where, must go to the railways.

There is not really any objective reason at all for the gloom and hopelessness with which Government propaganda has clouded the future of the railways and the Commission; for a radical alteration of the present structure about which the Prime Minister spoke on 10th March. I repeat what one of my hon. Friends said so well earlier in the debate, that if the Conservative Party put the needs of the nation before its own narrow party prejudice there would be no reason whatever why British Railways should not enjoy a brilliant and successful future and why they should not make every bit as much progress as the national railway systems in up-to-date countries all over the world.

We have discussed in this debate the situation in Britain as though no other country in Europe had been going through the same experience. Yet we have only to look at France, Scandinavia. Germany, Belgium, Holland and Italy to see that these problems are not insoluble at all and that there is no reason why we should not have an efficient and adequate railway system.

I want to make one reference to the speech of the hon. Member for Guildford (Sir R. Nugent), who said that he hoped that the Government would resist the pressure to have Parliamentary Questions about railway management because this would demoralise the management and be bad for the industry. I very much hope that the Government will not take that line. We had Parliamentary Questions during the whole period of the Second World War and they did not have that effect. I am assured by the Minister then responsible—he happens to be my father, the right hon. Member for Derby, South (Mr. P. Noel-Baker)—that the effect of Parliamentary Questions during the whole of that period was not only very good for the railway service and its efficiency but very much appreciated by the management as well.

One of the problems that we face with our great publicly-owned industries is the danger that they should become remote and that the ordinary member of the public should not have any way of exercising influence or control over them. If I look at the present set-up from the point of view of my relations with, for example, the Western Region of British Railways, I sometimes find myself thinking that it is more difficult to get at the management, to get a complaint properly ventilated and to get an explanation of what has happened when dealing with a region of British Railways than it would be if one were dealing with a private firm. Now that Government intervention is obviously to increase in all aspects of the Commission's work. we really should have proper facilities for discussing its operations and for asking Parliamentary Questions.

I very much regret the tone of the Minister's remarks during the debate. It has been a profoundly unsatisfactory debate, and I can only hope that the fore-bodings of my constituents in Swindon and of my right hon. and hon. Friends will not be justified when at last we get a Government policy in the next few months.

9.3 p.m.

Mr. R..J. Mellish (Bermondsey)

I agree very much with what my hon. Friend the Member for Swindon (Mr. F. Noel-Baker) has said, except his closing remark. I hold the view that this has been one of the best debates, particularly about the railways, that I have heard for a very long time. It has been well-informed, and I feel that we owe much to the fact that there was a Select Committee which gave many hon. Members information which they would not otherwise have possessed. We have had some most constructive speeches, for which, I gather, the Minister of Transport was looking.

One of the interesting things that came out of the debate was the fact that, on the one hand, we had from the hon. Member for York (Mr. Longbottom) what I thought was a truly progressive speech, and I would urge the Minister to read it in detail, and, on the other hand, a speech—the only speech—from the Liberal Party which I thought was thoroughly reactionary.

Mr. Holt

That is not surprising.

Mr. Mellish

Apparently the hon. Member for Bolton, West (Mr. Holt) wants a return almost to the days of 1929. There would then be no licensing of A, B or C vehicles. The hon. Member apparently genuinely believes in true and complete free competition between road and rail. I can only say to the hon. Member that he must remember that it took one Government after another to bring in a licensing system for road vehicles to protect the railways of those days. If this attempt to go back to 1929 is Liberal policy, I hope that the country will understand what it is facing.

From our point of view, the Minister's speech was very disappointing, and we hope that we shall get more information from the Joint Parliamentary Secretary. I hope that we shall get an admission from the hon. Gentleman that the emphasis which the Minister placed on certain words was wrong. The Minister said that the Transport Commission had agreed to slowing down the pace of the modernisation programme and, also, not to place any new contracts for the London-Midlands electrication scheme.

But when the Minister says that the Commission has agreed, he means that he told the Commission that it had to agree. The Commission is the servant of the Minister. As we have heard so often, the Minister is the banker. When a banker says to a customer, "This is what we should do," the customer does it. The Parliamentary Secretary should make it clear, in fairness to the Commission, that, in playing its part in slowing down modernisation, it is doing so not at its own request, but at the Minister's. It is important to get that on record. We understand that there is also to be a study group on which the Commission is to have a representative. I am certain that, once again, this is a case of a banker telling a customer what he must do.

Inevitably, this has been a debate on railways, because, apart from the great problem of finance, it was our own Select Committee which, quite understandably, concentrated on the position of the railways. But in the Annual Report and Accounts of the Commission there is a reference to other activities, and in fairness I should at least mention one before I, also, turn my attention to the railways. That is the position of London Transport. I hope that the Minister will do something about this. Today, there is complete frustration amongst drivers and conductors in London Transoprt, and there is also a great deal of it amongst passengers. There are fewer bus services on the roads than for many years. There are fewer staff; and we know something of the appalling congestion on the roads, for we have heard it so often from the Minister himself.

I believe that to be a London bus driver today is a tremendous job of work. To try to swing a heavy bus through traffic, particularly in Central London, is quite an achievement. Drivers and conductors are demanding a public inquiry into what they call the running of their services. They have written to every Member of Parliament for a London constituency and also, [...]believe, to other Members, asking for support. In my reply, I said: I personally would not object to a public inquiry provided its terms of reference were all right and provided it was composed of men and/or women who were completely independent. I believe that such a report would show that, in fact, the present position which we face on the roads in London today is primarily the responsibility of the Government. Many of the arguments which we can raise about the railways can also be applied to the bus services in London. In spite of the recent wage increase to drivers, very serious trouble is not far away unless something is done, particularly about the drivers who, owing to the fewer buses which are available, still have to try to cover the roads of London.

I now turn to the railways. The two main aspects have been well debated and I hope that the House will forgive me for repeating some of the points, for I may give them a different slant. The two arguments centre around the annual deficit of the railways and the rôle of the Commission itself. It is understandable that the Liberal Party, in particular, should have directed attention to what it termed the vast sums of money being lost over the years and should have claimed that not enough fuss was being made about the deficit. However, that is not my experience. Almost every time we debate these annual reports a great deal is said about the money which has been spent by the Commission.

Let us be fair to the Commission itself. Until 1955, its financial position was not serious. That is generally recognised and admitted, but in that year a deficit of about £70 million was shown, that covering the previous eight years during which the Commission had been running. I say at once—and I do not think that it will be denied, because the debate today has been notable for the different spirit towards the Commission which has been shown by hon. Members on that side of the House—

Mr. Marples

And on that.

Mr. Mellish

We have always supported the Transport Commission but, since the Minister did not allow anybody to interrupt his speech, perhaps he will be good enough to keep quiet.

I was saying that we had seen a different spirit on that side of the House and it is in that spirit that I say that that deficit of £70 million over that period could be accounted for by the inflation which had occurred in the previous eight years and for which we as the Labour Government, during that period, are prepared to take our fair share of responsibility. It is reckoned that inflation alone accounted for about £100 million loss. Inflation was a factor affecting the costs of the Commission over which it had no control.

Again, in fairness to the Commission we should remember that both the Labour and Conservative Parties handicapped it very badly. We have argued before about the Transport Tribunal procedure. The difficulty has been known for a number of years, but nothing has been done about it. The Select Committee was aware of that difficulty, as is shown in its Report.

The procedure is that to apply for increased fares to meet increased costs the Commission has to go before the Tribunal and go through a cumbersome machinery, the Tribunal receiving objections from outside bodies and finally recommending whether or not the Corn-mission should increase fares. In 1956, we had the then Minister of Transport refusing to accept the Tribunal's recommendation. There can be no private firm in the world which has to undergo financial restrictions of that kind, restrictions which the Commission has had to endure for many years.

I remind the House that it is against the background of that deficit which I mentioned that we must not forget that in 1953 it was the Conservative Government which denationalised road transport, the most profitable section of the Commission's undertakings. We have heard much about free competition of road and rail and I wish that Conservative Members would define what they mean by free competition.

We know what the Liberal Party means by it. The Liberal Party would abolish all transport licences so that anyone could put a lorry on the road and carry small parcels. I do not regard that as free competition, especially when it is remembered that the railways have a duty to publish freight charges, so that every competitor knows what the railways are proposing to charge. My own constituency is a transport constituency and road haulage operators are able to telephone British Railways and find out what charge they would make for the carriage of a certain type of freight from, say. London to Liverpool. The British Railways clerk is compelled to give the rate and when the haulage operator knows what the railways intend to charge he can easily undercut.

The time has come when the railways must be allowed to compete fairly and honestly and to quote what prices they think are economic and to tender. I am all for that sort of competition, but the Tory Party says that there is already free competition, which I deny.

It has been said that railway modernisation cannot pay until about 1963.

Mr. Holt

Do I understand that the hon. Gentleman is supporting the shocking proposal to abolish the Transport Tribunal?

Mr. Mellish

Of course. I thought that even intelligent Liberals would understand that, but I will come back to this. I am now opening my remarks. The hon. Gentleman had better wait until I get to my conclusions. The House will be shocked then.

It is recognised that the modernisation plan cannot become effective until about 1963. We have now learnt that the Minister intends to cut down this modernisation programme. I plead with him to accept the view that any cutting down of the plans put forward for modernisation will be disastrous for the Commission, and will mean that the Commission will go further into the "red". I say that on the evidence of previous inquiries into modernisation.

Let us look at the rôle of the Commission. Sympathy has been expressed for Sir Brian Robertson, and I will not go into that. My hon. Friend the Member for Bristol, South-East (Mr. Benn) made clear what we on this side feel about that. For many years Sir Brian has suffered from the fact that from many hon. Members opposite, including the present Minister of Transport, there has been almost hatred of the Commission. [HON. MEMBERS: "No."] Certainly. That has been so in the past. Animosity towards the Commission has been shown again and again.

I do not deny that it may well be argued by hon. Members opposite that it was the political dogma of the Labour Party that brought in the 1947 Act, but we have said before, that, apart from it being political theory, our action was backed by a number of Royal Commissions which said that that was the type of organisation which should be brought in.

Sir Brian Robertson has been criticised not only as an individual, but as a member of the Commission. He has had criticism from some of my hon. Friends who consider that he is still a capitalist, that he is still not doing the right thing, that he is still not giving the right kind of service, and that he is not the right man for the job.

The Commission has had a rough time. It has had to put up with constant interference from the House of Commons and from the political parties. One of the best things that has come out of this debate is hat for the first time we have not heard from hon. Members opposite the usual party political arguments on this matter. If that spirit prevails I am sure that the Transport Commission will be a success.

The Stedeford Committee is one more committee which has been inquiring into this industry. I do not think that there can be any industry which has been inquired into so much and about which so much is known. Before the war there were eight major inquiries and statutes in connection with this industry. Since the war there have been seven major inquiries. How much more do we need to know about the railways before the information sinks in?

We are now to have a study group of which the right hon. Gentleman will be the chairman.

Mr. Marples

A good group.

Mr. Mellish

I have no doubt that in the right hon. Gentleman's estimation it will be a good group, but he is so talkative and says so many foolish things that I am amazed that he has time to take the chair in the study group on the railways.

Much rubbish has been talked about the Commission. One would think that the Commission, and the Commission alone, was responsible for the entire running of the whole of the railways, the London transport system, and so on. We have heard today—and this again came out because of our Select Committee—that we have area boards. I hope that when the Parliamentary Secretary replies he will say some nice things about those who serve as members of area boards. As my hon. Friend the Member for Swindon said, the people serving on those area boards are among the finest people that private enterprise can produce. They are doing a grand job, and doing it very cheaply. I understand that they are paid £500 a year. Many of them are regarded as doing a part-time job, but, in fact, they are doing almost a full-time one.

A lot of the work of the Commission is put down to area board level, and is performed by those boards. We know that schemes up to £500,000 are agreed and decided on by area boards. That is a measure of the power which they have. When hon. Members talk about decentralisation, how much more decentralisation do they want than that area boards should have power to approve schemes costing up to £½ million?

In 1952, the then Minister of Transport, the then right hon. Member for Mid-Bedfordshire—now a Member of another place—emphasised the need to keep the Commission intact. He also urged the need for a centralised organisation. We have heard from my hon. Friend the Member for Southwark (Mr. Gunter) that the trade unions would regard any break-up of the Commission as a disaster, because it has taken years for trade union machinery to be built up. The Commission is entitled to know at a very early stage whether the intention of the Government is to smash the Commission as we now know it. We have only vague ideas of what the Stedeford Committee is up to.

If the Parliamentary Secretary cannot tell us tonight, I hope that he will soon be able to tell us what the Government intend to do with the Commission. We cannot expect the Commission to go on year after year with the Government constantly setting up probing committees, which make its whole future undecided, so that when it comes forward with long-term plans they are cut back. If this position continues I warn the Minister that he cannot expect to get away without any labour trouble. He should devote some of his personal attention to this matter, and also to the buses to find out what the men in the industry are saying.

It is interesting to note that the final conclusions of the Select Committee have very much in common with those of an inquiry carried out by the T.U.C.

Mr. A. E. Cooper (Ilford, South)

On the possibility of labour troubles, can the hon. Member tell us whether the transport undertakings operate for the benefit of the trade union or for the travelling public?

Mr. Mellish

That is not a very intelligent remark. It has taken many years to build up the present machinery of collective bargaining. From this point of view the relationship between the Commission and the many unions involved is a very satisfactory one, and if the Government smash the centralised machinery there will be labour trouble.

The hon. Member for Ilford, South (Mr. Cooper) has not been here all day and does not know what has been going on. If he had been here he would have heard hon. Members on both sides argue that decentralisation is a very good thing. One Conservative Member wants a return to the Great Western Region, the Midland Region, the Southern, and so on, and no doubt other Conservatives think that that is practical and possible. I was merely arguing that the present conciliation machinery must not be destroyed. If it is, the Government must accept the responsibility. I should not think that any Conservative would believe that workers could argue about rates of pay at a regional level, especially in the railways. That fact should be taken into account.

As I was saying, there is a great deal in common between the conclusions arrived at by the Select Committee and the T.U.C. inquiry. The Select Committee accepts the need for a centralised organisation of the railways. I am not as prejudiced as the hon. Member for Ilford, South believes. The Select Committee also criticised the Transport Tribunal, and accepted the fact that the national interest might require the operation of rail services which are not profitable. It consequently accepted, in principle, the idea of a subsidy. The right hon. Member for Blackpool, North (Sir T. Low), in a first-class speech, made it clear that he favoured a subsidy. He said that a subsidy should be provided for unprofitable lines which are necessary in a social sense.

I wish the Minister of Transport would pay some attention to what I am saying. I know that his regard for the House is not very great. He regards the House as a place which he can flit in and out of, but he is the Minister of Transport and is supposed to be listening to the debate. In any case, I am speaking on behalf of my party, and I am entitled to expect some attention from him. He does not gain from being flippant throughout the debate. He may think it amusing, but I do not.

The T.U.C., in its report, made the following—[Interruption.] Mr. Speaker, I do not know whether you can control the Minister of Transport.

Mr. Speaker

I hope that we can get on.

Mr. Mellish

The T.U.C.'s report stated that the Government should assume responsibility for the whole of the B.T.C.'s capital burden, including deficit advances and modernisation capital, and that the B.T.C. should be charged a reasonable rent based on ability to pay, the rent to be subject to periodic revision in the light of changing circumstances. The report asked the Government to meet the railway working deficits until 1963 and that provision should be made for the Government to contribute, in case of need, to the upkeep of uneconomical lines retained for social reasons. It also asked that the Transport Tribunal should be abolished. I would certainly support this. This is the answer to the only representative of the Liberal Party who is present. I understand that the Liberals are having a Party meeting.

The B.T.C., said the T.U.C.'s report, should have freedom to develop its sites, and proposals by the Government that B.T.C.'s non-railway assets should be denationalised should be opposed.

Sir T. Low

Has the T.U.C. report to which the hon. Gentleman refers, and which I have not had an opportunity of reading, been published? Has it also published the evidence of the memoranda on which it is based?

Mr. Mellish

That is a fair question. It was a joint committee set up between the T.U.C. and the various railway unions concerned. So far, it has not been published, in the sense that the Select Committee's Report has been published. Whether the Minister is aware of this I do not know. This is a political viewpoint and one that I would support as the way to approach this problem. I say publicly now that these were the joint committee's final conclusions, and that many of the conclusions which I have announced were because of its approach to nearly all these matters from a trade union and political point of view.

I am interested in the fact that the Select Committee, aided and abetted by all the evidence at its disposal, came to a number of the same conclusions. I ask the Minister and the Parliamentary Secretary to bear that in mind. We are to have a White Paper, but I am not sure when we shall get it. I gather that it will be later in the year. I assume that a new Bill will be proposed later to deal with any alteration in the present constitution. We shall expect it later in the year.

A Press report today stated that the Stedeford Committee had made many recommendations which defended the Transport Commission. If so, in fairness to the Commission, these are entitled to be published. By implication, if there are alterations to be made in the Commission's structure recommended by the Stedeford Committee, and put in a White Paper, we Should also be entitled to know any of the nice things which it may have said about the Transport Commission. Do not let this be a one-way traffic.

In a previous speech I urged that the whole question of the Transport Commission and the way in which it functions should be taken out of party political argument. It is too important for that. We cannot go on as things are. Let us face the inevitable. The Commission will not be handed back to private enterprise. That is a certainty. It is not making a profit. It may not make a profit for many years to come, and it will probably never make a profit.

Anything that does not make a profit will certainly not be taken over by a private concern. That is obvious, so let us accept that State ownership of transport and the railways is here to stay for ever. I believe that to be a good thing. We have to make it work without party political prejudices. The one man who can set an example is the present Minister of Transport. I believe that the Commission is entitled to expect from the Government not only assurances about today, but tomorrow as well, so that it may work on a forward-looking programme and make a great advance.

9.30 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Hay)

Almost every hon. Member who has spoken in this debate has remarked that this is likely to be the first we shall have of what may be a series of debates about the affairs of the British Transport Commission and the railways over the months to come. A number of hon. Members have expressed the view that the debate has been unreal. Looking round the Chamber I regard that view as quite justified. This is the first time I have ever known what is tantamount to a motion of censure debate being wound up by the Minister in charge at half-past-nine with the benches opposite so deserted—

Mr. Popplewell

What about the Government back benches?

Mr. Hay

I know that the party opposite has other pre-occupations at the moment and I do not blame hon. Members opposite.

I wish to make it clear at the outset that hon. Members have felt to some extent inhibited in what they have said by the fact that my right hon. Friend has not today been in a position to announce in detail what we have in mind to do. But there is an enormous amount of common ground between hon. Members on both sides of the House on these matters and my right hon. Friend has asked me to say specifically to hon. Members who have spoken how much he appreciates not only the constructive advice which has been given—this applies to hon. Members on both sides of the House—but also the objective and, to a great extent, the non-partisan way in which they have approached the problems of the industry.

Every one has agreed that something has to be done. This has been a debate concerned with the diagnosis of what is wrong. It is clear that the industry is not in a good way at all. A lot of things have been going on, but our purpose today has not been to prescribe the treatment to get the patient back on his feet again. That will come later, when my right hon. Friend and his colleagues have had a chance to study in detail the advice given by the two bodies already mentioned, the Select Committee and the Special Advisory Group under the chairmanship of Sir Ivan Stedeford and have also studied the advice given by hon. Members in the debate today. Then will be the time for my right hon. Friend to come forward with his proposals. As he said when he spoke earlier this afternoon, it is my right hon. Friend's intention to try as soon as may be to produce a White Paper setting out the broad lines upon which we hope to deal with the matter. This will be debatable, as White Papers are, and we shall then take account of the advice and views of the House on what should be the form of any legislation that is necessary.

Our task has been to analyse the situation and, if we can, to find out what has gone wrong. In this connection we have been enormously helped by the work done by the Select Committee. A great many deserved tributes have been paid to our colleagues on the Select Committee and to their Chairman, my right hon. Friend the Member for Black-pool, North (Sir T. Low). If I may speak for myself, I have some lively recollections of the last Report from the Select Committee on Nationalised Industries about the Air Corporations. As did my right hon. Friend, I regret that we had no adequate opportunity to debate that last year. In answer to a question which my right hon. Friend put at the end of his speech, I would certainly say that it seems to me this Committee is working along the right lines.

The other body giving advice on these matters is the Special Advisory Group and I wish at this stage—I am sorry it has not been possible to do so before—to dispel the idea that this group is or has been a committee in the formal sense. On 13th April we had a debate when all this was explained. The Group has not produced a report in the normally accepted sense. Hon. Members have spoken about the publication of the "Stedeford Report". There is no such thing. What has been happening is that, as the months have progressed since the Group was set up, advice has been tendered to my right hon. Friend and a number of recommendations have been made and are now available to us.

I come straight away in this connection to the point which was put frequently from the benches opposite, that we should publish the recommendations which have been made by Sir Ivan Stedeford and his colleagues. I say at once that is not possible, for the reasons set out by my right hon. Friend in the debate on 13th April. He said then that the advice given by this Group would be confidential to the Government and to the Commission, because the Group was to report, to make recommendations to, and to advise the Government and the Commission jointly. Therefore, my right hon. Friend could not take a unilateral decision to publish the recommendations of the Group.

Secondly, the work of the Group proceeded on the assurance that their proceedings would be confidential. Much advice and many views were expressed fully and frankly to the Group by those who gave evidence on that understanding, that the recommendations were not to be published. The hon. Member for Southwark (Mr. Gunter), who is not at the moment in his place, told us of the occasion when he and his colleagues from the railway unions went to see the Group. He complained a little of the way in which the proceedings had gone on. I think he had expected something more formal, but perhaps the "salty" language which he and his colleagues used on that occasion might not be the sort of thing which he and his friends would want to see in a published document. I do not know.

The Group was composed of advisers to the Commission and the Minister. What the House is more concerned with is not the views of the Group and the evidence given to it, but the proposals which the Government will put forward as the result of their general examination of all these matters. As I have said, there will be plenty of opportunity when we produce the White Paper, and debate it, for that to be done. Our first job has been to analyse the situation and to try to find what has been going on. I must set out what I consider to be the four major factors we have had to have in mind.

The first situation which faced us was the extremely serious financial position of the British Transport Commission as a whole and the railways in particular. I do not want to rub it in, but I feel that we have again to refer to this situation because it is the essential background to everything that has been going on, is going on now, and will take place in future. First, there are the deficits. It is not only the extent of the £74 million deficit which the Commission had in 1959; there is a series of deficits over a number of years to be considered as well. The total of those deficits is £350 million to the end of last year, and the railways themselves have had deficits of something like £400 million when we take into account their share of the central charges. When one looks on figures of that kind one is entitled to say that the statutory obligation placed on the Commission by the 1947 Act, that it should pay its way taking one year with another, begins to look a little derisory.

Mr. Mellish

Who was responsible?

Mr. Hay

I shall come to the question of responsibility a little later, but I am trying to paint the background and I am not exaggerating it. I hope that the hon. Member will give me credit for that. This is the situation we have to deal with. Secondly, one has to look at the figures for 1960. The estimated deficit will be £105 million and the estimated railway deficit is thought to be about £115 million, including the central charges. This includes the £40 million which has to be found to pay the cost of increased wages arising from the agreement which followed the Guillebaud Report.

It therefore means that in this year—this is the essential point for the House to grasp—the taxpayers, those we are here to represent and defend, will have to pay a direct above-the-line subsidy of £105 million. This is big money and this is why we have to take this matter very seriously. It is not the end of the story. Remember, also, that a large number of advances have been made by the Government to the Commission since 1956—£276 million has been advanced to meet deficits and another £326 million has been advanced for capital investment, a total of more than £600 million. When the hon. Member for Southwark and the hon. Member for Swindon (Mr. F. Noel-Baker)—and I did not enjoy the speech of the hon. Member for Swindon, which I thought fell far below the level of the rest of the debate—complain that politicians have done nothing to help and that the Conservative Government have starved the Commission of money, I hope that they will bear these facts in mind.

But again, that is not the end of the story. Let us remember that when the railways were nationalised the compensation to be paid to the shareholders was in the form of transport stock. At present, I understand, the total amount of the transport stock outstanding is £1,450 million, and this is guaranteed by the Treasury and ultimately by the taxpayer. This, again, makes it all the more important that we should take these matters seriously.

Mr. Popplewell

These interest charges have been included in the figures already given by the Minister.

Mr. Hay

The final point which I want to make on finance is the growing volume of interest charges which the Commission has to bear in the years ahead. When we examine the figures, and even when we examine such documents as the modernisation plan, the White Paper "Proposals for the Railways" and the reappraisal, it is quite clear that unless something is done there is a very great risk, to put it no higher, that in the years ahead interest charges on money borrowed either to meet deficits or for capital investment will swallow up the earnings of all the Commission's undertakings, and it does not look as if a position of solvency can easily be reached.

The second main point I wish to make is one which is made by our colleagues of the Select Committee. It is a difficulty which we all face, including the Commission, of trying to trace exactly where the money is being lost. If one looks at paragraphs 130–138 of the Select Committee's Report one sees the difficulties which our colleagues have found in trying to find out where the money has gone. The Commission itself admits that it cannot say with any precision where the money has been lost. All we know for a fact is that large sums of money are being lost. It may well be that greater decentralisation of management and matters of regional accounting could help us to reach a solution of that problem.

May I say a word about regional accounting? I know that it is anathema to many in the railway industry, but I urge those who had experience of the old railway clearing house system before the war to remember that accountancy and accounting have undergone a complete revolution since those days. Today electronics and computers make simple the task which previously had to be carried out by a building full of clerks, and an operation which might perhaps have taken a day or more can nowadays be done within a few seconds. Such things may well transform the difficulty of regional accounting.

The next point about the past and the present is the difficulty which our colleagues of the Select Committee and we in the Ministry have found in satisfactorily calculating the extent of relief from modernisation. This is an allied problem to that which I have just described. There is no doubt at all that modernisation along the lines proposed by the Commission in the White Paper will make a much better railway. But what disturbs us—a matter on which we are not sure—is whether the railway which is then created will be viable. In the light of the Commission's indebtedness ultimately to the taxpayer, which I have described, this is a matter of the greatest concern.

It is quite obvious that under the present arrangements, if nothing is done, by 1963, the year when the Commission expected that it would at least break even, it may not be viable; and after that again, if nothing is done, there is the greatest possible prospect that it will not be viable

The final point which I want to make about this is the difficulty which the Commission has to meet in the changing conditions in which it works. I want to pick out two or three matters for mention here. The first is, as the House knows, that the big traffic on which the prosperity of the railways in the past has always been founded has been the carrying traffic in coal. The White Paper and the reappraisal are both based on certain figures of coal carrying projected into the future. In 1958, there was a substantial drop in the amount of coal carried by the railways, and this was really the factor which led directly to the reappraisal of the modernisation plan. It would be unlikely, I think, that any hon. Member would be able to forecast with absolute certainty what would be the level of coal offered for carriage by the railways in the years immediately ahead. This is what makes the uncertainty that we have already for the Commission's future, even greater.

The next point is that we know that already nearly 60 per cent. of all goods traffic flowing in this country goes by road instead of by rail. Since 1952, the total volume of goods carried by road has risen by as much as a quarter. Allied with this has been the increase in personal passenger travel by road and by air, by road for short and medium distances and by air far longer distances. It is true that the commuter services in and around our big cities bring in and take out 2 to 3 million people a day, but it is also clear, if one refers to paragraphs 135 and 137 of the Report of the Select Committee, that these commuter services themselves, where the traffic is at its height and the utilisation of the equipment is at its most intense, still, apparently, do not pay, although they may with modernisation. It is quite clear, says the Select Committee, that long-distance passenger lines cover only their costs and their overheads; they do not contribute to the central charges of the Commission. That is paragraph 134 of the Select Committee's Report.

Therefore, we must have a searching inquiry into the major modernisation schemes which are in the Commission's programme, for three reasons: first, to determine as accurately as we can the extent to which the individual schemes will be profitable, to determine the profitability of the enterprises in which we.are asked to invest very large sums of taxpayers' money; secondly, so that we can determine the order of priority of the schemes in the programme; thirdly, so that we can judge the modernisation schemes against similar and prospective investment in other forms of transport in this country in the light of the constantly changing pattern of demand.

I will give an example of what I mean, the big thing we are all thinking of, namely, the electrification of the London Midland main line. We now know that this will cost about £160 million. This is two and a half times as much as our spending on major improvements and new construction on the roads for 1960–61. That figure is £65 million. To take another comparison, the £160 million for the London Midland electrification scheme is eight times the cost of building the M.1.

These are the sort of problems we must face. We have to decide whether it will be worth while in the long run to go in for the London-Midland electrification scheme or whether it would be better to use some of the money on other forms of transport. These are the problems with which my right hon. Friend is grappling, and I think he needs the sympathy and support of the House in them. This is really the purpose of the study group of which my right hon. Friend is chairman. I want to make it absolutely clear that this is not another committee.

My right hon. Friend was at some pains to explain exactly what was the purpose of the group he had set up. The object is really to consider what, in present circumstances, the British Railways modernisation programme should be. The reasons for setting it up are these. First, we have had some doubts, as have our colleagues on the Select Committee, about the economics of modernisation. Next, there are. obviously, changes in traffic trends going on throughout the country. I shall say something more about those in a few minutes. Finally—this is a reason which I hope will commend itself to the House—there is the very size of the bill which has to be paid for modernisation over the years measured against the inevitably limited funds that will be available for transport investment as a whole.

As I have said, this is not a formal committee. It is a working group. Its composition has varied, and no doubt it will continue to vary as time goes on. Essentially—and this is the point that I should like to make to the House—it is intended to be a meeting of the Minister and his advisers with representatives of the Commission under Sir Brian Robertson, who has been good enough to attend on the occasions the group has met.

Its method of work falls into short-term and long-term parts. In the short term, the group has been looking at some of the modernisation proposals which need the most urgent examination. I believe that it has almost completed its examination. In the long term, it will be considering the fundamental question of the size and shape, not only of the railways, but of the transport system as a whole over the next 25 years. To begin with, it is discussing two things—first, a costing study on the profitability of traffic, something which we have to have, and, secondly, a study on the trends of traffic as between the railways and other forms of transport.

The setting-up of the group leads me to the question posed by the Opposition in their Amendment. As I understand the case which they have made today, they argue that we on this side have no sense of the need for balance between the different forms of transport, especially between road and rail. I assure them that we certainly have, but we are face to face with a problem which is affecting all the highly developed countries of the world. The hon. Member for Birkenhead (Mr. Collick) put his finger on this when he pointed out that all over the world public transport is fighting a rearguard action against private transport. This is the fundamental fact with which we have to live and which we in this country have to accommodate.

Today, people in Britain, as in other highly developed countries, want to use private transport. They want to use it for their goods and for themselves. For example, there is the question of the C licence. It is sometimes suggested—it was suggested by the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell)—that we should restrict C licence holders. Before we can attempt any kind of answer to a proposition of that kind, I think that we must study the reasons why there has been this phenomenal growth in private goods transport over the years, particularly in C licences.

If one looks, for example, at the survey of C licensed vehicles carried out in October last year by the Traders Road Transport Association, one finds some very illuminating figures. This is the body which represents C licence holders. Its members said that, by comparison with the railways, the factors which motivated them to use C licences, their own private transport, rather than the railways, were not, as one might have imagined, the question of cost but primarily speed of delivery and certainty of timing. Cost came second, avoidance of breakages and damage third, and a door-to-door service fourth. Rather unexpectedly, the ability to advertise their products and trade names on their vehicles figured very highly in the motivating factors why they wanted to use C licensed vehicles rather than the railways.

I should like to ask the party opposite this question: would restriction, as some hon. Members opposite have advocated, necessarily be in the general public interest? Is it really desirable to force this traffic back on to the railways? It is quite clear that the prospects for greatly increased traffic for the railways if one were to restrict C licences are greatly over-estimated.

I now want to say a few words about passengers and private transport. I think that all one needs to do is to point to the vast numbers of new motor cars, scooters, motor cycles, mopeds, and so on, coming on to our roads simply because people want to buy and use them despite crowded road conditions. How many hon. Members went on holiday by rail this summer? I should imagine that the numbers were comparatively small. I think that the great majority of hon. Members with cars probably took them when they went on holiday.

This point concerns both goods and passenger traffic. I do not think that we would be wise to try to stem the tide of private transport. Our job is to accommodate it and to adjust the public transport system to fit. Private transport is not necessarily inefficient or wasteful. What is inefficient and wasteful is to try somehow desperately to maintain the public transport system in the same rigid pattern as it had twenty-five or fifty years ago.

This is the great fundamental cleavage between the two parties in the House. The party opposite is working all the tune for co-ordination of transport, and so are we, but hon. Members opposite seek to do it, as I understand their speeches today, by regulation and by restriction and somehow to direct the traffic to those parts of the transport system which somebody—heaven knows who it would be—decides is the best and most efficient method. We on this side, on the other hand, believe that competition can be equally effective and much more flexible in ensuring that same co-ordination.

It is what people want that counts. The trader will send his goods by his own transport or by road in preference to rail or by rail in preference to road, as often happens, not because somebody tells him it is a good thing and that he should do it for social reasons, but because he knows from experience that it will be more efficient and, perhaps, more profitable for him to take one or other of these courses. When the party opposite complains in its Amendment that we do not follow a consistent policy, it is really saying that we are not following a policy consistent with Socialist principles. Hon. Members opposite can hardly blame us for not doing that. That is why the

whole question of remodelling and reorganising the Transport Commission and its undertakings is of such crucial importance.

Today, we have described and discussed the problems. One fact which is inescapable is that in the face of the growth of private transport, our railway system must be reshaped to modern circumstances and future probabilities so far as we can determine them. The modernisation plan has to be adapted to that new shape. The dead wood has got to be cut out and the outmoded restrictions and obligations—the common carrier obligation—the control over fares, the inability to use property in the most economic and effective way must all be re-examined. The structure of the Commission, which has been in operation for twelve years, must be reconsidered and in the long term we must aim at financial viability.

In a sentence, I can state what our objective is in this operation. We seek an efficient, a modern and a viable railway and transport system, flexible, forward-looking and vigorous, which gives good service to the public and—this is vitally important—a good living to those who work in it. This is one of our constant anxieties and preoccupations.

I do not deny that the problems we have to face are grave. The task which is before us is daunting in its complexity and magnitude. It presents us on this side, and my right hon. Friend in particular, with a challenge, but I do not think that it can be beyond the wit of the British people in the middle of the twentieth century, with co-operation and with common sense, to find a solution. I assure the House that a solution we shall find.

Question put, That those words be there added:—

The House divided: Ayes 240, Noes 296.

Division No. 155.] AYES [10.0 p.m.
Abse, Leo Bence, Cyril (Dunbartonshire, E.) Brown, Alan (Tottenham)
Ainsley, William Benn, Hn.A.Wedgwood (Brist'l, S.E.) Brown, Rt. Hon. George (Belper)
Albu, Austen Benson, Sir George Brown, Thomas (Ince)
Allaun, Frank (Salford, E.) Blackburn, F. Butler, Herbert (Hackney, C.)
Allen, Scholefield (Crewe) Blyton, William Butler, Mrs. Joyce (Wood Green)
Awbery, Stan Boardman, H. Callaghan, James
Bacon, Miss Alice Bowden, Herbert W. (Leics, S.W.) Castle, Mrs. Barbara
Baird, John Bowles, Frank Chapman, Donald
Baxter, William (Stirlingshire, W.) Boyden, James Chetwynd, George
Beaney, Alan Braddock, Mrs. E. M. Cliffe, Michael
Bellenger, Rt. Hon. F. J. Brockway. A. Fenner Collick, Percy
Corbett, Mrs. Freda Jenkins, Roy (Stechford) Reid, William
Craddock, George (Bradford, S.) Johnson, Carol (Lewisham, S.) Reynolds, G. W.
Cronin, John Jones, Dan (Burnley) Rhodes, H.
Crosland, Anthony Jones, Elwyn (West Ham, S.) Roberts, Albert (Normanton)
Crossman, R. H. S. Jones, Jack (Rotherham) Roberts, Goronwy (Caernarvon)
Cullen, Mrs. Alice Jones, J. Idwal (Wrexham) Robinson, Kenneth (St. Pancras, N.)
Davies, G. Elfed (Rhondda, E.) Jones, T. W. (Merioneth) Ross, William
Davies, Harold (Leek) Kelley, Richard Royle, Charles (Salford, West)
Davies, Ifor (Gower) Kenyon, Clifford Shinwell, Rt. Hon. E.
Davies, S. O. (Merthyr) Key, Rt. Hon. C. W. Short, Edward
Deer, George King, Dr. Horace Silverman, Julius (Aston)
de Freitas, Geoffrey Lawson, George Silverman, Sydney (Nelson)
Delargy, Hugh Ledger, Ron Skeffington, Arthur
Dempsey, James Lee, Frederick (Newton) Slater, Mrs. Harriet (Stoke, N.)
Dodds, Norman Lee, Miss Jennie (Cannock) Slater, Joseph (Sedgefield)
Donnelly, Desmond Lever, Harold (Cheetham) Small, William
Driberg, Tom Lever, L. M. (Ardwick) Smith, Ellis (Stoke, S.)
Dugdale, Rt. Hon. John Lewis, Arthur (West Ham, N.) Snow, Julian
Ede, Rt. Hon. Chuter Lipton, Marcus Sorensen, R. W.
Edelman, Maurice Logan, David Soskice, Rt. Hon. Sir Frank
Edwards, Rt. Hon. Ness (Caerphilly) Loughlin, Charles Spriggs, Leslie
Edwards, Robert (Bilston) Mabon, Dr. J. Dickson Steele, Thomas
Edwards, Walter (Stepney) McCann, John Stewart, Michael (Fulham)
Evans, Albert MacColl, James Stonehouse, John
Fernyhough, E. Mclnnes, James Stones, William
Finch, Harold McKay, John (Wallsend) Strachey, Rt. Hon. John
Fitch, Alan McLeavy, Frank Strauss, Rt. Hn. G. R. (Vauxhall)
Fletcher, Eric MacMillan, Malcolm (Western Isles) Stross, Dr. Barnett (Stoke-on-Trent,C.)
Foot, Dingle MacPherson, Malcolm (Stirling) Summerskill, Dr. Rt. Hon. Edith
Forman, J. C. Mahon, Simon Swain, Thomas
Fraser, Thomas (Hamilton) Mallalieu, E. L. (Brigg) Swingler, Stephen
Gaitskell, Rt. Hon. Hugh Mallalieu, J.P.W. (Huddersfield, E.) Sylvester, George
Galpern, Sir Myer Manuel, A. C. Symonds, J. B.
George, Lady Megan Lloyd Mapp, Charles Taylor, Bernard (Mansfield)
Ginsburg, David Marquand, Rt. Hon. H. A. Thomas, George (Cardiff, W.)
Gordon Walker, Rt. Hon. P. C. Marsh, Richard Thomas, Iorwerth (Rhondda, W.)
Gourlay, Harry Mayhew, Christopher Thompson, Dr. Alan (Dunfermline)
Greenwood, Anthony Mellish, R. J. Thomson, G. M. (Dundee, E.)
Grey, Charles Mendelson, J, J. Thornton, Ernest
Griffiths, David (Rother Valley) Millan, Bruce Thorpe, Jeremy
Griffiths, Rt. Hon. James (Llanelly) Mitchison, G. R. Timmons, John
Griffiths, W. (Exchange) Moody, A. S. Tomney, Frank
Gunter, Ray Morris, John Ungoed-Thomas, Sir Lynn
Hale, Leslie (Oldham, W.) Mort, D. L. Wade, Donald
Hall, Rt. Hon. Glenvil (Colne Valley) Moyle, Arthur Wainwright, Edwin
Hamilton, William (West Fife) Noel-Baker, Francis (Swindon) Warbey, William
Hannan, William Noel-Baker, Rt. Hn. Philip (Derby, S.) Watkins, Tudor
Hart, Mrs. Judith Oliver, G. H. Weitzman, David
Hayman, F. H. Oram, A. E. Wells, Percy (Faversham)
Healey, Denis Owen, Will Wells, William (Walsall, N.)
Henderson, Rt. Hn. Arthur (RwlyRegis) Padley, W. E. White, Mrs. Eirene
Herbison, Miss Margaret Paget, R. T. Whitlock, William
Hewitson, Capt. M. Pannell Charles (Leeds, W.) Wigg, George
Hill, J. (Midlothian) Pargiter, G. A. Wilcock, Group Capt. C. A. B.
Holman, Percy Parker, John (Dagenham) Wilkins, W. A.
Holt, Arthur Parkin, B. T. (Paddington, N.) Willey, Frederick
Houghton, Douglas Pavitt, Laurence Williams, D. J. (Neath)
Howell, Charles A Pearson, Arthur (Pontypridd) Williams, Rev. Ll. (Abertillery)
Hoy, James H. Peart, Frederick Williams, W. R. (Openshaw)
Hughes, Cledwyn (Anglesey) Pentland, Norman Willis, E. G. (Edinburgh, E.)
Hughes, Emrys (S. Ayrshire) Plummer, Sir Leslie Wilson, Rt. Hon. Harold (Huyton)
Hughes, Hector (Aberdeen, N.) Popplewell, Ernest Winterbottom, R. E.
Hunter, A. E. Prentice, R. E. Woodburn, Rt. Hon. A.
Hynd, H. (Accrington) Price, J. T. (Westhoughton) Woof, Robert
Hynd, John (Attercliffe) Probert, Arthur Wyatt, Woodrow
Irvine, A. J. (Edge Hill) Proctor, W. T. Yates, Victor (Ladywood)
Irving, Sydney (Dartford) Pursey, Cmdr. Harry Zilliacus, K.
Janner, Barnett Randall, Harry
Jay, Rt. Hon. Douglas Rankin, John TELLERS FOR THE AYES
Jeger, George Redhead, E. C. Mr. John Taylor and
Mr. G. H. R. Rogers
Agnew, Sir Peter Batsford, Brian Black, Sir Cyril
Aitken, W. T. Baxter, Sir Beverley (Southgate) Bossom, Clive
Allan, Robert (Paddington, S.) Beamish, Col. Tufton Bourne-Arton, A.
Allason, James Bennett, F. M. (Torquay) Box, Donald
Alport, Rt. Hon. C. J. M. Bennett, Dr. Reginald (Gos & Fhm) Braine, Bernard
Arbuthnot, John Berkeley, Humphry Brewis, John
Ashton, Sir Hubert Bevins, Rt. Hon. Reginald (Toxteth) Bromley-Davenport, Lt.-Col. W. H.
Atkins, Humphrey Bidgood, John C. Brooke, Rt. Hon. Henry
Balniel, Lord Biggs-Davison, John Brooman-White, R.
Barber, Anthony Bingham, R. M. Browne, Percy (Torrington)
Barlow, Sir John Birch, Rt. Hon. Nigel Bryan, Paul
Barter, John Bishop, F. P. Bullard, Denys
Bullus, Wing Commander Eric Hill. J. E. B. (S. Norfolk) Page, Graham
Burden, F. A. Hirst, Geoffrey Partridge, E.
Butcher, Sir Herbert Hobson, John Pearson, Frank (Clitheroe)
Butler. Rt.Hn.R.A.(Saffron Walden) Hocking, Philip N. Peel, John
Campbell, Sir David (Belfast, S.) Holland, Phillip Percival, Ian
Campbell, Gordon (Moray & Nairn) Hollingworth, John Peyton, John
Carr, Compton (Barons Court) Hope, Rt. Hon. Lord John Pickthorn, Sir Kenneth
Carr, Robert (Mitcham) Hopkins, Alan Pike, Miss Mervyn
Cary, Sir Robert Hornby, R. P. Pilkington, Capt. Richard
Channon, H. P. G. Hornsby-Smith, Rt. Hon. Patricia Pitman, I. J.
Chichester-Clark, R. Howard, John (Southampton, Test) Pitt, Miss Edith
Clark, William (Nottingham, S.) Hughes Hallett, Vice-Admiral John Pott, Percivall
Cleaver, Leonard Hughes-Young, Michael Price, David (Eastleigh)
Cooke, Robert Hulbert, Sir Norman Price, H. A. (Lewisham, W.)
Cooper, A. E. Hurd, Sir Anthony Prior, J. M. L.
Cooper-Key, Sir Neill Iremonger, T. L. Prior-Palmer, Brig. Sir Otto
Cordeaux, Lt.-Col. J. K. Irvine, Bryant Godman (Rye) Profumo, Rt. Hon. John
Cordle, John Jackson, John Proudfoot, Wilfred
Corfield, F. V. Jenkins, Robert (Dulwich) Rawlinson, Peter
Costain, A. P. Johnson, Dr. Donald (Carlisle) Redmayne, Rt. Hon. Martin
Coulson, J. M. Johnson, Eric (Blaokley) Rees-Davies, W. R.
Courtney, Cdr. Anthony Johnson Smith, Geoffrey Renton, David
Craddock, Sir Beresford Jones, Rt. Hn. Aubrey (Hall Green) Ridley, Hon. Nicholas
Critchley, Julian Joseph, Sir Keith Rippon, Geoffrey
Crosthwaite-Eyre, Col. O. E. Kerans, Cdr. J. S. Roberts, Sir Peter (Heeley)
Crowder, F. P. Kerr, Sir Hamilton Robson Brown, Sir William
Cunningham, Knox Kimball, Marcus Rodgers, John (Sevenoaks)
Curran, Charles Kirk, Peter Roots, William
Currie, G. B. H. Kitson, Timothy Royle, Anthony (Richmond, Surrey)
Dalkeith, Earl of Lagden, Godfrey Russell, Ronald
Dance, James Lancaster, Col. C. G. Sandys, Rt. Hon. Duncan
de Ferranti, Basil Langford-Holt, J. Scott-Hopkins, James
Digby, Simon Wingfield Leather, E. H. C. Seymour, Leslie
Donaldson, Cmdr. C. E. M. Leavey, J. A. Sharpies, Richard
Doughty, Charles Leburn, Gilmour Shaw, M.
Drayson, G. B. Legge-Bourke, Sir Harry Shepherd, William
du Cann, Edward Lewis, Kenneth (Rutland) Simon, Sir Jocelyn
Duncan, Sir James Lilley, F. J. P. Smith, Dudley (Br'ntf'd & Chiswick)
Duthie, Sir William Lindsay, Martin Smyth, Brig. Sir John (Norwood)
Eccles, Rt. Hon. Sir David Linstead, Sir Hugh Soames, Rt. Hon. Christopher
Eden, John Litchfield, Capt. John Spearman, Sir Alexander
Errington, Sir Eric Lloyd, Rt. Hon. Selwyn (Wirral) Speir, Rupert
Farey-Jones, F. W Longbottom, Charles Stanley, Hon. Richard
Farr, John Longden, Gilbert Steward, Harold (Stockport, S.)
Fell, Anthony Loveys, Walter H. Stodart, J. A.
Finlay, Graeme Low, Rt. Hon. Sir Toby Stoddart-Scott, Col. Sir Malcolm
Fisher, Nigel Lucas, Sir-Jocelyn (Portsmouth, S.) Storey, Sir Samuel
Fletcher-Cooke, Charles Lucas-Tooth, Sir Hugh Studholme, Sir Henry
Foster, John MacArthur, Ian Summers, Sir Spencer (Aylesbury)
Fraser, Hn. Hugh (Stafford & Stone) McLaren, Martin Sumner, Donald (Orpington)
Fraser, Ian (Plymouth, Sutton) McLaughlin, Mrs. Patricia Talbot, John E.
Freeth, Denzil Maclay, Rt. Hon. John Tapsell, Peter
Galbraith, Hon. T. G. D. Maclean, SirFitzroy (Bute &N. Ayrs.) Taylor, Sir Charles (Eastbourne)
Gardner, Edward Macleod, Rt. Hn. Iain (Enfield, W.) Taylor, W. J. (Bradford, N.)
George, J. C. (Pollok) MacLeod, John (Ross & Cromarty) Teeling, William
Gibson-Watt, David McMaster, Stanley R. Temple, John M.
Glover, Sir Douglas Macmillan, Rt. Hn. Harold (Bromley) Thatcher, Mrs. Margaret
Glyn, Sir Richard (Dorset, N.) Maopherson, Niall (Dumfries) Thomas, Leslie (Canterbury)
Godber, J. B. Maddan, Martin Thomas, Peter (Conway)
Goodhew, Victor Maginnes, John E. Thompson, Richard (Croydon, S.)
Gough, Frederick Maitland, Sir John Thornton-Kemsley, Sir Colin
Gower, Raymond Manningham-Buller, Rt. Hn. Sir R. Tiley, Arthur (Bradford, W.)
Grant, Rt. Hon. William (Woodside) Markham, Major Sir Frank Tilney, John (Wavertree)
Grant-Ferris, Wg Cdr. R. (Nantwich) Marples, Rt. Hon. Ernest Turner, Colin
Green, Alan Marshall, Douglas Turton, Rt. Hon. R. H.
Gresham Cooke, R. Marten, Neil van Straubenzee, W. R.
Grosvenor. Lt.-Col. R. G. Mathew, Robert (Honiton) Vane, W. M. F.
Gurden, Harold Matthews, Gordon (Meriden) Vaughan-Morgan, Sir John
Hall, John (Wycombe) Maudling, Rt. Hon. Reginald Vickers, Miss Joan
Hamilton, Michael (Wellingborough) Mawby, Ray Vosper, Rt. Hon. Dennis
Hare, Rt. Hon. John Maydon, Lt.-Cmdr. S. L. C. Wakefield, Sir Wavell (St. M'lebone)
Harris, Frederic (Croydon, N.W.) Mills, Stratton Walker-Smith, Rt. Hon. Derek
Harris, Reader (Heston) Montgomery, Fergus Wall, Patrick
Harrison, Brian (Maiden) Morgan, William Ward, Rt. Hon. George (Worcester)
Harvey, Sir Arthur Vere (Macclesf'd) Morrison, John Ward, Dame Irene (Tynemouth)
Harvey, John (Walthamstow, E.) Mott-Radclyffe, Sir Charles Watkinson, Rt. Hon. Harold
Harvie Anderson, Miss Nabarro, Gerald Watts, James
Hay, John Neave, Airey Webster, David
Heald, Rt. Hon. Sir Lionel Noble, Michael Wells, John (Maidstone)
Heath, Rt. Hon. Edward Nugent, Sir Richard Whitelaw, William
Henderson-Stewart, Sir James Oakshott, Sir Hendrie Williams, Dudley (Exeter)
Hendry, Forbes Orr, Capt. L. P. S. Williams, Paul (Sunderland, S.)
Hiley, Joseph Orr-Ewing, C. Ian Wills, Sir Gerald (Bridgwater)
Hill, Dr. Rt. Hon. Charles (Luton) Osborn, John (Hallam) Wilson, Geoffrey (Truro)
Hill, Mrs. Eveline (Wythenshawe) Page, John (Harrow, West) Wolrige-Gordon, Patrick
Wood, Rt. Hon. Richard Woollam, John TELLERS FOR THE NOES:
Woodhouse, C. M. Worsley, Marcus Mr. Edward Wakefield and
Woodnutt, Mark Yates, William (The Wrekin) Colonel J.H. Harrison.

Main Question put and agreed to.

Resolved, That this House takes note of the Annual Report and Accounts of the British Transport Commission for the year ended 31st December, 1959 (H.C. 226), and of the Report from the Select Committee on Nationalised Industries (H.C. 254) relating to British Railways.

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