NATIONALISED TRANSPORT UNDERTAKINGS

HC Deb 30 January 1961 vol 633 cc615-731

4.14 p.m.

The Minister of Transport (Mr. Ernest Marpies)

I beg to move, That this House approves the proposals of Her Majesty's Government for the reorganisation of the Nationalised Transport Undertakings (Command Paper No. 1248). I hope that we shall now be allowed to pass from ships to railways. I am sorry that three-quarters of an hour has been taken from this very important debate. Before beginning my speech, I ask the House to excuse me, first, if my voice is not as loud as usual, and, secondly, if I absent myself from the Chamber during the debate more than is customary. I ask that indulgence only because I have just got up today after having had influenza.

I propose to divide my speech into two parts. The first will deal with the actual White Paper proposals, the main principles and their underlying aims. The second will deal with some matters which were deliberately not dealt with in the White Paper. These include the future size and shape of the railways, railway modernisation, productivity and fares policy.

I turn, first, to the White Paper proposals. The Government propose an entirely new organisational structure, because our experience shows that the present structure is unsuitable. We believe that it is now outmoded and that it has been overtaken by events. However, I ask the House not to forget all that has been accomplished, not only on the railways, but also in various other matters which have been and will continue to be the responsibility of the British Transport Commission until legislation is passed.

I would, therefore, like to take this opportunity of expressing our gratitude to the Commission, whose members have given a great deal of their time, and to Sir Brian Robertson personally for the distinguished way in which, during these difficult years, he has presided over a vast range of activities, and for the cooperative help which he has always been so ready to give. I am also grateful to the Commission for its willingness to cooperate in introducing the new scheme.

The Commission's efforts have been spread over a considerable range of activities. As paragraph 9 of the White Paper says: The activities of the British Transport Commission as at present constituted are so large and so diverse that it is virtually impossible to run them effectively as a single undertaking. Our underlying purpose is to separate the tasks and problems of operating the various nationalised transport undertakings, to define the responsibilities of management, and to provide management with clear objectives in set fields so that it can concentrate its efforts and energies. That is especially important for the railways.

As the Select Committee says in paragraphs 356–63 of its Report: 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. Our proposals recognise that.

The undertakings themselves can be grouped into two distinct categories. Some, because of their very nature, need to be conducted by a statutory authority. British Railways, London Transport, British Transport Docks and British Transport Waterways are all of that kind. Each needs an authority with special statutory powers and duties. Two of them for some time to come will need Exchequer assistance.

I now turn to the Holding Company and the commercial boards. The other activities of the Commission—buses, road haulage, hotels, road freight, shipping services, Thomas Cook and Son Ltd., and so on—operate alongside similar private enterprise undertakings and are generally in competition with them. They do not call for special statutory authorities. Also, they should depend entirely on their own commercial strength and they represent considerable and valuable public assets which ought to be used effectively for the public good and for the public purse.

To do that, they must be able to conduct their day-to-day business in exactly the same way as those commercial undertakings with which they compete. We propose a commercial framework for these activities. The Holding Company, by its support, advice and encouragement, without intervening in management matters, will be able to ensure that the right standards of operation and financial judgment are applied.

The White Paper proposals are essential first steps, but a number of doors have been deliberately left open in some important matters. The White Paper does not set out to deal with detail, or to leave no room for fruitful consultation in the framing of the necessary legislation. In framing the White Paper we had regard to the views of the particular interests concerned and we are prepared to do likewise in framing the necessary legislation. We shall take account of points made in the debate today and we shall also consult those with responsibilities in the new structure, especially the chairmen-designate of new boards.

Arrangements for the practical preparation of the Bill have been put in hand and we shall discuss with the Commission and the trade unions how best they can help us with their knowledge and information. We aim to give managements full opportunity to give of their best. They will have the means and tools of good management and be able to feel and bear the weight of personal responsibility for their actions.

This is of particular importance as regards the railways. Nowhere is a single-minded direction needed more. Let us get this quite clear. There is no argument about the essential unity of British Railways. They must be run as an effective national system. The British Railways Board will be the employer of its own workpeople. The responsibility for negotiating national wage and other agreements will rest squarely with the Board. The functions of central importance to the railways as a whole will be its prime responsibility. The Board will have particularly important responsibilities in fruitful modernisation investment and in getting the best value for money.

But everything cannot be done at the centre. The art of good management, given the right tools, is to get the best response at all levels. This means sensible and adequate devolution of authority. The man on the spot does not give of his best looking over his shoulder and having to wait upon decisions relating to his own job taken at levels remote from him.

The regional railways boards will, therefore, be an important new feature in the railway organisation. Unlike the present area boards, they will have a strong, full-time membership. They will be a living part of railway management and operation. Their job will be to translate into regional practice and operation the national railway policy. Above all, they will play a part in that national policy through their representation on the British Railways Board.

A new structure and reorganisation can do a great deal to make railway problems manageable, but of equal importance is the quality of the men who will provide leadership, and the morale of staff and workers. The railways must have the best leadership available. There must be opportunities in all parts of the railways for those with ability to get to the top. At the start it may be necessary to bring in a few new people. The task is challenging, and I believe that the time is crucial. The task is no; only running one of the biggest industries in the country, if not the biggest; it is the task of transforming its structure, its outlook and its finances. The Government will have to have regard to these special needs in their search for the best available talent and in considering the terms on which it can be obtained.

Now for the composition of the new boards. As the preparation for the Bill goes forward, the exact composition of each board will have to be worked out with those most closely concerned, including the chairmen-designate. In particular, paragraph 32 of the White Paper refers to the special contribution which can be made by those with trade union experience.

Then there are industrial relations and the madhinery of negotiation. There is nothing in our proposals which should interfere with the present system of national negotiations and agreements. I am already examining some points put to me at a long meeting I had with the Trades Union Congress, and if other proposals are advanced I will be ready to examine them.

I now turn to co-ordination, using that word in the sense given in the Shorter Oxford Dictionary. I have done this because in political life words take on certain rigid meanings and are used as incantations instead of with proper reference to their meaning. "Co-ordination" means To place (things) in a proper position relatively to each other and to the system of which they form parts. I cannot praise the Opposition more than by using the Oxford Dictionary. Coordination in transport can take two forms: co-ordination of investment and co-ordination of operation.

The allocation of investment is becoming increasingly a matter on which the Minister must form a judgment, because he has responsibilities to Parliament, and also because 'he oversees a wider field and has functions that go beyond the nationalised transport sector alone. For example, they include roads. Paragraph 28 of the White Paper gives the Minister an effective influence in this field, and I would like to inform the House that my Department is developing improved methods of investment allocation to meet this need. One example is the five-year rolling programme for classified roads instead of a yearly financial allocation. That is a great step forward. Another is our interest in a long-term programme for railway investment, on which I shall say more later.

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

Long overdue.

Mr. Marples

It may be long overdue, but as it has been introduced I am sure that it will be welcomed by the hon. Gentleman.

Another example is our interest in the operational field, because co-ordination over a wide range of activities can and should exist at different levels. For example, working arrangements existed between London Transport and the London lines of British Railways long before the Transport Commission came on the scene, and they will be continued, as paragraph 20 of the White Paper indicates.

Another very interesting question is the relationship between the railways and British Road Services. They are living in a competitive world dominated by neither. They will both have to consider the effects of competition from private enterprise road hauliers and the C licence vehicles. Where co-ordination is sensible, however, the White Paper provides for it.

Problems of co-ordination of both kinds, operational and investment, will arise and will need to be referred to the Nationalised Transport Advisory Council. Its advice will be based on full knowledge of nationalised transport undertakings plus the wider experience which will be available through independent members. The new structure and organisation will also provide for the usual indices of success or failure. If there are profits in one section the Exchequer will benefit as at present and they will offset deficits elsewhere.

I now turn to the financial proposals, which have been generally welcomed. The main feature is the reconstruction of railway finances. We must scale down the capital burden in one way or another. The scaling down must be properly related to the effective contribution which the assets they represent can make to the railways' financial recovery. Obviously, these assets should be in the hands of the Railways Board, and that is one of the ways in which it differs from the old Railways Executive.

The Railways Board will have the responsibility of operating them and securing the best financial results. We believe that the corresponding capital debt should also be the liability of the Board. This fosters financial discipline and provides the set task and clear objectives for which the new structure is designed. The figures I now mention are not intended to be exact: the precise figures will be determined when the details are worked out.

The total capital liability of the Transport Commission is £2,000 million. Of this, £1,600 million is attributable to railways. Of the £1,600 million, we would write off £400 million finally as a bad debt. This represents deficits mainly accumulated since 1955. That leaves £1,200 million. Of that, we consider that £400 million is sound, as it is money advanced for modernisation since 1955. That £400 million should be capable of yielding a return.

Of the remaining £800 million, we regard it all as doubtful and put it in a suspense account which is not subject to fixed interest or fixed repayment liabilities. In short, of the £1,600 million railway capital, £400 million is written off as a bad debt, £800 million is transferred to suspense account as a doubtful debt, and the remaining £400 million remains as a capital liability.

These are drastic measures and involve sums of great magnitude. The interest liabilities, although removed from the railways, will fall on the taxpayer. The Treasury will become responsible for the existing British Transport stock.

But this is not all. Over the next two years, even allowing for reduced interest charges, large sums will have to be provided from the Exchequer to meet current deficits. The object, which is formidable, is to place the railways in a position where they will have a real hope of achieving solvency and the resolution to attain it. There should be known targets, which management and men should set out to attain. We are already tackling this problem. We have discussed with the Commission the provision necessary in the calendar year 1961 to cover its overall deficit. I have the Chancellor's agreement to inform the House that we have agreed a figure of £103 million for this. Parliament will be asked to authorise the necessary expenditure from the Vote.

This may look only a small reduction on the £105 million in the current financial year, but the two figures are not comparable. In fact, after taking into account certain non-recurring items the provision for 1961 is a reduction of £13 million in the railways' operating loss. I hope that the House will take this as an earnest of what is still to come.

This may be the right moment to say something about the pensions of the older railway superannuitants. We all recognise that there are cases of hardship. On three previous occasions the Commission has given pension supplements. The Commission is, however, in serious financial difficulty, requiring assistance from my Vote, and it is necessary to take this into account. The Commission proposed that the cost of supplementation should be borne by the Exchequer, and I have informed it that this is not possible, and that responsibility for the level and payment of railway pensions must remain with the Commission, as employers.

There have been discussions, and the Commission has now put to me a scheme for supplementing certain pensions. par- titularly those of the older superannuitant whose sole pension is that provided by the railways. This scheme, which appears to hold the balance between relieving hardship and adding materially to the Commission's financial problems, will involve additional expenditure which will have to be taken into account in considering the future financial position of the railways. I have agreed that the Commission shall proceed with the scheme on that basis.

The total aditional cost in the first full year is expected to be £650,000. The Commission expects to be able to find the necessary sum from within the proposed Estimate of £103 million for 1961–62, and it will shortly announce the details of the scheme.

Mr. H. Hynd (Accrington)

What will the increase in pension be?

Mr. Marples

As it is a Transport Commission scheme the Commission will announce details in the near future, but I thought it right to inform the House that I have agreed to this scheme.

I now turn to commercial freedom and fares and charges policy. The railways should be given as free a hand as possible to conduct their commercial operations on a commercial basis. The days of general railway monopoly are long since over. Only in the London Passenger Transport area, where London Transport and British Railways together hold a virtual monopoly, will it be necessary to have a statutory control of fares. Elsewhere, the Government propose that the railways should be free to fix their own prices.

Railway revenues must make their due contribution towards railway solvency The public ought to know that railway fares and charges have not entirely kept in line with the general price level. As the Select Committee said, railway fares are lower, in real terms, than in 1938. We must support the railways when they pursue a realistic and purposeful fares policy.

There are also statutory restrictions in the interests of coastal shipping. The Government have to consider whether they should now be removed, so as to give the railways the competitive freedom they require. On the other hand, coastal shipping has its difficulties. the General Council of British Shipping has recommended that the restrictions should riot be abolished, but should be made more effective and even strengthened. The Government are considering the problem and will consult both the General Council and the Commission.

So much for the main proposals in the White Paper. This is not the whole picture. We now come to the question of the future size and shape of the railway system. The present layout is not entirely suited to the modern age. Neither does it give railwaymen and railway management the best chance of efficient operation. There must be a purposeful slimming of the railways to concentrate both effort and modernisation. This matter is at present being studied by my Ministry and the Commission. The new Railways Board, in due course, must take an important part in this exercise.

I would point out to the House that this is not an exercise which can be done once and for all and of which we will then be rid. It is a continuing exercise. We have made the first decision because much will depend on other forms of transport. For example, what will happen in ten years' time with internal aircraft flying, say, between London and Manchester?—especially as in ten years' time there will be the equivalent of a motorway between the centre of London and London airport, as well as, perhaps, vertical take-off aircraft.

Mr. Thomas Steele (Dunbartonshire, West)

Are we to understand that the Ministry of Transport is really considering what will happen to transport in ten years' time? This is new information to the House.

Mr. Marples

I do not think so. I have mentioned it before. Quite clearly, the hon. Member was not in his place when I did so; I will send him the copy of HANSARD where it was mentioned. He can then write to me further if he wants to.

It is not only a question of the air. What will happen when the motorway network of the country has been completed? What has been the effect of M.1, between Birmingham and London, on the railways, and what will be the effect when there is a complete network?

Mr. Percy Collick (Birkenhead) rose—

Mr. Deputy-Speaker (Sir Gordon Touche)

If the right hon. Gentleman does not give way the hon. Member must resume his seat.

Mr. Marples

I do not wish to be discourteous, but we have lost three quarters of an hour, and I know that many other hon. Members wish to speak. Interruptions take up my time. If the hon. Gentleman catches your eye, Mr. Deputy-Speaker, no doubt my hon. Friend the Joint Parliamentary Secretary will be able to give him a complete answer to the points that he raises in his speech.

I now turn to the question of uneconomic railway services. The Select Committee mentioned this in paragraphs 421 to 427 of its Report. I have now received the Commission's observations on the Report, and very shortly these will be sent to the Select Committee with my own observations. The railways are short, by well over £100 million a year, of meeting their full liabilities. The essential uneconomic services are masked and overlaid by this general situation. and it is difficult to evaluate the hard core problem. Services at present uneconomic may well become profitable as modernisation and rationalisation proceeds. But, as the Select Committee pointed out, there are uneconomic services which raise questions of social need. In the end these will be a matter for the Government to decide.

The problem goes wider than the rail ways, and affects other nationalised industries. The cost of uneconomic services has to be met somewhere, and in the present railway situation the burden falling on the taxpayer is very heavy indeed. The Government will consider the question of uneconomic services in the general context and in the light of the Select Committee's comments.

I now want to say a few words about modernisation. In 1959, the Commission submitted a reappraisal of modernisation which forecast a surplus on operating account by 1963. The Government did not endorse it, and I doubted the accuracy of its forecasts. How far these doubts were justified is shown in part by the financial section of the White Paper. As I am accountable to the House for the very large sums of public money to be invested, and as I personally doubted the estimates on which modernisation was proceeding, it was my duty to take some action.

My first step was to see all schemes costing more than £250,000. This was to some extent a crash action, but I had before me no long-term programme; no overall order of priorities; no real knowledge of the future incidence and phasing of expenditure on individual projects or for railway modernisation as a whole; no statement of the accumulated effect of the commitments to be entered into, and no power of estimating systematically how far all the proposed public investment was capable of producing the financial results so badly needed by the railways. Finally, there was no relationship between the proposals for railway modernisation and developments elsewhere.

What did I do under those circumstances? I set up machinery with the Transport Commission for examining modernisation in its relationship to these other developments. There had to be some slowing down on new commitments, but no cancellation of old ones, until it was possible to see more clearly where we were going; and the Commission agreed that this should be done. There had to he a longer term programme. On 16th December last, I received the Commission's proposals for the next four years. These will need a lot of work yet, especially in relation to future financial results and the targets given in the White Paper. A satisfactory relationship for this work has been established between the Commission and my Department.

As I bear responsibility for moneys invested, and as I disagreed with the forecasts in the reappraisal which was the basis of the investment, it is my duty to see that realistic proposals are formulated. We are, therefore, conducting a thorough stocktaking and, in the meantime, we paused on new investment. But even with this temporary pause, the House should not underestimate the magnitude of current investment on railways. En 1961, it will be up to £140 million, which is £26 million more than Fords of U.S.A. paid to take over its British subsidiary. So it is a fairly big sum.

Political and Press controversy has tended to oversimplify modernisation arguments and seems to have labelled people into two camps—either those who are pro-modernisation, or those who are anti-modernisation. But it is not as simple as that. The Government want to see modernisation, but it should be carried out to bring certain advantages. First, technically, it should be of a high quality and so reliable that not only does it serve the public, but it promotes our exports. One or two things that have happened recently have not been to our advantage, and I will deal with those. Financially, the capital assets should give value for money and the estimated income should be realised. Priorities must be right and the moneys concentrated where they can bring immediate return.

Mr. G. R. Strauss (Vauxhall)

May I ask the right hon. Gentleman whether, in view of the strong criticism and the attack that he has made on the Minister of Transport of the time—now the Minister of Defence—he followed the usual Parliamentary custom of giving him notice of his intention to do so?

Mr. Marples

I do not think that that is worthy of the right hon. Gentleman. In point of fact, my predecessor, too, did not endorse the reappraisal. The reappraisal came before the Government just before the General Election and, therefore, he did not endorse it; and when I saw it I did not endorse it, so we are together in that respect.

This is an appropriate moment to refer to the electrification of the London-Midland main line from London to Crewe, Manchester and Liverpool. Many people have been worried about the future of this work, but it would have been wrong for the Government to let this scheme proceed on the information that they had before them last summer, especially when we remember the grave financial plight of the railways and the amount of public money involved.

The pause for reconsideration has been fully justified. The Commission has now made a firmer estimate than ever before of the result of electrification, both the new receipts and savings in costs. It has prepared a comprehensive scheme for carrying out the work, with proposals for phasing the investment, which it is satisfied that it can keep to. We now have a much clearer picture about its relation to other proposals for railway investment.

The Government have decided that the London-Midland main line electrification Euston to Crewe, Manchester and Liverpool shall go ahead. It will also go ahead as quickly as is consistent with the best use of resources. I must make it clear that I shall keep the scheme under close review to see how the estimates of cost and the rate of completion are working out, and, also, that the Government approval of this electrification work does not mean that other major main line electrification works will necessarily be approved. The Government's approval of this—the largest scheme of all—should be taken as evidence of the Government's faith not only in modernisation, but in the British electrical manufacturing industry.

On productivity, let me make this clear. Reorganisation of management structure, financial reconstruction, commercial freedom, the continuing process of modernisation and rationalisation—none of these can succeed without a very considerable increase in railway productivity. This is crucial. The future of the railways and of the railwaymen will inevitably turn on this. Last year, railway wages were brought into line with general levels. We welcomed this. But only adequate and increasing productivity on the railways can maintain this position. The whole country will be anxiously watching the progress of the railways over the next few years to see how far we can increase productivity.

The British Railways Productivity Council has made progress, but it has still a very long way to go. There is the extension of work study to which both the Select Committee and the White Paper refer. There must be a reasonable and effective deployment of railway workers. The railway trade unions have a special responsibility and a great opportunity to help in this. Over a vast organisation like British Railways, small savings in innumerable places can produce considerable results. The Government and the taxpayer are contributing their share and effort, but without matching contribution from within the industry this can be of no avail.

I now come back to the White Paper. The Government's proposals are no more than the essential first steps in a long haul. But they deal with essentials and embrace those main things on which legislation will be required. The Government intend to introduce the necessary Bill during the next Session. It was not possible to introduce it earlier. There is a lot of work to be done before the Bill will be ready. Much can, however, be accomplished in the interim once the Government's policies have been approved. In this work the Transport Commission has given an assurance of its full co-operation—and I am grateful to it—and all concerned, including the trade unions, will be consulted in the detailed preparation of the legislation.

The Government think that these proposals provide a firm and clear hope for the future of the nationalised transport industries, and particularly for the railways. They are certainly a token for all to see of the Government's faith that the railways will surmount their present difficulties and fulfil their proper role in our national life and economy. The Government are resolved to discharge their responsibilities in this matter and they rely on others to do the same. It is in this expectation that I commend these proposals to the House.

4.48 p.m.

Mr. G. R. Strauss (Vauxhall)

I beg to move, to leave out from House "to the end of the Question and to add instead thereof: while welcoming the measures for temporary financial relief regrets that Command Paper No. 1248 offers no solution for the basic problems confronting British Railways and that it proposes a scheme of reorganisation that will further disintegrate the publicly owned transport undertakings". We are very glad indeed that the Minister of Transport has recovered from his recent illness sufficiently to enable him to explain the White Paper to us today. We feel sure that had he not been able to do so, his Joint Parliamentary Secretary, who made a very good show at Question Time last Wednesday, would have stepped into his shoes with great success. But, obviously, plainly, it is desirable that the Minister himself, with his authority, should come to the House to try to throw light on the many inconsistencies and imprecisions in the White Paper; to fry to justify some of its strange proposals and, in particular, to explain why the Government are so intent on disintegrating the publicly-owned transport industry when that is so plainly contrary to the national interest.

I submit that the Minister has failed to do any of these things. That is not due to any lack of powers of exposition on his part. It is because it is not possible, even for the right hon. Gentleman, to defend the indefensible. The anxieties felt about the Government's approach to the transport industry are not confined to Her Majesty's Opposition. They are shared in many responsible quarters outside this House, by the trade unions, Conservative newspapers, large sections of British industry and by many high executives in the railway organisations. As those who have read the recent issue of Modern Transportwill know, there is now added the strong criticism of Lord Hurcomb, who, I suppose, has had longer experience of transport problems than anybody else in the country, and who was for many years Chairman of the British Transport Commission.

The White Paper contains two entirely separate proposals, and it would be possible to put either into operation without the other. One is the reconstitution of the capital structure of the Transport Commission, and here there is a large measure of agreement. The finances of the railways have got into such an unhealthy state, as a result of past losses and the actuarial devices adopted from time to time by the Government to meet them, that the need for a drastic surgical operation has long been evident, and indeed urgent, as the heavy loss is bound to continue for some time. We therefore welcome the capital reconstruction set out in the White Paper, which is very much in line with the proposals put forward by Labour Party spokesmen.

Had the White Paper stopped there, it would have had our whole-hearted support. But it is no use thinking that even by this drastic reduction in the capital burden of the railways, and the payment out of taxation of the losses that will be incurred during the next five years, the problem will be solved. For a long time now the country has 'been lulled into a false sense of complacency by the optimistic forecasts of the Commission, about which the Minister spoke, and which, so far as anybody outside know, the Government had accepted.

Today, the Minister made a very strong attack on his predecessor. He recited a list of his right hon. Friend's deficiencies, and he told us many things Which his right hon. Friend ought to have done, but did not do. Presumably, he notified his predecessor that he intended to do this—I do not know. But one thing is quite certain. When the Commission's forecasts of the financial consequences of the modernisation plan were published there was never a word from the Government questioning the authenticity or the correctness of the forecasts. I challenge the hon. Member for Guildford (Sir R. Nugent), who was Joint Parliamentary Secretary at the time, to deny that not a word was spoken by his Minister or himself suggesting that the forecasts of the Transport Commission were in any way false.

Sir Richard Nugent (Guildford)

I gladly take up that challenge. Of course, I was not Joint Parliamentary-Secretary at that time in 1956. But that modernisation plan and its estimates were accepted by the Government of the day and were approved by Parliament and were accepted as being realistic and possible. The point made by my right hon. Friend was that the reappraisal in 1959, when the Transport Commission issued its present estimates, was not adopted by the Government of the day, by my right hon. Friend the then Minister, or myself. We said that we must study them in great detail and say what we thought about them.

Mr. Strauss

The hon. Gentleman has endorsed what I said. I am talking of the reappraisal of the Commission's modernisation plan published in July, 1959. I say that not a word was said by any Government spokesman thereafter suggesting that the estimate put forward by the Commission was in any way inaccurate. That is my challenge. The Minister of Transport says blandly that the Government did not accept those estimates. If that be so, a Government spokesman should have said so at the time, but nobody did.

Sir R. Nugent

I thank the right hon. Gentleman for giving way again. Naturally, we accepted the reappraisal as being an honest and a thorough one by the Commission. All we said at the time was that we should have to study it in detail before we could give an opinion.

Mr. Strauss

I am grateful to the hon. Gentleman for once more endorsing the statement which I made.

We now repeat our warning and say that the Government still appear to be over-optimistic in thinking that in five years' time, even after taking into account the proposed relief on interest payments, the railways will be able to pay their way. The White Paper states that in 1965 the interest charges will be between £60 million and £70 million—shall we say, £65 million. The present operating loss is running at about £60 million a year. On that basis, there will be a total deficit of £125 million. What are the chances of this being met by increased revenue?

In its reappraisal of the modernisation plan, published in 1959, the Commission estimated that the improved earnings likely to accrue by 1963 would be between £45 million and £95 million. We are now told that this estimate was probably optimistic. Even then it was only made on the assumption that there would be no wage increases meanwhile or other unforeseen additional costs. If one takes the top figure of £95 million of possible improvement, which means a total increase in revenue of 22 per cent., at the end of a period of five years obviously there will still be a substantial deficit.

No mention is made in the White Paper—I understand the reluctance of the Government to do so—of the fact that a minor but not insignificant part of the heavy losses sustained by the railways in the past was deliberately caused by direct interference from the Government. The story is now well known and I do not propose to repeat it in detail. I will just say this in brief to remind the House. The Government first sold to private owners a great part of the highly profitable road haulage organisation. Then they refused to permit an increase in fare and freight rates, although this had been authorised by the Transport Tribunal. This brought about a loss which has been estimated at between £15 million and £30 million.

There were probably heavier losses resulting from the Government demand that the modernisation scheme should be curtailed in 1958 and 1959. Therefore, in welcoming the present scheme for capital reconstruction, I cannot help remarking that the need for it is in some part due to the folly of the Government's own actions.

Today, when we are discussing the future of the railways, the question must be asked whether, in conditions of unrestricted road competition—conditions in which the Government believe—the railways can ever pay their way, or whether they will always have a deficit which the taxpayer will have to meet. The Government must face this question. Governments in other countries have already done so. In West Germany and in France decisions have been taken to restrict the free competition of road transport so as to induce certain traffics to go by rail. In those countries it is believed that such action, which is, as we know, contrary to the whole philosophy of the Conservative Party, is desirable in the general national interest.

In West Germany the number of vehicles permitted to ply for hire or reward outside a 50 kilometre radius has been limited to the number in operation in 1958. Long-distance road and rail charges are fixed by statute to prevent harmful competition and for some bulk traffic they are deliberately fixed to favour the railways. The French Government are now taking steps to co-ordinate road, rail and water transport and to fix freights on a basis which will make the most economical use of all transport. They propose to raise road freights in some cases where road transport is taking business away from the railways.

I do not say that identical action should be taken in this country, but I do say that if the Government persist in their belief that the national interest is best served by permitting unrestricted competition, they must make up their minds that the railways will have to be permanently subsidised out of public funds. From one source or another, either from its own revenues or from taxation, British Railways must have an annual income high enough to enable it to run an efficient national service and to pay attractive remunerations to its staff. So much for the financial changes proposed in the White Paper, which, with these observations, we welcome as affording a necessary temporary relief, but which do not solve the fundamental problems of the railways.

We take a wholly different view of the proposed organisational changes. The entire present structure of the nationalised transport undertakings is to be scrapped, the central authority—the British Transport Commission—with its powers of supervision and co-ordination, is to disappear and the various services are to he fragmented into separate autonomous units responsible to no one who has effective authority over them. Before examining the consequences of this great upheaval, we must ask the Government why they have considered it necessary.

The Minister has not enlightened us. He told us it is thought to be necesary, but he has not said why. Is it really suggested that the British Transport Commission, due to its preoccupation with the railways, was neglecting the other services? I know of no evidence to support such a complaint. These services are operating profitably and, so far as I am aware, the executives responsible for their running do not desire any greater freedom. Or is it suggested that the railways losses—the cause of the proposed upheaval—are due to the incompetence of the B.T.C., or that they would have been avoided or lessened if the Commission had not been responsible for railway affairs?

Neither the Minister nor anyone has suggested this. Indeed, the Commission has frequently been commended by Ministers for its zeal and competence and, in particular, for the drive with which it launched the modernisation plan. What, then, is the reason for this proposed drastic change? Surely no one would lightly reorganise the structure of the nationalised transport industries with all the confusion inseparable from such a course. Did the Stedeford Committee recommend it? The Government refuses to tell us. We regard it as indefensible that the Government should deny Parliament the knowledge of the conclusions of that expert Committee. We have the Report of the Select Committee on Nationalised Industries. That Committee, as we all know, made an admirably thorough and searching investigation into British Railways.

The more anyone studies that Committee's Report the more one commends the Committee and its Chairman on their achievement and their conclusions. Some of these were critical of the B.T.C., but nowhere did the Committee suggest the break-up of the whole organisation. Indeed, it said in paragraph 360 of its conclusions, which was unanimous: Without committing themselves on details, and without discussing the past, 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. Why then smash up the whole of the organisation and rebuild it on different lines?

Sir Toby Low (Blackpool, North)

It is rather dangerous to put a gloss on a Committee Report, but I think it would be right to remind the right hon. Member and the House that we were reporting, not on the British Transport Commission, but only on the railways. I think it very important in quoting the Committee's observations that we should remember that.

Mr. Strauss

Of course I accept that completely, but all the troubles and the proposals in the White Paper arise from the railways' difficulties. In investigating the railways, the Committee said that it thought that the present set-up in centralisation and decentralisation was working well. That is the point I am making.

In the absence of any rational argument or supporting evidence for this disruptive action by the Government, one can only come to this conclusion. Even if the Government did desire to bring about some shift of responsibility from one of the executive bodies to another, I challenge the Minister to deny that any such shift of responsibility could have been brought about with the greatest ease within the existing framework. Therefore, it seems to us that the only tenable explanation of the Government's decision to proceed with these disruptive proposals is their anxiety to save the Prime Minister's face. Without any preliminary inquiry, before the Stedeford Committee had reported and before the Select 'Committee had reported, without any demand from any quarter, without any supporting evidence, the Prime Minister announced to the House on 10th March, last year: the Commission must accept a radical alteration of its structure, so as to secure a more effective distribution of functions and a better use of all its assets."—[OFFICIAL REPORT, 10th March. 1960; Vol. 619, c. 644.] What induced him to pledge himself and his Government to such a course, without even giving any reasons to show that it was desirable? The only reason we have been given by the Minister of Transport today is that the present setup is out of date. That is no reason at all; it is an expression of opinion. I suppose we shall never know what induced the Prime Minister to make that statement. But the national transport industry—and the railways in particular —now has to accept the serious consequence of what appeared to be his off-the-cuff decision.

Let us look at some of these consequences. First, the Commission itself, as we know it with its integrating function, will disappear and nothing will effectively take its place. Presumably, also, the common services it now runs so advantageously, research, legal, traffic, finance, costing, manpower, public relations and publicity, commercial advertising, police and films will be disintegrated at great loss of efficiency and at much greater expense. British Road Services is to be completely severed from the railways. I should have thought that no one nowadays would have questioned the desirability of road and rail services being closely integrated.

British Road Services is not even to have the status of a separate board. Surely, it is as important as the docks, which are to have such a board; but, no, British Road Services, together with Thomas Cook, the hotels and five other services, are to be lumped together into a separate holding company. Can we, by the way, have a guarantee from the Government that they will reject any take-over bid for any of these services, as we know that many of their back bench supporters have long been advocating their sale to private owners? I notice that some hon. Members opposite are nodding their heads in agreement.

We have been told today that these services are to operate in the same way as private companies. Are they to have the same powers as private companies? Will they be entitled to enter into their businesses with the same unrestricted powers which a private company has today?

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

Mr. Strauss

I am delighted to see the Joint Parliamentary Secretary nod in agreement. We are looking forward to reading the terms of the Bill which will permit that to happen. It does not happen now.

When we come back to the question of disintegration of road and rail and other services, we find that there is generally—not scepticism, but—opposition among people who are aware of the railway and transport problems. Even staunch Conservative newspapers like The Timessay that this is going too far.

Mr. Grant-Ferris (Nantwich)

Can the right hon. Gentleman say whether he thinks that integration for the inland waterways has been beneficial?

Mr. Strauss

Certainly. I am amazed that the hon. Gentleman suggests that the waterways system and the other transport systems of this country should be separated. If he thinks that, we disagree with him entirely.

We find, for example, that The Times—I know that hon. Members opposite pay a great deal of attention to what The Timessays—has been stirred to indignation about the Government's policy of disintegration. In its leader on 21st December, shortly after the proposals came out, it said: Decentralisation is being carried too far—in many respects there will be less integration than there was in the 1930s. In today's edition The Times,as some hon. Members may have noticed, in rather milder but no less trenchant terms, makes this comment: Of this plan two broad criticisms can be made. The first is that it may isolate the railways too much from other transport operations. The second is that the decentralisation proposed is unreal and even within the terms of the White Paper natural forces will tend as the years go by to bring about centralisation one again, and so on. I will not quote the whole leader. I could quote much expert opinion outside the House.

I want now to ask the Minister and the House to consider this aspect of the problem. What is to happen on the periphery of the scheme for decentralisation? I am talking about the regions. At present, there are six, each with a general manager and a lines manager responsible for all local activities. They have full operating authority within their areas and considerable discretion even in fixing passenger fares and freight rates. It is a wholly successful scheme of devolution, and I doubt whether anyone concerned with it, either on the Commission or in the areas, wants any major change.

There is a board in each region consisting, with the exception of one or two Who are members of the Commission, of part-time members. There are conflicting opinions about whether these boards fulfil any worthwhile function. But one thing appears to us to be certain. There is no function for full-time members of the area boards, now to be called regional boards, to carry out. There is nothing for them to do. But it is proposed in the White Paper that such full-time members are to be appointed. What on earth can they do, except get in the way of the general managers? This is a thoroughly bad proposal, and although it is a key proposal I hope that it will be reconsidered.

It stems again, I suggest, from the Prime Minister's mind and his recollection of his activities as a member of the Great Western Railway Board long, long ago when conditions were very different. But I would remind him and the House that, as far as I am aware, when the railways were in private hands before nationalisation there were no full-time directors on any of the privately-owned railway companies except the managing directors. Therefore, neither precedent nor common sense suggests the desirability of having full-time directors on regional boards.

Moreover, in spite of the talk about the desirability of decentralisation, the regional boards are not, in fact, as far as we can see from the White Paper, to have any more power than the existing area boards. It would seem, therefore, that the Prime Minister's desires in this direction were found on examination to be wholly impracticable. The new Central British Railways Board, we are told in paragraph 14 of the White Paper, will retain all the central functions which are now the responsibility of the Commission. In our view, the Government are absolutely right in ensuring that the British Railways Board should be fully in control and strong, but it does not square with the Prime Minister's desire for decentralisation of the regions. This really seems to have been one of the main motives in the right hon. Gentleman's mind for bringing about the whole of this reorganisation scheme.

I wish to ask the Minister two questions about the duties of the new British Railways Board. Is it to be responsible for standardisation and bulk purchase? These functions are not mentioned in paragraph 14 of the White Paper. Is this an oversight or is it intentional? The other question is this. We are told that the British Railways Board will be responsible for—and these are very specific words— the determination of the future size and shape of the railway system. But we have also been told by the Minister previously—and it was repeated today—that it is he and his special study group who are going to decide the size and shape of the future system. We have had two contradictory statements. Which is it to be? Which is correct? If the right hon. Gentleman says that neither is to do it but that it is to be done in co-operation, that is intelligible. But at the moment we have been told (a) the Board is going to decide and (b) that the Minister is going to decide. We ought to know where the responsibility will lie.

Is it really the intention of the Government, as implied in the White Paper, to stop all railway services that do not pay? If so, there will be left a truncated railway system and the public and large sections of industry will be deprived of essential transport facilities.

We are told in paragraph 16 of the White Paper that each regional board is to have a separate trading account. Of course, it is desirable that all railway operations should be costed as accurately as possible, and an enormous amount of effort has been put into this by the Commission. It has already, with the help of its accountancy advisers, developed methods which, it claims, after comparing them with similar schemes in other countries, give it more comprehensive and accurate results than any in the world. And the Commission is developing them further.

But the suggestion that there will be any value in comparing the profits or losses of one region with another is not shared by anyone with any knowledge of railway working. To carry out such a purpose would need hundreds, may be thousands, of people whose conclusions at the end of the day would be largely guesswork. They would in no way measure the efficiency of any regional management. They would have no worth while purpose whatever.

I come back to what to our minds is the fundamental defect of the White Paper proposals, and that is the threatened break-up of the integrated transport system under the authority of the Commission. It was, no doubt, to placate the hostile criticism which this was bound to create that the Government are proposing to set up a body called the Nationalised Transport Advisory Council. Integration is to be replaced by sham co-ordination. The total inadequacy of the proposed council to carry out effective co-ordination or planning is so obvious that it barely needs arguing. It is only necessary to ask this question. How can this important and difficult task be done by five gentlemen —maybe with a few others added—without staff, in the time that they can spare from their chairmanship of the five important new boards? And if they should by some miracle succeed, what is the use, as they will have advisory powers only and no executive authority whatsoever? It has been suggested that the Minister, who is to be their chairman, will act on their advice and carry out such coordination as they may succeed in devising. But is that really the intention? We must be clear about this. Does the right hon. Gentleman propose to set up the large necessary staff in his Department to carry out such work? We must be clear about it. According to the terms of the White Paper this is not so. Paragraph 28 says: …the Government do not propose that the Minister's existing statutory powers and responsibilities in relation to the nationalised transport undertakings should be extended. At present, the right hon. Gentleman has no effective power to interfere with the operational decisions of the transport services, but only broad powers on any large subject of national interest.

Last week his Parliamentary Secretary, in reply to a supplementary question in the House, said that under the White Paper provisions the Minister would actually be hiving off some of his existing responsibilities. He will therefore have less responsibility, or interfere less, in the future than he has done in the past, if that statement means anything at all. If that is so, in future neither the Council nor the Minister will be able to replace the Commission's coordinating authority.

I will give an example of what it appears to me is likely to happen in view of the decision to do away with an effective co-ordinating body such as the British Transport Commission is. Disagreement may arise between a regional board and British Road Services about the location of a new depot in some town. British Road Services, for reasons of convenience which may appear good to them, may want the new depot established at a distance instead of adjacent to the railway depot—a problem of disagreement where coordination is necessary.

At the moment the process is clear. The British Transport Commission can interfere and can make an effective decision. But what will happen now? The regional board will go to the British Railways Board. The British Railways Board will then go to the Nationalised Transport Advisory Council and, if that body has the time and the facilities for deciding such a local but important uestion—it can itself take no decision it will then go to the Minister who, poor man, has no authority to impose a solution. If the new set-up is introduced, it will prove to be an admirable administrative machine for obscuring responsibility and retarding decision.

As the Minister is aware, many urgent representations have been made to him by the shipping industry and others for some action to prevent the growing competition of road and rail which has done such damage to the shipping industry and has reduced its tonnage so immensely during recent years. I very much hope that the body over which he is now presiding—I do not know how authoritative it is, except that he is chairman of it—will make early progress and will obtain the advice of all the expert opinion there is.

It is obvious that the main competition in transport today is not between the nationalised services but between them and the road, shipping and air services. One cannot help feeling that some of the hundreds of millions of pounds which are now being poured into road and rail may be lost in wasteful duplication. We thoroughly support the Minister in his desire to look at the transport problem as a whole, and we hope that his conclusions will be available at a time not too far distant.

I have one final comment to make on the White Paper. We have been told that legislation to implement its provisions will not be available until next Session. That means that the new scheme cannot be operative for two years at the earliest. During that period, whatever the Minister may say to the contrary, there is bound to be insecurity and uncertainty in the minds of the administrators and executives who have the responsible task of running the publicly-owned transport services. This cannot help having grave adverse effects, particularly when the modernisation plan is in such a critical stage. Having decided on this reorganisation, the Government should have determined, however difficult it may be, to introduce the necessary legislation in time for it to pass the House by the end of this summer. They could have done so if they had wanted to do so.

Meanwhile, may we have at least an assurance from the Government that there will not be any new interference in the affairs of British Railways which will have the same harmful effect as most of their interferences in the past. We know what those effects have been. They have all retarded the modernisation plan. I do not know what damage has been done not only to British Railways but also to the heavy electrical industry by the recent hold-up for over four months in the Crewe-London part of the London Midland electrification scheme. We now know that this was unnecessary, as the Minister has authorised its progress today. If the Government wanted to examine it, they should have examined it a long time ago. Why wait until October and then suddenly say, "We must stop. No new contracts to be authorised. Everything to be held up while we look at the plan." If it needed to be looked at, that should have been done before.

We have been told by the Government today that at last they have agreed that this part of the work should proceed. I hope that the Minister has noted the strong criticisms which have been made of him and the Government as a result of all this. The strongest of all, oddly enough, came from Aims of Industry, the most staunchly Conservative body in the country, which circulated a document saying that it is a ludicrous state of affairs which, irrespective of the known difficulties, reflects discredit on Her Majesty's Government. That sentiment will be warmly endorsed by everyone in the House who is not sitting on the Government Front Bench.

I mentioned this matter only because it appears to me to be an example, the latest and one of the worst, of the Government's attitude to British Railways. Ever since they came into power ten years ago they have never been able to desist from interfering with their operations and monkeying about with their structure, and nearly always to their detriment. Now they are engaged in another of these exercises and are today asking the House to endorse their view that if the structure of this nationalised industry is regrouped by disintegration, its services will be much better; although they are unable to produce any evidence or worthwhile arguments to support their contention.

Of course, there is much to be done to improve the railways: we on this side of the House are fully aware of that. Indeed, the Select Committee pointed out a number of improvements which the Commission should and no doubt would make. But there is nothing fundamentally wrong with the railways. Their greatest handicap since 1951 has been the existence of a Government who believe in competition as a panacea for all troubles, regard all national planning and integration as anathema and have consistently acted in accordance with this creed.

The present proposals are the Government's latest and most far-reaching move to achieve their end. They have met with strong criticism from an impressive volume of informed opinion. We hope that before bringing their implementing Bill to Parliament, the Government will think again. Meanwhile, we must record our strong disapproval in the Division Lobbies.

5.29 p.m.

Mr. Aubrey Jones (Birmingham, Hall Green)

I should like to begin by doing something which previous speakers have not done, although no doubt the omission is by inadvertence. I should like to express the gratitude of any rate one back bencher to the Stedeford Committee for the work that it has done. [HON. MEMBERS: "What has it done?"] The Stedeford Committee was called upon to tackle a job of formidable proportions in circumstances of great difficulty. It was, first, invited to help the Government with a problem which—I agree with the right hon. Member for Vauxhall (Mr. Strauss) in this—the Government had allowed to grow upon them and to which they had themselves contributed. The statement of 10th March announcing the establishment of the Committee contained a very strong hint as to the findings which it should reach. However independent-minded the members of the Committee might have been, it is very difficult to believe that that hint did not keep on entangling their discussions.

Next, the Committee was invited to do its job in a hurry in order to catch the legislative Session. It did the job in six months, an interval of time which could not possibly have allowed much opportunity to do all the cross-examination necessary in an analysis of this kind. After all this, the legislative Session was missed.

Finally, when the Government put forward their proposals in the House we are not allowed to know what the Committee recommended. The world is allowed, to infer that what is proposed arises directly from the Crmmittee's Report. I do not know, but it is at least a fair possibility that the Government have run away from some of the Committee's recommendations and that some, if not all, the members of the Committee think that some of the decisions are downright erroneous. [HON.MEMBERS: "Oh."]

I repeat that I think that the entire House owes a debt of gratitude to the Stedeford Committee. I do not object to the Government calling in outside advisers. Indeed, I think that it is very necessary, because, as I see the problem, the Government find themselves implicated in industry much more so than formerly, but, as the war years have receded and the industrialists then recruited have departed, the Government contains people unversed in industry.

I, therefore, agree with the principle of calling in outside aid, but if the Government do call in outside help the least they can do is to respect its independence. That implies no hint being given to those called in as to what they should find. It also implies the publication of what they recommend—not because we have a right to know, but because on no other basis will the Government continue to get good independent outside advice. They will get people anxious to gratify authority, but on this basis they will not continue to get the best outside independent advice. We have been witnessing an unhappy demonstration in the formulation of policy and in the use of outside advisers. I hope that we shall not see a repetition of what has happened in this instance.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

Is it not the case that. if the Stedeford Committee tendered advice which the Government did not propose to accept, it would be extremely embarrassing for the Government to publish the Committee's Report and then bring in contrary recommendations?

Mr. Jones

All I am suggesting is that it is invidious vis-à-vis the members of the Committee. I doubt very much whether they can be expected to serve again in an advisory capacity for the Government.

What strikes me most about the White Paper is that the important problems are not touched on in it, or in so far as they are touched on they are touched on very lightly. I concede immediately that some, though not all, were mentioned in my right hon. Friend's speech. I give as an instance one of the most important questions of all. What are to be the Government's relations with the Railways Board? Are the Government to treat the Board as a public corporation with the degree of autonomy inherent in the concept of a public corporation? Or are they rather to move towards making the Railways Board a post office, part and parcel of the Government Department, or are we to have a relationship midway between the two—in other words, nominally a public corporation, but in practice treated as though it were part and parcel of a Government Department, with the Government uncertain in their own mind about which direction they should move? What we have at the moment is the last of these three states.

In transport more than anything else we have seen a great retreat from the concept of the public corporations. For years the British Transport Commission has had no latitude in the determination of its charges. I doubt very much whether in these days it has any latitude in the determination of wages. As my right hon. Friend said, it is one of the largest, if not the largest, industrial undertaking in the country. Yet in respect of capital expenditure it enjoys no more latitude than that of a subsidiary of a normal sized commercial undertaking.

Reasons can be given for all these things. One can plead inflation, one can plead the deficit of the railways to explain present control on capital expenditure. But the fact remains that the British Transport Commission is an organisation at the moment which is in a state of thraldom to the Minister of Transport. No organisation which is in a state of thraldom will be an efficient organisation. Whether an organisation is efficient depends, first and foremost, as my right hon. Friend implied, on its management.

One of the purposes of the whole concept of the public corporation was to allow the Government to recruit to the nationalised undertakings men of quality, naturally, but men of a background and experience not ordinarily found in a Government Department. Is there any hope of recruiting them to an organisation which is in thrall to the Ministry of Transport? I doubt very much whether my right hon. Friend can solve his problem of management so long as he has the Commission in a state of subjugation. No hint has been given to us, either in the White Paper or in my right hon. Friend's speech, of any release from this state of subjugation.

There are other matters. I understood my right hon. Friend to imply that there was to be a revision of the terms and condition of appointment of board managers. I welcome that. It is very important.

Then there is the question of manpower. My right hon. Friend touched on this. I believe that the manpower on the railways has to contract, possibly by as much as 20 per cent. Finally, there is the question of charges. My right hon. Friend repeated what the White Paper says, namely, that the Railways Board would now be free from statutory control over charges. I welcome that, but what about the informal control hitherto exercised by the Government? Which of the two unpopularities do the Government prefer the unpopularity of seeing fares and charges rise, or the odium of so mismanaging the railways that they have permanently to subsidise them? I do not think that that is an exaggeration. This is the choice with which we are faced. Hitherto, the Government have chosen the second of these two unpopularities. Which is to be their future policy? Is their choice to be the same, or are we to infer from the brave words of my right hon. Friend this afternoon that there is now to be a change?

These are the important problems, and, compared with them, the organisational problems set out in the White Paper are of secondary, if not tertiary, importance. Nonetheless, I want to say a few words about them. First, the question of centralisation versus decentralisation. I regret that over the last few years, my party has attached itself, or has appeared to attach itself, without qualification to the principle of decentralisation. I find these matters much more complicated than that. I do not find these generalisations at all easy. In so far as one can generalise in these matters, whether a decentralised or a centralised structure is appropriate depends entirely on the time scale which one has in mind.

If one is thinking of planning far ahead, one requires quite a high degree of central power. Indeed, the whole trend of the time is mainly in this direction. This, I suggest, is indeed one of the most formidable strengths of the Soviet Union and a strength which we ought not to ignore by glib talk or glib generalisations about decentralisation.

If one is thinking of long-term planning, one requires a high degree of central power. For this reason, I welcome the reconstitution, in effect, of the Railways Executive. If, on the other hand, one is thinking of the flexibility of day-to-day operations, most certainly one requires freedom and latitude at the periphery. I am forced to say that the railways need this, too.

One of the problems of the railways is that they are a large organisation enjoying all the technical advantages of a large organisation. This technical advantage, however, is more than offset by the quickness and flexibility of the small operator with whom they are in competition. In other words, it is the juggernaut competing against the midget.

To achieve this flexibility, there must be latitude at the periphery. This requires, however, that the operating unit should be something much smaller than the region. Regionalisation does not begin to affect this issue. What is more, it requires a great change in our public expectations. Do we expect an organisation such as the Railways Board to be saddled with uniform charges, uniform wages and conditions of labour, a burden of uniformity from which the smaller operators do not in the least suffer?

Be that as it may, the essential point is that the proper distribution between central power and power at the periphery is something which we should leave entirely to the Railways Board. Do not let the Government appoint the Railways Board and in one and the same breath tell it how to do its job. Do not let them repeat the mistake which they made with the Stedeford Committee. If we are to recruit good men to the Railways Board, let them decide what the proper distribution of power should be.

On the question of the composition of the Railways Board, I would only note that, if the proposal in the White Paper goes through, we are now departing from the decision which the Government and the House took following the recommendations of the Fleck Committee for the National Coal Board. The Fleck Committee recommended that there should be no geographical representation on the central board and that the central board should be utterly independent of geographical representation. What is now proposed is different. I think that the Fleck solution for the Coal Board was right and I am very doubtful about this new proposal.

Even so, I should like to call the attention of the House to paragraph 15 (b)of the White Paper on the question of regional representation on the central board. Paragraph 15 states that the Railways Board shall contain (b) A representative from each of the Regional Railway Boards. I ask the House to note the use of the word "representative". Why not have the chairman? He is the obvious candidate. If the avoidance of the word "chairman" and the use of the word "representative" is to be construed as an intention to appoint to the central board someone other than the chairman of the regional board, I cannot imagine anything more calculated to destroy the corporate unity of any board. I can only hope that my suspicions are ill-founded.

I should like to say a word about the National Transport Advisory Council. There is a case for an outside advisory body in transport. I am not at all sure, however, that this is the right body or, indeed, that it is being given the right thing to do. The case which I would make for an outside body would be this. One of the most vital questions, as, indeed, my right hon. Friend the Minister conceded this afternoon, is the difficult question of relative investment in road and rail, and, I would add, air. This question is something which it may be that we can never answer rationally. The least we can do is to try to answer the question as objectively as we can.

At the moment, the authority charged with answering that difficult question is the Ministry of Transport. I suggest that the objectivity of the Ministry of Transport is open to question in at least two respects. First, that Ministry has inherited from the past a tradition of supervision and of control over the railway monopoly. These traditions are never easily got rid of and this getting rid of a. tradition of suspicion has been made all the more difficult by the difficulties of the Transport Commission over the past few years.

Secondly, however, while being a controlling, supervising authority over the railways, the Ministry of Transport is also itself the road-making authority. It may well be—I am making no personal allusions—that from time to time a particular Minister of Transport sees his political future and his political reputation primarily in terms of road building. I am making no personal question of this. My remarks are applicable to any Minister of Transport.

There is a strong case for correcting that inherent bias in the Ministry of Transport, but I am not at all sure from the White Paper that the question of relative investment in road and rail is part of the terms of reference of the Nationalised Transport Advisory Council. The White Paper is not clear about this. Even if it is part of its terms of reference, surely, this advisory council is the wrong body. It does not comprise people who are objective and independent vis-à-vis one form of transport and another. This advisory council is a collection of sectional interests and, what is more, it is to be chaired—again, I make no personal imputation—by, I suggest, the least objective person of all, the Minister of Transport. This repeats the very defect from which we are now suffering.

It surely must be without precedent for us to have put before us a proposal that the advisory body to a Minister should be chaired by the Minister himself. In these circumstances, there must be a temptation for the Minister to endeavour to colour advice with preconceived policy. In so far as he did that, he would frustrate the whole purpose of the advisory council. In so far as he fails, he might well be faced with mass resignations from his advisory council I ask the Government to think again on this, if on nothing else. This proposal appears to me ill-conceived.

I should like to say a brief word about the breaking up of the Commission. If I understood my right hon. Friend aright, the principle which the Government have endeavoured to follow is to create units of manageable size. This is an admirable principle and I entirely endorse it. We ought, however, to ask ourselves some questions about the manner in which the Government have endeavoured to carry out their principle, in particular about the severance of road and rail.

I would suggest that by the severance of road and rail certain advantages which are now enjoyed are going to be forfeited. Under the new arrangements I would suggest that it will be extremely difficult to bring about any cross-fertilisation of experience between road and rail. It is most important that people with the flexibility of road experience should play a part in railway operations. This is made more difficult by the proposals now before us.

Then again, the old road and rail problem has been superseded by a newer problem: the competition of both public road and public rail vehicles against the private vehicles. Both public road and public railway vehicles are duplicating and ruining each other, in competition with private vehicles. Surely the elimination of the surplus capacity between them is made more difficult by the proposals now before us. A joint effort by both to meet their common competitor is made more difficult by the proposals now before us. It may well be that we are entering a time when the future may belong to a vehicle adaptable to either road or rail and, if that is so, the development and introduction of such a vehicle is made more difficult by the proposals now before us.

The question is whether one could have avoided these disadvantages consistently with the Government's principle of making units more manageable in size. Had the Government thought differently I believe we could have had they thought of constructing regional or sub-regional units comprising both roads and railways.

If we look at the transport legislation of the last quarter century, if not longer, each enactment has been behind the event. The Railways Act, 1921, amalgamating the railways, was behind the event, because it was based on the assumption of the continuing monopoly of the railways when in fact road competition was round the corner. The Transport Act, 1947, dealt with the prewar problem of road versus rail and not the newer problem of road and rail versus the private vehicle. I think that posterity may pass the same judgment on the White Paper; it is behind the event.

On the financial proposals before us I do not think it is too great a misconstruction to say that what the White Paper does is to give the railways relief in respect of their capital liabilities except those connected with the modernisation programme. That is a rough and ready statement but I do not think it is far from the truth. The Government have gone to the furthest limits. I do not see how they could have done more and I do not object to it. However, I would agree with the right hon. Member for Vauxhall that they are still left with a formidable revenue problem. The revenue relief is £40 million a year and current losses are of the order of £100 million a year. I will not express any opinion as to whether or not that gap can be bridged. I will only say that it may be possible to bridge it provided two requisites are observed. The first requisite is one upon which my right hon. Friend rightly laid emphasis, namely, financial control. I would only add that the proper seat of financial control is in the Railways Board and not in the Ministry of Transport.

The second requisite, upon which I do not think my right hon. Friend placed as much emphasis, is the speedy execution of the modernisation programme. The most effective way of wasting money, I suggest, is to spin out investment over some time, because by spinning it out one not only delays the return, but one diminishes the return too. Without this I am afraid that the new deal we are discussing, like other new deals before it, may prove to be ineffective.

5.55 p.m.

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

I shall commence my remarks this afternoon by paying a tribute to the British Transport Commission. In effect, this White Paper could be called, "For whom the bell tolls." In the White Paper, the bell is tolling for the British Transnort Commission. I sincerely hope that by the time the debate ends and the Government have another think it may end in the cremation of this White Paper.

One can quarrel with the B.T.C. from time to time on various aspects, but the B.T.C. as a co-ordinating body under the present Chairman and, with Sir John Benstead as Vice-Chairman, has done a wonderful job of work in spite of very adverse circumstances brought about by the Government. It was a wonderful achievement that the British Transport Commission could integrate transport services and make a profit in 1951, 1952 and 1953. It is only since the advent of this Government in 1951 that the deficit commenced to rise and to continue until it has reached these staggering proportions. With the Alice in Wonderland finances of this Government, as has been said in this House on more than one occasion, it is astounding that the members of the Commission have made the Commission work as successfully as it has. As this is the burial of the Commission, I think we should pay tribute to that. I hope that if the Commission goes some other structure will be established in its place which will have executive power instead of the loosely nonsensical type of thing suggested in the White Paper.

Before I deal with the White Paper itself, I wish to compliment the right hon. Member for Birmingham, Hall Green (Mr. Aubrey Jones). I think he has indicated a change of climate, a change of opinion, in Conservative thought which we have seen gradually unfolding over a period of time. I wish that the speech he made today had been made some years ago and that due note had been taken of its contents by Members of his party. If it had, I do no; think transport would be in the deplorable mess that it is today. I commend him for his line of approach and his thought in this direction.

Let us face it. The debate today is a debate on the complete failure of the Government's policy. The White Paper indicts nearly every action of the Government in transport from 1951 onwards, and the present Minister is not absolved from that indictment. It is no use—and I think it is deplorable—for the Minister to say, as he frequently does in this House, that he has been Minister only for a short period of time and as such cannot accept continuing responsibility. That is very discourteous indeed, to say the least.

Each paragraph of the White Paper, as I say, indicts Government policy. But, unlike the right hon. Member for Hall Green, the Government have not learned any lessons from their past misdemeanours. The White Paper perpetuates and accentuates the great problems which have brought British Railways and the British Transport Commission to their present difficult state. We on this side of the House welcome, as a temporary measure, this financial easement to which so much reference has been made. It is, indeed, on the lines of our policy, but it is only a temporary measure.

What does it mean? If anyone thinks that it means that the British Transport Commission or the British Railways Board who now have to shoulder this burden of interest charges will be relieved of this burden to any great extent, he is Jiving in cloud-cuolcoo-land. It will not be done under this White Paper. The White Paper states that the assets of the British Transport Commission amount to £2,000 million. It suggests that £400 million will be offset against the holding companies. I shall return to that matter a little later. It also suggests that another £400 million shall be wiped off as a bad debt. The remaining £800 million is to go into the suspense account.

A sum of £1,200 million is going to be wiped out or transferred somewhere. Most of this £1,200 million is in British Transport Stock, which is paying 3¼ per cent. or 3½ per cent. interest. The Railways Board will be left with a problem concerning £400 million on which they have to pay current market rates of interest which, as we all know, are in the region of 5½ per cent. to 6 per cent. Therefore, in spite of this sudden wiping out of liabilities, if the interest charges are doubled on the remaining £400 million, the problem will not be any less realistic.

The White Paper itself states that the Railways Board will be left with an interest charge of £30 million a year. In addition, there will be a sum of £280 million in respeot of superannuation funds and bank deposit account, on which the Railways Board will have to pay interest. I would assume from paragraph 41 that the interest will be at current rates—that is, from 5½ per cent. to 6 per cent. In other words, that is another £19 million, making a total of £49 million.

The White Paper then says that modernisation will continue at the rate of about £100 million a year. Incidentally, it is not very gratifying to those interested in the railways to learn that the Government have set a target of £100 million per annum for modernisation. This is a considerable shortfull on what has been spent in 1960. It means a considerable retardation in modernisation. Whenever modernisation has taken place, there has been an increase in railway receipts. But the Government intend to retard modernisation compered with the case in 1960.

This £100 million a year to be spent on modernisation will involve another 5½ per cent. to 6 per cent. in interest charges. The White Paper says that by 1965 these interest charges will be in the region of £60 million to £70 million. I suggest that is a gross under-estimate. The interest charges alone will be well over £70 million. Not only that, but another £400 million is to be passed over to the holding companies and that will carry interest charges at current market rates. That is another £30 million per year in interest charges. It means that the present assets of the British Transport Commission will bear interest charges amounting to the astronomical figure of £100 million a year. This talk of financial easement is just a shibboleth. It will be purely of a short-term duration.

The Government refuse to face reality. They, prefer to live in cloud-cuckoo-land. What is all this talk about the Railways Board paying its way or even paying its operating costs? It is problematical whether it will be able to do so. The Government are assisting the present trend of diverting traffic from rail to road, and in this I agree with the hon. Member for Hall Green. We should consider the problem of road and rail. In fact, I would go a little further and say that we should consider road, rail, inland waterways, air and coastwise shipping.

However, to take the hon. Gentleman's analogy, let us consider the general pattern of road and rail trans-part. Last year 56 per cent. of freight traffic in this country was carried by road as against 44 per cent. carried by rail. This is the reverse of the position that obtained in 1952 when 46 per cent. of freight traffic was carried by road and 54 per cent. by rail. Since that time there has been a growing deficiency in the British Transport Commission's operations, combined with Government interference in the form of directives and so on. The White Paper will do absolutely nothing to ease the situation.

A circular was issued by the Council of British Shipping. In one voice this welcomes the greater freedom which is to be given, and then it asks the Government to curtail the Railways Board's policy on charges. The Council of British Shipping points out that coastwise shipping is getting into a very serious position, and challenges the greater freedom given to the railways. But it says nothing of where the real source of the trouble is. The real source of the trouble is the diversion of goods traffic from rail to road. We witness this in the tremendous growth that has taken place in long-distance C-licence traffic. Since 1948 there has been a growth of nearly 200,000 long-distance vehicles of 2½ tons unladen weight. I am not speaking of short-distance vehicles; I am not interested in the butcher, baker and retail man's delivery van. I am speaking of the long-distance haulage traffic. In addition, the number of vehicles of 6 tons unladen weight has increased from 2,500 to 8,800. Nothing has been said in the White Paper to deal with the real source of the problems of transport.

If the policy enunciated in this White Paper is followed, it will not be long before we are faced with another crisis. The White Paper in its references to hiving off and in its lack of integration. is asking the nation to accept the prewar position. It hives off road services. It takes the five companies, as it were, and makes them into limited liability companies under a holding company. It is given a complete commercial freedom and, as was suggested earlier, they can he liable to take-over bids. British Road Services are not even to be honoured with a separate board. With all these things, we shall face ruthless competition in freight and transport rates which will not be in the nation's interest.

There has been reference to the Government's previous refusal to allow the Commission to implement charges to pay its way. This was a gross blunder on the part of the Government. They have done it by directives to the Commission even after the Tribunal had agreed that the charges should be implemented. Even after a good case had been made out, the Government stepped in to say "No ". It was the height of hypocrisy for the Minister, when taunting the Commission with the Reappraisal of 1959, to say that he did not agree with the Commission's findings and he had no knowledge of the schemes returned. I thought that that was one of the most hypocritical statements ever made in the House.

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

Mr. Popplewell

It is no use the hon. Gentleman shaking his head. He should look at the evidence given before the Select Committee on Nationalised Industries by his Permanent Secretary. That civil servant indicated that day-to-day consultations had been taking place between the Minister and the Commission all along. Are we to assume that the schemes embraced in the reappraisal and the new look at modernisation had not been discussed? It is just nonsense, and no one will believe it. In evidence before the Select Committee, the permanent civil servant said that, in addition to the directives given to the Commission from time to time, there had also been day-to-day consultations. What were the consultations about?—the state of the weather? Certainly not. The very things about which the Minister says he has no particular knowledge must have been discussed. It is really shocking to suggest anything else.

I turn now to the regional railways boards. What are these regional railway boards to be? We are told that there will be a large element of full-time personnel. We all know that the part-time posts were simply jobs for the boys which wasted cash. Not much was wasted—I agree that they did not get much—but what there was was wasted, and, in the evidence before the Select Committee, it was extremely difficult to ascertain what the part-time members did. Without being asked to express any opinion on the merits or otherwise of the boards, the Select Committee made its findings.

What is expected from these full-time regional railway boards? Who will the members be? What will the boards do? Are they to perform the same functions as were performed by the part-time members of the area boards? It is very difficult to ascertain from the wording of the White Paper what their functions are to be. Will they be people brought from outside industry? Will the boards be separate entities, as it were, like a board of directors on a full-time basis? Will they be effective in their functions? Will they be in charge of departments, or what?

Will the regional boards act, as it were, with the regional manager sitting as chairman over the heads of his departments in a managerial, operational function? If that be the idea, that might help towards a better system of operation in the regions under men engaged in the industry who know the job and who can get on with it. I should welcome something of that sort. The right hon. Member for Hall Green, I think, supports that type of arrangement. I made a suggestion of that kind when the area boards were established in the first place, and I urged that we should use the men on the spot who understood the railways and who knew the job, giving them an opportunity to run the railways without another body superimposed. There is certainly an argument there. If what is proposed is anything different from that, I shall look askance at it and want to examine it very closely.

Coming, up the ladder, we reach the British Railways Board. How will the British Railways Board actually operate? A representative from each of the regional railway boards will sit on the Railways Board. What will their functions be? We are told that they are to he responsible for investment, for high finance, as it were, for wages, for discussions on staff arrangements and so forth. I presume that they will be responsible for the police. If that be so, what will the regional railway boards do in that respect? What does the proposal in the White Paper mean? The Minister himself does not know, and we are put in additional difficulties.

Again, on the subject of the British Railways Board, let us assume that a dispute takes place involving the trade unions in the railways world. The trade union representative discusses the matter with the Railways Board. Where do they go next? As far as I can judge, finality is reached when he reaches the Railway Board. There is the Railways National Staff Tribunal—I think that is its name—and we all know that there have been disputes galore within that body and appeal has had to be made to a higher body with executive power to work out a settlement. In London, the London Transport Executive is now to be the London Transport Board, which will be autonomous. There have been disputes galore between the trade unions and the London Transport Executive, but there has always been the power to appeal to the British Transport Commission as the executive body. Under the proposed new structure, finality is reached at the British Railways Board, at the London Transport Board, at the British Waterways Board, and all the rest of the bag of tricks.

There is no further provision in the scheme except for the National Advisory Council. That is a very high-sounding name, but the whole structure is really nonsensical. Who will be the National Advisory Council? What will be their interest in the whole thing? The Minister tries to ride off by saying that the body which will be responsible for coordination and integration will be the National Advisory Council.

The Parliamentary Secretary told my right hon. Friend the Member for Vauxhall (Mr. Strauss) at Question Time last week that the responsibility of the Minister will be smaller, not greater, under the new structure. If he is to have less responsibility, not more, who will really be responsible for co-ordination? If, in the analogy which has already been used, British Road Services want to establish a new depôt well away from the railways, who will be responsible? Ostensibly, it will be the National Advisory Council, of which the Minister or his nominee will be the chairman. In the main, the Minister will take the chair or, if he is not there, probably the Parliamentary Secretary will.

Mr. Hay

No.

Mr. Popplewell

It is obvious from the White Paper that one of those two gentlemen will occupy the chair. If that is not so, what is meant by the words of the White Paper? This is another indication of how nonsensical the whole thing is. It states: The Nationalised Transport Advisory Council will consist of the Chairmen of certain boards. Other members will be added, drawn from outside the nationalised transport undertakings. The Minister will ordinarily act as Chairman of the Council. We should like to know whether it is the intention to appoint someone outside Parliament to act as Chairman of the Council. If that is so, the White Paper is grossly misleading. The White Paper indicates that the Minister or his Parliamentary Secretary will be responsible in Parliament. If that is so, how can the Minister co-ordinate matters? It is not possible to do so.

Instead of there being an advisory council, there should be established an executive body with full power to determine matters of co-ordination, integration and many other things which are bound to arise in an industry such as this. These are important points.

In conclusion, I wish to refer to the opening paragraph of the White Paper, which states: In reaching their conclusions, the Government have been assisted by the advice they have received from the Special Advisory Group on the British Transport Commission. The House is being asked to approve a White Paper with a premise like that. Apparently, some group has given advice to the Minister and we are asked to approve the White Paper, because, it is claimed, it is based on that advice. That is the logical inference To be drawn. I hope that hon. Members opposite will rise up in revolt against it. An important body has been set up, but no one outside the Government knows its findings. Possibly the Commission knows them, but it is pledged to secrecy. This Advisory Group was forced on it. It was a little less than generous when either the Parliamentary Secretary or the Minister said that the trade unions had been consulted by the Stedeford Advisory Group. That was just playing with words.

Let us see what happened. The trade unions were called to meet the Stedeford Group in order to introduce themselves. Then there was another meeting. The trade unions were not asked for their observations, but there were a few questions across the table. According to the Minister, that constitutes consultation. That is merely playing with words, to say the least. We cannot trust the Minister if this is the result of his considerations based on certain information. Instead of it being a case of "for whom the bell tolls" concerning the British Transport Commission, we should cremate this damned offensive White Paper, which is not in the best interests of the industry or transport as a whole.

6.25 p.m.

Mr. Geoffrey Wilson (Truro)

I will deal with a number of the remarks of the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) in the course of my speech.

I support the White Paper and welcome it for many of the reasons which the right hon. Member for Vauxhall (Mr. G. R. Strauss) gave for opposing it. May I say, in passing, that I disagreed with almost every word of my right hon. Friend the Member for Birmingham, Hall Green (Mr. Aubrey Jones), except when he said that the conflict in transport now was no longer between road and rail transport but between public and private transport. I thought that he was adrift on many other points, including his criticism of the Stedeford Advisory Group.

Here the hon. Member for Newcastle-upon-Tyne, West seemed to be under a misapprehension. It was not a committee. It was a group.

Mr. Popplewell

I did not refer to it as a committee.

Mr. Aubrey Jones

I did not criticise the Stedeford Advisory Group. I merely complained that we were not paying sufficient respect to that body.

Mr. Wilson

Perhaps I have put it rather badly. I have not misunderstood my right hon. Friend. He said that what it thought had not been reported. But an express condition of its appointment was that what it said should not be reported. It was to advise not only the Ministry, but also the British Transport Commission. It would have been a breach of confidence if anything which it said had been reported. In those circumstances, it is not valid to criticise the Government for failing to report what that body said. The hon. Member for Newcastle-upon-Tyne, West complained that Questions were asked across the table. But what the group was asked to do was to give professional advice on specific points, and it tried to find out from all quarters what the answers should be.

I welcome the White Paper principally because I think that it introduces an atmosphere of reality into our transport debates which has been absent for too long. It is realistic because it starts by stating bluntly that the railways are still a vital basic industry. Several hon. Members have taken it for granted that that is so. It is quite commonly assumed that must be so, but the time has passed when we can assume as a matter of course that a railway is a vital necessity. They no longer have the same dominant position in the transport of the world which they formerly had.

In considering British transport, we must take British Railways on their merits and not assume that they are vital to the transport services. In this country, at least, I think that the railways are still an important factor. It is worth while stressing that point because, apart from the extremists of the Railway Conversion League who want to pull up all the railways and to convert them into roads, a large number of people—far more than some hon. Members think—are beginning to doubt whether the railways are obsolete, or at least obsolescent, and whether we are spending too much on modernisation and trying to bring our railways up to date.

I will not spend time in arguing whether it is correct that a properly run railway can carry more passengers and goods on a given space of land and in a given time than the same space of land could carry as a road. The recent report of the Channel Tunnel Study Group gave some very interesting facts and figures on that point. Nor will I enlarge on the proposition that there would be considerable engineering difficulties in converting many of the railways into roads. However, I should like those people who are enthusiastic road supporters—there are many of them—and are rather doubtful about the money we are spending on the railways to remember three points.

First, we now have 209,000 route miles of all forms of track. Of these, 190,000, roughly nine-tenths, are ordinary roads and 19,000, roughly one-tenth, are specialised railway track. The one-tenth railway carries, as the hon. Member for Newcastle-upon-Tyne, West pointed out, just under half the total goods of the country and also 1,000 million passengers, which is about one-fifth of all passengers. Therefore, one-tenth of our total routes is carrying one-half of our goods and one-fifth of our passengers. In other words, it is carrying much more than its proportionate share and it should not be lightly considered as obsolescent or grudged money to be kept up-to-date. We should be in serious difficulties if the one-fifth of all passengers and one-half of all goods had to be transferred to any other means of transport.

I should also like to urge road enthusiasts to remember that the British transport problem should not be compared with continental transport problems. First, we are not dealing with continents and the wide spaces of the Black Forest, of the ruins of Berlin, or the prairies, or the ever-changing cities of America. We are dealing with a small overcrowded island, heavily built up and industrialised, with agricultural land of exceptionally high value, a country thickly sprinkled with ancient monuments and places of special scenic beauty. All these things make it important for us to be particularly careful in planning how we should evolve new forms of transport which occupy land, roads, airfields, and so on. While we are ping that, it is inevitable, or, at least, it is desirable, that we should make the best use of existing facilities.

Incidentally, there was a reference in the Press this morning to how much better our domestic air services have been doing lately, but there is a distinction here between our country and America or Europe in that our domestic air services are much less likely to be serious competitors to surface forms of transport. On the short haul the disadvantage of not having an airfield close to the centre of the town is much greater than in the long haul in America and Europe. Until we have a really good commercial development of the helicopter, the vertical take-off aircraft, the Rotodyne or something of that sort, the competition of domestic air services with other forms of transport in this country will be considerably limited.

The third point that we should all remember is that planning takes a great deal longer here than in either Europe or America because of the British temperament. [An HON. MEMBER: "Rot."] Yes, I have referred before in the House to the fact that some years ago I inquired from officials in Germany, Holland and this country why it was that when Germans planned a new road it took them a maximum of twelve months to obtain possession of the land. The Dutch took an average of twelve months, but our Ministry a minimum of two years.

I asked the Germans, "When you plan a road from A to B, do not local landowners tell you to make it from X to Y?" Their answer was, "Who would question the route of a road once it is official?" In other words, they do not have to deal with the same amount of argument that we have to deal with. We must respect public opinion in these matters. It is inevitable that we should take rather longer over these things than people do in some other countries.

The second reason why I think that the White Paper is realistic is that, inevitably, there must be some financial reconstruction of the railways and it is clear that some of the outstanding debt must be written off. I leave it to others to argue whether the right proportion is being written off and how the matter should be dealt with, but I think that hon. Members are making a mistake if they try to spend too much time in debating the apportionment of blame for the losses.

The right hon. Member for Vauxhall referred to two incidents, to which reference was also made by the Select Committee on Nationalised Industries, where the Government had caused delay in the application of increased charges by the Transport Commission. But these two occasions together accounted for only £14.9 million, which is not a very large proportion of the total amount of the indebtedness. It is correct that there should be some degree of criticism of the Transport Commission itself for being rather optimistic in some of its estimates. A good deal of blame is also attachable to the party opposite in that in 1947 it set up an elaborate structure, the British Transport Commission, and imposed upon it a task which, from the start, it was clearly impossible for it to perform.

It is because I think that the White Paper topples over that rather clumsy structure that I particularly welcome it. The Transport Commission, from the time that it was set up in 1947, was asked to produce a properly integrated service of inland transport for passengers and goods. It could not do that with the facilities placed at its disposal, that is, all railways, about one-third of the buses and about one-hundredth of the lorries. One cannot integrate a minority. The Commission was given an impossible task.

This scheme of nationalisation arose from the idea which gained prevalence in the 1930s, that we were suffering from too much transport and that the only way to deal with it was by regulation to prevent wasteful competition. Phrases such as "Creaming the traffic", which have been so frequently used ever since, were invented in those days. I suspect that they were invented by the advertising agents who initiated the "Square Deal Campaign" for the railways. But it is only a step from co-ordination by licensing authorities to integration by nationalisation and I think that that is how the position arose.

But even if all the public services were nationalised—and we have already had a threat from hon. Members opposite that if they are returned to power they will take rather more drastic steps to deal with privately-owned public service vehicles—it would not get over competition from the private vehicles of "do-it-yourself" individuals, the C-licence holders and the private-car owners. Measures taken by the party opposite to deal with such vehicles would have to be very drastic indeed to be effective, and so drastic that they would cause a great deal of hardship and monstrous anomalies. Only in a strict Communist State, where only the commissar has a private car and nobody has a private lorry service, is it possible, though with great hardship and inconvenience, to produce an integrated service by central control. It is not possible to do so in a mixed free-enterprise and nationalised society.

If an elaborate structure is set up to carry out a task which it is quite impossible to perform, it is much better to abandon the attempt and dismantle the structure and make it something of a more handy size, and I believe that that is what the White Paper sets out to do. Much of the existing structure was quite unnecessary unless one was intending to produce an integrated service, and there is still a degree of Government control of these various services left in Government hands.

For those reasons, there is much to be said for the White Paper, and I support it as a very good beginning. It is certainly not intended to be a blueprint of what future legislation will be, but it is an indication of a new look at our transport problems, getting away from the policy of integration and thinking of control of the various nationalised industries in more manageable form, and for those reasons I support it.

6.42 p.m.

Mr. Thomas Steele (Dunbartonshire, West)

During the speech of the hon. Member for Truro (Mr. G. Wilson), I took a considerable number of notes but, as a number of my colleagues are anxious to make contributions to the debate, I feel that I should not comment too fully or too long on what the hon. Gentleman had to say. However, there was an interesting interjection about the Stedeford Group, and I was surprised that the Parliamentary Secretary agreed with the hon. Gentleman that its recommendations were mostly of a verbal character.

Mr. Hay

My hon. Friend said that he understood that some of the advice, or all of it, which was given by the Special Advisory Group was verbal. I agreed that that was perfectly true. Some of the recommendations and advice were in written form, but much of it was oral.

Mr. Steele

My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) was engaged in an inter- change, and I thought from that that the Parliamentary Secretary had more or less agreed that most of it was verbal. In any case, I got the impression that it was all done over a cup of tea, and if it was done over something more than a cup of tea I can understand why those concerned do not want to publish it.

Our argument about this is not that we should have the evidence on which the Stedeford Group made its recommendations but that what we should have is the recommendations themselves. There is no reason why the Stedeford Group should not have intimated to us what the recommendations were, without giving reasons or indicating who had given the information, so that we might at least know whether the recommendations put forward by the Government are their own or the result of the Stedeford Group's inquiry.

The most significant thing about today's debate has been the speech of the right hon. Member for Birmingham, Hall Green (Mr. Aubrey Jones). It was a remarkable performance. I was impressed not only by the quality of his speech but by the humility with which he approached the House. Also, it seemed to me that he made the Minister look just like a little schoolboy in his approach to this matter.

The right hon. Gentleman posed some very pertinent questions to the Minister, and I hope that we shall have some answers to them. These questions regarding the position of the Railway Board and the Minister are substantial ones, and if we do not receive answers we shall have evidence that all is not right on the benches opposite in this matter.

The right hon. Gentleman asked what the position was between the Railways Board and the Minister. I can tell him that the Minister himself does not know. In producing the White Paper, the Minister is telling us that there will be further reorganisation, but he has not made up his mind about it yet. I joined the railways in 1920, and reorganisation has been going on practically every year since that time. Every time proposals are brought forward, the Government say that, no matter what happens, there must be more reorganisation. Reorganisation seems to be the cure for all their ills.

In the Third Reading debate on the Transport Act, 1953, I ended my speech by saying that the Government; …are determined to get this Bill through. but once the effects of it are seen in operation it is quite clear that another Bill will have to be presented to this House."—[OFFICIAL REPORT, 16th February, 1953; Vol. 511. c. 960.] Here we have another Bill.

During the proceedings on the 1953 Measure, we said that the main purpose of the Bill was to sell off the profitable undertakings and that the railway reorganisation Clauses were merely to cover up the aims and objectives of the Government. We said that any reorganisation which was necessary could have been done with the powers already held by the Minister, and it is also true that any reorganisation which is necessary at the moment could still be done with the powers held by the Minister.

We said in 1953 that it was a mistake to abolish the Railway Executive. Now the Government are reintroducing the Railway Executive and calling it the Railways Board.

Mr. Hay

It is entirely different.

Mr. Steele

The hon. Gentleman says that it is entirely different. If there is a difference in the functions of the new Railways Board, let him tell us what it is. The Railway Executive was responsible to the then Commission. Will the Railways Board be different from the Railway Executive in that respect? If so, we should like to know.

Actually, we are not discussing the failure of nationalisation today; we are discussing the failure of the Tory Government in transport over the past ten years. They have had this problem since they came to office in 1951, and the position in transport today is very much worse than it was then. It is evident from the speech made by the Minister today that the Government are determined to go on making the same mistakes that they made in 1953.

What is the general philosophy and approach of the Government. in November, 1952, the then Minister of Transport, now Viscount Boyd, said: … competition gives a better service than monopoly.—[OFFICIAL REPORT, 17th November 1952; Vol. 507, c. 1,405.] Do hon. Gentlemen opposite agree?

Mr. R. Gresham Cooke (Twickenham)

By and large.

Mr. Steele

The trouble is that hon. Gentlemen opposite do not really believe in it themselves. What is happening outside at the present time shows what they believe. They believe in monopoly and not in competition at all. However, in transport competition means waste and extravagance which the country cannot afford. The boards responsible for the coal, gas and electricity nationalised industries are responsible for estimating what the public will need ten years ahead, and they put their programmes to the Government accordingly; but in transport the Government muddle through from day to day.

I was surprised when the Minister today tried to tell us that the Government were looking ten years ahead. I and my hon. Friends who sat with me on the Select Committee tried to elicit from the witnesses what was happening in this respect. We could 'get no information. We asked the Ministry of Transport witnesses what machinery it had, and who was responsible for looking at transport as a whole, for estimating public need in the next ten years and for advising the Minister. The answer was, "No one." Yet the Minister boldly tells us today that this is what it does and what the Government propose to do. But the Ministry has no machinery for it.

For years we have been saying that we cannot look at railways or roads, or aviation, or coastal shipping, each in isolation. Living on a small island needing to look after its resources, we must regard transport with a capital T, and we must have some powerful advisory body considering what we can do to use the resources at our disposal and to advise the Ministry accordingly.

Does the right hon. Gentleman's speech today indicate that he is looking for an answer? The White Paper only pushes the problem off for another five years. A great deal has been said about the financial provisions, and I shall not repeat it. Those provisions are, however, only a lifeline for the railways. They will keep the railways going only for the next five years.

My right hon. Friend the Member for Vauxhall (Mr. Strauss) expressed a view about the Nationalised Transport Advisory Council, as did the right hon. Member for Birmingham, Hall Green and my hon. Friend the Member for Newcastle-upon-Tyne (Mr. Popplowell). I do not wish to take up the time of the House on that, but I should like to deal at the moment with the regional railway boards which are now being proposed to replace area boards. I quote two sentences: … the best way to have a good service is through- decentralisation… in the case of the railways, regional enterprise."—[OFFCIAL REPORT, 17th November, 1952; Vol. 507, c. 1405.] …the principles which we should try to establish … as follows: a substantial measure of regional railway autonomy sufficient to give genuine reality to regional railway control of matters proper to regional responsibility."—[OFFICIAL REPORT, 17th November, 1952; Vol. 507. c. 1414.] What does all that mean? Those quotations are from what the then Minister of Transport—now Viscount Boyd—said when be brought forward the 1953 Act. That was what the Government wanted to do. Viscount Boyd used rather flowery language, but that was what they wanted to do. What does the White Paper say, however? Each will he autonomous in all matters which concern its region alone. So we have not got very much further. Therefore, I want the Joint Parliamentary Secretary to tell us what new responsibilities will be given to these new regional boards which they do not have at the present time. We dealt with this in detail in the Select Committee, but obviously the regional boards will not have the responsibility of capital investment—that is to be left to the railways board, or indeed, more probably, to the Minister; they will not have responsibility for salary and wage negotiations; nor will they be responsible for commercial policy, despite what Members opposite may say, because I cannot see how local boards can apply separate rates and fare structures not in keeping with the general policy of the Railways Board as a whole.

The regional boards will not be in control of research on the design of rolling stock and locomotives, including safety. That must all be responsibility of the Railways Board. It may be that each region will have the right to select the colour of its own coaches, but that does not matter very much.

What is left to these local boards? I see no change in their functions, and it is because I see no change that I question whether their members should be full time. Unlike some of my hon. Friends, I am not too critical of part-time members of the boards of the nationalised industries. I believe it to be right and proper that men with experience in other matters should come in and be helpful, even if only in a critical fashion, to jog along people who are perhaps tending to get in a groove. These members have a function to perform. However, I do not see how that function can be provided by making these people full-time, because then the Minister will be denied the opportunity of getting the right kind of person with ability to do the job.

Evidence was given before the Select Committee by Sir Philip Warter, Chairman of the Southern Area Board. I was impressed with his evidence. Here was a man who gave much more time to the job than could reasonably be expected in a part-time capacity. He was questioned by the Chairman of the Select Committee about his views on whether he should be a full-time or part-time member, and he replied: I do not think myself the fact that we are part time is a bad thing, provided we can give enough time to it. I think myself it would be a very bad thing if the Chairman was full time, because I cannot conceive a situation where the Chairman would be sitting in the office at Waterloo eight hours a day, with the General Manager, and both of them trying to run the railway. It would be stupid. Has the Minister read the Select Committee's Report? Has he read the evidence given before it? If he believes in taking the advice of business men, then here in Sir Philip Warter is a man of knowledge.

I could also say quite a lot about regional accounts and the decentralisation of accounts, but again, in deference to colleagues in the House, I shall pass on to a much more intimate matter to Scotland. Speaking on behalf of Scotland, I ask whether we can have any faith in what any Minister of Transport has to say. Can we have any confidence in any speeches or promises which they make? Hon Members opposite may recall that my right hon. Friend the Member for Clackmannan and East Stirling-shire (Mr. Woodburn) and some of my hon. Friends and I conducted a campaign to take Scotland out of the 1953 legislation. The Scottish Press showed a great deal of concern about the matter. The Conservatives, too, were concerned, and they sent a deputation to the then Minister of Transport because they were worried about what would happen in Scotland with the denationalisation of road haulage. It was recognised that Scotland had a special case and had to have something different since her problems were entirely different from those South of the Border and co-ordination was essential.

The Government were so worried about the attitude of Scottish Conservative Members and the Scottish Press that they decided in the 1953 Act, to set up a completely new body, called the Scottish Transport Council. My right hon. Friend and I criticised the Council, saying that it could not function and had no executive powers, but the then Minister pooh-poohed that idea and said that the Government would not set up a body of that kind. He said in answer to our criticisms: He asked me who is to see that this new body meets, and questions of that kind. It is our intention, of course, to see that there are appointed to that body people who would not for a moment consider serving on it if it did not get effective powers of a co-ordinating character. They would meet regularly. Naturally, the arrangements for their meetings would have to be in their own hands. Of course, we have every intention of seeing that the people who are appointed are such that they would not consent to serve on a body which was hopelessly ineffective…"—[OFFICIAL REPORT, 16th February, 1953; Vol. 511, c.949.] The Minister's statement was hailed in the Scotsmanand in the Glasgow Heraldas a great victory for Scotland.

May I ask the present Minister how often that Council has met? Has it ever reported? What has it done? What has it ever attempted to do? I can tell him. This "effective body", these "men of great character" who would not consent to be appointed by the Minister to an ineffective body, were appointed and did meet—and they decided that they had no useful function to perform. That is all that has happened.

That kind of thing is only window-dressing, and it was callous window-dressing because of Scotland's special needs. There is a grave threat to Scotland in the White Paper proposals, because the Government do not seem to realise that even before the 1947 Nationalisation Act railway companies in Scotland already controlled docks, hotels, road transport and buses. The S.M.T. and other bodies were owned by the railway companies. A great deal of co-ordination had taken place in Scotland before the 1947 Act, and the present proposals now go back not to 1953 or 1947 but to thirty years ago.

The Minister does not seem to appreciate what has happened, and I hope that he will appreciate the importance of the speech of his right hon. Friend the Member for Hall Green. Scotland would welcome being taken out of these new proposals. We want, not a Scottish Transport Council as a bit of window-dressing, but a new executive body which will enable us to have a proper system of co-ordinated transport.

I said that the White Paper contained a grave threat to Scotland. Paragraph 7 says: The practical test for the railways, as for other transport, is how far the users are prepared to pay economic prices for the services provided. Broadly, this will in the end settle the size and pattern of the railway system. What does that mean? Does it mean no railways north of Perth? The railways north of Perth do not pay, never have paid and are never likely to pay. The same is true of the West Highland line. Are the people in those areas to be told that unless they pay economic prices for their transport, they will have none? Those are questions to which we want answers. Those are the reasons why there is general alarm in Scotland about these proposals. Will the Minister answer those questions? Does paragraph 7 mean that if a service is not economic it will be withdrawn? Does it mean that no area north of Perth will have a railway service if these proposals are brought in? [HON. MEMBERS: "Answer."]

It is clear that the Minister does not know. Perhaps he thinks that the railway line from Perth to Aberdeen is a branch line. The Scottish people will not appreciate that, but that is what his proposals mean. If they do not mean that, then the people of the South will have to pay for those services. I hope that the Government recognise that many of the services, begun by the railway companies at the end of the last century, were subsidised because the Government recognised that they could not pay.

McBrayne's Steamers are subsidised. What is the present relationship between McBrayne's and the Commission? Scottish Members have put legislation on the Statute Book to enable subsidies to be given to the Orkney and Shetland services. That was more nationalisation, and it was done because the difficulties of the situation were recognised. The Government must face up to the problem of Scotland's transport, and they will not be doing that unless they accept the Select Committee's proposals about uneconomic services.

I could say much more about this subject, but I will conclude with this last topic. Scotland has been the Cinderella of transport. We all welcome the modernisation proposals and the new diesel services, especially the new electrification between Airdrie and Helens-burgh. That passes through my constituency, and no one was more concerned, worried and depressed than I about the accident at Renton, which resulted in the services having to be withdrawn. The withdrawal has been a big disappointment, not only to the railwaymen but to my constituents, and I hope that a solution will shortly be found.

In this incident there is grave criticism of the British electrical industry, and my constituents have shown great sympathy with British Railways and how they have been dealt with in this matter. If this were an isolated incident, the failure of the British electrical industry would not be too bad, but I understand from other sources that private industry itself has been having similar trouble and similar problems. I should like to have an assurance that this trouble will not hold up the proposals for the electrification of the line from Glasgow to Motherwell, on the south bank of the River Clyde, and the Cathcart Circle.

I end as I began. These proposals are only playing with the problem. This idea of continually reorganising the railways is not the answer. We must deal with transport with a capital T and find an answer to the problem as a whole instead of sub-dividing it in the way that we are doing at the moment.

7.10 p.m.

Sir Toby Low (Blackpool, North)

The hon. Member for Dunbartonshire, West (Mr. Steele) has been talking, as he has a right to do, about the special position of Scotland. As he reminded us, this raises the question of uneconomic services, and I shall have something to say about that in a few moments.

I do not think that the hon. Gentleman was being fair to the Government when he said that they had paid no regard to the recommendations of the Select Committee of which he was a prominent member. If he looks at paragraph 50 of the White Paper he will see that the Government state why they have not yet made a statement on this matter. However, as I attach every bit as much importance as he does to the implementations of the recommendations which we all joined I hope that when I come to it in the latter half of my speech he will give me the support on this matter that he did in the past.

Hon. Members who have spoken today have touched on two main matters raised in the White Paper, and those are the two matters raised in the Opposition Amendment. The first one on which I would like to touch for a moment relates to coordination. The Amendment refers to further disintegration of the publicly owned transport undertakings, whatever that extraordinarily charming phrase may mean. What does it mean? Surely we all know that for many years these undertakings have been run very largely separately by the British Transport Commission? Furthermore, as hon Members of the Select Committee will remember, we were told by the Commission that its buses competed with its railway trains, and that its lorries were encouraged to compete with its freght trains. There is nothing wrong with that. It can continue. and I hope that it will.

However, there is a place for coordination in transport policy. When right hon. and hon. Gentlemen opposite talk about co-ordination in transport, I never quite understand whether they mean that those who co-ordinate transport policy should be directly responsible to this House, as is the Minister, or whether they should be a nationalised undertaking removed at least by one degree from the House which is armed with some powers of interfering not only in the doings of the public sector of industry but also in the doings of the private seotor of industry. Do hon. Gentlemen mean that they want a public authority to have power to restrict road transport, or to add to the cost of road transport? That might be right sometimes, but I very much doubt whether such a policy would be right at a time when we all agree that exports must come first. We do not want to add to the costs of our exporters. if such a policy were right, surely this House would want direct control over the man or authority who was responsible for it.

It therefore seems to me absolute sense that the Minister of Transport should say openly, "I am the man who, with his responsibility to the House of Commons, should have full responsibility for, and authority over, the co-ordination of transport policy." As I am talking to the Minister, may I say that I am glad to see him back after his bout of influenza. After listening to his speech, my only reaction was that if after a bout of 'flu I had as much energy as he showed, I should indeed be proud of myself. It is clear from our discussions on the railways that he will need every bit of his remarkable energy.

As I understand it, the first and main objective of the White Paper is that it should lead to a more efficiently run railway system. The problems of the railways are summarised in the early paragraphs of the White Paper. In paragraph 7 it is said, and I think rightly said, that the practical test for the railways, as for other transport, is how far the users are prepared to pay economic prices for the services provided. I do not exclude the observations of the hon. Member for Dunbartonshire, West about uneconomic services. I will deal with them later. The White Paper goes on to say: Broadly, this will in the end settle the size and pattern of the railway system ". It is on the economics, the finances and the size and shape of the railway system that I want to concentrate my remarks.

I welcome all the steps of reorganisation and other matters outlined in the White Paper. It is not surprising that I welcome them, because they are, in the main, the steps recommended in the Select Committee's Report. I welcome the sensible organisation structure that is proposed, subject to this comment. I find myself in agreement with those who ask the Minister not to throw overboard the idea of part-time members of regional boards. They are extremely useful people. The Minister has not said that he will throw them completely overboard. The area boards as they are at present organised are run quite efficiently, and I hope that he will not do away with the services of a reasonable number of part-time members.

I welcome the introduction of the Railways Board and I welcome what the Minister said, that we shall now have single-minded direction of the railways. I also welcome the commercial freedom promised to the railways, and the emphasis that is now laid on financial control. However, all these things are right only as a first step. They are, as the Minister said, the first essential step. They are not the be-all and end-all of the solution to the problem of the railways.

I do not know whether the Opposition think that one wave of the Socialist wand, even if it is broken in two from time to time, is enough to solve these railway problems. By the terms of the Amendment it would seem that hon. Gentlemen think that the Government ought to have been able to come here and say, "Here we are again and we have the final solution to the problem". I welcome the attitude of the Minister. He is proceeding step by step.

I might remind the House, it so happens that yesterday was Old Moore's birthday. I think that we should beware of Old Moore.

Mr. Steele

Surely the right hon. Gentleman is not suggesting that the Minister should be hanged.

Sir T. Low

I was talking of Almanack Moore. I was suggesting that in seeking a complete once-and-for-all cure for this serious problem the Opposition should beware of that.

I now turn to the financial and economic problem, and the problem of the size and shape of the railways. As The Timesand the Financial Timesremind us, those are the main problems. In the last eight paragraphs of the Select Committee's Report there are set out very shortly—perhaps almost too concisely—certain comments and recommendations as to the way in which decisions should be taken about the future size and shape of British Railways. Those comments and recommendations also cover the provision of Government money to pay for those parts of the newly constituted railway system which would not be justified on purely commercial grounds.

In paragraph 9 the White Paper takes up the background to these considerations. It refers, as did paragraph 417 of the Select Committee's Report, to the confusion in judging between what is economically right and what is socially desirable. Later, in paragraph 50 of the White Paper, there is a direct reference to the closing paragraphs of the Select Committee's Report and the problem of the uneconomic services. It is said that since this question must affect other nationalised undertakings the Government must have time to consider it in that general context. I do not think that anyone can quarrel with that; that is what we should expect and what we think right.

Mr. Collick

This is very important. If the right hon. Member will read on in the White Paper he will find that under the new set-up it will be the responsibility of the Railways Board to decide that question. The point arises that if the Commission were open to such criticism as this, in what way would the Railways Board not be faced with the same sort of criticism?

Sir T. Low

I am sorry that I have led the hon. Member to interrupt. He has asked me to read on from the Report. If he will listen on to my speech he will find that I am about to refer to that exact point, which is an important one.

There must indeed be a definition of responsibility. Although this point has been made in the Select Committee's Report, I hope that, at a time when the House will accept and give full support to the first steps the Minister has taken, it will forgive me if I rub home the recommendations about the importance of economic and financial control, and of getting that control right as soon as possible.

The White Paper defines the responsibility of the Railways Board and the regional boards. I have much sympathy with the point made by my right hon. Friend the Member for Birmingham, Hall Green (Mr. Aubrey Jones), that the Minister and Parliament in any Bill laying down these matters should not be too rigid in defining who does what. As the Select Committee said, the devolution required of regional boards is one of management and operations, and the exact degree of devolution may depend upon personalities and changing circumstances. We should be making a mistake if we were too rigid about that.

What the White Paper does not touch upon—and, here again, I agree with my right hon. Friend—is the division of responsibility between the Minister and the Railways Board. If one thing has been brought home to me in my three and a half years on the Select Committee, dealing with various industries—during which time we covered three main industries—it is that the House, including Ministers, must define much more clearly than has been the practice in the past the distinct responsibilities of the Minister, on the one hand, and those operating nationalised industries, on the other. I think that the hon. Member for Dunbartonshire, West and others on the Select Committee agree that this responsibility must be defined in financial terms as well, and that the financial arrangements between Government and industry must be compatible with these separate responsibilities.

What is the present position? There can be no doubt in anyone's mind that the British railway system covers services that cannot be justified in modern conditions purely on commercial grounds, however much they may have been justified in old times, when we could have a far greater degree of cross-subsidisation. Now, when competition is rife in transport, not only between road and rail but between rail and air, who can say what part of the deficit of the railways is due to shortcomings on the commercial side and what part is due to social necessities, or to national economics?

Mr. Walter Monslow (Barrow-in-Furness)

Is the right hon. Gentleman suggesting that we should cut out all uneconomic units within the railway industry although they may be socially desirable in many instances?

Sir T. Low

I am sorry to be impatient with the hon. Member, but if he will read the Select Committee's Report, which has now been published for eight months, and if he will listen more carefully to what I am saying, he will understand the point that I am making.

I am saying that so long as there is doubt about the division of responsibilities, and about where the loss comes from and why, it is impossible for financial control by the Government or the House to play any part in the business. How can a Committee of Members, or an individual Member, come to any conclusion about the efficiency of the operation or the rightness of decisions simply by looking at the accounts or the Report? Some Members are troubled about the difficulty of knowing whether the coastal shipping interests are right or wrong in what they say. All we can now do is to ask Sir Brian Robertson, the Commission, or the Minister what the position is. We have no other test. How can modernisation proposals involving large amounts of capital be properly adjudicated upon by the Treasury, the Ministry or the House, when approval is asked for, until there is a clear division of financial and economic responsibility?

I would go one step further: how can we ask responsible men to take over the great burden of running the railway system if we do not let them have in their hands a reasonably sharp financial weapon to test their own operations and the operations of those working under them? The Select Committee and the White Paper noted the confusion in the minds of the Commission as to what was economically and what was socially desirable. All the members of the Select Committee were conscious that that confusion was also present in the House. We must not blame the Commission alone for that. On the question of uneconomic services, we await the Commission's observations on the Select Committee's Report, and I hope that we shall also have the Minister's comments. I thought that I detected a certain amount of reservation by the Minister, but I hope that that will not be visible in the comments he makes.

I know that reservations exist in the minds of many people who study these matters, outside the Government machine and outside the transport world. One hears it argued in the "clubs and pubs" that the test the Select Committee suggests is really impracticable, and too theoretical.

I am told that it is really not a practical thing to ask the Commission—or it will be the Railways Board—to work out and delineate a railway system that is justifiable commercially. I am also told that to establish as a principle that uneconomic services will be paid for by the Government is to play into the hands of unscrupulous men in charge of the nationalised industries. I do not believe that the men in charge of the nationalised industries are unscrupulous in this respect or in any other. I do not think that the Government are so stupid that they would agree to pay for an uneconomic service put up to them if they knew it was not really uneconomic.

What do we mean by the phrase "uneconomic services"? We do not mean that part of the railways which is at present making a loss, any more than when dealing with the airways—the Select Committee had the same point in the Report dealing with the Air Corporations—we said that B.E.A. services in the British Isles were uneconomic just because they were losing money at present. That is not true. What we meant were those services that are bound to be run at a loss, and we said so in paragraph 416. We know full well that in any transport system there are many parts of it which are justifiable not on the direct profit that they earn, but because they perform an activity that is good for the rest of the system, such as a feeder service; and I am told that many lines are valuable as feeder services. What we were referring to were those parts of the railway system that could never be justified on any commercial ground.

Let me put to the Minister this point. How do the Government propose that the future size and shape of the railway system shall be settled? I cannot but think that the arguments that will precede any settlement of that matter must include an analysis of those parts of the system that are commercially justifiable, those parts of the system that are justifiable on wider national economic grounds, and those parts of the system which are justifiable in the Government's view on social grounds. That is bound to be done and that is what we recommended should he done. If I am right in saying that, then I entreat the Minister that in making the financial arrangements he should then act on the lines set out in the Select Committee's report.

In particular, the Minister should agree in advance each year or period of years how much the Exchequer will pay to those running the British Railways for the services which would not be run on purely commercial grounds. It will then be quite clear for what these payments are made. Parliament will have control over the payments and the reasons for making them. Both those reasons, on national economic grounds and social grounds, are grounds for spending public money over which Parliament should have control and which should not be left to even such a body as the Transport Commission to define.

There is one other point with which we close the Select Committee's Report: If this were done, there would be one important consequential advantage—the advantage that both the Commission and the Minister would become much more clearly accountable to Parliament for their separate railway responsibilities". I make no apology, except to my colleagues who wish to speak, for having stressed this so much.

I must now refer to one important financial decision on this matter which the Government have taken—that is the decision to write off a large part of the captial. I seemed to deteot in the speech of the right hon. Member for Vauxhall (Mr. G. R. Strauss) not only some of the tones that we heard when he was talking to us on the steel denationalisation decision, but a ringing of the bells of joy that so much capital had been written off. I am rather old-Fashioned about these matters. I cannot welcome, although I can understand and support, the writing-off of these past debts on capital.

Mr. Strauss

In case the right hon. Member misunderstood me. may I say that I was not pleased about the necessity for writing off this big capital debt? I said that I welcomed this. I thought that I had made quite clear that I welcomed the fact that the Government were at last prepared to face reality in this matter.

Sir T. Low

Perhaps I misunderstood the right hon. Gentleman. On balance, I support the writing off of the accumulated losses. I think that that is a sensible and realistic thing to do in the present circumstances. I am less certain. but I have decided that I also support the putting into suspense account of the £800 million. I am less certain because, frankly, I do not think that we can ever get strict financial control when we are slipshod about writing off large chunks of capital represented by working assets. I accept that at the present time it is wise to put a sum in suspense account, and if things go as I think they will go, and I know they can go, then, certainly, this capital could be properly serviced, as indeed the White Paper makes clear.

I am not so apprehensive about the future ability of the Railways Board to pay interest on new capital as the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) seemed to be. All this modernisation will make it much easier for the railways to earn more, to spend less, and to pay high and proper wages at the proper time. Do not let us overlook the great gains that the railway system will have by expenditure of this capital.

I am not so able to welcome the last statement in paragraph 50 of the White Paper about uneconomic services. In referring to the financial arranaement, these words are used: For the time being, railway losses on any such services"— that is, the uneconomic services will, in practice, be covered by the contributions proposed from public funds. I can see that that may be so, but who can be certain? Surely that is rather a slipshod way of getting at the truth and trying to get full control over the finances of our great railway system.

I use the expression "slipshod". It may be the only way that at present the Government can tackle this problem. until they have worked out how they are to deal with uneconomic services. But, in returning once more to the recommendations and comments of the Select Committee at the end of its Report, I wish to stress to the Economic Secretary to the Treasury, as well as to my right hon. Friend the Minister of Transport, that one of the great advantages of the recommendations, from the point of view of Parliamentary and Treasury control over money, is that there is no need to be slipshod. We can find out why losses are incurred. We do not have to express the hope that arrangements will cover those losses after they are incurred.

I suppose that some of my comments may seem to be unduly critical of my right hon. Friend. But I know full well the work he has done and the energy he has put into getting his first move in the reform of the railways system. What I am saying amounts to no more than an entreaty to him that his next step should be to tighten up financial control and adopt a system of economic and financial control, as recommended unanimously by his colleagues, and by hon. Members opposite, who have studied the difficult problem in respect of which he at present bears the burden.

In my last speech on the subject of railways I said I sensed that this was a crisis not only of money, but of morale. I think that that was right. I think that there is still that crisis. But I detect a change among those on the railways to whom I have talked. I think that now they believe that my right hon. Friend and the Government have faith in the future of the railway system. Now they know that modernisation will be proceeded with on a sensible basis. But there is yet a long way to go. It is not enough just for us here to have faith, that kind of blind sporting faith on which The Timescomments today. I believe that success can be achieved only by the vigorous use of every instrument of management and of science known to man, and if we in the House of Commons face some of the very difficult and inconvenient problems still involved in getting the railway system right.

7.41 p.m.

Mr. Francis Noel-Baker (Swindon)

Like hon. Members on both sides of the House, I listened with the greatest attention and respect to the speech of the right hon. Member for Blackpool, North (Sir T. Low). None of us on this side of the House would wish to express any sentiment other than approval and appreciation for the way in which he chaired the Select Committee, and for the Report which he and his colleagues produced. We all feel that it is the best piece of work on this subject which has been done for a very long time.

After listening to most of the speeches made today, including that of the Minister, my comment is that from time to time I find myself feeling astonished that we do not recognise more often that almost every other major industrial country in the world, certainly in our part of the world, has been through exactly the same experience that we are going through at the present time, and that most of them have solved their railway and transport problems in an effective and efficient manner.

Last week, I was in France and, among other people, I talked to the head of the French National Railway Company. Listening to their experiences and discussing our problems with them, I am bound to say that one sometimes wonders why we are making such very heavy weather over the difficulties which face us at present. I found the speech of the Minister depressing in many ways, as I believe will my constituents in Swindon. This is principally because we still have no Government expression of opinion on two basic questions. The first is: what size and shape shall be the future railway system of this country? Goodness knows, the Conservative Party has had long enough to consider it. At the beginning of his speech the Minister told us that he would reveal his thoughts on this matter, but he did nothing of the kind.

Secondly, we can detect no real determination to spend such money as is required for speeding up the modernisation of our railway system and then to face the fact that to have an up-to-date and efficient railway system we must subsidise it for a period of years until, by its efficiency and by the contrasting congestion on the roads, traffic comes back to the railways and the system begins to pay its way—as happened in France. There, capital investment was speeded up by the fact that the system was crippled by the war. They had to spend vast sums in introducing a modern system. They were also helped by the fact that they started nationalisation in 1937 instead of ten years later, as we did.

Now the French have produced a first-class system. Their trunk routes are electrified and their freight is being hauled with less than 50 per cent. of steam. By 1970 steam traction will have disappeared altogether. Although these big sums of money were spent immediately after the war and the taxpayer has been required to contribute large subsidies during the years since, the interesting thing is that the subsidies are beginning to disappear and the annual equilibrium grant, as it is euphemistically called by the French Government, has been reduced to a quarter of what it was in 1955. I have no doubt that we should take bold financial decisions now. We should be prepared to face the fact that we cannot have an efficient railway system without an annual subsidy for perhaps ten or fifteen years; otherwise, we shall be left with the most derelict, antiquated, inefficient and expensive system in any modern industrial country.

At this stage in the debate, I have jettisoned a large part of my notes, for which I hope I shall be applauded by some of my hon. Friends who are anxious to speak, although I may disappoint some of my constituents. However, I wish to ask one specific question on a matter not yet raised and which I consider of importance. Paragraph 59 of the White Paper refers to pipelines. I wish to ask the Joint Parliamentary Secretary to give an explanation of Government policy on this matter. I am very apprehensive at the spectacle of a proliferation of privately-owned competing pipelines which, I am afraid, may lead to a situation similar to that which arose eighty years ago when there was a proliferation of privately-owned railway systems. In paragraph 59 there is a reference to …general legislation on pipelines which the Government may wish to promote.… I should like the Joint Parliamentary Secretary to tell us something about that intention and what is the meaning of the phrase that … it is proposed to give certain of the new undertakings, particularly the railways, powers to lease, provide and operate pipelines on their property. If one thing is certain, it is that with the growth of a pipeline system many of the types of freight now carried by train or road will be more efficiently and cheaply carried by pipeline. I believe the railway system can play an important part in the development of new pipelines on its property.

I come now to the main point to which I wish to draw attention, the position of the British Railways workshops, a subject which is mentioned only in three or four words inside brackets in line 3 of paragraph 14 of the White Paper. As the Minister knows, the British Railways workshops now employ about 110,000 men, of whom nearly 8,500 are at Swindon. Nearly 5,000 of them are in the locomotive works and 3,500 employed on the maintenance and repair of carriages and wagons. This is an important constituency point for me, and I believe it is also important for many of my hon. Friends.

Among most of these workers there is a clear recognition that they are in a declining industry. Many of them recognise frankly that most of the factories will contract during the coming years and that some will probably close down altogether in the not too distant future. If things remain as they are and the Government are allowed to carry out what I believe to be their long-term intentions, I have very little doubt that in the end the only choice will be that British Railways will either have to close down their railway factories altogether or sell them to private-profit firms. A number of the men in the workshops in Swindon believe that to be the intention.

Ever since 1947 the railway workshops have been hampered by two very difficult handicaps. One has been inefficient and top-heavy management. I think that the Labour Government, when they took the industry into public ownership in 1947, made a mistake by leaving far too many active and violent opponents of public ownership in key positions on the railways and many in important positions in railway works. We made a second mistake in accepting a Conservative Amendment to the 1947 Act whereby we changed Section 2 (3), so that publicly-owned railway factories were allowed to manufacture for no one except the domestic railway systems. We excluded export work and prevented them doing any other manufacturing work for which they were qualified and had a first-class labour force.

Since 1951 a third handicap has been added to railway workshops. That has been Government prejudice and favouritism towards private firms. There is no doubt whatever among my friends in the Swindon factory that the Government, and the British Transport Commission under Government pressure, have been leaning over backwards to give work to private firms whenever they could do so. My Swindon friends feel particularly jaundiced about this at present when they look at the results of some of the electrical and other equipment which has recently been supplied to British Railways with rather disastrous results.

I wish to say a few words about the detailed position in my constituency. I had a meeting yesterday with the works committee of the Swindon British Railways factory. The members of the committee told me that they were very worried about the programme for 1961, particularly on the carriage and wagon side. Apparently, not a single new diesel car is to be built in Swindon this year. The only cheering factor on the scene is that the 1961 figures are to be slightly inflated by work carried over from 1960, and the men and management believe that this year they will get by. The real trouble is likely to arise in 1962.

The men feel the greatest anxiety about the future. They told me that, in theory, from 1962 onwards they are to get new carriage work at Swindon at the rate of about 100 vehicles a year. From the continuity of the employment point of view, it makes a great difference what type of vehicle they are to make. Some of my hon Friends will know that there is much more work in a restaurant car or a diesel unit than in ordinary carriage stock. So far, of the promised 100 vehicles, all that is known about the 1962 programme is that 31 first-class corridor coaches are to be carried over from 1961 —the men tell me that this will mean only a few weeks' work for some finishers and those in associated trades—and there is some possibility of 40 diesel cars. There is no certainty about that, and there has been no authorisation. Mystery surrounds these diesel units.

An official statement put out by the management last November, brought the total to the notional figure of 100 carriages by the extraordinary device of including the figure "X". The men are desperately worried about the future. There is not a single item of new work which they expect to be available in the carriage and wagon department at the beginning of 1962, and at present there are 3,500 workers involved.

This brings me to the more general ipoint that if work in the British Railways factories and for the modernisation programme itself is to proceed in an orderly and planned way, it is essential that the Commission, while responsible, and the new Board, when it comes into office, should be able to plan ahead. The Minister has mentioned this on one or two occasions, and I think he made a passing reference to it today.

To take Swindon as an example, for continuity of work it is necessary to have eighteen months' warning before new work can begin in order to give time for preparing plans and specifications and to get materials for which they have to place outside contracts. Incidentally, they have been held up very badly recently by delays in outside contracts. There has been particular trouble about copper tubing and other piping on the locomotive side. The men have a suspicion that supplies are going to private enterprise firms faster than they are coming to British Railways works. They and the management say that they cannot plan for the future unless they have adequate warning of what is to happen next.

This brings me to a general point regarding finance. In the White Paper on Public Investment, there is a column on page 16 referring to money going to the British Transport Commission. For 1961 there is a firm figure of £125 million, and then a figure, subject to review of £15 million. The fact is that neither the management in Swindon, nor the Commission, nor perhaps the Minister himself, have the faintest idea of what is to happen in 1962. So it is, perhaps, not surprising, although very regrettable, that when the men in Swindon asked to see the General Manager at Paddington to discuss the future outlook in railway workshops he refused to see them. I suspect that it was because he had not the faintest idea either.

I make a strong appeal to the Minister to do whatever he can to see that information about future spending is passed on to the B.T.C. and regions and that the Western Region is taken out of the impossible position of having no idea of what money will be available in 1962, although it has to have at least eighteen months' notice.

I add to that appeal a plea to the Minister to look very carefully at relations between management and labour in the regions, particularly in the factories. I do not want to make any invidio8s comment about individuals, but the Minister may perhaps remember a quite unnecessary strike, preceded and followed by a great deal of unnecessary friction, in November, 1957. That, in my opinion, arose very largely from a refusal by the general manager at that time to meet the men to discuss their reasonable point of view, which was amply justified by results. They were, in fact, asking to do more work than the management said they were capable of doing. They struck and got the extra work, which they carried out more quickly than they had predicted. It would be a tragedy if that kind of thing were to happen again.

These men came to see me yesterday morning and said that they were very worried. They had asked to see the general manager. They had been through all the proper channels—

Mr. Ellis Smith (Stoke-on-Trent, South)

Is there not workshop machinery and trade union machinery which caters for this kind of thing? Cannot the workshops committee get to know what is happening?

Mr. Noel-Baker

I am grateful to my hon. Friend. There is that machinery, and these men have been very meticulous in going through every stage of the machinery. I have been meticulous in keeping out until they had done so. they had a session with the chief mechanical and electrical engineer and, when everything else failed, they appealed to go to the general manager. In a letter which they showed me, they were told that it would not be proper for him to see the works committee. My immediate reaction was, what on earth is the general manager for if not to see the men on an occasion of this kind? Indeed, so remote does the general manager appear to be from Swindon that the men refer to him as Mr. Hammond, the chairman of the Western Area Board." I had to explain to them the difference between the chairman and the general manager. This happened when I was talking to them yesterday. At all events, there may be a good reason for the general manager being in difficulties about seeing the men, for I believe that he does not know any more than they do about future plans. But I appeal to the Minister to consider relations between management and labour and, if he can use his influence in this case, to 'use it so that the men are kept in the picture and this kind of situation does not arise again.

In the interests of others of my hon. Friends, I have jettisoned many of the points I wished to make. I finish by saying only that we deplore the point of view and the state of mind that is reflected by the White Paper. This is not simply an expression of party political feeling. We are worried that the whole attitude of the Government towards the railway system is old-fashioned and out of date. It is humiliating to come back to this country and see the condition of our railways when one has been to countries like France, Italy, Germany or Sweden, where they have been through all this and solved the problem many years ago. Let the Minister now take the railway service, men and managements, into his confidence and let them know what his intentions for the future really are.

8.2 p.m.

Colonel C. G. Lancaster (South Fylde)

The hon. Member for Swindon (Mr. F. Noel-Baker) will not expect me to follow him in matters which concern most particularly his constituency. I should like for a few moments to refer to certain matters which have come out of the debate, many of which were considered in great detail by the Select Committee, of which I was a member.

The hon. Member for Dunbartonshire, West (Mr. Steele) regretted—I was entirely with him in that respect—that we are discussing the Government's policy today without having the opportunity of knowing anything about the Stedeford recommendations, or—I go further than the hon. Member—of knowing what were the arguments which led up to those recommendations. Undoubtedly, what is being proposed by the Government this evening must, in part, have originated from what Sir Ivan Stedeford and his Advisory Group recommended. We find ourselves in something of a vacuum if we are debating the matter without knowing on what premises they came to those conclusions.

It was no part of the business of the Select Committee either to initiate or to propagate policy, but it is impossible to spend the time that we individually spent on that Committee and not to come to certain opinions and views on the policy that should emanate. We are debating and considering the situation without the benefit of those conclusions which must, in great measure, have influenced the mind of my right hon. Friend when setting out his views in the White Paper.

Having said that, there is one other matter to which the hon. Member for Dunbartonshire, West referred and to which, equally, I give my support. The hon. Member, as well as my right hon. Friend the Member for Blackpool, North (Sir T. Low), referred to the benefit which could, and I feel will, accrue from having part-time members on the regional boards.

I want now to refer to something which may appear to be controversial, although I do not put it forward in any controversial manner. It became evident from the evidence which was forthcoming from the Transport Commission that not only the old pre-nationalisation railway companies, but, indeed, the post-nationalisation Commission itself had done little to recruit for the railways men who had had the advantage of the sort of education which is available both in the older universities and in the technical universities.

If I may use an analogy, I would say that that was an error which was not committed in the mining industry. Both before nationalisation and, to the credit of the Coal Board, since nationalisation, there have been a variety of schemes by which university candidates from the older universities, in certain cases, and from other parts of the educational system received grants to go to technical universities—Leeds, Birmingham and the like—and then to play their part in that industry.

I am not saying that those men, and those alone, are the sort of men one wants to see coming up within an industry. If, however, an industry denies to itself the advantage of getting men from that strata of higher education, it is handicapping itself unnecessarily. In that respect, the railways have been, and are continuing to be, remiss in the directions in which they are recruiting men who should, in course of time, take up the higher technical and administrative posts within that organisation.

What we are discussing this evening is the inevitable evolution of nationalisation. I am not saying this in a critical approach to nationalisation, but if we look at this matter objectively we must recognise that in every nationalised concern there is this process of evolution. In the first instance, there is immense concentration at the centre, the idea being that power should rest at the centre and that the scheme, which embraces the whole of the interests of the industry concerned, should be a tidy one and should be so concentrated that every decision can be made at that point.

This process, however, has in it seeds of its own decay. The more we centralise, the less responsibility and initiative there will be at the periphery. In due course, that loss of responsibility and initiative will have its inevitable effect on the centre. That we should today be considering a degree of devolution is all to the good. To what extent that devolution should be hurried on, I am not so certain. I am not very happy, for example, that the docks should be withdrawn from the control of the central board. I am not sufficiently versed in these matters to say whether it is wise to have London Transport operated as a separate section divorced from the main railway interests.

That we should go too far too fast is something I am not happy about, partly because I am not certain that we have all the men available to take on these immense responsibilities which too great a degree of devolution would bring about, and partly because, if we go too far from a single integrated system, we shall run the risk at some future time of having further recourse to centralisation. I hope, therefore, that in considering the problems that lie ahead of him, and before he has worked out the legislation which in due course will appear before the House, my right hon. Friend will bear in mind that there is a necessity, even at this stage, to face this matter, and to face it within the reasonable scope of what is practicable in the first instance. That does not mean I am not wholly in favour of devolution as a principle. I merely put in the reminder that we would be wise to approach this matter in a phased and orderly manner.

One matter occurred in the evidence before the Select Committee which has not been referred to today and I will dwell on that for a moment. That is the matter of time and motion study which had been applied in certain directions within the railway industry, It seemed a million pities that it had been done on only such a very limited scale. I speak from some experience in this matter. Almost a generation ago time and motion study was applied to the industry in which at that time I was interested and after a short while it was accepted by men and management as being something in both their interests. It showed itself in almost every way to be in the interests of that industry. I have not the slightest doubt that the same principles hold good in the railway industry. As I say, in the very few examples where it has been applied to that industry it has been shown to have brought about some remarkable results.

Mr. Ellis Smith

Like the men working without their coats.

Colonel Lancaster

I had hoped that there would be an extension of that throughout the industry. I am certain that it would be as much in the interests of the men as of management.

I have certain reservations about the approach of my right hon. Friend to these problems. It is not on the score that the principle of what he has in mind is an unsound one—I do not think that that is so—but in the course of our investigation into the problems of this industry I was impressed not only with the size and the complexity of the industry, but with the fact that if we go too far too fast we may deny ourselves the eventual chance of bringing about a solution to these problems. I hope, therefore, that my right hon. Friend will consider what was reported on by the Select Committee and the conclusions to which we came.

My right hon. Friend the Member for Blackpool, North has set out very clearly the problems of uneconomic sections of the industry. I agree entirely with what he said. Until we know what is the size of the industry to which we are to apply our economic approach, we shall be floundering in our approach to the whole problem of what lies ahead. We must have that clear as soon as possible and if the Minister is able to give his conclusions on that matter before even he puts legislation before the House it will enable many of us to make up our minds on the benefits or otherwise of what he has in mind. I think that that is essential.

So long as the Minister is prepared to recognise that a policy of this sort must be tempered by a good deal of caution, I am in restrained agreement with the proposals that have been placed before the House.

8.15 p.m.

Mr. Frank McLeavy (Bradford, East)

British transport in all its forms, whether it be by road, rail, sea or air, is now vital to the economy of the nation. All these forms of transport have been built up without any real thought on how they should be planned to serve the best interests of the community. By the ordinary process of success or failure, we have arrived at a position today of wasteful competition, each section fighting for traffic regardless of the overriding needs of the country. There is no controlling national body authorised to plan and co-ordinate all forms of transport to obtain the maximum benefits in both service and lower rates. There is a mixture of State-owned and privately-owned undertakings, each in keen competition for available traffic. Parliament is confronted with pressure groups from all sides; each concern is trying to get some advantage for itself regardless of the national need.

We are today faced with a trade and export crisis which is far more serious than the Government will admit. British exporting concerns are facing increased competition in the markets of the world, and some of their competitors are being subsidised by their Governments to an alarming degree. What is Britain's answer to these developing tendencies? The first thing the Government should do is to set up a National Transport Board to make a national survey of existing transport facilities and keep the Government informed as to the best ways of obtaining a cheap and integrated national service. It is only by wise integration of all forms of transport that we can hope to reduce rates and fares and at the same time find at least part of the solution to our export problems.

Mr. Gresham Cooke

We have had integration of transport in London for thirty years.

Mr. Leslie Spriggs (St. Helens)

And the party opposite destroyed it.

Mr. Gresham Cooke

It still exists in London. but it has not solved London's transport problem.

Mr. McLeavy

If the hon. Member had been listening to what I was saying, he would have realised that I was speaking of the broad basis of national transport and not to any particular section. It is all right to try to side-track the issue, but unless we solve this problem of adequate, co-ordinated and cheap transport our industry is going to suffer in consequence.

My main criticism of the White Paper is that it deals with the nationalised sector in isolation. There is a complete rejection by the Government of the principles of integration and no indication at all that the Government recognise the tragic failure of the Tory Government since 1951. I am more concerned about finding the right solution to our great transport problems than in indulging in political recriminations, but I am bound to say that out of the very mouth of the Government came a remarkable admission of deplorable failure over the last ten years. The Government say boldly in the White Paper: The heart of the problem is in the railways. They are a great national enterprise and a vital basic industry. I only wish they had thought that ten years ago.

Speaking of the financial problem of the railways, the White Paper says that it is so serious that they cannot now carry on without large-scale support from the Exchequer. This position is presented today to Parliament as though it had suddenly happened, was unforeseen and did not result from the folly of Government policy. So we have to have a face-saving device in the White Paper which is before the House today. Then we have to have a scapegoat, so the British Transport Commission must be sacrificed.

Even now, the Government have not learned the lessons of the follies of the last ten years. The Minister talks about this new set-up and about a Bill being introduced next Session. I do not think it is an unreasonable estimate to say that it may take two years before the proposed changes in the White Paper can take effect. Meanwhile, waiting for the impending changes, There will be stagnation. Men under sentence of death are not likely to be interested in the things that surround them. The next two years, in my opinion, will be vital to the industrial prosperity of Britain. Is it really wise for the Government to add this disturbance at the present time?

It is not difficult to set out the causes of this unfortunate crisis. They are quite clear to anyone who has been in this House for the past fifteen years: first, the lack of a real national transport policy; second, since 1951 the Tory Government's indifference and, indeed, hostility to the integration of road and rail; third, the valuable time wasted between 1951 and 1959 in attempts to weaken the progressive development of the British Transport Commission, interference with the fare structure and retardation of modernisation; fourth, a complete lack of vision as to the future needs of industry and the travelling public; fifth, a total disregard for the over-riding needs of the nation. These are five main points of criticism which require a direct answer from the Government.

On the question of forcing traffic on to the railways, the Minister of Transport, in a television interview, said that it would be wrong of him to attempt to force traffic on to the railways and that we must not interfere with the freedom of industry to choose the form of transport it should use, although this is done in many continental countries with benefic al results to industry and to the economy of those countries. Yet the Minister and the House must realise that unless by force of law or by persuasion we can get substantially increased traffic on the railways, no amount of subsidy will save it from financial distress in the end.

I do not think that anyone would wish to see a rigid enforcement of traffic on to the railways, but, in view of the successful practices abroad, there is a strong case for the Minister to take legal powers to do so if only to strengthen his hand in persuading industry to use the railways, provided the powers are used as a last resort.

I reject the White Paper as totally inadequate to meet the needs of our times. It is more urgent than ever that the British Transport Commission and industry should be brought together to find a way by which the railways can serve the industries of the country. The Minister could render a real national service by bringing this about. Above all, having regard to the sad experience that we have had over the past ten years, let us at least start off the New Year with a determination to place the national interest above petty political personal considerations.

8.27 p.m.

Mr. John Peyton (Yeovil)

It is very easy indeed to follow the hon. Member for Bradford, East (Mr. McLeavy) and to agree with the last sentiments that he uttered. I do so most warmly.

Perhaps he will forgive me if I do not follow him in any detail, though perhaps this is not irrelevant to what he has been saying. The treatment of the railways on a rather piecemeal basis by Parliament is nothing new. Just about a hundred years of railway legislation is available for examination, and, if one looks at it, it is strange how clear it becomes that Parliament has been consistent alone in the building up of a tradition of tampering with this industry and never really attempting at any one time to deal with the problems both of its structure and size and at the same time with its obligations.

I do not believe that since the war Parliament has helped at all in dealing with these problems. we have had, of course, as one would expect, a vigorous argument on the merits of nationalisation or otherwise. I believe that the nationalisation of the railways is with us forever. It would be both helpful and refreshing if we could all stop arguing about it and try to make the present system work. I believe that a great deal of the trouble—we ought to admit this as Members of Parliament—is that far too often we expect from the railways satisfactory financial results and, at the same time, press upon them a policy of low fares and uneconomic services. This will not and cannot work.

There is another reason why I, for one, accord a rather chilly welcome to the White Paper. The main question on which any discussion of organisation must hinge has been shirked. There is no indication at all of what the Government's intentions are about the size of the railways or their eventual role. For my part, I reject as barren any discussion of railway problems until that question has been answered. It is not possible to judge the merits of proposals until we have the answer to that main question set out clearly before us.

I appreciate that these proposals are only skeleton, hut in viewing them I ask myself this question: has there been any change of circumstances or change of heart on the part of anyone who will take part in running the railways which entitles us to suppose that these proposals carry within them the seed of hope? For myself, I see none. Have we any reason to suppose that the new Railways Board will be more successful than the old Railway Executive? Have we any reason to suppose that it will be more successful than the Commission? Again, I think that the answer is "No".

Do these proposals give any indication that the obstacles to decentralisation will in some magic way be removed? No. Have we—let us have this quite clear—any hope arising from this White Paper for better and more effective union co-operation? Again, I think that the answer is "No ". At present work study covers only 6 per cent. of the field. That is a lamentable fact. The mere mouthing of pious hopes will not get us anywhere. I do not believe that there is any change in organisation which gives ground for hope. I do not believe that the new Advisory Council will bring some magic effect with it.

We in the House of Commons should pause for a moment—I absolve the right hon. Member for Vauxhall (Mr. Strauss) on any charge of levity in his approach to the matter—and seriously consider what we are doing in writing off, at least putting into suspense about £800 million of public money. In the White Paper, Proposals for the Railways, Cmd. 9880 of 1956, Sir Brian Robertson is recorded, in paragraph 100, on page 28, as saying that …the replacement costs of the total investment, in terms of current money values, can be put at well over £4,000 million ". That is true for the Commission as a whole. Nevertheless, it is probably fair to say that £3,000 million, or at least three times as much as is now being placed into suspense, is being forgotten. This is taxpayers' money. It is a serious matter, and Parliament would be failing in its duty if it did not high-light the fact that this really involves the British taxpayer in the loss of £2,500 million worth of property.

I believe that there are no grounds for giving this White Paper even the most general blessing. It is full of pious hopes, but it brings with it very little evidence that those hopes will bear much fruit. The aim, of course, is unexceptionable. I do not think that anyone could challenge the aim and policy stated quite clearly in paragraph 2. We are told that sweeping changes are to follow. Here I must express rather more criticism because I find it impossible to believe that the Government have really assessed the effect during the interregnum of such a statement as that. What will happen in the intervening period to those who carry heavy resonsibilities? What sort of feelings will they have in the future, and what will be the effect upon the stability of the industry on which so much depends.

I cannot refrain from uttering the suspicion that we have here change for the sake of change. We are told that the system must be made more compact. If this is really the line of thought, we should have been told more, and told it very much earlier. We are told, also, with commendable modesty on the part of the Government, that the answers to the many problems of the railways will not be found overnight. But I do not think that it is entirely unfair to ask the Government how they find themselves so unprepared to produce some answers and a general picture of the railway problems. One did not need the gift of prophecy to be able to anticipate at least some of the Guillebaud recommendations and their results. The writing has been on the wall for a very long time, and I think that the Government stand Charged, and reasonably so, with being so inexcusably unprepared.

Reference is made in the White Paper to the fact that the activities of the Commission are large and diverse. Hon. Members, particularly on this side, have been making this point for years but nothing has been done about it. I am glad that cognisance has now been taken of it, but I beg my right hon. Friend to realise that, while these functions are huge and diverse, and the old empire has been far too big, the mere business of isolating the railways will not amount to the same thing as genuine decentralisation.

I am also slightly nervous of the reference in paragraph 13 to direct responsibility to the Minister. Will this be so different from the position under the old scheme of things? If so, what will it achieve? It is fairly clear to me that the net result, if anything, will be to bring the Minister and the State closer into touch with the business of running the railways. There are many people who do not have a 100 per cent. faith in the efficiency of the State. A number of them believe that the State, particularly as an industrialist, is apt to be ponderously inefficient. Parliament does not entirely share the rather amiable belief of Ministers that they are good representatives of Parliament. Parliament still has some sort of slumbrous desire to safeguard taxpayers' money. I do not believe that it is true that Parliament is always willing to accept Ministers as adequate representatives for it in the discharge of this function, one of its most important.

Apparently, the Advisory Council, which, we are told, will be set up, will have no executive functions. It will advise my right hon. Friend or the Minister of the day on how to co-ordinate the nationalised transport activities. I have no idea how effective co-ordination can be carried out as a result of the machinations of such a body. I have a good deal of sympathy with my right hon. Friend, who will find himself right in the thick of the transport melee and who is considerably adding to his difficulties concerning other transport interests, such as road haulage and the much neglected shipping industry, which will all be out on a limb.

I do not wish to refer at length to the financial provisions. I have mentioned them briefly. However, I should like to refer for a moment to productivity and manpower, which receive only a cursory mention in paragraph 49 of the White Paper. This is the nub of the whole matter. The pith of my complaint is that I do not see in the White Paper a sign of anything which will change any of the distressing features of manpower and productivity.

I want to finish with two or three short points. First, I hope very much that, instead of a statutory board controlling the British Transport docks, consideration might be given to the possibility of setting up ordinary dock and harbour authorities in which users, local authorities and all those interested might have some direct influence.

The vexed question of coastal shipping deserves far more time and consideration than it receives in the House. This is a vital and economic industry which finds itself in a great deal of difficulty when there are quoted against it rates from a subsidised industry which on the whole must be quite uneconomic. My right hon. Friend has one of the most difficult roles to play and he has a great deal on his plate, but I beg him to realise that the shipping industry has had a very difficult time and that the coastal shipping industry has special problems of its own quite apart from the general ones which warrant his attention. On mere grounds of strategy, defence and national security this industry has a strong claim to attention. I hope that it will receive it and that the Government will realise the nervousness and anxiety in the industry because it is threatened by subsidised, unfair competition.

All sorts of difficulties arise when one starts to deal with a concealed and Ill-defined subsidy. There is a wagon manufacturing and repairing industry in this country. It is a privately-owned industry in which many people earn their living. I hope that my right hon. Friend will get to grips with this problem and that someone will say clearly whether or not it is the Government's intention that this private industry should survive. My right hon. Friend should bear in mind that over many years this industry has made a valuable contribution to our export trade.

To sum up, it is urgent that the Government should decide what sort of size of railway system they want. Until they do so, talk of organisation is a waste of time. I am certainly not prepared to give any sort of welcome to the proposed financial provisions and, therefore, I cannot vote for the Opposition Amendment, but I find myself also unable to support the Government's proposals in the Lobby tonight.

8.42 p.m.

Mr. Charles Mapp (Oldham, East)

The general tone of the arguments by hon. Members opposite has been, in the main, unfriendly to the Minister, but I have always understood that hon. Members opposite regarded two principles as their prerogative. One was financial discipline and the other organisational genius. In respect of both these heads the White Paper falls down lamentably.

I should like to quote one or two figures which touch upon the manpower issue that has already been mentioned In the debate. I left the railways in 1959 to come to the House and I should like to compare 1952 with 1959. The overall surplus of the British Transport Commission in 1952 was £8 million. Year by year afterwards, until 1959, there was a deficit which grew to £73.8 million. It consistently got worse and worse in the period of office of a Government who were consistently interfering with the normal transport operations of the industry. In terms of manpower, do hon. Members fully realise that in 1952 there were just over 600,000 railwaymen while in 1959 that figure had gone down to 519,000? I take it that that would be conceded as quite a handsome reduction in manpower. I have had personal experience of how this reduction was brought about.

Also, I have had some experience of productivity and work study. If hon. Members opposite go to Willesden Yard wishing to carry out time and motion study with a shunter, or in connection with many of the other phases of railway operation, such as the attaching and detaching of stock, they will find that it is not like a belt system in a factory. When hon. Members opposite think in terms of railways, I beg them to think of traffic yards and the movement of wagons. I have had considerable experience of the routine operations of a goods shed where bonus arrangements can be applied, but there are many railway operations which in themselves are unique to the industry and depend mainly on the character and good will of the railway servant involved.

The railway carryings are not as bad as the House might be led to believe. In 1959. the number of passenger miles was 22,000 million. In 1952, it was 20,000 million. Consequently, one can say that the volume of passenger miles has increased by one-tenth, which is not bad if one acknowledges that during the same period the railway labour force has been reduced in the proportion of six to five.

To come to the root of the problem, there has been in those years a 25 per cent. drop in the railway goods merchandise, a 17 per cent. drop in minerals traffic and a 16 per cent. drop in coal traffic. Incidentally, the average wagonload has been improved from about 8frac12; tons to 9¾. Consequently, inferences that the Commission or the railways, in particular, are dragging their heels are not sustained by the facts. Indeed, I am inclined to the view that the White Paper is a face-saving operation on the part of the Minister.

If one examines carefully what has been happening during the last few years, not least the Stedeford Group or the Minister's constant jumping into positions without the back-room staff to equip him for the chairmanships which he continues to take over, one is led to the conclusion that the White Paper will accentuate that the Minister's rights of direction to the Commission have become daily and constant interference.

The Minister has at his disposal in a staff of, presumably, some thousands, one professional and technical member and 12 administrative staff engaged on railway work, making, with clerical staff, a total of 41, engaged on railway problems, against a figure of well over 1,000 engaged on road transport matters. If any of us think that the Minister is completely and constantly informed on this very big set-up, why should he have to go outside his own Department to find the brain-box to equip him with the knowledge that he wants? In this case, the Minister admits that he is in the hands of the Commission's professional and technical personnel. Having been fed by that agency, he then proceeds, with complete abandon, and sometimes apparently with jubilation. to criticise the Commission for its forthcomingness.

I frequently meet railway people, and travelled with some administrative officers this morning, and I can tell the Minister that his stock is rather poor, not only with the railway unions, but with a very large number of railway officers at the middle level of management. There is not much confidence in him and not much faith. It is for him to recover that loss of confidence. I know that the trade unions are willing and anxious, provided that they are given reasonable opportunities, to endeavour, as far as possible, to rebuild the bridge that has been, to some extent, blown away during this last year or so.

I now come to what I call the two essentials of this problem—essentials, that is to say, provided that we can, for the moment, take politics out of this immediate consideration. Many railwaymen, including myself, consider that the problems of the railways are more important than the political arguments that might follow. The White Paper—and hon. Members—have again under-lined that, provided that the financial arrangements are adjusted, the railways will be viable—assuming fair competition.

I imagine that many hon. Members have discussed, as I have, with businessmen and railwaymen, the factors which constitute fair competition, and I hope that the Minister is in a position to state, or has an objective analysis, of what constitutes fair competition between road and rail. I suggest to him—and in this I agree with the hon. Member for Yeovil (Mr. Peyton)—that we cannot go very far in transport policy without having an idea of the required size of British Railways. But it is equally necessary that the Minister should have a yardstick, a definition, of what constitutes fair competition.

Having said that, I hope that all railwaymen—and, I hope, the travelling public, too—will be reassured by the fact that the railways will be relieved of their tribunal responsibilities. But the White Paper does not say all that a railwayman would like it to say. There are very many other charges and rates of a special character which do not normally fall within this heading. For instance, to what extent do the promises in the White Paper cover many of the miscellaneous charges, such as warehousing and demurrage?

British Road Services is now to pass to a holding company. If I remember rightly, it is still confined to a limited fleet which was, I believe, specified in recent legislation. If that is the case, and in the light of what the Minister said today—that there would be a free and open, fully commercial responsibility—then I take it that this statutory limitation on B.R.S. will be lifted. If the statutory figure is maintained, then he will be doing B.R.S. what the railways have been used to for centuries —pinning one arm behind their back. I hope that the Minister will be able to clear up that matter this evening.

Many hon. Members opposite say—and it is a fair argument—that these proposals will make the railways viable. If that argument is accepted, why are the railways not made a State service, like the Post Office? Equally, the contrasting argument is that if they are viable, surely there are men in the City who would be prepared to buy British Railways.

Mr. Ellis Smith

Thomson.

Mr. Mapp

The test of the political philosophy of hon. Members opposite lies in this sort of case. For totally different reasons, my hon. Friends and I would not pretend to lay our hands to taking out of the social conscience a valuable entity of this kind, but if hon. Members opposite have as their basic political philosophy the sort of view at which the hon. Member for Yeovil hinted, why do they not face the consequences?

Mr. Peyton

The hon. Member is putting into my mouth—

Mr. Mapp

I gather that the hon. Member was making reservations about nationalisation as such.

Mr. Peyton

Let me make it absolutely clear that I have no use whatever for nationalisation, but that I regard railway nationalisation as something which is here to stay.

Mr. Mapp

That shows the complete illogicality of the argument.

The Minister resurrected the Railway Executive Committee. I am among those who know of the direct consequences of the central control of the old Railway Executive Committee, which dealt with matters of stock, and so on. I beg the Minister not to include in his proposals any detailed instructions for the new body, but to seek the advice of railwaymen, railway management personnel and to find out what is happening on the Continent.

I do not believe that the Advisory Council will be able to study the national problem of transport. I notice that the White Paper uses the expression "Nationalised Transport Advisory Council". That is there deliberately, of course, but the general content of the commercial element of the country can never be decided if we isolate public service utilities from the other and

Generally unrestricted side of the economy.

9.0 p.m.

Mr. John Howard (Southampton, Test)

I wish to draw attention to the position of the coastal shipping industry. I agree with the main theme of the White Paper, with the proposals for placing the main activities of the British Transport Commission under private boards, and also with the realistic decision to write off the capital which has been lost. on the lines of a capital reconstruction under the Companies Acts.

However, we cannot regard the reorganisation of the British Transport-Commission in a vacuum. I do not accept the point. implicit in the White Paper, that if the taxpayer remits the debts of the railways, the remission of those debts should be the means of permitting the railways to expand their scope for unfair competition with coastal shipping. Coastal shipping has already paid its share of subsidising the railways.

The position of coastal shipping is dismissed in about five lines in paragraph 60 of the White Paper, but it refers to the fact that various road and rail traffic Acts contain provisions protecting coastal shipping from competition from inland transport. The industry certainly needs that protection. It is inadequate already in certain directions, and it will be an absolute disaster if the position of coastal shipping is not strengthened in any legislation which my right hon. Friend might bring in.

We are indebted to a recent Report prepared by the General Council of British Shipping which refers at some length to the troubles which beset the coastal shipping industry at the moment. We in this House too frequently pay lip-service to the shipping industry and only too infrequently pay attention to its problems. We spend a great deal of money on defence, yet the coastal shipping industry provides a ready-made reservoir of ships and coasters for use in the event of war or in an emergency.

Predecessors of my right hon. Friend have from time to time given categorical assurances upon the essential nature of coastal shipping. If the present Minister of Transport wishes to preserve the coastal shipping industry, he must take prompt action. He must not even wait for legislation. I was glad to hear that he is shortly to consult the General Council of British Shipping on this problem.

In the last three years the number of ships in the coastal trade dwindled from 634 in June, 1957, to 506 in June, 1960, a loss of 128 ships amounting to about 212,000 tons deadweight. The coastal trade has taken a battering, first, from foreign flag competition round our coasts; secondly, from the conversion of waterside power stations from coal to oil and, thirdly, from the current competition from the railways carrying goods at cut rates. We fear that all restraint will be thrown overboard if the reorgani- sation proposals set out in the White Paper are put into practice.

Coastal shipping competes with both road and rail. Road transport has a distinct advantage because of the door-to-door services it can provide. Rail transport competes largely artificially by flat rates and cut rates for the carriage of bulk cargoes over long distances which coastal shipping is ideally suited to carry. One example of this is that a coaster can carry a load equivalent to eight trainloads of coal.

Rates at present being quoted by the British Transport Commission are designed to lure freights from shipping. In the opinion of the shipping industry those rates are completely uneconomic and unrealistic. It is difficult to prove this fact, but I have instances which I am prepared to give to my right hon. Friend. Paragraph 7 of the White Paper talks about practical economic tests which will settle the size and pattern of the industry. Those tests mask the true nature of the cost of the services, and unless a right to "cost" exists coastal shipping will decline still further because of this form of competition.

I ask my right hon. Friend to give the friends of shipping in this House a positive assurance on the position of coastal shipping. In particular, I ask that no legislation be passed until the role of coastal shipping in relation to the transport system has been defined.

There are other and more immediate requirements. I will not instance them now, but will merely refer my right hon. Friend to paragraph 135 of the Report of the Council of Shipping in which those immediate requirements for the survival of coastal shipping are outlined.

9.5 p.m.

Mr. James Callaghan (Cardiff, South-East)

I am very glad that the hon. Member for Southampton, Test (Mr. J. Howard) managed to talk about the plight of the coastal shipping industry, because it is significant that the General Council of British Shipping should, for the first time within my experience, have taken to lobbying Members actively and publicly about the state of its industry. It has always yielded to the view, which is prevalent in the Ministry of Transport, that the only way to deal with the problems of the shipping industry is behind the closed doors of the Ministry, and that it could get a much better bargain that way than by approaching Members of Parliament. I have never believed that to be true, and the General Council of British Shipping is now finding out that it is not.

The hon. Member is right in what he says; the Report of the General Council of British Shipping tells us that 110 ships have been scrapped in the last three years. That represents about 200,000 tons of shiping. I may be wrong, but I understand that only three new tramp ships are building to replace that 110. Over 40 per cent. of shipping in the coastwise trades at the moment is more than twenty years old. There are no major programmes for replacement. I agree with the hon. Member, and I ask what the Government propose to do about it. Are they willing to let that industry bleed to death? That is what is happening.

When I remember what took place during the war, and the way in which merchant seamen plied their trade down through the North Sea to the Thames and through the English Channel; when I remember the part they played in the winter of 1947, when coal was frozen on the railways, and the way in which they brought it through all the weather of that winter, I say that if the Government let this industry bleed to death they will be betraying the nation.

It is this example which betrays the dichotomy in the thinking of Government supporters. Coastwise shipping will not pay its way unless there is a measure of protection. The hon. Member for Test said that, and he is right. But the Government—and they will soon be the Opposition if we go on having the kind of debate we have had today —think that the making of a profit is the test of what transport facilities ought to be provided.

That is not the view of the General Council of Shipping. The hon. Member gave us only part of the remedy proposed by the Council. What the General Council says is in line with what has been said in every speech in the House today except one and a half from the right hon. Member for Blackpool, North (Sir Toby Low) and one from the hon. Member for Truro (Mr. G. Wilson). Like a stranded leviathan, the hon. Member for Truro can always be relied upon to support the Government, no matter how many plans they bring in and how contradictory they may be, and the right hon. Member for Blackpool, North always spoils his case, because after criticising the Government he thinks that he must distribute his blows equally, and so goes on to attack the Opposition, refraining from charging his hon. Friends with incompetence.

In paragraph 127 of its Report the General Council says: It is essential… that, in considering the future structure of the railways and the relationship between rail and road, the Government should look at the transport needs of the country as a whole, including the part that coastal shipping should properly play. Shipping replacement today in the coastwise trades is virtually impossible as the Minister's policy is working itself out, and I warn him that he will be held responsible by many people outside this House as well as those of us in it who care about the coastwise shipping industry if he does not produce a policy which will save this industry from the straits into which it has fallen.

Another instance of the dichotomy of thinking of hon. Members opposite was to be found in the speech of the hon. Member for Yeovil (Mr. Peyton), who produced accusations against the Minister and used ferocity of language which, if I were to use it, would be called quite immoderate. The Minister will soon have to return to his sick bed if he gets many more attacks like that. But, having launched his fiercest bolts against the Minister, he said that he did not believe in nationalisation. He did not believe that it solves the problem.

Dame Irene Ward (Tynemouth)

It does not.

Mr. Callaghan

I am sure that the hon. Member is very glad to have the hon. Lady's support.

I am looking at the document produced by the National Union of Railwaymen, which I do not suppose the Minister has deigned to read, called "Planning Transport for You ". The prices of British Railways stock over the years before nationalisation are surely some idea of what the market and the Stock Exchange thought about the prospects of British railways at that time. The prices per £100 of the London and North-Eastern Railway preference stock ranged from £11 10s., £7 10s., £21, £14 10s., £10, £12 and £8 10s. [An HON. MEMBER: "What about Daltons?"] Daltons have never got down to that, not even despite the credit policy of the Government.

Great Western Railway prices were £50, £51, £64, £42, £30. Southern Railway preference, which were the cream, were £24, £64, £79. They climbed to £97 in one year and then started to fall back again. The average over the whole period was £77 5s. So one could go on with the deferred stock. This was the view which the market took about this stock. [HON. MEMBERS: "When was this?"] I am quoting a whole series of years—anything between 1924 and 1938. Those are the years immediately before the war and, of course, before nationalisation.

I say to the hon. Member for Yeovil—and I agree with much of his criticism that if he does not accept nationalisation, if he cannot feel any enthusiasm for it. and if his own private enterprise system failed—what is the solution? The hon. Member has arrived a little too late to answer, so he will have to get it from his hon. Friends. I am paying him a compliment with one hand and taking it back with the other.

Mr. Peyton

I am grateful to the hon. Gentleman for a compliment under any circumstances.

Mr. Callaghan

I have a feeling that the Minister of Transport hopes that because of the way in which the Press reports our debates what will get the headlines tomorrow is that London-Midland Region electrification is going on, and that all the other criticisms will disappear beneath that statement. I think that we all welcome that. We are all glad to know that, having held it up since last June. the Government have decided to proceed with it.

I wish to ask the Joint Parliamentary Secretary a question to which I shall be glad to have an answer. I understand that it was the intention of the Commission to complete this electrification by 1964. Of course, the hon. Gentleman will realise that it is important to know over how many years the Government are proposing to extend the electrification and modernisation. Can the hon. Gentleman tell the House whether it is the intention of the Government to keep within the original proposal of 1964 for the completion of the electrification? Perhaps I may have an answer to that, because, clearly, it is of great importance.

I come now to some of the other questions which have concerned us. Anyone who has listened to the debate will have reached the conclusion that what the Minister has said is this, "I cannot tell you what the size and shape of the industry will be. I do not know what form road transport will take. I shall fry to keen a little control over road building and by that means I shall be able to co-ordinate to some extent between road and rail. About coastwise shipping I have nothing to say, but what I can say to you, members of the public, is that you are going to have to pay either higher fares or higher taxes to support the railway system." I do not think that an unfair summary of what the Minister told the House this afternoon. For that reason, I think, every one of his hon. Friends—except one-and-a-half —attacked him so bitterly this afternoon.

The House and the people are entitled to know what is to be the future of the railway system. It is not good enough for the right hon. Gentleman to ask us to vote hundreds of millions of pounds—because that is what it will amount to before we have finished it will certainly be well over £100 million—if he cannot tell us that this money is not to be poured down the drain because the Government refuse to perform the elementary function of integrating the transport system. This is where, I think, there is the great divide between us.

The Government affect to believe that it is through competition that we shall get the best results in transport, and that it is through profits, of course, in the second place. It is through profits that the efficiency of the system will be determined. Anyone looking at transport knows that neither of these things is true. Let us take one example, which has been referred to before, the Victoria tube. In 1957. the Transport Commission asked the Minister for his views about the Victoria tube. It has been regarded by everyone who has examined the situation as essential.

Millions of Londoners who travel every day to work have to put up with intolerable conditions, if they have to get from Victoria across either to the West End or further to Arsenal, Highbury and Waltha mstow, by the inadequacy—I do not say the failure—of the present system. It will cost £55 million to build the Victoria tube. What does the Minister tell us? He has had four years to make up his mind about it, but we still do not know what the right hon. Gentleman is proposing to do.

Four years ago he was asked to decide whether the Victoria tube should go through. It is in the 1957 Annual Report of the Commission—not the right hon. Gentleman, his predecessor, I beg the pardon of the right hon. Gentleman. Of course, he was most careful this afternoon to dissociate himself from anything that happened before in the Ministry. It would be unfair to saddle him with any responsibility for what happened under the régime of his predecessor. I am sure that the right hon. Gentleman would be the last to want to throw any blame on his predecessor. He made that clear to us this afternoon. He did not want to say that his predecessor had done anything wrong at all, but if it was not the right hon. Gentleman or his predecessor, who was it?

Does not the doctrine of collective responsibility still apply to this Government? They are all in it so long as they sit on the Treasury Bench. I say to the Minister of Transport that although he may not be personally responsible for the failure to come to a decision on the question of the Victoria tube, it is the Government who are responsible. and the people of London are suffering today for this four-year delay.

The tube will cost £55 million. Is that to be added on to the fares? The right hon. Member for Blackpool, North had a long passage about this in his speech. It is said that it will be uneconomic. I do not know what uneconomic "means in this sense. I know that it will bring a great deal more convenience to millions of people in London. I should have thought that the real test in this case was a social test, which is one that could be applied to a publicly-owned transport system. Then, we do not necessarily employ the test of profitability—

Mr. Cyril Osborne (Louth)

Somebody has to pay for it.

Mr. Callaghan

Yes, somebody has to pay for it. The hon. Gentleman is "on the ball" as usual. Of course we have to pay for it. But it is he and his hon. Friends and, indeed, the Government, who say that the test of a system is whether it makes a profit. It is no use looking pained. We have to sit and listen to this day after day. It is a lot of rubbish, but it is no use at this late stage protesting about it. Everyone knows that the Victoria tube, the cost of which will be the equivalent of one day's operation at Suez, ought to have been got on with years ago.

What appals me about the situation is that, while the Government have taken four years to consider the matter and still have not been able to make up their mind about the Victoria tube, the Minister is now proposing to take more powers. As I understand the White Paper, he proposes to do Sir Brian Robertson's job in his spare time. He is to do it when he has finished neglecting coastwise shipping, when he has finished with shipping, and not looking after the road programme, and not doing anything about road hauliers, and when he has finished inspecting coastguard stations. Then he is to do the job of Sir Brian Robertson.

I do not know what the Minister's role is in this set-up. I agree very much with the right hon. Member for Blackpool, North and the right hon. Member for Birmingham, Hall Green (Mr. Aubrey Jones) that the Minister has to take some very important decisions as to how far he is to meddle in these affairs. He is giving himself immense powers, whether he intends to use them or not. Is he to start to meddle in wage negotiations? He has the responsibility here if he cares to use it. I do not think that he will do very much. I do not think that he will do Sir Brian Robertson's job. I think that it will be left undone.

The real weakness will be that the Minister will start to meddle in affairs when he is subjected to Parliamentary or public pressure, quite arbitrarily and without reference to their importance. This seems the danger the Minister is in in taking these great powers. It is no use him or anyone else arguing that he has not got them, because the White Paper sets out the genealogical table. I would not care to say who is illegitimate in it, but he is at the top. He is the father of the lot. All of them are fathered on him.

The House ought to know, and certainly the railwaymen ought to know, how the Minister envisages his responsibilities and his powers in this matter. Is he to meddle from day to day as the whim takes him? If not, what self-denying ordinance is he to pass upon himself about what he is to interest himself in and what not? He said in a moment of frivolous effrontery that, of course, he would do all the co-ordination that is necessary. Does he really mean that he has not got the machinery and staff to do it? Of course, he cannot do it.

The basis of our criticism is that the Minister, in the words of the Amendment, has done nothing to solve the basic problems of the railways. He has done nothing to place them in their proper relationship with the other items and matters of our transport system and —what is worse—he is, in fact, tearing apart that which should be put together. The surprising thing—though perhaps it is not surprising in this light—is that this is at the moment when most of the Governments of Europe are pursuing a policy of integrating transport. At the very moment when they are endeavouring to gather transport together, the Minister and his Joint Parliamentary Secretary are preparing to tear it asunder even so far as it is together.

Is there anything so very different between our economic situation and that which characterises the countries of Europe such as France and Germany? I do not think so.

Mr. Alan Green (Preston, South)

There is a deficit on the French railways.

Mr. Callaghan

Of course there is a deficit on the French railways, as there is on the English railways. It is not that which makes us different. The real trouble is this, and hon. Members opposite much pause and consider where they are getting transport to in this country. It is their idea of approach to the problem of transport and their desperate belief in the virtues of private enterprise, competition and the profit motive which is destroying our railways and is responsible for a great deal of waste in our transport system.

I agree that there must be some duplication of our transport resources. Indeed, I have argued for it in the case of coastwise shipping. I would certainly have duplication of coastwise shipping routes and of the railways down the main spine from the North-East Coast, but I want those decisions to be taken positively by people who have studied the problem and know what the additions and subtractions are, and who have reached a conclusion about them. To leave them to the blind chances of whether one lot makes a profit and the other lot makes a loss, and to allow a strategic industry like coastwise shipping to be destroyed on that basis, is sheer folly. It is with that that we tax the Government in this matter.

What is necessary, above all, is this. It is time that the Minister or someone should take a look at transport as a whole. Everybody is looking at it from his own point of view. In this House, we have a succession of the most powerful lobbies that I have ever known. We have the British Road Federation busy lobbying the whole time. We have the General Council of Shipping, which has now embarked on its new career. We have the road hauliers, who are always ready to leap at any moment when their rights seem to be challenged.

Mr. C. Osborne

Who is lobbying now?

Mr. Callaghan

In a modest way, we have the Transport Commission, which is at least as much entitled to lobby as anybody else.

We do not get a transport policy by a series of groups each of them prosecuting its own interest in the matter. We get a transport policy only if there is somebody or a group ready to sit back and view the problem as a whole.

I am sorry to say this, because I welcome the financial provisions, but one cannot honestly conclude, on the basis of the White Paper, that the railways have a fair chance of making a success of the responsibilities that are being placed upon them. The Minister should not be content to leave the situation there. Certainly, I am not alone in thinking this. The Minister's hon. Friends behind him join with me in saying the same thing.

What the Government have done is to buy five years' time with their financial proposals. They have proceeded from plunder to blunder. They plundered British Road Services and they are now blundering about British Railways. They bought their five years. They will not solve the problems in five years. I have a feeling that they will be coming back to us, if they have not already disappeared before then, with further proposals for financial help before the end of that time. That being so, we have no confidence in what they are doing and we ask the House to vote against the Government's Motion.

9.28 p.m.

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

When I heard that this debate was to be opened by the right hon. Member for Vauxhall (Mr. Strauss) and closed by the hon. Member for Cardiff, South-East (Mr. Callaghan), both speaking on behalf of the Opposition, I was quite elated. I thought that at last we would have experts in transport speaking to us, because both the right hon. Gentleman and the h on. Gentleman at different times have held office in the Ministry of Transport.

I have been gravely disappointed, however, because I expected speeches from both of them that would rise more to the level of the importance of the subject we have been discussing. At least, we were spared from the hon. Member for Cardiff, South-East some of the funny jokes and cheap cracks with which he so often entertains us. We had a little more light from him this evening and a little less heat. For that, at least, we are grateful. One point in the hon. Gentleman's speech with which I entirely agree is that it is time that we in this country took a look at transport as a whole. That is precisely the purpose of my right hon. Friend and of the policy which he has been following in these last months.

The hon. Gentleman asked me a specific question about the London-Midland electrification scheme. He said that he understood that the British Transport Commission had wished to complete this scheme by 1964. It is true that in the re-appraisal it was suggested that the scheme, if then started, might well be completed by that date. How- ever, that was only an estimate. The latest position is that we believe that the scheme can be completed by 1966. This additional two-year period is due to two factors which I must at once announce. The first factor is that for the first time the reconstruction of Euston Station is included, which as the House will appreciate, is a big undertaking. The second factor is that it is assumed that work on the whole scheme can proceed at the optimum rate at which the Commission can do it having regard to the resources available. I hope that has answered the question.

Mr. Callaghan

Does the Commission agree that that is a reasonable estimate of the optimum pace at which they can proceed?

Mr. Hay

Yes. This is one of the results of the comprehensive reexamination of this scheme, about which we have been so much criticised, which has been carried out by my right hon. Friend and his Department with the Commission in recent months. This is a date that the Commission itself put forward now. [An HON. MEMBER: "Now?"] Yes, now. This is what they say they think they can now do.

The reception which the White Paper has received in the House today has been mixed. May I say at once that a number of hon. Members who have offered contributions to the debate would, perhaps, not have been so credulous and argumentative about some of the points raised had they more thoroughly studied what is said in the White Paper. The fact is that there have been a good many misunderstandings about what the White Paper says.

I wish it were possible for me tonight, in the course of what must obviously be a speech of limited duration, to clear up all the misunderstandings and points which have been raised. The House will appreciate that there is so much material that I am faced with the problem of selection. There are a number of matters referred to in the White Paper on which final decisions have still to be made, and I can only promise hon. Members who have raised individual points on questions, that if I cannot answer them in my closing speech tonight I will see that they receive an answer by letter within the next few days.

The broad outline of what we are doing is clear. We have approached the problem of the Commission with one aim in view, and that is to make the thing work. We have sought to provide practical answers to practical problems. We have not sought to be guided or to allow ourselves to be swayed by doctrinaire approaches for or against nationalisation, because, quite honestly, however much this issue may tear the party opposite, so far as this Government are concerned nationalisation is a dead issue. We are concerned now with making those industries that were nationalised work.

No one would imagine that the White Paper is a set of detailed working drawings of what we are trying to do. At this stage it can only be a sketch plan. It does, however, at least give the House, the country and the Commission and its workpeople a pretty clear idea of the way in which we would like to go. If the House approves the White Paper, the preparation of the Bill will proceed and we shall bring in the Bill during the next Session of Parliament.

A number of people in the Press and elsewhere have criticised us, the initial reaction of many newspapers to this White Paper being that it is a shame we could not do something more quickly. I think hon. Members, who are well acquainted with the procedure of legislation, should realise that, although we should naturally have preferred to have moved much more quickly than the Parliamentary process permits, nevertheless Parliamentary time for a major Bill of this kind—because it will be a very big Bill, indeed —will have to be found, and that is not possible at this stage of the Session. Also, there is a great deal of drafting to be done. A large number of interests will have to be consulted and the detailed and numerous points that have been raised in the debate show that there are still many points of detail to be resolved. We shall press on with this during the months that lie ahead.

At least I can claim that the White Paper means that there is an end to the uncertainty that has hung over the Commission and the industries that it controls in recent months. I do not agree with the right hon. Member for Vauxhall, who said that uncertainty would be perpetuated. On the contrary, I think that already morale in the Commission's industries and particularly on the railways has begun to improve because at last the railwaymen in particular know what is happening.

I go about the railway system perhaps not quite as much as some hon. Members, but certainly quite a bit, and I often talk to individual railwaymen. The one thing that I have heard since the White Paper was published is that they are glad to know that at last the uncertainty has been ended. They may have doubts. They often voice doubts as to whether what we are doing is right, but at least they know what is happening. This, of course, is of great importance.

Comparatively few hon. Members in this debate have referred to the morale, particularly of the railwaymen. The railway service, as the House knows, has always had something about it which one does not find in many other industries—a pride in the job and in the responsibility of the task of carrying the public in safety. Of recent years much of this morale and pride has been lost. It is due to a number of factors. There is the long tale of constantly mounting deficits. There are the constant public criticism and complaint. There is the disheartening effect of working with worn-out and obsolete tools. Another factor which I think has had a great effect here has been the knowledge of the working railwaymen in particular that the old and retired railway servants were living on inadequate pensions, and I am glad, as I am sure every hon. Member is, to know that at last the Commission is in a position to do something to help these people. I have had to stand at this Box on a number of occasions in recent months to deal with the situation to which reference has been made by hon. Members, and I assure the House that I am delighted that this action can at last be taken.

We have not been indifferent to all this. No Minister enjoys being responsible for an industry which is struggling with difficulties of this kind, but it must be borne in mind that Ministers have a responsibility to Parliament and to the public, as well as to the industries over which they have some control. What they can do to help must be decided in the light of that knowledge.

A balance has got to be struck between, on the one hand, the desire of a particular industry such as the railway industry for assistance and protection, and, on the other hand, the ability and the readiness of the public to bear the additional burdens which will be imposed. As ultimately these things so frequently come down to the question of money, we have got to strike a balance between what the industry says it must have and what the taxpayer considers it would be legitimate to pay. I think the acceptance by the House of the financial proposals shows that we have struck that balance correctly, although nobody should be in any doubt that the price which we have to pay to correct the financial difficulties of the Commission is indeed heavy.

To get rid of £1,200 million of capital by writing off £400 million as a bad debt, as irrecoverable, and placing another £800 million to suspense is drastic action by any standards, but it is only realistic to face the facts and to do so. But we still leave the railways with a heavy load to carry. Several hon. Members have pointed out that, although they will be left with about £400 million capital, there will in addition be the obligation to carry the £280 million liabilities for the Savings Bank deposits and superannuation funds, and this makes a total of nearly £700 million in capital, a figure which will increase and which will all have to be serviced as modernisation proceeds.

Moreover, as we say in paragraph 47, the railways will be set a target over five years of turning an operating deficit of about £60 million a year into a surplus of £60 million a year to meet their charges for interest on this new capital structure; This is a turnover of £120 million. Several hon. Members have expresed doubt as to the ability of the railways to do this.

I assure the House that we did not fix this figure without a great deal of thought and most careful consideration and estimation of whether or not it would be possible. It is a formidable task, but there are three points to be borne in mind in connection with it. The first is that this target is by no means more optimistic than what the British Transport Commission itself, in the reappraisal document, stated would be possible, and that without the capital reconstruction which we propose. The Commission then said that on operating account it thought that by 1963 it would be able to reach a surplus between £17 million and £69 million. That is the first observation.

The second point is that, in carrying out their obligation to meet this target, they will be assisted, as we say in the White Paper, by the special grants from the Government, which means, in effect, that the taxpayer will be helping the railways to carry a large part of their burden.

Finally, as we say in paragraph 48 of the White Paper, increases in railway fares and charges must, where and when appropriate, make their due contribution towards meeting railway costs. There is no doubt that at the moment they do not. It is interesting to look at the comparative figures of fares and other indices of prices and wages since 1938. Between 1938 and 1959, the average level of fares of the railways went up by 150 per cent. The cost of living in those years went up by 181 per cent. The index of weekly wage rates went up by 208 per cent. The inference is absolutely inescapable, that the nation is not paying the full economic price for its transport. Whatever the hon. Member for Cardiff, South-East may say, it is absolutely clear that we must reach a position where the railways in fact pay their way. That is our objective.

Mr. Callaghan

This is a very important matter, and I am following the hon. Gentleman with great care. If charges or prices are to be raised, what part will the Minister himself play in the new set up? Will he take the initiative in recommending higher fares, or will he leave it to the Railways Board?

Mr. Hay

This is one of the points for further consideration. It is a difficult matter—[HON. MEMBERS: "Dodging."] I am not trying to dodge the point. I assure the hon. Member for Cardiff, South-East that it is a difficult point to bear in mind in the drafting of the Bill, and we shall be interested to know what people like the trade unions and the British Transport Commission have to say about the procedure. Certainly, our intention, which is made clear enough in the White Paper, is to give the railways the maximum degree of commercial freedom, except, of course, in the London Transport area, in respect of their fares and freight charges. I come now to coastal shipping, which, rather unexpectedly—

Mr. Arthur Holt (Bolton, West)

Before the hon. Gentleman leaves the other point—

Mr. Hay

I am sorry. I have not time. I wish to say a word now about coastal shipping, which, rather unexpectedly, ranked high in the debate. It is for decision now by Ministers whether the strategic and economic advantages mentioned by many hon. Members which are possessed by the coastal shipping industry in fact outweigh the need for railway solvency to such an extent as to justify special protection for the coastal shipping industry. It is necessary to bear in mind that one of the reasons why coastal shipping has been in decline in recent years is not only competition from the railways but the growth of road transport as well. This is another aspect of the problem which we will have to take into account in our discussions with the Commission and the General Council of British Shipping.

We believe that the major contribution to meeting the target for the railways is by modernisation. There has not been a full stop in connection with the modernisation programme recently, as is frequently said. There has not been an end to modernisation. There has been a pause for reassessment of the future commitments which we are asked to undertake. I believe that this was perfectly reasonable.

May I briefly go over the recent history of the modernisation programme? First, the Commission put forward its plan in 1956 estimating a total figure of £1,240 million. It said then that this would mean that it could break even by 1961 or 1962. The Government endorsed the plan and told the Commission that it could go ahead and began to provide the money. Then came the recession of 1958. [HON. MEMBERS: "Oh."] Hon. Members had better wait for it. The recession of 1958 led to a decline in the coal traffics which are the staple commodity of the railways. The Commission indicated to us that the estimates contained in its original modernisation programme would be adversely affected.

We therefore called for a reappraisal of the plan, and this was produced in 1959. It was received in July of that year. It showed that the cost of the modernisation plan had risen from £1,240 million to £1,660 million, a fairly big rise, and also that the prospects of a break-even by 1961 or 1962 had fallen to an anticipated overall surplus of £15 million or an anticipated overall deficit of £40 million by 1963. These estimates alone gave us reason to pause.

This was in the summer. The General Election followed, and my right hon. Friend's predecessor made it perfectly clear—I think that he made a statement in the House—that, while the Government were prepared to publish the reappraisal, they should not be accepted as having approved it; it would require a good deal of consideration. It was, however, obvious by the end of 1959 that the financial out-turn would be disappointing, and this caused more doubt to be cast on the figures. We then had the Guillebaud recommendation for 'higher wages, which the Government accepted. We provided £40 million of additional capital to enable the better wages to be paid. The result is that we now have an accumulated deficit of £500 million for the Commission.

That is the history of the modernisation plan as briefly as I can put it. It is only right to say that, when we were faced with this situation, we had to take some action. We began by saying that projects costing more than £250,000 would have to be submitted to the Minister for examination, whether they related to major matters or part of a major scheme, or to isolated major schemes on their own. Secondly, we provided a subsidy of £105 million above the line, a direct charge on the taxpayer.

Thirdly, we set up the Special Advisory Group—the Stedeford Committee, as it is so often and inaccurately called. This group was intended to do no more nor less than advise the Minister on the way In which the Commission's activities could be streamlined to deal with modern problems. It was made perfectly clear to the House and to the country that its investigations and the advice which it gave would be confidential. The whole matter proceeded on that basis. We debated it in this House. The party opposite chose to divide the House on this issue, and it was defeated. In the light of that, we are entitled to say that we were quite right to continue with the procedure which we had laid down.

We then agreed with the Commission that there should be some slowing down in the rate of investment while a fresh look was taken at modernisation. I think that the House wants to know just how severe a brake this slow-down in the modernisation programme has been of recent months. I can give the figures in investment. In 1960 a total of £160 million is provided by the Treasury as investment in the railway industry. In 1961 the figure is £140 million. These are pretty big sums, as the House will see. As a result of these re-examinations, over 70 major projects have already been approved and, as my right hon. Friend announced this afternoon, we have given the Commission the green light for the London-Midland scheme which will cost £175 million in all. We have also just received the Commission's proposals for a phased four-year programme of investment. We got this on 16th December.

Mr. Holt rose—

Hon. Members

Sit down.

Mr. Hay

There is always difficulty in getting this date out. Something always happens to interrupt the announcement, and it is important because my right hon. Friend has been accused of slowing things up. We received the proposals on 16th December and we are giving them the most urgent examination.

As for modernisation, we believe in good modernisation. We have the responsibility of the banker in this and our interest is to see that the taxpayers' money is properly invested. My right hon. Friend is often said to be anti-railway. [HON. MEMBERS: "Hear, hear."] I can tell hon. Members who are making such a noise that my right hon. Friend is not anti-railway, but he is pro-taxpayer, and that is something which should commend itself to the House.

In helping the railways to reach this target, we are providing also a new structure for the various industries controlled at present by the Commission. I find it frankly most piquant that the party opposite, which has always claimed to be the party of progress and reform, has in this context proved itself the most reactionary party that one could imagine. All the speeches that we have heard delivered from the benches opposite have been pleas for the continuation of the present situation while we on this side of the House, the reactionary party as we are sometimes called, are proving by our proposals to be truly progressive, because it has always been the philosophy and the policy of the Conservative Party to adapt, to improve and to alter existing institutions in the light of modern conditions and experience. That is what we are doing in relation to the Commission's undertakings.

It is quite obvious that the present structure just does not work. Our proposals in the White Paper are intended to try to make it work. There are a number of points upon which I should have liked to touch, but there is one of great importance to the decision that the House has to make. It is said by the Opposition, in the Amendment, that what we are doing in the White Paper is to disintegrate the transport system. This, frankly, is not true. What we are seeking to do and what our policy is aimed at is to try to get rid of this monolithic and cumbersome structure which has proved in the past 12 years to be unsuited to the purpose for which it was originally created.

It is perfectly true that one can look back and say that mistakes were made in the past. It is also equally true to say that certain decisions were taken in the past which have proved good ones now, but we have to face the practical realities of the situation. We have to face the fact that the taxpayers' money is being lost at an increasing rate in this organisation. What we have to do is to try to put things right.

Our actions and proposals have been guided throughout by nothing more nor less than the practical realities of the situation. We have sought to propound practical remedies for the problems. We have not been guided by doctrinaire prejudices for or against nationalisation. Our concern has been to find a new framework for these industries which is modern, consistent with their size and importance, and which will work. The nation needs, as we all admit, an efficient and economic transport system, but there is a limit, and must be, to the price which we can ask the taxpayer to pay for it, and in our belief that limit has now been reached.

If there is a criticism which can be made of the Government, it is not, as some hon. Members have said, that we have interfered too much with the activities of the Commission but rather that we held off from taking this sort of decisive action for too long. This is a criticism which is made, and that is the answer to it. If we did hold off, it was because we were anxious not to interfere too much, to give the Commission every opportunity, which we have backed with £600 million of public money, to obtain results and to get itself on its own feet. It is obvious that our attempt has not been successful and the time has come for a new approach.

Hon. Members opposite really must know in their hearts that much of what they have been suggesting in this debate is either unworkable or unreal. I implore them to re-examine their own views on these matters. I do not, of course, claim that every detail of our proposals is perfect—of course it is not—and I do not pretend that we shall not be obliged to modify this or that point as we go forward, but I do claim that the White Paper in its broad outline provides a scheme which takes account of the realities—

Mr. Callaghan

No.

Mr. Hay

—-and tackles them honestly.

My last words in the debate must be these. I hope that out of our debate will come a feeling that the time has arrived for all concerned in these great transport industries to look to the future rather than to the past. This is true not least of the railways, and this applies from the members of the Commission itself right down to the chaps who work on the line. I urge them to put the past behind them and forget the troubles and acrimonies of recent years. After all, there is now an opportunity for a new and substantial co-operative effort to put things right once and for all.

We in the Government are determined to do our part. We have sought in the White Paper to provide a new deal for this great array of transport industries. I believe that, however much hon. Members opposite may jeer and enjoy themselves, and however much they may wish to divide the House, when it comes dawn to brass tacks the ordinary man working on the railway will be glad that at last he will be run by people who really care about the railways and who are much more closely in touch with him and his problems than is unfortunately now the case. I appeal to them and to the House to approve the White Paper in its broad outline and so institute the new deal which I believe is long overdue in our nationalised transport industry.

Question put,That the words proposed to be left out stand part of the Question: —

The House divided:Ayes 303, Noes 221.

Division No. 34.]	AYES	[10.0 p.m.
Agnew, Sir Peter	Black, Sir Cyril	Chichester-Clark, R.
Altken, W. T.	Bossom, Clive	Clark, Henry (Antrim, N.)
Allan, Robert (Paddington, S.)	Bourne- Arton, A.	Clark, William (Nottingham, S.)
Alport, Rt. Hon. C. J. M.	Box, Donald	Clarke, Brig. Terence (Portsmth, W.)
Amery, Rt. Hon. Julian (Preston, N.)	Boyd-Carpenter, Rt. Hon. John	Cleaver, Leonard
Arbuthnot, John	Boyle, Sir Edward	Cole, Norman
Ashton, Sir Hubert	Braine, Bernard	Cooper, A. E.
Balniel, Lord	Brawls, John	Cordeaux, Lt.-Col. J. K.
Barber, Anthony	Bromley-Davenport,Lt.-Col.Sir Walter	Cordle, John
Barlow, Sir John	Brooke, Rt. Hon. Henry	Corfield, F. V.
Barter, John	Brooman-White, R.	Costain, A. P.
Botsford, Brian	Bryan, Paul	Coulson, J. M.
Baxter, Sir Beverley (Southgate)	Bullard, Denys	Courtney, Cdr. Anthony
Bell, Ronald	Bullus, Wing Commander Eric	Craddock, Sir Beresford
Bennett, F. M. (Torquay)	Burden, F. A.	Critchley, Julian
Bennett, Dr. Reginald (Cos & Fhm)	Butcher, Sir Herbert	Crosthwaite-Eyre, Col. 0. E.
Berkeley, Humphry	Butler, Rt.Hn.R.A.(Saffron Walden)	Crowder, F. P.
Resins, Rt. Hon. Reginald (Toxteth)	Campbell, Sir David (Belfast, S.)	Cunningham, Knox
Bidgood, John C.	Campbell, Gordon (Moray & Nairn)	Curran, Charles
Biggs-Davison, John	Carr, Compton (Barons Court)	Currie, G. B. H.
Bingham, R. M.	Carr, Robert (Mitcham)	Dance, dames
Birch, Rt. Hon. Nigel	Channon, H. P. G	d'Avigdor-Goldsmid, Sir Henry
Bishop, F. P.	Chataway, Christopher	Deedes, W. F.
de Ferranti, Basil	James, David	Price, David (Eastleigh)
Digby, Simon Wingfield	Jenkins, Robert (Dulwich)	Price, H. A. (Lewisham, W.)
Donaldson, Cmdr. C E. M.	Jennings, J. C.	Prior, J. M. L.
Doughty, Charles	Johnson, Dr. Donald (Carlisle)	Prior-Palmer, Brig. Sir Otho
Drayson, C B.	Johnson, Eric (Blackley)	Profumo, Rt. Hon. John
du Cann, Edward	Johnson Smith, Geoffrey	Proudtoot, Wilfred
Duncan, Sir James	Jones, Rt. Hn. Aubrey (Hail Green)	Quennell, Miss J. M.
Duthie, Sir William	Joseph, Sir Keith	Ramsden, James
Eden, John	Kaherry, Sir Donald	Redmayne, Rt. Hon. Martin
Elliot, Capt. Walter (Carshalton)	Kerans, Cdr J. S.	Rees-Davies, W. R.
Elliott, R. W.(Newcastle-on-Tyne,N.)	Kerby, Capt. Henry	Renton, David
Emery, Peter	Kerr, Sir Hamilton	Ridley, Hon. Nicholas
Emmet, Hon. Mrs. Evelyn	Kershaw, Anthony	Ritisdale, Julian
Erroll, Rt. Hon. F. J.	Kimball, Marcus	Rippon, Geoffrey
Farey-Jones, F. W.	Kitson, Timothy	Robson Brown, Sir William
Farr, John	Lagden, Godfrey	Rodgers, John (Sevenoaks)
Fell, Anthony	Lancaster, Col. C. G.	Roots, William
Finlay, Gramme	Langford-Holt, J	Rogner, Col. Sir Leonard
Fisher, Nigel	Leavey, J. A.	Boyle, Anthony (Richmond, Surrey)
Fletcher-Cooke, Charles	Lewis, Kenneth (Rutland)	Scott-Hopkins, James
Forrest, George	Lindsay, Martin	Seymour, Leslie
Fraser, Hn. Hugh (Stafford & Stone)	Linstead, Sir Hugh	Sharples, Richard
Fraser, Ian (Plymouth, Sutton)	Litchfield, Capt. John	Shaw, M.
Freeth, Denzil	Longhottom, Charles	Shepherd, William
Galbraith, Hon. T. G. D.	Low, Rt. Hon. Sir Toby	Simon, Rt. Hon. Sir Jocelyn
Gammans, Lady	Lucas-Tooth, Sir Hugh	Skeet, T. H. H.
Gardner, Edward	MacArthur, Ian	Smyth, Brig. Sir John (Norwood)
George, J. C. (Pollok)	McLaren, Martin	Spearman, Sir Alexander
Gibson-Watt, David	McLaughlin, Mrs. Patricia	Speir, Rupert
Glover, Sir Douglas	Maclay, Rt. Hon. John	Stanley, Hon. Richard
Glyn, Dr. Alan (Clapham)	Maclean,Sir Fitzroy (Bute&N.Ayrs.)	Stevens, Geoffrey
Glyn, Sir Richard (Dorset, N.)	McLean, Neil (Inverness)	Stodart, J. A.
Godber, J. B.	Macleod, Rt. Hn, Ia'n (Enfield, W.)	Stoddart-Scott, Col. Sir Malcolm
Goodhart, Philip	MacLeod, John (Ross & Cromarty)	Storey, Sir Samuel
Goodhew, Victor	McMaster, Stanley R.	Studholme, Sir Henry
Gough, Frederick	Macmillan,Rt.Hn.HaroldtBromley)	Summers, Sir Spencer (Aylesbury)
Gower, Raymond	Macmillan, Maurice (Halifax)	Sumner, Donald (Orpington)
Grant, Rt. Hon. William	Maginnis, John E.	Tapsell, Peter
Grant-Ferris, Wg Cdr. R.	Manningham-Buller, Rt. Hn. Sir R.	Taylor, Sir Charles (Eastbourne)
Green, Alan	Markham, Major Sir Frank	Taylor, Edwin (Bolton, E.)
Gresham Cooke, R.	Marlowe, Anthony	Taylor, W. J. (Bradford, N.)
Grosvenor, Lt.-Col. R. G.	Marples, Rt. Hon. Ernest	Teeling, William
Gurden, Harold	Marten, Neil	Temple, John M.
Hall, John (Wycombe)	Mathew, Robert (Honiton)	Thatcher, Mrs. Margaret
Hamilton, Michael (Wellingborough)	Matthews, Gordon (Meriden)	Thomas, Leslie (Canterbury)
Hare, Rt. Hon. John	Maudjing, Rt. Hon. Reginald	Thomas, Peter (Conway)
Harris, Frederic (Croydon, N.W.)	Mawby, Ray	Thompson, Kenneth (Walton)
Harris, Reader (Heston)	Maxwell-Hyslop, R. J.	Thompson, Richard (Croydon, S.)
Harrison, Brian (Maldon)	Maydon, Lt.-Cmdr. S. L. C.	Thornton-Kemsley, Sir Colin
Harvey, Sir Arthur Vere (Macclesf'd)	Mills, Stratton	Tiley, Arthur (Bradford, W.)
Harvey, John (Walthamstow, E.)	Montgomery, Fergus	Tilney, John (Wavertree)
Harvie Anderson, Miss	More, Jasper (Ludlow)	Tweedsmuir, Lady
Hastings, Stephen	Morgan, William	van Straubenzee, W. R.
Hay, John	Mott-Radclyffe. Sir Charles	Vane, W. M. F.
Heald, Rt. Hon. Sir Lionel	Nabarro, Gerald	Vaughan-Morgan, Sir John
Henderson, John (Cathcart)	Neave, Airey	Vickers, Miss Joan
Henderson-Stewart, Sir James	Nicholls, Sir Harmar	Wakefield, Sir Wavell (St. M'lebone)
Hendry, Forbes	Nicholson, Sir Godfrey	Walker-Smith, Rt. Hon. Sir Derek
Hicks Beach, Maj. W.	Noble, Michael	Wall, Patrick
Miley, Joseph	Nugent, Sir Richard	Ward, Dame Irene (Tynemouth)
Hill, Dr. Rt. Hon. Charles (Luton)	Oakshott, Sir Hendrie	Watkinson, Rt. Hon. Harold
Hill, Mrs. Eveline (Wythenshawe)	Ormsby Gore, Rt. Hon. D.	Watts, James
Hill, J. E. B. (S. Norfolk)	Orr-Ewing, C. Ian	Webster, David
HirSt, Geoffrey	Osborn, John (Hallam)	Wells, John (Maidstone)
Hobson, John	Osborne, Cyril (Louth)	Whitelaw, William
Hooking, Philip N.	Page, John (Harrow, West)	Williams, Dudley (Exeter)
Holland, Philip	Pannell, Norman (Kirkdale)	Wills, Sir Gerald (Bridgwater)
Hollingworth, John	Partridge, E.	Wilson, Geoffrey (Truro)
Hope, Rt. Hon. Lord John	Pearson, Frank (Clitheroe)	Wise, A. R.
Hopkins, Alan	Peel, John	Wolrige-Gordon, Patrick
Hornby, R. P.	Percival, Ian	Wood, Rt. Hon. Richard
Hornsby-Smith, Rt. Hon. Patricia	Peyton, John	Woodhouse, C. M.
Howard, Hon. G. R, (St. Ives)	Pickthorn, Sir Kenneth	Woodnutt, Mark
Howard, John (Southampton, Test)	Pike, Miss Mervyn	Woollam, John
Hughes Hallett, Vice-Admiral John	Pilkington, Capt. Sir Richard	Worsley, Marcus
Hughes-Young, Michael	Pitman, I. J.	TELLERS FOR THE AYES:
Hurd, Sir Anthony	Pitt, Mies Edith	M. Edward Wakefield and
Hutchison, Michael Clark	Pott, Percivall	Colonel J. H. Harrison.
Irvine, Bryant Cadman (Rye)	Powell, Rt. Hon. J. Enoch
Jackson, John
NOES
Abse, Leo	Allen, Scholefield (Crewe)	Baxter, William (Stirlingshire, W.)
Ainsley, William	Awbery, Stan	Beaney, Alan
Aibu, Austen	Bacon, Miss Alice	Bellenger, Rt. Hon. F. J.
Altaun, Frank (Salford, E.)	Baird, John	Bence, Cyril (Dunbartonshire, E.)

Blackburn, F.	Howell, Charles A.	Price, J. T. (Westhoughton)
Blyton, William	Hoy, James H.	Probert, Arthur
Bowden, Herbert W. (Lelos, S.W.)	Hughes, Emrys (S. Ayrshire)	Proctor, W. T.
Bowles, Frank	Hughes, Hector (Aberdeen, N.)	Pursey, Cmdr. Harry
Braddock, Mrs. E. M.	Hunter, A. E.	Randall, Harry
Brockway, A. Fenner	Hynd, H. (Accrington)	Rankin, John
Brown, Alan (Tottenham)	Hynd, John (Atterotiffe)	Redhead, E. C.
Brown, Rt. Hon. George (Belper)	Irvine, A. J. (Edge Hill)	Reid, William
Brown, Thomas (Ince)	Irving, Sydney (Dartford)	Reynolds, G. W.
Butler, Herbert (Hackney, C.)	Janner, Sir Bartlett	Rhodes, H.
Butler, Mrs. Joyce (Wood Green)	Jay, Rt. Hon. Douglas	Roberts, Albert (Normanton)
Callaghan, James	Jenkins, Roy (Stechford)	Robinson, Kenneth (St. Pancras, N.)
Castle, Mrs. Barbara	Johnson, Carol (Lewisham, S.)	Ross, William
Chetwynd, George	Jones, Rt. Hn. A. Creech (Wakefield)	Shinwell, Rt. Hon. E.
Cliffs, Michael	Jones, Dan (Burnley)	Silverman, Julius (Aston)
Collick, Percy	Jones, Jack (Rotherham)	Silverman, Sydney (Nelson)
Corbet, Mrs. Freda	Jones, J. Idwal (Wrexham)	Skeffington, Arthur
Craddock, George (Bradford, S.)	Kelley, Richard	Slater, Mrs. Harriet (Stoke, N.)
Cronin, John	Kenyon, Clifford	Slater, Joseph (Sedgefield)
Crosland, Anthony	Key, Rt. Hon. C. W.	Small, William
Crossman, R. H. S.	King, Dr. Horace	Smith, Ellis (Stoke, S.)
Cullen, Mrs. Alice	Lawson, George	Snow, Julian
Darling, George	Ledger, Ron	Sorensen, R. W.
Davies, G. Elfed (Rhondda, E.)	Lee, Frederick (Newton)	Soskice, Rt. Hon. Sir Frank
Davies, Ifor (Gower)	Lever, Harold (Cheetham)	Spriggs, Leslie
Davies, S. O. (Merthyr)	Lever, L. M. (Ardwick)	Steele, Thomas
Deer, George	Lipton, Marcus	Stewart, Michael (Fulham)
de Freitag, Geoffrey	Logan, David	Storehouse, John
Delargy, Hugh	Loughlin, Charles	Stones, William
Dempsey, James	Mabon, Dr. J. Dickson	Strauss, Rt. Hn. G. R. (Vauxhall)
Diamond, John	McCann, John	Strass,Dr.Barnett(Stoke-on-Trent,C.)
Donnelly, Desmond	MaoColl, James	Swain, Thomas
Driberg, Toni	Mclnnes, James	Swingler, Stephen
Ede, Rt. Hon. Chuter	McKay, John (Wallsend)	Sylvester, George
Edelman, Maurice	Mackie, John	Symonds, J. B..
Edwards, Rt. Hon. Ness (Caerphilly)	McLeavy, Frank	Taylor, Bernard (Mansfield)
Edwards, Robert (Bilston)	Mallalieu, E. L. (Bragg)	Thomas, George (Cardiff, W.)
Edwards, Walter (Stepney)	Malialieu,J.P.W.(Huddersfield,E.)	Thomas, Iorwerth (Rhondda, W.)
Evans, Albert	Manuel, A. C.	Thompson, Dr. Alan (Dunfermline)
Fernyhough, E.	Mapp, Charles	Thomson, G. M. (Dundee, E.)
Finch, Harold	Marquand, Rt. Hon. H. A.	Thornton, Ernest
Fitch, Alan	Mayhew, Christopher	Thorpe, Jeremy
Fletcher, Eric	Mendelson, J. J.	Timmons, John
Foot, Dingle (Ipswich)	Milian, Bruce	Tommy, Frank
Forman, J. C.	Milne, Edward J.	Ungoed-Thomas, Sir Lynn
Fraser, Thomas (Hamilton)	Mitchison, G. R.	Wade, Donald
Gaitskell, Rt. Hon. Hugh	Monslow, Walter	Wainwright, Edwin
Galpern, Sir Myer	Moody, A. S.	Warbey, William
Ginsburg, David	Morris, John	Watkins, Tudor
Gooch, E. G.	Mort, D. L.	Weitzman, David
Gordon Walker, Rt. Hon. P. C.	Moyle, Arthur	Wells, Percy (Faversham)
Gourlay, Harry	Neal, Harold	Wells, William (Walsall, N.)
Greenwood, Anthony	Noel-Baker, Francis (Swindon)	White, Mrs. Eirene
Grey, Charles	Oliver, G. H.	Whitlock, William
Griffiths, Rt. Hon. James (LianaIly)	Dram, A. E.	wigg, George
Griffiths, W. (Exchange)	Oswald, Thomas	Wilcock, Group Capt. C. A. B.
Grimorid, J.	Owen, Will	Willey, Frederick
Gunter, Ray	Padley, W. E.	Williams, D. J. (Neath)
Hall, Rt. Hon. Glenvil (Colne Valley)	Paget, R. T.	Williams, LI. (Abertlliery)
Hamilton, William (West Fife)	Pannell, Charles (Leeds, W.)	Williams, W. R. (Openshaw)
Hannan, William	Pargiter, G. A.	Willis, E. G. (Edinburgh, E.)
Hart, Mrs. Judith	Parker, John (Dagenham)	Wilson, Rt. Hon. Harold (Huyton)
Hayman, F. H.	Parkin, B. T. (Paddington, N.)	Winterbottom, R. E.
Healey, Denis	Pavitt, Laurence	Woodburn, Rt. Hon. A.
Herbison, Miss Margaret	Pearson, Arthur (Pontypridd)	Woof, Robert
Hewitson, Capt. M.	Peart, Frederick	Wyatt, Woodrow
Hill, J. (Midlothian)	Pentland, Norman	Yates, Victor (Ladywood)
Hilton, A. V.	Plummer, Sir Leslie	Zilliacus, K.
Holman, Percy	Poppleweil, Ernest	TELLERS FOR THEE NOES:
Holt, Arthur	Prentice, R. E.	Mr. Rogers and Mr. Short.
Houghton, Douglas

Main Question put and agreed to.

Resolved,

That this House approves the proposals of Her Majesty's Government for the reorganisation of the Nationalised Transport Undertakings (Command Paper No. 1248).