TRANSPORT BILL

HC Deb 20 November 1961 vol 649 cc930-1060

Order for Second Reading read.

3.34 p.m.

The Minister of Transport (Mr. Ernest Marples)

I beg to move, That the Bill be now read a Second Time.

I think that it will be for the convenience of the House if I say which Government speakers will take part in the debate. Tonight, my hon. Friend the Parliamentary Secretary will wind up the debate; tomorrow, the Financial Secretary will open the debate and will concentrate, naturally, upon the financial provisions, and tomorrow night my right hon. Friend the Home Secretary will finally wind up the debate.

Mr. Thomas Steele (Dunbartonshire, West)

On a point of order. Am I to understand from what the Minister has just said, Mr. Speaker, that a Scottish Minister will not take part in the debate?

Mr. Speaker

I regret to say that I did not hear what the Minister was saying, because I was engaged on other business.

Mr. Marples

The hon. Member is quite right; a Scottish Minister will not take part.

The Bill deals with the reorganisation of the British Transport Commission.

Mr. Scholefield Allen (Crewe) rose—

Mr. Marples

I do ask for the indulgence of the House. This is a very large Bill, and it will take a long time to explain.

It is a major Bill, of some length and complexity, but its main provisions were in the White Paper which was approved by this House last January. There is no doubt that the heart of the problem is British Railways. They are in serious financial trouble. Last year, their gross receipts were £478 million, but they spent £546 million, leaving a loss of almost £70 million on revenue account alone, which is 15 per cent. on turnover. But there are other problems as well. For example, the canals are not viable in their present form.

Mr. Hector Hughes (Aberdeen, North)

Do the figures to which the Minister has referred include Scotland?

Mr. Marples

They include the whole of British Railways.

Mr. Hughes

Then why is not a Scottish Minister taking part in the debate?

Mr. Marples

Canals are not viable in their present form. The docks are being inquired into by the Rochdale Committee. London Transport also has special problems.

To all these questions there is no easy or quick solution, but it is quite clear what must come first. The task of running all these activities at present is too big a job for any single authority. The British Transport Commission is overloaded with work. Reorganisation, financial reconstruction, and a different climate of operation are urgently needed. To provide for these is the purpose of the Bill.

Even though there are 91 Clauses and 142 pages, three clear principles run throughout the Bill. The first is that each main field of the Commission's present activities must be placed under a separate authority. Each authority must have clearly-defined responsibilities and be equipped to concentrate on its own set task.

The second principle is that each of the new undertakings must have a separate financial constitution and identity. Each will, therefore, be vested with its own assets and be responsible for its own capital debt and financial performance. The third principle is that there must be greatly increased commercial freedom. This will not come about only from organisational changes: outdated statutory restrictions must be removed. There must be greater freedom to fix prices, and there must be more scope to develop and make the best use of publicly-owned assets.

I now come to the new structure, set out in Part I. British Railways, London Transport, Inland Waterways, and British Transport Docks will each be a separate statutory authority, with appropriate powers and duties. The rest of the Commission's undertakings are different, because they are ordinary commercial companies operating road haulage, buses, shipping and travel agencies. They are generally in competition with similar companies in private hands.

Mr. Hector Hughes

On a point of order. This is very important. Here is the Minister, opening a debate dealing with the whole of these islands, and telling us that a Scottish Minister is not to speak. I want to know whether Scotland is to have a separate authority—whether one of the authorities to which the Minister is now referring will be a separate authority for Scotland.

Mr. Speaker

On the matter of the point of order, if the Minister does not give way the hon. and learned Member may not remain upon his feet.

Mr. Hughes

Surely the Minister should give way, Sir.

Mr. Speaker

As for the rest of the hon. and learned Member's intervention, in the interests of the House and in view of the fact that other hon. Members desire to speak, I venture to put forward the view that we should get on better with fewer interruptions.

Mr. Hughes

But is not there an anomaly in a situation where a Minister is dealing with a Bill referring to the whole of these islands and has said explicitly that a Scottish Minister will not speak? Surely he should give way in order to deal with that point.

Mr. Speaker

I hope that the hon. and learned Member will not usurp the time of the House by urging, in the form of a pretended point of order, that which does not raise a point of order.

Mr. A. C. Manuel (Central Ayrshire)

Does the Minister appreciate that there is very deep feeling in Scotland at the fact that over 200 trains are being withdrawn and many branch lines threatened with closure? Can he give us some Scottish figures so that some of us will be able to talk intelligently to our constituents on the matters he is dealing with?

Mr. Marples

If I were allowed to make my speech it might be found that I shall be mentioning something about Scotland. I did not wish to mention this point, but perhaps I may point out that the Opposition do not have a Scottish Front Bench speaker for this debate. Therefore, I do not think that it lies with the Opposition to criticise the Government in that respect. [Interruption.] The Leader of the Opposition is making sedentary interruptions, but he has not arranged for a Scottish Opposition Front Bench speaker.

Mr. Manuel

How does the right hon. Gentleman know that?

Mr. Marples

Because I have been given the list of hon. Members who are to speak from the two Front Benches.

Mr. Hugh Gaitskell (Leeds, South)

Does the Minister realise that it is not the Opposition who are responsible for closing down all these lines in Scotland?

Mr. Marples

The right hon. Gentleman is being too disingenuous. If he had Scottish interests at heart he would have arranged for one of the Opposition Front Bench speakers to be a Scotsman. All the Front Bench speakers represent English constituencies, one being on the North-East Coast. There is nobody from Scotland. It is clear that some of the complaints ought to be directed against the Leader of the Opposition.

Mr. James Callaghan (Cardiff, South-East)

We ought to try to dispose of this point now. The Leader of the House will be aware by now that there is a feeling that a Scottish Minister should speak, as I think the Leader of the House will find he has spoken on previous occasions.

May I put this point to the Leader of the House and to the Minister of Transport? The present Secretary of State for Scotland is a former Minister of Transport. There can be no one who knows better than he what the effect of this Bill will be in Scotland. May I, therefore, repeat the plea that we should hear from the Secretary of State for Scotland what the effect of the Bill will be on Scotland?

Mr. David Price (Eastleigh)

Mr. Speaker, could you confirm that an Act of Union was passed about two centuries ago? I raise this because we are too frequently subjected to these sorts of interruptions which upset the flow of debate. Surely we are now one kingdom.

Mr. Speaker

I suspect that points of order which are not points of order are a nefarious form of interruption.

Mr. William Ross (Kilmarnock)

Further to that point of order. Did not the Act of Union guarantee certain rights to Scotland?

Mr. Speaker

It was not a point of order, so there is nothing further to it as a point of order.

Mr. Hector Hughes

On a point of order. Mr. Speaker, you will be aware that the question of the rights of front benchers as against back benchers was raised with you the other day. Is it not anomalous that the Minister should give way to one of our front benchers and refuse to give way to back benchers?

Mr. Speaker

If the hon. and learned Member again rises to a point of order which is not one, I shall be compelled, in the protection of the common interests, to consider my disciplinary powers.

Mr. Marples

If I may be allowed to continue, I was talking about the ordinary commercial companies.

Mr. Callaghan

Will the Minister allow me to interrupt him again, to press this matter? There is a genuine feeling about this. All I ask at this stage is that the Minister should consult the Leader of the House and tell us later today whether we are to hear from the Secretary of State for Scotland on this important matter?

Mr. Marples

My right hon. Friend the Leader of the House is present and will no doubt have heard the exchanges which have been going on.

Mr. Callaghan rose—

Hon. Members

Order.

Mr. Speaker

If the Minister does not give way, the hon. Gentleman must resume his seat.

Mr. Callaghan

I fully realise that, Mr. Speaker, but—

Hon. Members

Order.

Mr. Marples

I think that it would be the general wish of the House that I should continue.

The ordinary commercial companies, which operate road haulage, buses, shipping, and travel agencies, are similar to the private companies in the same fields. I think that they would thrive best in a commercial climate which is the same as that of their private enterprise competitors. Therefore, these commercial companies will be grouped under a Holding Company which will operate, as Clause 29 says, as if it were a company engaged in a commercial enterprise". I now propose to deal with each of the four statutory boards and then with the Holding Company. I shall try to show the way in which my three principles apply to them. I will deal, first, with British Railways. Preparing the Bill has made me more than ever convinced that the railways should be controlled and managed by an authority solely devoted to them. This was the conclusion at which a Select Committee arrived. The new British Railways Board must be free to concentrate on those matters vital to the railways as a whole. The Board will, however, need to be relieved of the pressure of those day-to-day matters of management and operation which can best be carried out down the line. That is why Clause 2 provides for regional railway boards.

Let me get one point quite clear. In practice, getting the right balance between central control and effective devolution of authority is not an easy matter. The central Board must control directly those matters which are vital to the railways as a whole—for example, national wages negotiations, price policy, investment, modernisation, and the purposeful reshaping of the railway system. On the other hand, there must be some effective devolution—quite a lot, in fact. This will free the central Board for its main task and it will also give management and workers responsibility and opportunity.

I am positive that it would be wrong to write into a Bill a rigid definition of the relative responsibilities of the central Railways Board and the regional railway boards. There really must be flexibility and not a rigid blueprint. But one thing is clear. The central Railways Board must decide what it will delegate to the regions and when. Therefore, the Bill so provides, subject only to the general approval of the Minister.

We must bear in mind that although the new Board is taking over a unified system of railways, the shape and balance of this system is not under the Bill fixed and rigid for all time. The future of British Railways depends upon its ability to adopt itself to modern circumstances. As the Prime Minister indicated on 10th March last year, sweeping changes will be needed. The duty to be placed upon the Railways Board has been drawn with this in mind.

This Board will also be responsible for other services closely connected with railways operations, such as the railway collection and delivery services, the packet ports and those shipping services which are really extensions of the railways. All these will continue to be treated as part of the railway system. The Board will also inherit certain other powers contained in existing legislation. But these powers must not lead to the development of services not necessary for the efficient conduct of the railways as a whole. Therefore, their use beyond their present point will be subject to the Minister's consent.

One of the ancillary activities will, after all, be hotels.

The White Paper proposed that hotels should be placed in a separate company under the Holding Company. Further study has shown that the balance of advantage lies in putting the hotel company under the Railways Board. Not only are some hotels bound up physically with the railway system, but economies can be secured by running the hotels alongside the railway catering services. The hotels will still be separately incorporated with their own set task. Thus we shall, amongst other things, be able to assess their financial performance.

I turn now to commercial freedom. All fares and charges, except for passenger fares in London, will be removed from the control of the Transport Tribunal. Railways, like most industrial enterprises, will now, in the main, be free to shape their own commercial and price policy. They will also be freed from a number of statutory restrictions and obligations, which oblige them to provide certain facilities and services regardless of whether they pay. The railways will also be freed from their common carrier liabilities. They will also have new powers to make better use of their assets.

At present, they cannot develop their land for sale or lease. Therefore, the Bill provides that not only the Railways Board but also the other boards shall be able to develop land which is not required for the purposes of their business. This does not mean that the railways will be able to go in for general property development on a scale likely to distract them from their main task. A formidable task faces them. They will not be able to acquire additional land for general development by compulsory purchase, and they will need the Minister's consent to any substantial expenditure.

The Railways Board—and the other boards—may construct and operate pipelines on their own property and also on the property of the other boards. Railways and Inland Waterways possess between them long stretches of land very suitable for pipelines. But the development and operation of pipelines is to be the subject of general legislation. Therefore, the exercise of this power will be subject to the consent of the Minister.

I now turn to London Transport. Clause I of the Bill provides that there is to be a quite separate authority. Its task, set out in Clause 7, is .. to provide or secure the provision of an adequate and properly co-ordinated system of passenger transport.. for the London area. This is a big job and surely merits a separate and independent organisation.

The main operating pattern of London Transport was laid down in 1933. It would be wrong not to have considered at this juncture whether any changes are necessary in the interests of the travelling public. I have reached the conclusion that the main running powers of London Transport should continue as at present and that the London passenger transport area should remain un-changed. But at present the London Transport Executive operates beyond that area, although within established limits. These services may continue but, of course, however, within these established limits passenger demands may change.

Therefore, the Bill provides that the Board shall have rather more freedom to seek the approval of the Traffic Commissioners to meet new public needs, subject always to suitable protection for other operators. In addition, if there are really exceptional circumstances, the Minister will have power to enable the new Board to seek authority from the Traffic Commissioners for particular extensions of its services.

On the other hand private operators to whom the Board has refused consent to run in the London area will now have a right of appeal to the Metropolitan Traffic Commissioner. To get fuller use from London's buses in the general public interest, the Bill enables the Board to hire out to other operators any buses temporarily surplus to requirements. But, of course, it may not build up a special fleet for this purpose.

Mr. Manuel

I appreciate that powers are being taken under Clauses 7 and 8 to get a properly co-ordinated transport system, mainly for the London area. But is the Minister sure that under the regional boards he is giving enough power to get a properly co-ordinated system in the other areas of the country?

Mr. Marples

I think so, but it will become apparent when I come to deal later with the other boards.

Turning now, to the British Transport Docks Board, the docks to be placed under the Docks Board are, in the main, those other than the packet ports which are going to the railways. The new Board will thus run 32 ports, of all shapes and sizes, equivalent to one third of our total port capacity.

The new Board will devote itself to the task of operating its ports to the best advantage and dealing with the problems which each presents. Like the independent ports, the Transport Commission's docks are the subject of a major inquiry by the Rochdale Committee, which is going into the subject of docks throughout the country and which may have important things to say about their future. To that extent the provisions in the Bill can be regarded as a holding operation. But they also provide for an organisation which could continue indefinitely.

There is still, more or less, an element of monopoly about ports in relation to the areas and the traffic which each serves. There will, therefore, need to be control over the charges made by the new Docks Board. The independent ports are, of course, subject to control over their charges, but under a different system from that which has hitherto applied to the Transport Commission's ports. Under this system, which has worked well, the independent ports are able to increase their charges, either by securing the necessary authority from the Minister or from Parliament by private legislation. The Bill proposes that control over charges made by the new Docks Board's ports should, in future, be similar to that at the independent ports. Therefore, the present control by the Transport Tribunal will disappear.

I remind the House that the Bill is to reorganise the activities of the Transport Commission and not to solve the general problems of canals. Nevertheless, the Bill contains important provisions for inland waterways. Clause 1 sets up a separate public authority to be called the Inland Waterways Authority. Its duty is not only to provide inland waterways services and facilities where expedient, but also—and this is really important—to formulate proposals for putting to the best use canals no longer required for transport. The Authority must also take all steps open to it to carry out such proposals, including, where necessary, the promotion of private legislation.

This means that for the first time the nationally owned canals are to be under a single Authority with an express duty of turning them to the best account. I must make it clear, however, that the new Authority's duties may well involve the closure of canals, or their conversion or disposal if, thereby, the burden on the taxpayer can be relieved.

Secondly, the Authority will have more adequate power than the Transport Commission had to sell surplus water from its canals. This is a useful source of revenue and one that can be increased. This is important since the Waterways Authority may receive up to £10 million assistance on revenue account from the Exchequer during the next five years.

Thirdly, I must refer to those canals which had become unnavigable before the beginning of last May. For a period of five years from the passing of the Bill the new Authority will be protected from proceedings designed to compel it to restore these canals to navigable condition. This is necessary to give the new Authority a fair start. Fourthly, the new Authority, like the railways, will be freed from control over its canal charges and from its common carrier obligations.

The statutory Holding Company is a novel concept. I do not think that it is any worse for that. As I have already made clear, the activities to be placed under the Holding Company are of a different character from those of the other four new bodies. All of these will need guidance, as well as opportunity, if they are to operate efficiently and do their best for the public purse. This need will be supplied by the Holding Company.

It is necessary, too, to reconcile the commercial and operating freedom of this group with the need for adequate accountability to the Minister—from whom the Holding Company may borrow—and to Parliament. The public assets involved are large—about £140 million. It would not have been appropriate, in view of their character, to group these companies under an ordinary statutory board. On the other hand, it would clearly not be suitable to vest them directly in the Minister. After much reflection, the Government have reached the conclusion that the Holding Company is best incorporated as a statutory company.

The Minister will be able from time to time to give directions to the board of directors of the Holding Company. In practice—this is very important—this is no different from what the Minister would be able to do as sole shareholder if the company were incorporated under the Companies Act. This does not mean, and it must not be taken to mean, that it is the intention that the Minister should actively intervene in the management and operation of the Holding Company. This would be entirely contrary to the purpose for which this organisation is to be set up. But, in view of the considerable public assets involved, I do not think that the Minister should have less power over this Holding Company than he would have had as sole shareholder had it been incorporated under the Companies Act.

The objects and powers of the Holding Company are defined rather carefully in Clause 29—

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

The point which the Minister has just made about the Holding Company is very important. Since he is taking so many other powers in the Bill, if the Holding Company wishes to subscribe for, take, acquire and hold, exchange and sell securities of companies why is it not subject to his consent or approval? Why is it a separate matter when it comes to selling?

Mr. Marples

That is an ordinary power which a holding company has. It is a power which the Transport Commission has. It is no different from what the Commission has or from what the party opposite put in its Transport Bill in 1947. I should have thought that that was a quite respectable precedent.

Mr. Popplewell

Will the right hon. Gentleman give way again?

Mr. Marples

No. I have still quite a lot to say. The hon. Gentleman will be winding up for the Opposition tonight and my hon. Friend the Parliamentary Secretary will be able to deal with that point in a rather more orderly way than I can by question and answer at this stage.

As I have said, the objects and powers of the Holding Company are defined rather carefully in Clause 29, but it might be necessary, in the light of experience, to make adjustments to them. I therefore thought it right to provide in the Bill for this to be done by order of the Minister, although, of course, subject to an affirmative Resolution of Parliament. This gives Parliament the power to say what it thinks if the Minister wishes to change the duties of the Holding Company.

I must now deal with the financial provisions of the Bill which implement the second of my three principles, the financial one. The Financial Secretary to the Treasury will explain this at greater length tomorrow, but there is something which must be said now. The financial provisions have two main purposes. The first is to provide each of the new statutory boards and the Holding Company with its own separate financial constitution, its own responsibilities for its own capital debt, and a financial duty. The second is to relieve the railways of a burden of debt which they can never hope to carry and so lay the foundations for financial recovery.

To meet the first purpose, each of the statutory boards, like other nationalised industries, will have a duty to pay its way. The task of the Holding Company will be to secure the best possible results for the public purse. During the first five years, however, neither the Railways Board nor the Inland Waterways Authority is likely to be able to discharge its duty in full. Therefore, during this period the full duty will not apply to either of these boards. The Railways Board will be required to put itself in a position to pay its way as soon as possible. The Inland Waterways Authority will be under an obligation to keep its deficit as low as possible.

The financial reconstruction under which it is hoped to achieve the second main purpose follows, in principle, the White Paper scheme. The total capital debt of the Commission which we have to deal with is about £2,450 million. Of that £2,450 million, about £475 million of accumulated losses will be written off as a bad debt. This leaves about £1,975 million as a capital debt to be divided among the new undertakings. Roughly £1,575 million will be attributed to the British Railways Board and £400 million to the other activities.

The railway debt of £1,575 million will be further sub-divided into two parts. The first part will be a doubtful debt of about £650 million to £700 million. This corresponds broady to the written down book values of the pre-1956 assets. It is to be put into suspense account and will bear neither interest nor repayment obligations for the time being. The second part is about £900 million. This corresponds to the written down value of assets acquired since the end of 1955, largely for railway modernisation. It will bear interest and be repayable.

All the figures that I have given are the result of more precise calculation than was possible in the White Paper, which was based on the 1959 position. But they are still only approximate. The House will have noticed some important changes from the White Paper figures, notably in the amount of the railway interest-bearing debt, which, of course, takes into account the large expenditure on modernisation between 1959 and the end of 1962. Broadly, the railways will be relieved of an interest of £35 million a year on a debt of about £1,150 million. The Exchequer will now bear this burden.

Even after this financial reconstruction, the Railways Board will still face a formidable task. It will have to meet interest of about £65 million a year. Naturally, as it borrows still more money for capital investment, those interest charges will increase. But, even without taking account of interest charges, the operating deficit of the railways is now running at about £80 million a year. The new Board's mammoth task—and it is a mammoth task—is, first, to wipe out this operating deficit, and, secondly, to earn a surplus sufficient to cover interest.

It is too soon to forecast the Board's prospects, but it is clear that it would be unrealistic to expect a dramatic and early improvement. Therefore, Clause 22 empowers the Minister to make grants or loans to meet revenue deficits up to a total of £450 million over a five-year period. I should not like the figure of £450 million to be regarded as a firm forecast. It is the best estimate that can be made at present, and, even so, it assumes very substantial progress towards viability over the next five years.

These financial proposals were framed to give the Minister and the House a chance of looking again in future at what was happening. In a year's time we shall be able to have another look at the matter, for this reason. The Commission is now engaged in a vitally needed series of traffic studies. When they are completed in about a year's time I will be be able to get a clearer picture of the prospects. I then intend to review the situation and to settle with the railways targets of financial performance.

In another two years' time there will be a further opportunity for the Government and Parliament to review the position of the railways, because the borrowing power under the lower limit of £1,100 million in Clause 19 will then be running out and can only be exceeded by means of an Order approved by the House. This has been done purposely so that the House will have an opportunity in a couple of years' time to debate the situation.

Finally, after five years the upper limit of £1,400 million on borrowing powers is expected to be used up, and, at the same time, the power to provide subsidies on revenue account up to £450 million will expire. There will then be an opportunity for a full review of the financial position and prospects of the railways. I thought it important to try to frame the technique of these financial proposals so that the House would automatically have an adequate opportunity of debating them in the next few years.

This reorganisation means dismantling machinery set up in 1947 for integration, which, in fact, never took place. [HON. MEMBERS: "Why?"] It never took place and, if I may say so, it does not really lie in the mouths of hon. Members opposite to ask why. [HON. MEMBERS: "What about C-licences?"] They must search their own hearts because they brought in the Act.

Mr. Callaghan

The Minister and his lion. Friends never gave it a chance.

Mr. Marples

The provision for C-licences was not made by this side of the House, but by that side. Right hon. and hon. Members opposite sold integration down the river in 1947. It may well be that Mr. Alfred Barnes at that time was responsible for it. It was not this side of the House which was responsible for it. He gave way to pressure from certain outside interests on the question of C licences. I do not say whether he was right or wrong in that, but he did.

Mr. R. Gresham Cooke (Twickenham)

The co-operatives.

Mr. Marples

It may have been the co-operative societies at the time, as I hear someone behind me say. I can only say that Mr. Barnes did give way to pressure.

There will be co-ordination, but not integration, which would mean dictatorship by the Government of what the customer should use. There are, however, limits in regard to co-ordination to what can be achieved by legislation. In practice, co-ordination is achieved in two main ways. First, there is co-ordination of policy and investment. Secondly, there is co-ordination of operation and management and services.

Co-ordination of policy and investment must be the responsibility of the Minister. He is responsible to Parliament. He sees the wider transport field and has functions beyond the nationalised sector. To help him in this task there is to be under the Bill a Nationalised Transport Advisory Council. The chairman of the four main Boards and of the Holding Company will be among the members.

Further, there are very important opportunities for co-ordination in day-to-day operation and management, and some special provisions for this have been made in the Bill. Notably, both the Railways Board and the London Board are placed under a duty by Clauses 3 and 7 to co-ordinate their services in London. The Bill also provides for working agreements between the new undertakings, including the Holding Company.

I turn now to coastal shipping, which was mentioned by the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes), who, I regret to say, is not now in his place to listen.

Mr. Ross (Kilmarnock)

I do not blame him.

Mr. F. Noel-Baker (Swindon)

Before the Minister leaves that point—

Mr. Marples

I am sorry. I did say that I had a long speech to make. The Parliamentary Secretary and two other Ministers will be able to reply later.

Mr. Noel-Baker

What about the Minister's own personal position in relation to the House?

Mr. Marples

I know that some hon. Members, and particularly the hon. and learned Member for Aberdeen, North, who showed a great deal of indignation about half an hour ago, are worried about coastal shipping. No doubt, the hon. and learned Gentleman will be able to read in HANSARD tomorrow what I have said.

Some people are worried lest the railways take advantage of their new commercial freedom to compete unfairly with coastal shipping, particularly in the carriage of coal. I want to put the problem in the right perspective. At present, the railways carry 148 million tons of coal per annum. Coastal shipping carries 17 million tons, and of the 17 million tons 8 million, nearly half, are carried in the ships of other nationalised industries, the remaining half being carried in coastal shipping owned by private enterprise. I have mentioned those figures to put the scale of the problem in its right perspective.

The coastal shippers are concerned about two possibilities. The first is that the railways will use their subsidised position to undercut the shippers' charges on long hauls. This is a legitimate worry, and the Bill provides a remedy. If there is reason to believe that the railways are not at least covering their costs by the charges for, say, carrying a consignment of coal from Tyneside to London, then the Minister may hold an inquiry as a result of which he can issue a direction to the railways. The coastal shippers want also to be protected against an overcharge by the railways on short hauls, that is to say, the carriage of coal from pithead to the ports. They suggest that the railways might charge so much that the coal would never get to the ports at all. This is a more difficult problem.

I do not want to start the railways off on their commercial freedom with a restriction designed to protect one particular industry, because many other industries have asked for protection. Nor do I wish to create a situation in which the railways are, in effect, forced to keep their charges too low, lower, in fact, than the traffic would bear, because this would really give a concealed subsidy to the coastal shipping industry.

The problem is difficult. Since the publication of the Bill, I have received certain representations. I have arranged for meetings between representatives of the two sides, coastal shipping and the railways, first, together, and, next, I propose to meet both of them and act as chairman. In the light of these discussions, the Government will decide whether any further action is necessary by legislation or in some other way.

I turn now to the provisions affecting transport users. First, London. Here the Railways Board and the London Board will together exercise a sizeable monopoly. Therefore, provision is made for the Transport Tribunal to continue controlling London's fares. There is, however, a change from the present "quick" procedure for emergency increases in London fares. Clause 48 provides a quick procedure whereby London's fares can be raised by the boards, with subsequent justification to the Tribunal. This will apply where either costs have risen or revenues have fallen and the situation must be met quickly.

In future, the Transport Tribunal's work will be almost entirely taken up with London fares control and road haulage appeals. Clause 58 reshapes the Tribunal accordingly. In future, it will sit in two divisions, one for each of its main tasks. Incidentally, these new arrangements should help to expedite business, which is a concern of one of the local authorities which I saw.

Mr. Hector Hughes rose—

Hon. Members

The hon. and learned Gentleman was not here.

Mr. Hughes

On a point of order, Mr. Speaker. I understand that the Minister took advantage of my momentary absence from the Chamber to refer to what I said to him earlier. In fairness, he ought, surely, to give way now.

Mr. Speaker

I invite the hon. and learned Gentleman to consider what is and what is not a point of order. That is not a point of order.

Mr. Ross

The Minister should give way.

Mr. Marples

I come now to the transport users' consultative committees and uneconomic services. There are new arrangements for the transport users' consultative committees. They will continue to deal with the quality of services provided by the boards. The main change concerns the withdrawal of unremunerative railway services. The only proposals of this kind now to be left with the consultative committees are those for the complete withdrawal of railway passenger services from both lines and stations.

To expedite proceedings and thus avoid costly delay the Central Transport Consultative Committee will no longer take part. The area committees will report direct to the Minister on the degree of hardship to passengers which they judge might be entailed. Also, they will be able to report on any proposals which they may have for mitigating the hardship. The Minister will then decide whether such passenger services should be closed down.

The partial reduction of railway passenger services and, indeed, withdrawals and reductions of freight services are another matter. I do not think that social considerations are so much an issue here.

Mr. F. H. Hayman (Falmouth and Camborne) rose—

Mr. Marples

The factors involved are principally within the field of management and operating and commercial policy. On the other hand, trade and industry made it clear to me that it would greatly help them if adequate advance notice could be given as far ahead as possible of any proposals for the discontinuance of railway services, whether for goods or for passengers.

Clause 55, therefore, provides for this. Perhaps I might be permitted to say that I think that in the past the Transport Commission has not given adequate notice to the public of its intentions as a whole. Those intentions have been given rather piecemeal.

So far, we have talked about the new organisation. Before I end, I should like to say some words of reassurance to the present staff of the Transport Commission—

Mr. Hayman

Before the Minister leaves—

Mr. Marples

I am sorry—the hon. Member will no doubt catch your eye, Mr. Speaker.

So far, we have talked about—

Mr. Percy Collick (Birkenhead)

On a point of order, Mr. Speaker. May I direct your attention to the fact that the Minister has been reading his speech almost from the time he started. Is it in order for a Minister to read his speech?

Mr. Speaker

One has to give some indulgence, I think, to a Minister introducing a long Bill of this kind. I am sure that the hon. Gentleman, when that affliction comes upon him, will be grateful for that indulgence.

Mr. Collick

I have occupied the Ministerial Bench, Mr. Speaker but I did not make a practice of reading my speeches.

Mr. Callaghan

Further to that point of order, Mr. Speaker. Perhaps I may draw your attention to previous Rulings in which Mr. Speaker has deprecated the reading of speeches page by page, whether by Ministers or others.

Mr. Speaker

Some balance should be entertained in this matter. It must be remembered that in the case of a Minister, perhaps introducing some long Bill, it might even make for brevity if he were to have some indulgence.

Mr. Callaghan

May I take it, Mr. Speaker, that we are now in the presence of a new Ruling; and that it is in order for a Minister to read his speech page by page and word by word from beginning to end?

Mr. Speaker

I have not said that. I think that the general principle is that the House is prepared in these circumstances to allow a Minister to have what are called copious notes. Some people are more skilled than others in using a copious note word for word without the appearance of reading.

Mr. Hector Hughes

Further to that point of order, Mr. Speaker. You used the word "some"; you said that a speaker is entitled to "some indulgence." Surely that does not mean that a Minister may read his speech from beginning to end, and refuse to give way when he is asked to give way.

Mr. Speaker

I make no pronouncement whatsoever about giving way. It is not a point of order. I hope that the hon. and learned Gentleman will be able to remember that for the future. What I said about dealing with copious notes the hon. and learned Member will find in HANSARD.

Mr. Manuel

Further to that point of order. It does appear to several hon. Members that something new is being introduced by your Ruling today, Mr. Speaker. You have said that it would be allowable for a Minister introducing a Bill of this size, or a larger Bill, to make a greater reference to copious notes, but this is going much beyond that. Do I take it that your Ruling today will apply to back benchers who are equally bending their minds to understand large Bills?

Mr. Speaker

No.

Mr. Marples

I think that hon. Members know me well enough to understand that I would rather much deliver a speech without notes at all, because I enjoy myself better. At the same time, in the interests of trying to cover all the points lucidly and comprehensively, I prepared my notes today more fully than usual. I am quite prepared, if hon. Members want me to, to make a speech without any notes, but the point is that I am trying to give hon. Members general information they would want when dealing with the Bill—[Interruption.] The questions raised by the hon. Member for Cardiff, South-East (Mr. Callaghan) from a sedentary position are so ridiculous that they are not worth answering—

Mr. Callaghan rose—

Mr. Speaker

Order.

Mr. Callaghan

I rise on a point of order here, Mr. Speaker. It has been made most difficult for us this afternoon—as I think you will agree—because the Minister has consistently refused to give way and now takes objection to interruption from a sedentary position. He tells us he wishes to read his speech because he wants to give us certain information. As I understand the purpose of debate, it is that we should be able to ask for information, too, on a number of extremely important points, which we have been unable to do because the Minister has read his brief page by page from beginning to end. May I ask for your protection for the normal rights of the House in dealing with an important Bill like this?

Mr. Speaker

I think that we manage in an ordinary way by having speeches, usually on one side and then on the other, but I do not think that we take the view that constant interventions and interruptions contribute to debate. I think that it might perhaps be better if we were to get on, and allow the Minister to complete his speech. Those right hon. and hon. Gentlemen who speak thereafter from the opposite side will no doubt be able to demand in their speeches explanations of the points they wish to raise.

Mr. Callaghan

Further to that point of order, Mr. Speaker. I was present throughout the debates on the Transport Bills of 1947 and 1953. I remember especially the interruptions to which Mr. Alfred Barnes was subjected in 1947 by hon. Members who had important points to raise, and they were allowed and they continued. It is surely part of the function of a Minister, when he is introducing an important Bill of this sort, to give way so that questions may be asked.

We started off with the question of the Minister from Scotland. Maybe that has influenced your mind about other interruptions, but I put it to you that it would be in the interest of the House as a whole, and certainly of the Opposion, if you were not to encourage the Minister in refusing to give way on perfectly legitimate and important questions of principle that are being put.

Mr. Speaker

I think that if the hon. Gentleman meant that the Chair was doing something it should not do—

Mr. Callaghan

No, I did not.

Mr. Speaker

—or encouraging the Minister in a course of action which was wrong, I would have to refer him to other procedures—but I do not think that he meant something of that kind.

Here is the point. The Chair does not tell Ministers when to give way or not to give way. The Chair has no power to do that, and it is no good trying to make a point of order out of the failure of a Minister to give way. If the Minister should have given way, and did not, that is a matter to be directed to the Minister in due course.

Mr. F. Noel-Baker

Arising from my hon. Friend's point of order and from your Ruling, Mr. Speaker, we are finding ourselves in difficulty because the Minister is dealing with a Bill which changes his powers very greatly, and which changes his position in relation to the House of Commons. We therefore want an opportunity to question him about his position in relation to the House and to extract the answers only he can give. If he refuses to give way, he really puts us into very great difficulty—

Mr. Scholefield Allen

Further to that point of order, Mr. Speaker—

Mr. Speaker

It was not a point of order, so there can be no question of there being anything further to it. I have explained; whether a Minister gives way or does not give way is not a matter for the Chair.

Mr. Marples

If I may continue, the staff of the Transport Commission will go with their jobs to the new undertakings on the basis of the activities in which they are employed. This should work quite smoothly for the overwhelming majority of them—

Mr. Callaghan

Why not circulate this in the OFFICIAL REPORT?

Mr. Marples

There will be a relatively small number of staff employed at the Commission's headquarters and elsewhere to whom this does not apply. If employment has not been found for them by vesting date they will become the employees of the Railways Board. Therefore, none of the staff employed by the Transport Commission immediately before vesting date will be without an employer to whom he can look for his rights under his contract of employment.

There are in the Bill other provisions for the care of staff, about which, I am sure, the House would like to hear. They are provisions for taking care of the staff—[Interruption.] Those are the words of the Bill. Clause 79 provides for the payment of compensation to those of the Commission's staff … who suffer loss of employment or loss or diminution of emoluments or pension rights, or whose position is worsened … by the reorganisation. That is the first provision.

Secondly, provision is made in Clauses 71 and 72 for the Boards to pay pensions, and for the Minister to make Orders in connection with pension schemes. The general principle is that the existing pension schemes should pass over as they now stand to the new boards, mainly to the Railways Board. There may be some that do not—they may go to the Docks Board, for example. Most of them will go to the Railways Board.

Mr. Popplewell

As this is a technical matter, I hope that the Minister will give way.

Mr. Marples

Presently.

It is intended that there will be no worsening whatever of the existing rights of beneficiaries, wherever they go. If, however, modifications are found necessary, the Minister has power in the Bill to make such modifications. Therefore, from the viewpoint of the pensioners themselves, they are guaranteed that there will be no worsening of their present position. That, I think, will meet the point that the hon. Member was about to make. I do not think that there is a technical hitch in the wording of the Bill, but if by chance there is, the intention is as I have stated. If it can be pointed out that the wording does not carry out that intention, such an Amendment in Committee will be most welcome and acceptable.

A few weeks after becoming Minister of Transport, I remember saying to the House that I did not know the meaning of the words "vested interests" until I went to the Ministry of Transport. That has been a complete understatement. During the preparation of the Bill, we have seen dozens of representative associations. They presented their case and made their requests forcefully, very forcefully in some cases and almost vehemently in others. I do not complain, because it is their job to do so. Each request, however, collides with somebody else's request and the Minister has to make a decision. Whatever decision he makes, he is doomed to displease somebody. That has happened on this Bill and it will happen on every Transport Bill. We must accept this fairly philosophically. To arrive at the right conclusion in the general public interest, however, it is necessary to assess each case on its merits.

Inevitably, any industry which is old has strongly entrenched vested interests. The older the industry, the more entrenched they are. Railways are a very old industry. Passengers—the customers—the management and the men all have traditional practices and privileges which they want to preserve. I do not complain about that. But only if all those sections—and I mean all of them—make a contribution will we succeed in restoring health to the railways.

A question has been raised about Scotland. Take passengers. The closure of uneconomic lines is a question of the relative facts in each case. There was an article in the Scotsman of 13th November which I read with great interest. It was by William A. Porter and was headed "Now Substantial Government Aid is Needed." It said that the movement cogs of the 7.56 p.m. train from Berwick to Edinburgh—I believe it means the cast per day—was £164 and that the receipts were 10s. The loss was £163 10s., which is a 99.7 per cent. gross loss on the turnover. On the Monday, there were five passengers; on the Tuesday, two; Wednesday, six; Thursday, six; Friday, two, and Saturday, eight.

It is clear that if we are asking British Railways to continue with that sort of service, they are doomed to be a burden on the taxpayer.

Mr. H. Hynd (Accrington) rose—

Mr. Marples

Let me finish the point. It would pay the Transport Commission to buy second-hand scooters, give one to each person travelling on the train and close down the line.

Mr. Hynd

Can the Minister say whether that train carried any mails or parcels or had any strategic value, for example?

Mr. Marples

It was travelling from Berwick to Edinburgh, so it would not be strategic. If, however, it went from Edinburgh to Berwick to carry troops to the Border, it might be.

Mr. Steele

The Minister has made a valid point, but out of the context of the debate. Nobody in his senses would say that a railway company must provide a train to run if nobody wanted to use it. That, however, is not the point. In using the example which he has given, the Minister is only cheapening the debate. I hope that he is not saying, in effect, that that one train is typical of what is happening with all services.

Mr. Marples

No, I am not. Nor was it out of context. There are quite a lot of these cases. All I am saying is that they must be taken on their merits, which is fair enough. It was not out of context. There is a whole series of examples.

I do not want to weary the House, but to quote another instance there is the 5.45 a.m. from Kilmarnock to Dumfries, which costs £176 and takes £7. The loss is £169. It never carries more than eight passengers in any day. One cannot expect the Transport Commission to carry on that sort of service. I did not say that the Commission should not carry on other services. I gave an example of what the Commission should not carry on and I hope that it was a fair point.

Mr. Manuel rose—

Mr. Marples

I cannot give way. I have given way a great deal with points of order. I am thinking of hon. Members on both sides who wish to speak.

I have mentioned what passengers must accept, as, I believe, they must. The men, too, must accept something. I have made a lot of inquiries into this. Many of the men are working very long and irregular hours. It is difficult to get men on the railways these days because of the irregular hours they work. I wondered whether the work could be better directed and with extended work study and skilful management, I think that it could.

On the management side, I really believe that a new approach is needed. It is now being done in a variety of ways. First, the new chairman is developing a much-needed system of personnel assessment of the top management. It is no good assessing these people unless we promote them accordingly. If we promote solely by seniority, we get elderly men at the top. If we promote by ability plus seniority, we get efficient men at the top. I hope that this system, which is being applied to the top railwaymen, will give railwaymen the extra opportunities forecast for them in the White Paper.

The House will note that in making appointments to the Board, the Minister will consult the chairman who is carrying out this assessment. Appointments to the regional railway boards will be made by the Railway Board itself, subject only to the Minister's approval, which again means that it is a question for management, who, I hope, will give the best opportunities to the railwaymen who work for them.

Another point on which management must concentrate is the right size and shape of the future railway system. Because of the technical advance of road transport, a railway system will have to be contracted where necessary. This contraction will take place either purposefully, in which case it will not hurt so much and it can be done in an orderly manner, or as a result of being left haphazardly to events, which would mean decay. The studies which Dr. Beeching is making will show what traffics the railways are best suited to carry, and to carry profitably. Expenditure on modernisation must be geared to these studies.

The Bill by itself merely provides the framework under which we can get a dynamic management and give the opportunity and enable the railways, in particular, to regain their efficiency and play their proper part in our national life. [Interruption.] I am bitterly disappointed that in this debate the Leader of the Opposition has not chosen the hon. Member for Cardiff, South-East to play a principal part. The Opposition have four Front Bench speakers and one Front Bench interrupter. [Interruption.] I will repeat it. I said that the Opposition have four Front Bench speakers and one Front Bench interrupter. Next time, I hope that the hon. Member will be a Front Bench speaker.

I know that railways have a nostalgic meaning for right hon. and hon. Members opposite, but I am convinced of one thing: unless we make them efficient we are doomed to have a heavy load on the economy for years to come. It is the object of the Government to make them efficient.

4.41 p.m.

Mr. G. R. Strauss (Vauxhall)

I congratulate the Minister of Transport on having had rather more support from his own side of the House in presenting the Bill than he had when presenting the Bill for the replacement of the Cunarder, but I am not sure whether that support, which was evident when he sat down, did not arise more from the fact that he was often interrupted from this side of the House than from the fact that he made a case which convinced his own supporters.

I do not object to the right hon. Gentleman delivering his speech from "copious notes". I was myself in the position of introducing one major Bill on that side of the House, and I found it essential, out of respect for the interests of the House, to have "copious notes" from which to make my speech. My objection is not so much to the method in which the Minister delivered his speech but to its contents, and I hope to show that the case which he has made out in favour of the Bill is unsound and open in many ways to the strongest possible objection.

Nevertheless, I am prepared to admit straight away that there are many features of the Bill which are good and which we welcome, and I will deal with these first. My only complaint about them is that they are belated. Most important of all, of course, is the Government's proposal to write down drastically the capital structure of the railway industry, and thereby, at last, to take a realistic view of railway finances.

Gone today is the false optimism, which we never shared, that the modernisation plan would make the railways financially viable in the early 1960s. That was the view which was accepted by the Government for some time. Gone, too, is the abhorrence of subsidising the railways, which we used to be told would be so demoralising and encourage inefficiency. Gone, fortunately, is the complicated juggling with railway finances by loans on top of loans, which we have had for a number of years, and whose purpose was, in fact, to conceal open Government subsidies.

The need for this has now been frankly acknowledged, and £450 million is to be provided for such subsidies during the next five years; and the capital charges on the railways is to be substantially cut. We have long advocated such action as being necessary to put the railways on a sensible and realistic footing.

We welcome too, the permission granted in the Bill to the boards to develop their surplus lands, but I am rather concerned about how this is to be done. Will it be through property speculators, with the sole object of squeezing every possible penny out of the deal, or, as the land belongs to the nation, will the broader national interest be taken into account? I hope that the Government will tell us how it is contemplated that the Railways Board will carry out this new task.

The proposed abolition of the Transport Tribunal outside London is probably wise. In present conditions, it serves little purpose. Although welcomed in many quarters, personally I am not 50 happy about the cancellation of the Railways Board's obligation to be a common carrier. If it is the Government's intention that in future the sole concern of the new Railways Board is to be its balance sheet, then there is a case for relieving it of the common carrier burden; but if the purpose of the nationalised railways is to serve the national interests, should they not continue to bear it? During the last century, Parliaments invariably imposed that obligation, in the public interest, on companies seeking Parliamentary authority to build railways. If it was right that private profit-seeking enter-prices should have to carry this burden, it is surely illogical to withdraw it from the railways when they are publicly owned.

Before leaving the subject of railway finance, I want to mention one aspect which is rather complicated, but which is very important for London members and all those who are concerned with the level of fares in the London area. By Clause 39, the Minister is to determine the manner in which the total debt of the Transport Commission is to be apportioned between the various boards, and also the rate of interest payable by the boards to the Treasury for their respective shares of the total debt. At present, the rate of interest payable on British Transport Commission stock raised for London Transport purposes averages 3¼ per cent.

Are the Minister and the Treasury thinking of demanding the current rate of interest, which is now well over 6 per cent.? I hope that we shall get an answer from the Treasury on that important point, as I am advised that, if that is so, it might mean an annual addition of about £4½ million to the interest liabilities of the London Board, and this would mean, of course, substantial increases in fares.

This matter should not be left in doubt, but should be settled by Parliament during the passage of the Bill. I hope that the Government will be able to give a satisfactory assurance on this point. To be precise, we would like the Government to tell us, before the debate closes, first, what is to be the method by which the London Board's share of the Transport Commission's total indebtedness is to be apportioned, and, secondly, the basis on which interest charges on these debts are to be payable by that Board.

There are many other aspects of the Bill upon which my hon. Friends will talk, and will talk favourably, concerning such matters as the canal and the pensions proposals in the Bill. I want to leave these matters for them, and to concentrate my remarks on the main provisions of the Bill. It seems to us that its main purpose—and this was confirmed by the speech of the Minister—is to destroy the spirit and machinery of co-ordinated public transport. The Conservative Party, we know, is by nature opposed in principle to publicly-owned industries. Where possible, it sells those industries to private concerns, and where it cannot do that it operates them with some displeasure.

It did its best to sell off a large part of the publicly-owned transport industry to private interests, when it sold the long-distance road haulage element of the British Transport Commission and went on doing so as long as it could until it was stopped by the pressure of the chambers of commerce. Now what it is trying to do is to destroy the integrated service which was established in 1947, and to ordain that the individual transport elements should operate on their own as separate competitive commercial concerns without any unifying influence.

We consider that to be exceedingly damaging not only to the elements concerned but to the future of the transport industry generally, and we oppose this disruptive proposal, which is central to the Bill before the House today.

What excuse do the Government put forward for doing this? They cannot quote any expert authority for saying that this should be done. They certainly cannot quote in support of their action the recommendations of the Stedeford Committee, as they have never been published. One feels that if that Committee's recommendations had been in favour of such a course they would have been. All they can say, as the Minister has said today, is that the Commission is overloaded with its direct responsibility for the railways, and has too much on its plate to consider adequately the other transport matters, and that, therefore, it should be abolished.

The Commission may well be overloaded today, as the Minister has stated, by having direct responsibility for the railway operations, but if that is the argument one is bound to ask, who overloaded the Commission? The answer, of course, is the party opposite in 1953, in one of its recurring spasms when it feels the compulsive desire to juggle with the organisational set-up of British transport. The Government then abolished the Railways Executive which operated with the other executives under the supervising authority of the Commission, and they transferred its activities to the Commission itself.

It was a very foolish thing to do. When the party opposite complains today of the unbalanced, overloaded responsibilities of the Commission—it is quite right about that—it should, of course, address its complaints to itself. Members opposite should come to the House in sackcloth and ashes, admit their mistake, and proceed to reverse it. They should then reconstitute a separate railways executive—call it a Railways Board if they prefer—with full operating responsibility, but leave it under the general authority of the Commission whose duty should continue to be that of co-ordinating and planning on a broad scale the work of all the elements of the publicly-owned transport system.

Having such an over-riding authority is not a mere theoretical concept. It is a practical necessity in any large enterprise in which there are a variety of associated activities. The principle is accepted throughout private industry. Is there not a strong supervising, controlling body in Dr. Beeching's own industry, I.C.I.? Of course there is; and in Unilever and every other large concern in this country. The whole trend of modern industry is to build more and more on this pattern. Why, therefore, embark on the reverse process in transport? Are not rail and road and waterway services at least as much in need of co-ordinating and planning as the diverse activities of I.C.I.? Certainly they are, and to move in the opposite direction as the Government are doing is crass folly.

If it is suggested that central planning and control may be desirable in other industries but not in transport, let me quote to the House the evidence of someone in a position to know and who has a very different opinion. This is what Mr. K. W. C. Grand said in a speech to the Canadian Railways Club at the beginning of October. Mr. Grand, as the House may know, is one of our leading railwaymen, a member of the British Transport Commission, and the president of the Institute of Transport. This is what he said: It is clear that the common ownership of rail transport and part of road transport has thrown up opportunities of pooling of resources of many kinds, and that one of the most important is the ability to offer a trader a comprehensive transport service. It has also enabled the B.T.C. to plan its transport facilities on a joint working basis, and in all new works, to take account of all forms of transport. What, then, is the reason for the Government's proposal in the reverse direction? I think that the most charitable explanation may lie in a wag's comment on the last major upheaval in the transport set-up: Small boys play trains, but grown men have a better game. They call it railway reorganisation. I assume, that no one will seriously argue—the Minister today did not even attempt to do so—that the Nationalised Transport Advisory Council is really in any way a substitute as a co-ordinator for the Transport Commission. It will be indeed an extraordinary body consisting mainly of the very busy chairmen of all the Boards and the Holding Company who will all be deeply concerned with their own particular worries and troubles. It will have no powers and presumably no staff. Its purpose, as its name implies, will be to advise. Advise whom? The Minister, who is to be its chairman. It will be the queerest kind of advisory body in the western hemisphere.

This body obviously will be incapable of resolving the recurring policy conflicts between—shall we say—the Railways Board and British Road Services. It will have no staff to evaluate these conflicts and no authority to impose a solution. Nor does the Minister possess the power to do so. The whole thing seems to us to be nothing more than a device to give the appearance that there is still some co-ordinating body in existence when in fact there is none. In practice this body is unlikely to do anything more than delay decisions.

Is the Minister himself, as he seemed in his speech to suggest, going to take on the responsibility of planning transport policy as a whole, gauging its future needs and deciding the priorities of capital expenditure within the industry? And is he going to recruit the large technical staff needed for such a task? The Minister implied he proposed doing so, but there is no evidence of that in the Bill or in official Government statements. We must assume that the answer is "No", as the White Paper specifically states that the Minister's responsibilities in relation to the nationalised transport undertakings are not to be extended; and if they are not to be extended he certainly will have no powers to supervise or plan British transport as a whole. So in fact the position will be that, with the disappearance of the Transport Commission, there will be no effective, unifying authority of any sort in the industry.

Incidentally, the White Paper's statement about the Minister not assuming any additional powers is scarcely borne out by the Bill in other directions. One of my colleages, the hon. Member for Oldham, East (Mr. Mapp), with his unrivalled combination of curiosity and industry, went through the Bill to see in how many matters the Minister had power to interfere and give a nay or yea to the Boards. He gave up after he had counted 97. Other hon. Friends of mine have tried to count again and have found the number to be 112. There is no objection to the Minister being the deciding authority on a limited number of major policy questions, but 97 or 112 is going a bit too far.

It stems, of course, from the Minister's refusal to trust the Boards he has appointed or to give them the same freedom as is normally possessed by the boards of private companies in running their affairs, a freedom which we consider publicly-owned boards should have, too. Incidentally, I should like to know, when the Minister either gives or refuses his consent to the many submissions which the boards are likely to make to him, whether he will publish his replies so that we can all know which actions are the responsibility of the Minister and which of the boards. We think that the right hon. Gentleman ought to publish his replies, and in Committee we intend to press him to do so.

Mr. F. Noel-Baker

I am sorry to interrupt my right hon. Friend, but before he leaves that point he might care to press the Minister on this question now that he is here, as he will seldom be later. My right hon. Friend will recollect that some time ago we were disturbed about the powers which the House had for putting Questions to the Minister and getting information out of him. The right hon. Gentleman's powers are now to be enormously extended, but he has not said anything about his responsibility to the House. As I say, perhaps my right hon. Friend would care to press him on this point.

Mr. Strauss

I was thinking along those same lines—about the Minister's responsibility to Parliament—when I asked that we should be informed whenever the Minister was appealed to by a board and either gave or refused to give his consent. On such occasions we shall, of course, be able to question him about his advice and to take him to task if we think he has done wrong.

The next question I want to ask the Minister is: what are to be the new functions of the proposed regional boards? Are they necessary at all? The existing area boards have all the responsibilities they need and can properly use. To give them any more is a retrograde step. If any change is to be made it should rather be to strengthen the authority of the central Board than to devolve more authority on the regions. To set up the area boards in any way in competition with each other might well damage the railway interests as a whole and increase rather than diminish their losses.

There is no more case for splitting up the railway services in the way that appears to be contemplated than there is for cutting up the Post Office services. The right hon. Gentleman and the House may have seen that the president of the National Union of Railwaymen, writing on behalf of his union, has called the present proposals for devolution "inept and frivolous." That view is shared by hon. Members on this side of the House.

We are given no indication whatsoever, as I think we ought to be when Parliament is endorsing this passing on of responsibility, this very drastic scheme of devolution, what the scope of the area boards' responsibilities is going to be. We are told that it is to be left to the discretion of the central Railways Board. That is not good enough. We want to know, in broad principle, what will happen and the extent of any devolution. In particular, we want to know why the new boards are to have full-time members who will be able to do nothing, as far as we can see, except get in the way of the area general managers.

This proposal to have full-time members on the boards seems to us to be nonsense, and so it must do to Sir Philip Warter, the chairman of the Southern Region Board, who was questioned on the point by the Select Committee. He told the Committee: I do not think myself that 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. But in the Bill the Government are proposing to permit this stupidity.

There are two other matters that I wish to mention. One is, as the Minister said, the London Transport Executive is no longer to hold the monopoly position which it has held since 1933. Anyone who wants to run a stage or express carriage service in that area can in future apply to the Metropolitan Traffic Commissioner and, if turned down by him, to the Minister. If I, or any of my colleagues were the Minister of Transport, I should not worry about this proposal in the slightest, but if it is to be the present occupant of that office or any of his colleagues I should be very worried.

They believe in competition as an act of faith which it is almost sacrilegious to question. True, they are not always so keen to apply it indiscriminately to private industry, but they think it a grand thing when applied to public industries, and they may well want to apply it against the London Transport Board. After all, the Government can adduce just as good a reason for competition by privateers against the London Transport Board as they did, with such disastrous results, in the case of B.O.A.C. and B.E.A. Therefore, it seems to us that this proposal is an acutely dangerous one.

Another proposal in the Bill, to which the right hon. Gentleman referred and on which he spoke at some length, is the abolition of the Coastal Shipping Advisory Committee. That body has been in existence since 1921, and in the view of the shipping industry it has been exceedingly valuable and a considerable safeguard to its interests. In its place there is to be an appeal to the Minister if it can be alleged that the freight rates of the railways are excessively low. The right hon. Gentleman gave no reason for the abolition of this excellent Committee in which both sides of the shipping industry have great faith.

I cannot understand why the Minister of Transport, who is responsible for the welfare of the shipping industry as much as for the welfare of the railways, should want to abolish a body whose purpose it is to hold the balance fairly between the two and prevent unfair, competition damaging either. I noticed that the Minister said that he is to reconsider the matter. I hope he will, as there appears to be no case whatever for doing away with this highly esteemed Committee. If the right hon. Gentleman does not agree to having second thoughts, he will meet a hurricane of opposition from both sides in the House that will make the storm he had to face over the Cunarder look exceedingly petty.

Behind this proposal and behind most of the proposals in the Bill, and, indeed, behind the whole of the Government's approach to the railways, there is plainly today an attitude of mind which we on this side find completely objectionable. Their approach is this. Because of the continuing losses of the railways, they should no longer be considered as a public service but should be operated as a commercial enterprise whose concern is no longer the national interest but its profit and loss account.

We have been told that lines which do not make a profit or which are unlikely to make a profit are to be closed down, with few exceptions. We have been told that outside by spokesmen of the Transport Commission, and from indications that we have had on past occasions from the Minister this is to be the general policy of the Government. No one suggests that those little lines about which the Minister talked, with half a dozen passengers and costing a lot of money, should be kept going. What, apparently, is proposed—and this has been said authoritatively—is that lines which make no profit or which have no prospect of making a profit must be closed because the major, indeed sole, concern of the railways in future is to improve their revenue.

We think that that attitude is a wrong one. It has been suggested, and, indeed, it was put forward by the Select Committee, that where there are lines which are unremunerative but which are performing an important social service, meeting a social necessity for the people living in the area, the Government should give a subsidy in respect of them and not put the burden on the Transport Commission or the Board.

I confess that I am personally doubtful whether this is practicable, because, except in a few cases such as, for example, the North of Scotland or South-West England, it would be extraordinarily difficult to identify and segregate the unremunerative services and there would be interminable arguments between the Treasury and the Railways Board. The Board might well be able to show that a quarter or even half of the present services do not pay.

Do the Government accept the policy put forward by the Select Committee, or not? We ought to be told on this occasion. In particular, we ought to be told in what way the large sums of money made available by the Government to meet railway losses during the next five years are applicable to the closing during that period of unremunerative lines and services. Are the Government saying that they have provided these large sums of money so that lines required by the public can be kept going and the burden need not be considered to fall on the Board?

One railway service which is especially controversial at the moment is that in Monmouth. Questions have been asked about it in the House. It is alleged that closure of the service would cause grave inconvenience to large numbers of people. Is this covered by the £450 million which the Government are making available to the railways to meet possible loss in the next five years? Will the Minister, as a matter of principle, give his consent almost automatically to all the applications put before him by the new Board to close lines and stop services wherever they can be shown to be uneconomic? If that is so—and that appears to be the view of the Government at the moment—an immense proportion of existing railway operations will come to an end, with grave consequences to industry and the public.

What about future railway developments? Are they to be judged solely on the ground of prospective profitability, or is the element of public need to be taken into account? I have in mind in particular the Victoria-Walthamstow line. Every expert committee that has studied that development has endorsed it and has said that it is urgently needed. Is that to be postponed under the new directive and attitude of mind for another five years? I hope that we shall have an answer to that question.

The profitability argument is justified by the Government by the heavy losses made by British Railways. This, as we know, is not a development peculiar to this country. Most railway systems throughout the world, as a result of road competition, are in the same position. But the fact that railways are making losses instead of profits in no way justifies the abandoning of the concept of the railway system as a national service. This is what the Government have been doing at accelerating tempo in the last ten years. It can be best illustrated by the duties imposed on the Railways Board by the Bill compared with those imposed on the Transport Commission under the 1947 Act. In that Act the Commission was ordered to provide an adequate system of public inland transport. Significantly the word "adequate" does not appear in the present Bill. Nor does the injunction to provide for the needs of the public, agriculture, commerce and industry, which was embodied in the Act passed by the Labour Government.

These omissions sum up the difference between our attitude and that of the Government to the publicly-owned transport system. In our view, the whole essence of public ownership is adequate service to the public. It was to provide it that we nationalised the railways and kindred transport facilities. We believed, and we still believe, that such a service could best be provided if the main transport elements, road, rail, docks and inland waterways, were integrated under the responsibility of a supervisory body concerned solely with the public interest.

But the Conservative Government take a different view. They regard nationalised transport primarily as a business and only secondarily as a public service. They believe, moreover, that, contrary to all industrial and commercial experience, disintegration of its component units is desirable. These are the doctrines which they have now embodied in the Bill. They are doctrines which we are convinced are contrary to the best interests of the nation and should be rejected by Parliament.

5.16 p.m.

Sir Richard Nugent (Guildford)

The right hon. Member for Vauxhall (Mr. Strauss) has chided us for omitting certain aspects of public obligation on the transport system which were referred to in the 1947 Act, but he did not refer to a principle in the 1947 Act of which I think he approved in the past, that the Transport Commission should have the obligation of balancing its accounts taking one year with another. This is a principle which is still guiding us and we still feel that it is one of the main principles which should be living in the transport world. Indeed, my right hon. Friend the Minister of Transport has it as a guiding principle in the Bill.

The line which the right hon. Member for Vauxhall deployed with his usual skill was a disappointment to me. Following his last point, to the effect that this is a common problem throughout all advanced economies and that it is immensely difficult to run the railways in the modern economy in competition with road transport, I had hoped that we should have a non-party approach to the subject and so obtain the support of Parliament as a whole in the immensely difficult job which still has to be done outside on the railways. I am sorry that, because it is a departure from the original approach of his party towards an integrated system, the right hon. Gentleman feels that he and his hon. Friends must reject the Bill.

The integrated system which the right hon. Gentleman talked about never worked. [An HON. MEMBER: "It was never practised."] In contacts which I had with the railways when I was in the Ministry of Transport it was surprising how little it was possible to get the railway system to integrate with the British Road Services system. [HON. MEMBERS: "Nonsense."] It was like trying to mix oil with water.

Mr. Manuel

It worked very well in some parts of Scotland.

Sir R. Nugent

There are two substantial reasons which I should like to advance to right hon. and hon. Members opposite why we should not go back to this idea of an integrated system. First, it is inevitable that in an integrated system of transport as believed in by right hon. and hon. Members opposite there would be a substantial degree of central direction and of nationalisation of private business, and those are things which the people as a whole have already said three times they do not want.

Mr. Callaghan

Is this a non-party approach?

Sir R. Nugent

We are here to represent the people of the nation and surely we should have some regard for their wishes. Let right hon. and hon. Members opposite go ahead with it and they can be sure that the people will say "No" for the fourth time.

Mr. George Darling (Sheffield, Hillsborough)

If Britain goes into the Common Market and the Minister of Transport attends the Council of Ministers of the European Economic Community, the Rome Treaty will place an obligation upon him to secure the co-ordination of transport in Europe.

Sir R. Nugent

I know of no Western European country which is contemplating a system comparable with the proposed Socialist system of public transport. I read very carefully their report on the matter. The countries of Europe are not considering a plan which will favour one system of transport, and they are certainly not contemplating any central direction of that kind.

Let me turn to the economic argument which, feel, must carry weight on both sides of the House. The fact is that traders use road transport today because it gives them a better transport system and a quicker and more reliable delivery of the goods they send. It a system of the kind contemplated by the Labour Party is introduced, inevitably traders will be obliged to send goods by a system of transport which is against their better judgment. That is bound to increase the cost of transport to the nation. [HON. MEMBERS: "No"] This must be against the national interest and put it at a disadvantage—[HON. MEMBERS: "No."]—because it would make the transport system longer and the delivery less reliable and there would be more breakages in the delivery. It is as simple as that. It is bound to raise the cost of transport.

I now turn to the point which the right hon. Gentleman made very cogently about closures. By the reaction on the benches opposite when my right hon. Friend was dealing with this and by what the right hon. Gentleman said himself, it is quite evident that hon. Members opposite feel that it is wrong to be guided by what is a principle of economics and that it is wrong, therefore, to close services which, in the main, are making losses. That is the guiding principle in the Bill.

We all agree that we want modernisation to go ahead. If the whole system were to be modernised as it now stands, we all know that large parts of it are completely out-of-date and that we should be obliged to spend large sums of capital on modernising a system which is to a very large extent out of date. We should be committing ourselves and the economy to a modernised out-of-date system. It is like the farmer who wished to modernise his farm by having a tractor instead of horses, and when he hitched the tractor to the plough he insisted on carrying his horses on the tractor as well. It does not make sense. It puts a burden on the shoulders of the nation.

Mr. Manuel

Would the hon. Gentlemon remember the position confronting us in Scotland? He should remember that this is a United Kingdom debate. If it is purely a question of closing all uneconomic lines, I can see no railway lines being left in the whole of the seven crofter counties. There is no indigenous coal there and the roads cannot take coal there even in the quantities needed for the central heating of the hotels, let alone for use in industry. The hon. Gentleman is subscribing to a policy that will cut off the Highlands altogether and kill them.

Sir R. Nugent

I thank the hon. Gentleman for his intervention and I agree that there is a certain weight in what he has to say. I shall have something to say about that particular section of the railways later on.

I am certain that, for the country as a whole, the right thing to do is to streamline the system, to do what is needed to meet present-day purposes and then to modernise the railways just as fast as we can. In doing this, we shall not only save ourselves large sums of capital, but we shall release large numbers of men who can be far more productively employed in other industries. We shall at least have a chance of putting the railways on a healthier basis and relieving the taxpayer of the enormous burden which he is now carrying.

Last year there was a deficit of £112 million on the railways alone. That is an enormous figure. I am quite sure that my right hon. Friend is right in bringing forward legislation which may put this right. I believe that this is the right method of approach. I believe that it is the right step to take now. The broad system of modernisation which was started under Sir Brian Robertson is, I think, right. His reappraisal indicated in 1959 where the troubles were and this legislation and my right hon. Friend's plans are now broadly designed to put them right.

I think that his design of the modernisation plan still holds. Where it has failed is in the tempo. It has not been happening fast enough to overtake the rapid changes going on in the transport world. I would commend particularly the five points in the Bill which, I think, will help to speed up the whole tempo of this vast operation.

First, I think it right to hive off the other functions because I think that it is right to have a Railways Board which is completely autonomous to concentrate on the job of dealing with the railways. This is a smaller and a stronger Board, and I think—this is one of the points on which I can agree with the right hon. Gentleman—that it will achieve a more integrated system in the actual operation of the railways. This, I think, is an advantage.

On capital reconstruction, I find myself also in agreement with him. I am sure that it is right to relieve the railways of what in fact amounts to interest charges on £1,100 million, and to put them on a reasonable basis so that they have a chance now of paying their way. I do not agree with him about the common carrier. I am sure that it is right to relieve the railways of the last vestiges of the common carrier obligation. Lord Robertson, as he now is, is on record as saying that what remains of the common carrier system in regard to freight is not affecting the commercial freedom of the railways. This Bill removes the last of it and also gives them freedom in respect of fares except in the London area. I think that this is the right approach. I say this to my right hon. Friend. In aiming to remove this conception statutorily, he is also removing it from the general thinking of the railwaymen, because I am sure that the great majority of the railwaymen, brought up in the tradition of the common carrier, still tend to work in terms of it. It just does not fit the bill.

On the point of the transport users' consultative committees made by my right hon. Friend, I warmly welcome the fact that he intends to reduce the functions that these bodies will carry out in order to speed up procedure when closures are contemplated, so that my right hon. Friend may then consider whether a measure of hardship arises out of the proposals. I think that is the right kind of statutory structure, and my thought has been: what sort of railway system are we aiming for now?

I would say that, at the moment, it is not possible to be precise as to what should be exactly the shape and size of the railway service. The only part of the railway service that I believe to be absolutely essential today is the London commuter service, perhaps to a radius of 50 or 60 miles around London. There is physically no other way to get that huge number of 1¼ million people in and out of London every day.

Mr. Steele

That does not pay.

Sir R. Nugent

It can be made to pay. Coming to the provincial commuter service and the long-distance passenger services, those, obviously, will have to compete with other forms of transport—road and, possibly, even with aircraft. Therefore, they will succeed only if they can offer services attractive enough and at the right price to get a full complement of traffic. I should have thought that the stopping services on the main lines and the branch line services were in the main completely uneconomic and that the great majority of them would have to go.

The position about freight is far less clear. Modernisation has already made a very considerable impact on the passenger services, and many attractive services are running today. The result of that is better traffics. But on the freight side the problem is very obscure. Modernisation has not yet made much impact. There are a few first-class services, like the Condor service with its modernised system, an express service, but in the main the freight services are still operating on the traditional pattern which was laid out for the carrying of coal and minerals throughout the country. In the main that means that it operates slowly. What is more unfortunate is that its general design does not coincide with the general merchandise flows which are the best prospect for the railways in improving their general freight position.

As my right hon. Friend said, the railways carry a very substantial part of the coal traffic, and they will no doubt continue to do so, but the general trend there is a lower traffic in coal as more of the big users put their industries alongside the pits. A small increase in the minerals traffic may be expected, but it is in general merchandise that the railways will succeed in their freight operation. It is on that side that every effort must be made to offer a service which will really meet the interests of traders.

At present, the freight system, still in its 19th century pattern, has depots spread out in thousands all over the country. That was designed for the days when the horse and cart did the rest of the deliveries, and, therefore, distances had to be short. Today most of those depots handle diminutive quantities of freight. The men working there have practically nothing to do. That is not their fault; there just is not any freight to handle.

I have obtained figures from my own region, the Southern Region, which is not a big freight mover. It has 650 freight depots, and more than half of them handle between them only 7 per cent. of the total freight volume. That gives some idea of the tiny quantity of freight handled at some of these depots. Because of competition with road transport, there is no chance in the world of those depots reviving.

What is wanted on the freight side is, as my right hon. Friend said, first of all to carry out a survey to find out what is really happening in the freight world. Here I think Dr. Beeching must be congratulated. It is the first survey of freight that has ever taken place. It has always been thought impossible before. This survey will show what is potentially possible, where merchandise flows are, where business could he picked up and what it is likely to be economic to spend money upon.

Mr. Manuel

That traffic has been put on the roads.

Sir R. Nugent

Private road hauliers are running on routes where the general merchandise wishes to move. The trouble is that they are not capable of meeting the demand. What is needed as the railway freight system of the future is express freight services catering for this merchandise flow.

Mr. Manuel

On the uneconomic routes.

Sir R. Nugent

No; on the main lines. I do not doubt that they will pick up a great deal of traffic when they can offer services of that kind.

One other thing must be said on the freight side, and that is that it is absolutely vital to modernise the wagon fleet. We have at present the largest fleet of the smallest wagons in Europe. One gets some idea of the unwieldly mass with which the railways are still trying to cope when one realises that the number of 16-ton wagons that we still have, 900,000, is equal to the total number of freight wagons in all the Western European countries. That gives one some idea how difficult it must be for our railways to operate a freight system when they are equipped with rolling stock as out of date as that. It is not easy to modernise this fleet. All the private sidings are fitted to take them. To get bigger modern wagons means that everything will have to be refitted and revamped. Thus, the problem on the freight side is to get the modern wagons for freight which will carry the merchandise. We must get a fleet of modern, large wagons—30–40 tons—fitted with brakes, which can travel fast and give a good service.

What I want to see in the shape of the railways of the future is the certainty of this big commuted pattern for London, and then the rest—the long-distance passenger services, the provincial commuter services and the national freight service—will depend on getting rid of the uneconomic services which now exist. There must be rapid modernisation and improvement of the rest so that they can offer attractive enough services in order to provide a full complement of passengers and freight so that the remaining railway system can be operated. That can be done, and that is the monumental task that my right hon. Friend is setting out to do with Dr. Beeching.

Mr. Walter Monslow (Barrow-in-Furness)

Ten years and nothing done.

Sir R. Nugent

There are three other points that I wish to put to my right hon. Friend. The first concerns labour. What I have proposed means reducing the size of the labour force. My right hon. Friend spoke about the provisions in Clause 79 for dealing with redundancy. I should like to know whether the unions have been brought into this. It is vital from both the human and the business point of view that these systems of resettlement should be fair and generous so that men can accept them and work with them, because it depends upon the enthusiasm and co-operation of the whole railway staff to get this vast scheme under way. We must have a reasonable arrangement in that respect.

Looking to the railways of the future, I am sure that nothing can be worse for the railway staff than to be in an insolvent industry. It means that they are always at the end of the wage queue and always resisted, because there is no money in the undertaking and it has to be obtained from the Government. I should think that the basis of the future would be a smaller, better paid railway staff, with solvency as its foundation.

There is one other point I want to make on the Select Committee procedure mentioned by the right hon. Gentleman. This refers to closures to deal with loss-making lines. I have in mind here such proposals as that to keep open a railway service such as the one in the North of Scotland north of Perth, which everybody knows is losing money. Will my right hon. Friend tell the House that it is the Government's intention to find out, in cases where it can be clearly defined, what the loss is and make it a matter for Parliament to decide whether there is a strong enough social interest to justify keeping the service open? I am sure that it is wrong to hide it all in the general accounts so that nobody knows what has happened.

Also, will my right hon. Friend tell us whether it is his intention that over the next five years the Advisory Council shall carry out a study of our transport system in order to evolve a policy for investment, so that we may have a clearer view of what the real costs of transport are. We know that fares and charges are a help in evaluating it, but they do not show us the whole cost. We need a clearer view of what our transport is costing the country so that Parliament may the better be able to judge the shape and size of our railway system of the future.

My right hon. Friend has my best wishes—

Mr. Steele

He will need them—

Sir R. Nugent

—for the success of the Bill. He will be engaged upon a vast undertaking. He must be congratulated on his courage in coming forward with it. I very much hope that he and Dr. Beeching will together succeed in this monumental task, which holds the greatest possible benefits for the country.

5.39 p.m.

Mr. Philip Noel-Baker (Derby, South)

I want to answer some of the basic assumptions made by the hon. Member for Guildford (Sir R. Nugent) and make some criticisms of the principles on which the Minister has founded his policy.

I must begin by apologising for the fact that a long-standing engagement will prevent me from being here to listen to the Government's reply. I shall, of course, read it and take care that my constituents in the railway town of Derby do the same.

I wish to speak about what are, I think, two basic and disastrous misconceptions on which the Minister's policy has been based. On 10th November, 1959, when the Minister had been in his present office for a month, his Joint Parliamentary Secretary said: … the whole railway system will have to contract … we have to have a smaller type of railway system than in the past."—[OFFICIAL RFPORT, 10th November, 1959; Vol. 613, c. 371.] I have heard the same point put another way. It is said that the modernisation plan for the railway system is not really a plan at all and that what is wanted is a scheme for contraction of the lines in use, of the number of stations and trains, and of the capacity of railway workshops, all of which will reduce the scale of operations in proportion to the size of the market which the railways have to serve. The assumption is that the market—the people who want to travel and the firms who want to send their goods by rail—will constantly and inevitably decrease.

What is the market? It is the nation—a population that is increasing, with a standard of living which, thanks not to the Government but to science and to invention, is rising. The Prime Minister has said that by 1970 the average worker will have an income of £1,000 a year. Not long ago the Home Secretary told us that in twenty-five years the gross national product will be doubled. What does it mean? It means that there will be far more people wanting to travel and that there will be double the quantity of goods to be distributed around the country and delivered to the ports for export.

But if the railway system is to contract, if we are to have a smaller system than we have today, the railways will not be able to carry even the traffic which they handle now. They will have to shed some of it to the roads, and the whole of the new traffic will have to go to the roads as well. We cannot know what the increase in passenger traffic will be. I believe that it will be great as incomes rise. If the national product doubles, other things being equal, the additional goods to be transported will be about 500 million tons to 600 million tons of originating traffic every year. Does the Minister seriously believe that all these extra passengers and enormous volume of goods can be carried on the roads, or that the passengers and firms concerned will want to use the roads rather than the railway?

I venture to think that it is utterly impossible that this traffic can be put upon the roads without disaster to the nation, but it is the logical result of the proposition, which the Minister repeated at the end of his speech today, that the system is to contract and that we shall have a smaller type of system. I hope that he and his colleagues will give up this grotesque conception of the future of British Railways which, for a short time only, we hope, is in their hands.

My second major point is that when the Minister says that the railways will contract he means that he will make them contract by cutting off every service, passenger or freight, which does not show an immediate profit for the railways in this stagnating economy of ours under Tory rule. Yet we know that if we had had the same rate of economic expansion as in France, West Germany and Italy in the last ten years, the railways would not have had a deficit at all. I want to consider how important this annual deficit—which is, I understand, an average of about £15 million a year—really is, and to assess the loss to the nation entailed in the Minister's policy of contracting the railways and piling the traffic on the roads.

It is possible that the Government's policy may impose a heavy loss on the nation which does not appear either in the accounts of the national Exchequer or in the balance sheet of any public or even private undertaking. When I was Minister of Fuel and Power ten years ago, I was gravely disturbed by the waste and loss to the nation through air pollution. I found that the Smoke Abatement Society had obtained most desirable results and I asked the Treasury to approve a subsidy to the Society of £3,000 a year.

The Society told me that it could do a great deal if it got that sum. The Treasury refused. Before I could take the matter to my right hon. Friend the Leader of the Opposition, who was then Chancellor of the Exchequer, we had the General Election of 1951. Three years later, in 1954, the Beaver Committee found that the cost of air pollution to the nation was not £3,000 a year but about £300 million a year—a loss to the nation which appears in nobody's accounts.

Let me give another illustration. When I was at the Ministry of War Transport, I invited Professor Jones of Leeds University—I believe that it was in 1944—to make the first serious estimate of what road accidents cost the nation. Professor Jones had all the facilities and assistance he desired. He worked with insurance companies, the police, the motoring associations and others, and produced the estimate that road accidents with wartime traffic and at 1944 prices were costing the nation £60 million to £70 million a year. The Government Actuary, by different methods, made a calculation on his own, and his estimate, as he pointed out, was significantly close to that of Professor Jones.

Since then, the Royal Society for the Prevention of Accidents has applied Professor Jones's methods to the mounting toll of accidents every year. The Society calculated that in 1950 the cost to the nation had risen to £136 million and in 1960 to £229 million a year. In human terms, the accidents are terrible enough—7,000 killed and 84,000 seriously injured in 1960. Very often, to the victim and his family, serious injury is worse than death. This year, to the end of October, with the two worst months to come, ten people have been killed and 188 seriously injured in the town of Derby.

What would the public say if the railways had an accident involving 140 deaths every week? The figure of road accidents grows inexorably with the growth in the number of vehicles. The statistics prove it. Therefore, we must expect that this toll will progressively increase. If the Minister pursues his policy of causing the railways to contract, of shedding traffic to the roads, then the cost of accidents—£229 million in 1960—will inevitably increase, and that increased burden on the nation must be set against the average deficit of £15 million a year on the railways during the last few years.

Sir R. Nugent

I think that the right hon. Gentleman has his figures wrong, because the deficit in the railways accounts in 1960 was £112 million.

Mr. Noel-Baker

I had my figure from a very high authority, but I am willing to accept the correction. But, really, whether the average deficit is £15 million a year over the last few years or not is not to me very important.

Mr. Popplewell

In justification of my right hon. Friend, I must point out that the £15 million he has mentioned is the average deficiency on actual working costs over a yearly period, based upon a number of years and not last year.

Sir R. Nugent

It would have to be taken over a good many years.

Mr. Noel-Baker

If the economy were to expand, as it should, that deficit would very quickly disappear.

I want to take another example which is just as cogent. In doing his sums about the finances of the railways, the Minister takes no account of the very heavy loss to the nation from traffic congestion on the roads. In 1944, we got the London Passenger Transport Board and the Metropolitan Police to make an estimate of what traffic congestion cost, and they discovered that in the Greater London area the average speed of all their vehicles—I speak from memory—was 10.4 m.p.h. and that if they could raise it by 1 mile an hour to 11.4 m.p.h., they would save £2 million a year—in rubber, oil, petrol and drivers' time, but nothing allowed for the loss of the passengers' time. It was £2 million for the undertaking alone.

That figure is very striking, and it makes me ready to believe the estimate of the Institution of Civil Engineers that in 1957 road congestion cost the nation £500 million, and that, if present trends continue, by 1967 it will have risen to £2,000 million a year. They are staggering figures, but in 1959 we already had 29 vehicles per mile of road, much the heaviest in the world—the United States had fewer than 20. The number of vehicles is increasing by nearly 800,000 a year. The Minister should take those facts into consideration, for he can be certain that the increase in the number of vehicles will go on whatever anyone may do.

I remember that the House was not ready to believe it when in 1950 I said that within 10 years the number of vehicles on the road would have doubled. It has happened. It was 4.4 million in 1950 and 9.4 million in 1960. In its Report for 1960, the British Transport Commission says that the number in London will double again within 17 years. That is very optimistic, for it may happen a good deal sooner.

Can hon. Members envisage what conditions in our towns and country will be like if the number of vehicles increases towards a figure of 18 million or 20 million? It is no good thinking that we can do in this country what the Americans have done. The Americans have three and a half times our population, but they have 30 times the territory in which to build roads. There is no comparison to be made.

This enormous loss of £2,000 million as a result of traffic congestion is bound to increase, and that must be remembered when we are considering the loss on the working of the railways. The Minister should be doing everything in his power not to increase the burden on the roads and to mitigate the cost of road accidents, traffic congestion and road maintenance by doing everything he can to divert as much traffic as possible, passenger and freight, to the railways instead of multiplying the waste caused by his policy of giving us a smaller railway system to deal with the vastly increased scale of traffic.

Everyone wants the comfort and convenience of the car to be available to all our people, but the heavy cost of traffic on the roads can be a grievous public nuisance, as my constituents have found in Derby with the coal lorries which pass through the town in great numbers every day. The multiplication of private cars can defeat the very purpose for which people want them.

I do not know whether the Parliamentary Secretary has visited Los Angeles recently.

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

Never.

Mr. Noel-Baker

I hope that he will. Los Angeles has 4 million inhabitants. Vested interests have helped to establish the tradition of having no public transport except taxis. The 4 million inhabitants have 2 million cars, and at any hour of the day these men can be seen travelling at high speed on thousands of miles of motorways, one person per car, wasting vast quantities of oil, petrol, rubber, and using them while suffering grave personal discomfort and inconvenience. At 11 o'clock on most days of the year, there is what the Californians call the "Los Angeles smog", smog caused by the fumes of the 2 million cars, smog which makes one's eyes smart, which fills one's lungs and which obscures the City Hall on its hill-top, so that from half a mile away one sees it as one sees a London building in the twilight fog of a November night. Because of natural conditions, that is worse in Los Angeles than elsewhere, but it is happening to us in our cities, if to a lesser degree. It is not only in Los Angeles, but in other parts of America.

Mr. Collick

And in London.

Mr. Noel-Baker

In every part of the United States the decline of the railways has caused great loss and inconvenience to the American public. On the east coast, owing to their financial condition, the privately-owned railway companies have dirty trains, expensive and bad meals, while almost every train runs behind time. On the Californian coast, there are so few trains that one can travel only by car or air. In the centre of the country, it is just as bad. Between Detroit and Cleveland, two large cities only 200 miles apart, there is only one passenger train a day and the journey by air is a nightmare. From Cleveland to New York there is no night train and the air journey is even worse than that from Detroit to Cleveland. Fifteen years ago the Americans had the finest railways in the world. They have let them decay, and the American people have paid a very heavy price.

The contrast with France and Germany is very striking. Fifteen years ago the railways of those countries had been largely destroyed by bombing in the war. They decided to re-equip and reconstruct their railways on the most modern lines. It meant a very heavy capital investment and many years of Government subsidies. The railways did not pay—on the Minister's standards—and for years the French Parliament voted a subsidy which varied from £100 million to £150 million a year. But they accepted that burden because they calculated that a modern and efficient railway service would be an advantage to the nation as a whole and that, in particular, it would help their exports and their tourism, which were vital to the recovery and reconstruction of devastated France.

The policy has been an immense and unmitigated success. The national railway authority adopted the principle expressed in its own advertising slogan—"We will take you from anywhere to anywhere"—and if it does not have a train it provides a railway bus to take passengers to their desired destination. The French railways give a service which is second to none. Their traffics have increased and the annual deficit has decreased until the subsidy from the National Exchequer is now only about £50 million a year. It is a lot of money, but when I travel in France I confess that it is well worth while. So do the railway experts of the French nation, and I have never heard a Frenchman dissent from that view.

The Minister plans to contract the railway system. He is running directly counter to the findings of the Select Committee, published a year ago. The Committee considered whether the losses of the railways arose mainly from the fact that the railways were out-of-date and that there were more modern forms of transport. The Report says: Your Committee are convinced that this is not so. On the evidence they have received, there is no doubt that a large-scale British railway system can be profitable. It goes on to say that further improvements can be made and that the application of science to railway transport has barely begun.

Paragraph 422 of the Report says: A service may be justified on other than economic grounds. … That is what we are asking the Minister for. The Report also says that account must be taken of social considerations, and that if necessary this should bring a subsidy from the Government.

Those who defend the Government's policy say that if the railways are not making a money profit, if they depend on a subsidy, the management and staff will feel that they have failed, and that efficiency will decline and catastrophe will loom ahead. This is doctrinaire nonsense which flies in the face of all the evidence. It simply has not happened in France where efficiency has constantly increased. The Select Committee said that productivity, on the basis of train miles per member of staff, had increased by 27 per cent. since 1948. It has never increased so much as in the last few years when a deficit has been made.

Hon. Members should look at paragraph 212 and the succeeding paragraphs of the British Transport Commission's Annual Report for 1960. They should read what the Report says about the development of the car sleeper service; the Pullman expresses; the flat cars for the motor industry; the vacuum-brake wagons for goods trains—39 per cent. of the stock now consists of this type of wagon, but it is not enough; and the development of the next-day delivery services for export goods from 350 inland centres to our ten main ports.

The process of improvement and development has never been so rapid as it is now. What must dishearten and demoralise the staff of British Railways is the Minister's constant talk of contracting the railway system; his constant suggestion that the services and the work for the railway workshops must inevitably and rapidly grow less. If we are to be an efficient modern country, our railway system must expand. Of course, if the services are to be properly maintained, and adequately improved, the railway workshops, and many thousands of workers in Derby, must have more work in future than ever before.

I end by appealing to the Minister to abandon his doctrinaire ideas and to do his utmost to make British Railways the magnificent national asset which they ought to be.

6.3 p.m.

Mr. Simon Wingfield Digby (Dorset, West)

The right hon. Member for Derby, South (Mr. P. Noel-Baker) speaks with great knowledge on railway problems. He covered a great deal of ground in an interesting speech which he would hardly expect me to follow altogether.

The right hon. Gentleman spoke about a number of diverse matters. His comments on the fumes from motor vehicles were very topical. I rather envied him his trip to Los Angeles. I do not know why he found it so tedious. I thought that it was a pleasant place, despite its 4 million inhabitants and fairly near to Hollywood. However, I hope that on the next occasion he will ask me to accompany him to investigate this traffic problem.

I was glad that the right hon. Member for Vauxhall (Mr. Strauss) was present to speak on this occasion because, speaking as one who spoke on the Second Reading of the 1947 Transport Act, I think that he is about the only survivor of the Front Bench speakers on that occasion. I have heard him make many speeches on the transport industry. I found more today with which I could agree than in the past, although it was a pity that he allowed himself to forget a number of the claims which were made in 1946, and which he would have done well to have faced today.

As have no doubt other hon. Members, I have been re-reading some of those debates. Even if we allow for the fact that 1946 was only a year after the party opposite got in with a big majority, some of those claims were very high and have hardly been justified by events. However, it is not my purpose this evening to make anything of a party speech. I will refrain from making one or two of the enticing quotations which I have looked up, and endeavour to address myself in a more objective way to this subject.

There is no doubt that this is a difficult subject. This is the third attempt at dealing with the transport industry. I do not think that anyone can claim that the previous attempts have been complete successes. The figures for the railway losses and subsidies have been widely quoted and it is not necessary for me to go through them again.

My right hon. Friend is to be congratulated on making this attempt to deal with a difficult problem. Whatever right hon. and hon. Gentlemen may say, it is a difficult problem indeed, and a great many calculations on it have gone awry in the past. The railways have incurred these losses, and, what is perhaps almost worse, they failed to amass any reserves for their future capital improvement. There are still widespread criticisms of the passenger and goods services, and the morale of the railway service is not as high as we should like it to be.

Another factor, which is perhaps surprising after 15 years, is that the conditions of the railway employees have not improved as much as was hoped by many speakers opposite in the debates in 1946 and 1947. I therefore welcome any Bill which tries to deal with this rather intractable problem of the railways, but I have some reservations on this matter.

I am not in sympathy with the coastal shipping proposals, and I am still a little doubtful about the general principles running through the Bill. There are so many Clauses in it—very nearly as many as in the 1947 Act—that it is difficult to see the principles for the Clauses, but I shall endeavour to do so in my remarks.

As has been said, one of the principal difficulties of the railways has been the impact of the roads. This at first may not seem surprising, but it is more surprising when we remember the great difficulties of road transport at the present time and the hold-ups that we get. Roads to the West Country, like the A.30, provide examples of that.

There is a lack in this country of such things as fly-overs, which they started building in France before the last war. There are other matters such as the number of heavy loads which travel on the roads which must be taken into consideration, but I cannot see why free police escorts should be given to these loads going by road. I believe, like one or two other hon. Members, that there is some case for trying to influence this kind of traffic on to the railways which are often well designed to take it. I would not flinch from influencing them, but I do think that it is wrong to influence the heavy loads on to the roads from the railways by financial incentives.

Next, I come to an interesting White Paper published in April of this year, Cmnd. 1337, "The Financial and Economic Obligations of the Nationalised Industries". I do not take exception to any of the principles set out in the White Paper. What I am not so certain about is how far they have been applied to this Bill. I was surprised that my right hon. Friend made no reference to that White Paper, which sets out at the end a sentiment with which I would not disagree. Paragraph 33 says: .. all have, although in varying degrees, wider obligations than commercial concerns in the private sector. I doubt whether any hon. Member opposite would seriously disagree with that.

The paragraph goes on to talk about the losses of some of the nationalised industries, and sets out a series of principles, the first of which is that in a period of five years a nationalised industry ought to be able to pay, and the second that it should make some contribution towards the amassing of capital for its own development. Table IV of the White Paper shows the extent to which public corporations depend on the savings of others to finance their investment.

I regard that with some apprehension, especially in view of the extent of nationalised industries today. I realise that we are tonight dealing with one of the most stubbornly difficult of nationalised industries—the railways—but, generally speaking, I should have thought that the principle could be applied even to the railways, when the time came, that they should be made self-supporting, and even aim at the amassing of their own capital. They have considerable monopoly powers, and in attempting to achieve that amount of commercial success they should not abuse their special powers and privileges.

Mr. Steele

What privileges?

Mr. Digby

They do have privileges. They have the finance of the State behind them. They have power to acquire land compulsorily, and they are a vast concern and have a monopoly of all railway services. They cannot expect to be treated in the same way as the small tobacconist around the corner. It is all very well to talk about fair competition, but they are like a very big firm indeed.

I now want to deal with the application of the principles set out in Cmnd. 1337 to the transport industry generally and the railways in particular. First, we must consider the men. I am sure that we all wish success to Dr. Beeching. I was glad to hear that he has a new method of seeking out and promoting, all down the ladder, those who show the greatest ability. I also hope that he will regard the question of morale of being of the greatest importance. A short time ago I spoke to a man, whose opinion I value very much, on the question of what was wrong with the railways, and he told me that he thought that nothing was more important than the question of morale. There is much to be said for that argument.

That brings me to the question of organisation. During our debates in 1946 much stress was laid by Mr. Alfred Barnes upon the Commission. If we read the report of his speech when introducing the Transport Bill, we see that he kept saying that he hoped this, that and the other of the Commission. He kept referring to the commissioners and what he expected them to do. It may be significant that the commissioners have been rarely talked about as commissioners, and that all the publicity has seemed to go to the chairman. That may be one of the places where the organisation envisaged at that time has failed to match up to what was expected of it.

After listening to my right hon. Friend, I wonder how far the Advisory Council will be a replacement for the Commission. I noticed that the right hon. Member for Vauxhall was also on to that point. I see that it can discuss only those things which are referred to it by the Minister. How much will he refer to it? How much will it be something of a Cabinet? The Commission was at a disadvantage in not having departmental heads. We know from experience of Cabinets that Ministers without Portfolios, overlords, or whatever they may be called, do not exercise, as members of the Cabinet, the influence that one would expect. Despite the fact that departmental Ministers have so much outside work they are very often the most valuable members of the Cabinet.

In the same way, the Advisory Council could be made more useful. What will it do? How far will it have a general duty, and how far will it have any staff behind it to consider general transport questions? Will it be able to do nothing until a specific case is referred to by the Minister? I hope that it will be a little more than that.

The right hon. Member for Vauxhall made some play about the extent of the powers given to the Minister to interfere. One of the things that went wrong with the 1947 Act was that the Minister did not have enough power. It was often difficult for him to influence the Commission as he wished. The Bill is therefore going in the right direction in allowing the Minister much more power of interference.

Next I come to the boards and the Holding Company. I am unable to make out very much about the Holding Company. We shall probably find out more about that in Committee. I was a little surprised that the powers of the boards were not more specific.

We are told that the British Railways Board is to provide railway services in the United Kingdom. If it closed down every line except one I suppose that it would still be doing that, so we are not very much wiser on that point. I thought that the Bill would have gone a little wider in that respect, and would have shown what was wanted. Even in the 1947 Act, which many of my hon. Friends criticised, far more specific instructions were given to the Commission as to what it should do, and even the freedom of choice as between different forms of traffic was written into the Bill.

The Minister did not touch upon the question of salaries for the Railways Board and the other main boards, even the regional boards. This may be a thorny question, but I hope that the principle of giving enough to attract the best men to the job will be adhered to. I disagree with what was said by the right hon. Member for Vauxhall about the regional boards. I believe that they have a big part to play. But, once again, it is a little difficult to tell exactly what they will do. We do not know what powers will be delegated to them by the Railways Board. As I understand, that Board has a completely free hand about the delegation of powers.

It is quite justifiable that charges should be freed, and that railways should no longer be under the same obligations as they have been hitherto, because they are primarily commercial concerns. As for ports, docks, and inland waterways, again, it is a little difficult to see what specific instructions the boards have. The duty imposed on them is to provide facilities to such an extent as they may think expedient", which is not placing a real duty upon them to provide adequate facilities. I hope that that provision can be improved in Committee. The action to be taken with regard to hotels is absolutely right. They should have complete freedom. They have very few special privileges of a monopoly character, and they should be able to compete.

It is difficult to say how far the provisions of the Bill will mean the closing down of more branch lines. There is the obligation set out in Cmnd. 1337. If the closing of branch lines were carried too far, it would be wrong. The Railways Board will still have this monopoly and very great powers. At the moment my own constituency is threatened with a line closure. It is a line which connects us with the South and with the Midlands. It used to be the Somerset and Dorset Joint Railway, which was known by the rather unflattering term of "The Slow and Dirty". It is a very useful railway to us. It connects us with the Midlands, which is useful from the commercial point of view. It is also very useful for the holidaymakers who visit us. Unless some form of alternative transport from the South of England can be provided, I ask the people concerned to think very carefully about this matter before anything is done.

I feel very strongly about the proposals concerning coastal shipping. I am sure that no one in the House will doubt the value of coastal shipping. The memories of the war and the contribution of coastal shipping at Dunkirk and in Normandy are sufficiently recent for us to realise that it would be strange at the moment to reverse the tendency which has existed since 1921 of trying to look after the interests of coastal shipping. I cannot regard the defence consideration as having completely disappeared in these days. It would take a great deal to convince me that that was so.

The coastal shipping industry employs 6,000 to 7,000 seafarers. These are very valuable men in an island such as ours. The Common Market is probably coming along and they could be increasingly valuable if we enter it. In any case, a serious decline is taking place in coastal shipping. Only two new ships are being built this year, as compared with twenty-eight ten years ago. The fleet has been reduced from 970 to 638. This is not the time to expose coastal shipping to fresh competition.

It is unfair competition, because the railways are in such a very powerful position compared to the coastal shipping industry. There would not be a great advantage from taking over some of this work from the ships. The cargo would mostly be coal. The damage which would be done to our shipping would be out of all proportion to anything gained by the railways. In 1958, an inquiry was held to ascertain whether the railways were placed in an unfavourable position as regards coastal shipping. The answer was that they were not. For these reasons, it would be wrong for coastal shipping to be suddenly exposed to complete competition of the railways, because I do not regard the safeguards as sufficient. Even what we were told by my right hon. Friend did not remove the doubts.

I am very glad to see the powers concerning pipelines and, within reason, the additional powers which are given for the development of land. As regards the development of land, I hope that purely commercial considerations will not have priority. The railways own land in very useful places. The A.A. and the R.A.C. have made representations that some of this land might be released for traffic reasons. I hope that this consideration will be borne in mind as well as purely commercial considerations. It is not logical to give nationalised industries the power to acquire land compulsorily but when they wish to dispose of it to say that they can dispose of it to their own advantage regardless of the interests of the nation.

I welcome this attempt to deal with the transport problem, particularly with the railways, which I am sure the whole House wishes to be solved and put on a proper basis. It is a great pity that we cannot agree more than we have done so far today. I should be opposed to allowing purely commercial considerations to apply to nationalised industries which are given these privileges. For that reason my support for the Bill, if it is there at all, is very lukewarm. I find some difficulty in supporting the Bill. I am quite unable to support the provisions concerning coastal shipping.

6.25 p.m.

Mr. Scholefield Allen (Crewe)

I welcome the concluding remarks of the hon. Member for Dorset, West (Mr. Wingfield Digby). I am sure that all of us on this side of the House recognise that he has integrity. The one thing which anyone who has studied this problem should know and accept but which the Press has largely concealed from the general public is that losses are not a feature unique to British Railways. They are a feature which is common to all railway systems in the world. This is a fact of life. In recent days, hon. Members opposite have been anxious to point out what they call "facts of life". It is a fact of life that, with competition from the roads, the railways cannot now be made to pay and must be subsidised.

Mr. Geoffrey Wilson (Truro)

Has the hon. and learned Member been to Holland?

Mr. Scholefield Allen

Yes. In Holland they manage occasionally to make the railways pay. Holland is a very small country. It is very concentrated. It is as flat as a pancake. There are no hills and no tunnels. The hon. Member for Truro (Mr. G. Wilson) knows a great deal about the railways, but if Holland is the only example he can give it is a thoroughly bad point because the circumstances there are unique.

The Labour Party endeavoured to solve the problem by attempting co-ordination of road and rail. This was deliberately sabotaged by the Conservative Government. They have taken this up by the roots on more than one occasion. Every time they have replanted it the situation has been made worse. We on this side believe that it is not incompetence but wilfulness which has caused them to do this.

We heard from the hon. Member for Dorset, West about road conditions in the West Country and about the great loads which use the roads there and which are given police protection. When the Labour Party put through the 1947 Act, the public were perhaps not as conscious of the road problems as they are today. They have learned in the past five or six years, because of the tremendous increase of traffic on the roads, that what we did in 1947 was a wise move.

We attempted to get traffic from the roads on to the railways. By 1952 we managed to make £8 million profit for the nation by road haulage. That was taken away and handed over to the hon. Gentleman's friends. They do not have to pay for the track, but the railways have to pay for the track The roads are paid for out of the general taxation, but the railways have to provide and maintain their track and the competition from road haulage will always be very unfair.

I shall not follow the hon. Member for Dorset, West on all the points he made. He skipped from Clause to Clause. I want to talk about a problem which affects a large number of my hon. Friends and several hon. Members opposite. This is the position of railway workshops under the present scheme.

I represent Crewe, a railway workshop town, and the problem of railway workshops is of particular interest not only to myself but to all hon. Members who represent such areas. I hope that my hon. Friend the Member for Swindon (Mr. F. Noel-Baker) will catch your eye, Mr. Speaker. The hon. Gentleman the Member for Eastleigh (Mr. D. Price) should be particularly interested in this matter, as well as the hon. Gentleman the Member for York (Mr. Longbottom), although I do not see either of those hon. Gentlemen in their places at the moment. They are very much involved with this problem, representing as they do railway workshop constituencies.

Over 100 years ago there was no such place as Crewe. There was a village called Crewe Green, some distance from Crewe, but Crewe itself was created by the railway companies on the Cheshire Plain. People came to the area from all over the country. They settled there and the town grew up. To this day the railways, the Commission, own much of the town, including the town hall and a large number of houses. Between the wars Crewe suffered dreadfully from unemployment. It had practically only one industry—the railways—the vast workshops, with between 7,000 and 8,000 men.

Since that time there has been some diversification, and we now not only produce the finest engines in the world but the finest motor cars as well—Rolls-Royces and Bentleys—and this has brought relief. But Crewe is still a railway town depending on its locomotive works. It is, therefore, enormously important to Crewe's economic life that the railway workshops should not be neglected.

Hon. Members who represent railway workshop towns will be aware of the disquiet of recent years concerning the future of locomotive workshops. There have been redundancies among skilled men, many fitters have been dismissed, there has been a general curtailment of employment, and even apprentices who, in the early days, ten years ago, were invited to go to the yards and work their way up to become skilled journeymen have been affected. It is dreadful to think that at the age of 21 there is no work for many of them. This has all happened to Crewe in the last two or three years.

The position of the railway workshops is dealt with in Clause 13, where it states: …Each of the Boards shall have power to construct, manufacture, produce, purchase, maintain and repair anything required for the purposes of the business—… The Minister did not mention Clause 13 in his speech, and I hope that when replying to the debate the Parliamentary Secretary will have some words of hope and succour for us.

About a year ago, hon. Members representing railway towns got together because of the fear among our constituents that the Minister was not helping the nationalised railway works as he should. As I say, the representatives of fourteen railway towns banded together in order that our plight should not be forgotten. At that time, we had a meeting and passed a resolution which read: That this meeting of representatives of local authorities, Members of Parliament and trade union representatives from railway towns throughout England is seriously concerned with the immediate and, more particularly, with the long-term prospects of employment in workshops of British Railways and that representations be made to the Minister of Transport, the Board of Trade and the British Transport Commission to ensure that the necessary long-term planning is carried out to safeguard these towns from the serious effects of redundancy arising from the railways' modernisation plan. A further resolution was passed—agreed to by the hon. Member for York and the hon. Member for Eastleigh—to the effect that it should be proposed that Section 2 (2) of the Transport Act, 1947 (proviso iii) be repealed so that the railway workshops would be able to contract for outside as well as for inside work.

Clause 13 of the Bill under discussion allows railway workshops to produce only for their own consumption, as it were, and states: …the Boards shall not have power to construct, manufacture, produce, purchase, maintain or repair anything not required for any of those purposes.

Mr. Hay

May I point out that there are additional words which the hon. and learned Gentleman did not read? The Clause also states: …Each of the Boards shall have power to construct, manufacture, produce, purchase, maintain and repair anything required for the purposes of the business—

1. (a) of that Board,
2. (b) of any other Board, or
3. (c) of a subsidiary of any of the Boards or of a subsidiary of the holding company."

That gives wide cover for the railway workshops in their manufacturing capacity inside the Commission.

Mr. Scholefield Allen

The Transport Commission is being split into several parts. Previously the workshops were able to supply for the B.T.C. It would be a deadly blow if now the workshops were told that they could supply only the Railways Board. If the Government are taking credit for this, then it takes my breath away. Surely it would be outrageous to suggest that it would not be perfectly proper, when split into four, that the workshops should supply the new four boards just as in the past, they used to produce for the B.T.C. comprising the new four?

Mr. Hay

I thought that the way in which the hon. and learned Gentleman put his previous argument gave the impression that he was saying that the railway workshops were being confined to manufacturing for the Railways Board. I am drawing the attention of the House, and of the hon. and learned Gentleman, to the fact that the powers given are much wider than that.

Mr. Scholefield Allen

I accept that. I would more strongly condemn the Bill if I did not think that that was to be the case. I think this matter was raised by the hon. Gentleman the Member for Eastleigh in a Bill introduced under the Ten Minutes Rule, the effect of which was to allow the workshops to manufacture not only for the B.T.C. but for outside competition. The Government resisted that and the matter has been raised in the House again, but the Government have paid not the slightest attention to it.

If the railways workshops are excluded from competing for outside work, and are limited to inside work, they cannot grow in capacity like an ordinary industrial concern which supplies or may supply the whole world. The railway workshops are deliberately excluded from that market. The corollary, surely, is that the railway workshops must have priority for and opportunity to do all the production allowed them by the Bill, to the exclusion of private enterprise. Private enterprise has the whole field open to it. It can export all over the world. The Bill limits the railway workshops to railway work and the old Commission's work. If they are to be restricted in that way, they should be given all the possible work that they can do, and they should be fully employed before work goes elsewhere.

The railway works are a very valuable national asset. They have been paid for by the nation. They have men there who have spent a lifetime in the works, men who have special skills. There is nothing that those men cannot do if they are given the opportunity to do it. Yet work goes to outside contractors.

I am told that it is still going to outside contractors in preference to the railway workshops. Private enterprise contractors outside are constructing diesel units and making continuous braking gear and automatic train control equipment, all of which could be done by railway workshops.

There is great uneasiness in the railway towns. As an hon. Member opposite said, there has been constant disturbance of the modernisation plan. The Government have been in and out, stopping and going, so that Sir Brian Robertson and his colleagues were unable to plan properly because they never knew when the whole modernisation plan might be stopped or disrupted for months and months. The deliberate action of the Government, with their stops and goes, has caused great havoc in the phasing of the modernisation plan and its execution.

Considerable anxiety is felt in my constituency now. The Crewe workshops have their programme fixed for 1962, but they have no information at all at this stage, in December, 1961, about their 1963 programme. It is only twelve months off. The Loco Works Committee has had interviews with the manager, and it has expressed in a letter to me its view that it is essential to enable continuity of employment to be maintained that at least twelve months preparation is allowed for ordering and manufacturing of materials. The time factor will be a very important factor if engines of a new design are to be built at Crewe. The staff and the committee are very concerned about the present situation.

I wrote to Dr. Beeching about it and received no satisfaction. Dr. Beeching replied saying that the works manager could not give the staff representatives any information about the 1963 programme. The reason", he said, is that we have not yet been able to decide in conjunction with the Ministry"— with the Ministry, be it noted— what we shall spend on the construction of various kinds of rolling stock in 1963". It appears from that letter from Dr. Beeching that one of the influences holding back the settlement of the 1963 programme is to be found in the Ministry itself.

Clause 13 (4) provides that: Each of the Boards shall from time to time submit to the Minister proposals as to the manner in which their powers of construction, manufacture and production under the tore-going provisions of this section are to be exercised". I may be wrong, but, so far as I am aware, that is an entirely new proposition. I never knew that Crewe Works submitted its programme or that the B.T.C. submitted its programme to the Minister for his approval before entering upon it.

The subsection goes on: and shall exercise those powers in accordance with those proposals as approved by the Minister with or without modification; but the Minister may … direct that Board to discontinue any of the activities which they are carrying on in accordance with proposals so approved". That is a very wide power indeed, without any appeal, as far as I can judge. As I read it, the Minister is to be given power to say, "We will close the whole of Crewe Works. We do not want anything manufactured there".

I do not suggest that the Minister would do such a thing, but it is a very wide power to give, to enable the Minister of Transport, after consultation with the Board, to direct a Board to discontinue any of its activities. We in Crewe would like to hear from the Parliamentary Secretary why such an extremely wide power should be proposed, without any possibility of appeal by anyone. The power should be greatly modified.

Millions of pounds of the nation's capital have been invested in our great loco works in one part of the country and another. I hope and trust that the Minister under that or any other power will never sabotage the railway workshops as he has sabotaged the British Transport Commission by handing back the roads to the road hauliers. We need more traffic by rail and less by road. Now the railways get the dirty stuff to carry and the clean and valuable goods are taken by the road hauliers at good profit. The railways take what the road hauliers do not want.

For the Minister and Dr. Beeching to gain the confidence of the trade unions and the workers is an essential prerequisite of the working of our railway system. The hon. Member for Dorset, South spoke of morale and said that it was important. It is important. No good is done to the morale of the railway workshops when they hear depressing reports in the Press and elsewhere about the future possibilities of work in the great railway workshops. The Minister and Dr. Beeching should go out of their way to keep the men and the trade unions fully and constantly informed about what they propose to do. The people of the railway towns are very much in need of reassurance today. I hope that the Minister or his Parliamentary Secretary will give us an assurance that the future of our great railway workshops is not as dark as some of us have been led to believe by reports of what has happened behind the scenes.

6.49 p.m.

Colonel Sir Leonard Ropner (Barkston Ash)

During the course of my remarks, which will be very brief, I shall be occupied almost exclusively in criticising one or two Clauses of the Bill which are, I think, by almost unanimous consent judged to be gravely misguided.

Before dealing with coastal shipping, I congratulate the Minister of Transport on the Bill taken as a whole. To decide what he wanted to put in the Bill and what he thought should be excluded from it must have called for many judgments on a host of problems of great complexity and intricacy. I think that the Bill—subject, of course, to further consideration, detailed scrutiny and proper amendment—will achieve its many purposes.

It is in the national interest that the railways should prosper and, as taxpayers, we must certainly hope that such will be the case. I do not think that any right hon. or hon. Gentleman can forget the future welfare of the many hundreds and thousands of men and women employed on the railways and their ancillary industries.

Of the Bill's 91 Clauses, only two relate to coastal shipping and, of the eleven Schedules, only one concerns itself with this important section of the national transport service. That is a very small part of a very big Bill. Nevertheless, since the Bill was published not very long ago I think that part has, perhaps, received more attention than the rest, and certainly has been the most wholeheartedly condemned.

Earlier this afternoon, my right hon. Friend the Minister expressed reluctance to treat coastal shipping as a special case, but there is a very long history of legislation that has recognised the need for statutory powers to regulate competition between the railways and coastal shipping. As has already been said today, the story goes back as far as 1921—long before the railways were nationalised, and long before they became the recipients of vast subsidies.

Ministers of Transport of all parties have over a very considerable period stressed the importance to the nation, in time of peace and in time of war, of maintaining an adequate coastal marine. As far back as 1947, Mr. Alfred Barnes, then Minister of Transport in the Labour Government, charged the Railways Rates Tribunal to have regard to .. the importance of maintaining adequate coastwise shipping services. In 1952, Lord Boyd, then Minister of Transport in the Conservative Government, said: We propose to strengthen the machinery for the protection of coastal shipping. As recently as 1958, a joint inquiry conducted by British Railways and coastal tramp shipping reached the unanimous conclusion that conference arrangements between railways and coastal shipping would not and could not hamper the railways in competition with road transport. It is true that in 1953 the powers of the Coastal Shipping Advisory Committee were, unhappily, somewhat curtailed but, generally speaking, ever since 1921 safeguards for coastal shipping have been progressively strengthened.

Coastal shipping seeks no subsidy in order to compete with the heavily subsidised railways. Moreover, coastal shipowners and the seafarers recognise that it is for the Government to determine whether ships engaged in the coasting trade are necessary for the needs of the nation in peace and war. All previous Governments have thought that they were necessary. The present Minister of Transport appears to think that they are not but, if my right hon. Friend really holds that view, I believe that in the later stages of the Bill he will find that the great majority of hon. Members on both sides disagree with him.

By now, surely—for I know that there has been considerable consultation—the Minister must have realised that, as it stands, Clause 54 cannot carry out the purposes for which it appears to have been drafted. Not only everyone engaged in the coasting trade—from the chairmen of companies to the latest-joined deckhand—but substantial sections of the public and of the Press are asking: is it fair that, without reasonable statutory protection, coastal shipping should be forced to compete with a vast monopoly which is in receipt of huge subsidies?

Mr. Popplewell

Is it not also correct that not only does coastal shipping seek that with the railways, but would rather like a type of division with road haulage similar to that which took place before the 1947 Act was altered by the 1953 legislation?

Sir L. Ropner

I am very sorry, but I do not think that I am in a position to answer that question or express a view under the head of road transport.

If the question which I have said was being asked were to be put in other words, I think that they would be: should the taxpayers' money be used to kill coastal shipping? Not only the coastal section of the shipping industry, but the General Council of British Shipping, the National Union of Seamen, the Merchant Navy and airline officers' organisations—representing as they do, all sections of men and women employed in the coastal trade—are all quite unable to comprehend why the Minister of Transport, at a time when he is proposing to give the railways such potentially damaging powers, should wish to take away the existing safeguards for coastal shipping. It seems to me to be completely "potty," and I very much hope that the Minister will put this matter right.

The Minister of Transport has recently professed—and I am sure that he is sincere—considerable concern for the present and future position of the shipbuilding industry. Between 1950 and 1958, the tramp section of coastal shipping built new tonnage in each year during the whole of that period which was never less than 21,000 tons and in two or three years went as high as 40,000 tons. What has been happening recently? In 1959, new tonnage was down to 5,000 tons, in 1960 it was down to 4,000 tons, and I am told that unless the Bill is amended the amount of tonnage built next year will be completely nil.

The Minister of Transport has been fairly ready to criticise the shipyards of the United Kingdom during the last few months, but the action which he proposes would lead to a complete shutdown or, at best, a great diminution in new orders for the coasting trade. That would not seem to show a genuine desire to play any part in helping those localities which are dependent upon shipbuilding or, I may add, those smaller yards which are particularly suitable for building the comparatively small coasting vessels.

I shall not vote against the Second Reading of the Bill. As I have said, on the whole it is a good Bill, but I certainly urge the Minister, before a vote is taken tomorrow night, to go rather further than he went in his speech this afternoon and to give an assurance that he will agree to amend the Bill so that the threat to coastal shipping can be removed.

My right hon. Friend could, I am sure, accomplish what so many of us would like to see him do without in any way damaging the railways. If at this stage my right hon. Friend is adamant and does not appear ready to go a good deal further in safeguarding the interests of coastal shipping, I assure him that there is fairly serious trouble ahead in the later stages of the Bill.

I add only one more comment arising from something that was said by my right hon. Friend this afternoon. I was glad to hear him say that Dr. Beeching and some leading shipowners had been asked to meet and to see whether they could find a solution to the problem with which the Minister thinks he is faced. But behind-the-door discussion between representatives of coastal shipowners and the chairman of the railways will not do. The Minister cannot shuffle off his responsibility.

Mr. Marples

I have said that they would meet separately and then we shall be meeting next week under my chairmanship. So I shall enter into conversations with them.

Sir L. Ropner

For the sake of coastal shipping and of the Ministry of Transport, I hope that those meetings and conversations will be successful.

7.5 p.m.

Mr. Walter Monslow (Barrow-in-Furness)

I do not propose to follow the hon. and gallant Member for Barkston Ash (Sir L. Ropner), who, naturally, has particularised. I know his interest and I expected him to make the speech which he has made. I certainly could not follow the hon. and gallant Member in the sentiments which he expressed when he extended his congratulations to the Minister upon the presentation of the Bill.

The Minister certainly gave us a long dissertation, but it was only a rehash of what we have experienced from the benches opposite for the last decade. The Government may feel that the Bill will give a fillip to the railway industry. My right hon. Friend the Member for Vauxhall (Mr. Strauss) put the point lucidly when he said that the railways have been the playthings of politicians, and, once again, we have an attempt by the Government to improve the fortunes of the industry.

I hazard a guess that there will be no solution to the problem of transport, for it cannot be treated in isolation. It has been said, and it is believed by the Minister and others who have spoken from the benches opposite, that the railway industry will soon be a viable concern once again. From the Bill, I see no ground whatever for believing that.

I have long expressed the view that the Transport Act, 1947, was wrecked of any hope of success from its inception because we had no control—the Minister was right about this—over C-licences. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite say, "Hear, hear", but I want to develop the point.

I appreciate that in 1947, we on this side aimed at co-ordination and centralisation of all forms of transport. Had there been no tampering with that objective, I am confident that the industry would not be in its present economic plight. I am satisfied that the retreat from co-ordination and integration, which has resulted in so much cutthroat competition confronts us with a problem which was inevitable.

Mr. G. Wilson

If the hon. Member wants complete integration, would he not also have to nationalise the private cars, which represent the largest number of vehicles on the road?

Mr. Monslow

Had the hon. Member waited a moment, he would have had the answer. His interjection was premature.

There is nothing fundamentally wrong with the railways. Their greatest handicap in recent years has been the belief by hon. Members opposite that competition was the only solution to all their troubles. Hon. Members opposite have always regarded anything like planning or integration as repugnant to Conservative philosophy. We have arrived at a position when we have wasteful competition between the competing sections fighting for traffic regardless of the needs of the country.

In the past, there has been too much supervision by whoever happened to be the Minister of Transport. From time to time, the railways have been denied, even by Government directives, the opportunity to increase their freight charges, even when the Transport Tribunal has declared that in the interests of the railway industry it was necessary that that should be done with a view to meeting the increased costs demanded by other industries for their products, namely, coal and steel, for example. We are reaping what we have sown, and so long as we failed to embrace both public and private transport it was inevitable that the problem with which we are now confronted would arise.

This situation is not only our experience, but it is the experience of every highly industrialised country in the world. The floods of private transport, both freight and passenger, have submerged public transport, road and rail, both privately owned and State managed, in all industrial countries alike. I will cite two examples, but there are many more that I could give. Take Western Germany and the United States of America. They have experienced the most savage competition from road haulage, and in our case, as in theirs, the difficulties still persist, which demonstrates that whatever country is involved railways cannot survive as a separate entity in the realm of transport unless there is Government aid, thereby recognising that the railways are an integral part of the nation's economic life.

In the Soviet Union, which I visited recently, I found that transport services are run at a loss as a matter of Government policy. They are run to give a service which is looked upon as part of the social services. I know that that sounds quite revolutionary.

Mr. Arthur Holt (Bolton, West)

It happens here.

Mr. Monslow

Not quite. The hon. Member says that it happens here. I will deal with that aspect of the matter later, because I now want to develop the statement I have just made.

I appreciate that that would be a revolutionary idea, but I hazard a guess and make this prediction now. If this Bill is passed, there will still be a large number of unprofitable suburban commuter services in Britain which will be left to the railways, as they are more economically efficient and are, physically, the most economic way of getting people to work. The Minister and others who have spoken this afternoon have talked about co-ordination, but the Bill provides co-ordination for the London area under the London Board only, and there are specific reasons for that being done.

May I ask the Minister to tell us whether social needs in any other part of the country will be taken into account, whether the railway services are economic or uneconomic? I know that that aspect affects the travelling public, but I want to stress a more important aspect. In the light of the communications which I have received from various parts of the country—and I will cite only one example—I understand that in Scotland, on 4th December of this year, 125 train services are to be withdrawn. On 8th January, 1962, there are to be 165 further withdrawals.

I want to say a word or two about the sociological implications of these withdrawals, and I want to ask a question. I know that the Bill provides in Clause 71 certain safeguards for compensation and superannuation, but I think that something else needs to be stressed. As a result, there will be some mobility of labour, and I assume that when all these services are withdrawn the men will be expected to transfer to other depots, where there may or may not be places for them. Will there be any compensation for their removal from their homes by way of allowances?

Over the years, I have stressed in our transport debates the need for the Government to take into account the possibility of the maintenance and renewal of the permanent way being carried on the Defence Estimates. I believe that it would be a valuable contribution towards easing the financial strain on the railway industry. I know that hon. Gentlemen opposite will remind me that it would be a direct subsidy, but that would be nothing new for this Government. They have no qualms at all when private enterprise comes along with its begging bowl. The Government are not by any means reluctant to assist their friends in private industries which are not more important to the nation than the great railway industry.

Now, I wish to deal with one or two financial implications of the Bill. May first, put a question for clarification of something on which I confess I am puzzled? I have here a copy of the White Paper "Reorganisation of the Nationalised Transport Undertakings" (Cmnd. 1248) which gives some financial statements. In the Bill nothing at all is said about financial statements, and we find reference to it only in the Explanatory and Financial Memorandum. In the White Paper, it is said that the existing liabilities of the Transport Commission would be £1,600 million, of which £400 million would he written off, £800 million placed to suspense account and £400 million would be retained. The Bill gives no figures, but the Memorandum says that the amount to be written off is estimated at £475 million and the suspended debt is likely to be £650 or £700 million. Clause 39 (6) of the Bill says that the Minister shall decide the rate of interest and period of repayment. The right hon. Gentleman is aware that the original B.T.C. stock is repaid over a period of ninety years, and that recent loans have been for repayment in twenty-five years. I ask the Minister to tell what the position is. What is his estimate of the commencing capital debt of each of the boards and the Holding Company? What is his estimate of the total amount of the commencing debt, and what proportion of the whole, does he intend that each of the boards and the Holding Company should carry? Does the estimate given in Cmnd. Paper 1248, that interest-bearing debt for the railways will be £400 million and for other activities £400 million, still stand, or is the revised figure, as given in the Memorandum to the Bill, the figure upon which he is to make his assessment? My last question to him is what the rate of interest will be and what will be the repayment period? Does he intend now to lay down what the commencing debt should be, and the new borrowing?

I conclude by saying that there are dangers in this Bill, as I see it, particularly in regard to wages and salaries. I should like to know whether in this decentralisation method, what has been accepted, even by the Prime Minister himself, in the Guillebaud Report, that wages and salaries in future must bear some relationship to what is happening in private industry, will be maintained? My information is that, in consultation with the trade unions recently, Dr. Beeching did not accept what the Prime Minister stated in the House. I should like some clarification of the point so that we may know whether, when the Bill becomes an Act, we are to have that measure of protection which the Prime Minister told us railwaymen would enjoy.

I have said that I believe that the Bill will never solve the problem of the railways because it cannot be solved in isolation. It is only by a process of co-ordination and integration that we shall ever create a successful transport undertaking in Britain. I am glad that we are to divide the House against the Bill.

7.20 p.m.

Mr. Ronald Russell (Wembley, South)

The hon. Member for Barrow-in-Furness (Mr. Monslow) began and ended his speech, as I expected he would, by advocating integration and co-ordination of our rail and road services. That has never been achieved in this country, even under the party opposite, and I suggest that it is wholly undesirable, because it means dictating to industry exactly how it is to transport its goods and—

Mr. R. J. Mellish (Bermondsey)

Why not?

Mr. Russell

Because I do not think that industry should be dictated to as to how it transport its goods.

Mr. H. Hynd

We did it during the war.

Mr. Russell

A great deal of harm would be done to the whole operation of industry if we were to dictate to it like that.

There is one country, I know, where this does happen, and it is the one country which the party opposite will not be eager to copy—the Republic of South Africa, where the railways have an almost complete monopoly of the transport of goods. At any rate, they have a say whether any goods shall be transported by road.

I must admit that on a journey of 1,100 miles by road from Cape Town to Durban the only goods vehicles we passed were about half a dozen furniture vans. Outside any of the big towns the roads are a complete paradise to motorists, but whether the transport of goods by road is a paradise for industrialists is quite another matter.

Mr. Mellish

If it could be proved conclusively that giving this consideration to the traders' interests, as the hon. Member calls it, were not in the interests of the nation as a whole and that they would suffer, would he not agree that the time would then have arrived when the traders should be told what to do?

Mr. Russell

It is so difficult to decide exactly what is meant by the interests of the nation. That is a matter of opinion. I do not think that anybody can possibly define that. I doubt whether in any country in the world can prove that an integrated system does work to the benefit of the nation, bearing in mind the interests of the public and the interests of industry.

Mr. H. Hynd

We had it during the war.

Mr. Russell

Not to all that extent. Anyhow we are trying to run road and rail services in time of peace now, and that is a different state of affairs.

I welcome the Bill as an attempt to put the railways on a more commercial basis. I say "a more commercial basis" because, I reiterate, I doubt whether it is ever possible to run them on a completely profitable basis. I welcome the financial freedom outside of London in areas which have not had it before.

I hope that this will result in the railways gutting away from the mentality which they have had all too much in the past, that is, that if there is a fall in traffic and therefore a loss, then the automatic remedy is to put up the fares. That is against all normal commercial practice. I would suggest that sometimes the remedy might be a reduction, in order to attract more traffic, and I hope that the Ministry and the boards will think in terms of attracting more traffic, both passengers and goods, back from the roads, before, possibly, closing services.

I think that this is a step towards the Dutch system, which my hon. Friend the Member for Truro (Mr. G. Wilson) mentioned, and which does pay its way. I know that there is this difference between the Dutch railways and probably most others, as someone pointed out, that Holland is a small country, but it has achieved the target of profitability—I think in all the years since the war but one. Surely, if we cannot equal that, we can at least regard it as a target and try to reach it. One of the reasons for the Dutch railways' success is that they operate only the railways, and all the other services are done either by subsidiary companies or by contractors. I think that is why they pay their way.

Mr. Charles A. Howell (Birmingham, Perry Barr)

Is the hon. Member so ill informed that he is not aware that the railways made a profit until 1953?

Mr. Russell

I do not think that that is quite correct. In any case, it is not on the same basis, and I am not talking about 1953 or before that. I am talking about now.

One word more about the question of closing services. I hope that before this is done an effort will be made to attract more passengers to see if the services can be made to pay. I have an example which arose last year in my constituency, on a suburban service from St. Marylebone to High Wycombe. The first two stations down the line are in my constituency, and one of these is "Sudbury and Harrow Road". Last year there was a proposal to close this station altogether. It was a derelict- looking station, completely bereft of any modern paint, and it looked, I think, as it must have done when it was built in the 1890s. It was attracting only a very small number of passengers. There were very many people who hardly knew that the station existed or that any service ran from it to Marylebone.

As a result of the threat to close it down representations were made by local residents and British Railways adopted a suggestion which I put up to them, that they should keep the service going pending the introduction of a diesel service on the line. They did that. I think that the diesel service has been a success. At any rate, there are more trains stopping there now than there were in the days of the old steam service. I hope that now there can be no question of the station being closed.

I wonder whether more could be done with further examples like that and by advertising the services. Outside Sudbury and Harrow Road station there is a bridge across the road with nothing on it, not even an advertisement. I suggest that a notice should be put on it saying something like "Marylebone in 15 minutes"—or whatever the time may be. That might draw the attention of the public to the fact that there is a train service there and possibly more people will use it.

Clause 3 of the Bill authorises the Railways Board to deal with services. I do not know how far that entitles me to go into one or two problems in which I am very interested, particularly the questions of speed and punctuality, and perhaps I should be stretching the rules a bit far if I said too much about that now, but I hope the Bill will enable the railways to look into the question of the speed of trains today compared with their speed before the war and the speed of trains today in some foreign countries, because I feel that we have made very little progress in that direction.

The fastest train from London to Edinburgh is still 40 minutes slower than before the war, and there are comparable times in other services. My hon. Friend the Parliamentary Secretary will know, from going to Strasbourg a few years ago, that some French services are far faster than ours. I hope that that will be looked into.

I hope, also, that the Bill will enable the railways to concentrate on something else which is vitally important, and that is punctuality, in which we have a lot to learn from some foreign countries.

Mr. Manuel

When the hon. Member is talking about times and punctuality does he mean the scheduled timetable times or the times of the actual journeys?

Mr. Russell

I mean, as far as speed is concerned, the scheduled timetables, and as far as punctuality is concerned, the times of the actual journeys.

Mr. Manuel

Even when there is snow?

Mr. Russell

I am speaking, of course, from my own experience of speed and punctuality on the railways, but I do not want to weary the House with this, but to pass on to something else.

I particularly welcome Clause 11 of the Bill which allows the railways to develop by lease or sale land which is not needed for railway purposes. I am quite sure that every hon. Member in the House will agree that there are, in London in particular, and in most of our big cities, vast areas of land belonging to the railways, and on which there is nothing at all, but which could be put to profitable use, particularly in view of the great need for car parks. I know that some progress is being made in that respect, but I hope that this matter will be looked into seriously and earnestly. There must be plenty of spaces where there might be car parks. I wonder whether the problem could be considered of building over railway tracks on existing sidings so that what at present is in other respects wasted land could be put to more profitable use.

Like the right hon. Member for Vauxhall (Mr. Strauss), I hope that a decision will be made soon on the Victoria-Walthamstow tube. I have no interest in it, constituency or otherwise, but I dislike schemes like this being broached and nothing being done about them and no decision taken one way or the other. I see from the Annual Report of the Transport Commission that an experiment has been conducted with a new method of tunnelling in the Finsbury Park area. The tunnel will be part of the new tube system if it materialises and I understand that it has resulted in a more economical method and a reduction in cost. I believe that the original estimate for the tube was £50 million. I wonder whether the new method may result in some substantial reduction on the present estimate.

I am a great believer in going underground, if it is humanly possible to do so, to speed up travel across our cities whether by rail or by road. We should look into this question of tunnelling much more seriously than we have done in the past, particularly in view of what has been achieved, for example, in tunnelling under the Alps and under the Kiel Canal. This might be a means of solving traffic problems, whether of road or rail, without pulling down property, which is nowadays one of the greatest cost factors in modernising the system. If this were done we should deal more effectively with our transport problems in future than we have dealt with them in the past.

7.21 p.m.

Mr. Francis Noel-Baker (Swindon)

I hope that the hon. Member for Wembley, South (Mr. Russell) will forgive me if I do not follow him very closely in debate, but I am sure that he will not be surprised if I say that I disagree fundamentally with a great deal of what he has said. A gulf divides the two sides of the House. We on this side of the House see the railway system and transport as a whole as a public service. We believe that if necessary it must be paid for by the Government and the taxpayer to make it as efficient a public service as possible. We believe also that the reason why our railway system has fallen behind that of almost any other advanced industrialised country in Europe, if not in the world, is that those countries have treated their railway systems and transport system generally in that way and we have not.

I was interested to hear the hon. Member refer to the efficiency, speed, and punctuality of the French, Dutch and other railways on the Continent. The reason is that large sums of public money have been spent on them and the Governments concerned have been prepared to subsidise them if necessary to keep them running efficiently. The background to the present condition of the Dutch railway system is that the railways there have been in public ownership for many years. Enormous sums have been put into them to make them efficient. The Dutch Government were prepared to run them at a loss until they became, as they now are, efficient and running at a profit.

The Minister has had a very chilly reception from a good many of his back benchers today. I do not know whether at the end of the debate we may witness another of those retreats with which we began to be familiar when the Commonwealth Immigrants Bill was discussed. We think that this Bill is thoroughly bad. We think the whole approach to the problem is wrong. We shall try to turn the Bill inside out in Committee and to do what we can to change a great deal of it.

When Conservative Members of Parliament discuss this question they talk as though the problem which we are facing has not been faced by country after country. The hon. Member for Wembley, South was discussing railway problems as if they had not existed elsewhere, and yet in the next breath he gave the examples of France and Holland. The Conservative Party has been in power ten years. The hon. Member for Dorset, West (Mr. Wingfield Digby) told us about the mistakes that we made in 1947, but what about the mistakes that the Government have made since 1951?

One of the things which has astonished me about the debate and when trying to follow the thinking of those now in charge of the railway system is that they still do not seem to have made up their minds. We were told in January of this year by the Parliamentary Secretary: The one thing that I have heard since the White Paper was published was that they"— that is the railway workers and the industry— 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."—[OFFICIAL REPORT, 30th January, 1961; vol. 633, c. 720.] In trying to follow what may be in the mind of Dr. Beeching, in looking at his public statements and in listening to the Minister, it seems to me that that is exactly what has not happened.

We are still in a state of uncertainty. The right hon. Gentleman says that the Government will conduct separate studies which may be completed in a year's time. Dr. Beeching is taking stock of the situation before trying to reach final decisions. What on earth have the Government been doing in the last ten years? What has been the purpose of the proposals and counter-proposals and the Stedeford Committee when it seems reasonably clear that the Government have not yet decided, for example, whether the railway system has a long-term future at all?

The Minister has the reputation of being a man who dislikes and despises railways. He has gone out of his way to make offensive remarks, for example, at the Conservative Party Conference a year before last and elsewhere, and disparaging remarks which have been resented by railwaymen at all levels. Does he or does he not believe that the railways have a long-term future and that an efficient railway system will be an essential part of a modern set-up in 20 years' time? Does he think that they can be gradually replaced by other forms of transport? He should tell us his view and the Government's view of the kind of future that it is intended to produce for the railway system.

I should like to turn to a detailed matter which has been referred to by the hon. Member for Dorset, West, and that is the pipelines mentioned in Clause 12 of the Bill. I am very much disturbed by everything I read in that Clause. I appreciate, of course, that legislation will be introduced by another Minister to deal with the pipeline question as a whole, but this Clause seems to be thoroughly bad. It seems to put the development of pipelines entirely at the mercy of the Minister. He can intervene at every point.

The Clause does not give the right to the Railways Board to run a pipeline system of its own. The Board is hedged about by all kinds of restrictions and obstacles. After reading the Clause and hearing what the Minister of Fuel has had to say in recent months, it seems to me plain that the Government propose to repeat with pipelines the mistake made in the early part of last century with the railways, by having a proliferation of separate pipelines, some privately and some publicly owned, which will leave us with a very unsatisfactory situation. We on this side of the House have always taken the view that there should be one integrated common carrier pipeline system at the disposal of those whose very wide range of suitable products can be moved by pipeline. I therefore particularly dislike Clause 12 and hope that something will be done about it in Committee.

It would not be right for me as Member of Parliament for Swindon not to say something about the railway workshops. I listened with great attention to the speech of my hon. and learned Friend the Member for Crewe (Mr. Scholefield Allen). I am sorry that he is not now in the Chamber because I want to contradict flatly one thing that he said. I should get into trouble with my constituents if I did not say that it is known to everybody in the House that the finest locomotives are not made in Crewe but in Swindon. I endorse everything else that my hon. and learned Friend said and I would draw the Minister's attention to the fact that there are 150,000 industrial workers and a good many clerical and administrative workers now in the railway workshops who are very worried about their future. Nothing that is stated in Clause 13 will put their minds at rest. Once again they are hedged around with obstacles and difficulties and the Minister has the power to intervene at almost every point.

The Clause states that Each of the Boards shall have power to construct, manufacture, produce, purchase, maintain and repair anything required for the purposes of the business— We have had discussions about this before. I was hoping that the Bill might have given a little hope that the Government were prepared to introduce an element of real competition into this business. There has been the fiction of competition with private firms. It is a fiction because the railway workshops have not been allowed to do work for which they are well fitted for outside firms. They have not been allowed to modernise their plant and have not been able to plan ahead.

One of the bad effects of this Bill and of the Government's policy during the last ten years is that the Government have put these railway factories in the impossible position of not knowing how much money they will have to spend each year or the year after. That has made future planning impossible for them. The restrictions that arose originally when the Labour Government accepted a Conservative Amendment in 1947, quite wrongly in my opinion, on doing outside work in the railway workshops produced a ridiculous situation.

In Swindon we have first-rate workshops, as the Minister should know. There is a factory a couple of miles away desperately needing castings. When I was talking to the general manager the other day he said, "It is a ridiculous situation. Here is a foundry in Swindon with less work than it wants and here am I crying out for things which it could make. I am an obvious customer, but I am not allowed to buy from them."

I make one more appeal to the Government to consider whether when there is difficulty in the railway workshops they cannot at this late stage liberalise their policy towards them and allow them to do outside work. Many of my friends in Swindon and many people in the railway industry with whom I am in touch have the greatest doubt about the Government's intentions concerning these factories.

I ask the Minister a couple of direct questions. First, does he think that over the next four years or so, while the modernisation plan is going through, work on new construction and on maintenance will tail off? Is it his intention when the modernisation programme is finished to close down these factories altogether? There are many well-informed people in the industry who think that this is so. If it is so, the Government have an obligation to thousands of men employed in these factories to tell them that it has been decided, for reasons of Conservative Party policy, that these factories are to be dispensed with and, therefore, they had better start making other arrangements for themselves now.

When we look at Clause 13 (4) there is a good deal of reason to be worried, because among the manifold powers given to the Minister is this: …the Minister may, after consultation with a Board, direct that Board to discontinue any of the activities which they are carrying on in accordance with proposals so approved. That means that from one day to the next the Minister could direct a Railway Board to shut down a factory in Swindon and there would be nothing that anyone could do about it. The indications seem to be that the Government are thinking in terms of tailing off all work resulting from the modernisation programme throughout the next four years and that after that they will want to dispose of the factories altogether.

I turn to a paint on which I was trying to attract the attention of the Minister while he was speaking. I hope that he will not think it too offensive of me when I say that we regret the fact that he could not have shown a little more courtesy while he was speaking and have dealt with some of the serious points which my hon. Friends were trying to put to him.

One matter which worries me very much about the Bill—it was referred to by my right hon. Friend—is that one of my hon. Friends has calculated that there are 97 points at which the Minister is now entitled to interfere in the railway system in this Bill. [An HON. MEMBER: "More than that."] I am told that it is more than that; that it is 112; but no one has yet counted the total. Throughout the Bill, over and over again there are new doors open for Ministerial interference. We have always taken the view on this side of the House that one of the troubles about the way in which the present Government and the party now in power have dealt with the railways is that they have constantly subjected them to political interference. Now, that power is becoming very much greater.

In 1959, when the present Minister and the present Parliamentary Secretary had recently taken over their present jobs, the Parliamentary Secretary made a reference to the power of direction. He said that …the power of giving direction is a pretty strong weapon, which was conferred on the Minister of Transport by the various nationalisation Statutes. It is a kind of sledgehammer kept in some dark cupboard in Berkeley Square."—[OFFICIAL REPORT, 10th November, 1959; Vol. 613, c. 372.] That sledgehammer, according to the provisions of this Bill, appears to have been taken out of the dark cupboard and put into the Minister's hands, and he is to be invited to wave it about all the time. His power of interference has been enormously increased. This is despite the fact that there was a sentence in the White Paper, in paragraph 28, which stated: Nevertheless the Government do not propose that the Minister's existing statutory powers and responsibilities in relation to the nationalised transport undertakings should be extended. I ask the Minister why it is that they have been so very greatly extended in the Bill. What happened between the publication of the White Paper and the publication of this Bill to change the situation? I have a second question to ask him, which I think is very much more important.

Even under the old arrangement there was a great deal of anxiety in the House of Commons because the railways appeared to be becoming not more but less accountable to the House and to the general public than they were when in private hands. We had difficulty at Question Time, as Mr. Speaker knows very well, in putting matters of very great general public importance to the Minister, because he could always say, "It is a matter of day-to-day management and I am unable to answer that." Sometimes we had to try to get around the Table by putting down Questions asking if the Minister would give a general direction on the subject. This was the only way in which we could get a Question in on many issues. On this very great extension of the Minister's powers, would he not consider discussing with the Leader of the House and the Prime Minister whether there ought not to be some extension of the rights of the House of Commons?

My right hon. Friend and relative the Member for Derby, South (Mr. P. Noel-Baker) was Parliamentary Secretary to the Ministry of War Transport in this House for a large part of the war. His Minister was in the House of Lords and he was answering for the Ministry here. He tells me, as he has told the House, that when at that time he was subjected very frequently to a mass of Parliamentary Questions, because at that time the Ministry accepted Questions on any aspect of the running of British railways, far from their being a hindrance to him or to the railway system they were a very great advantage. He said that it was a good thing from the point of view of the public, the Ministry of Transport and the House of Commons that these questions should be asked.

I appeal to the Minister of Transport—I do not often adopt an appealing tone towards him; he is one of my favourite targets for attack when I speak in my constituency and elsewhere, but I am not now trying to score a party point, because this is an important House of Commons matter—to look again at the Bill and the enormous extension of his personal right of intervention, and consult his colleagues and see whether it is not possible to achieve some extension of his accountability to the House of Commons and, in particular, some extension of our right to ask him Questions.

I find it difficult to understand how the Minister will be able to perform his functions and intervene, as he is asked to intervene by the Bill, without building up an enormous department in the Ministry of Transport. Perhaps I might here refer to the Transport Advisory Committee, of which I presume the right hon. Gentleman will be the chairman. There is a discrepancy here between the Bill and the White Paper. The White Paper says that he "will" be chairman; the Bill says that he "may" be chairman. Perhaps the right hon. Gentleman would care to clear up this point right away, and if so, I shall be pleased to give way to him. Does he propose to be the chairman of the Transport Advisory Committee?

As the Minister does not respond to my invitation, we can only conclude that he has not decided whether or not he will be the chairman. It seems an extraordinary situation that he will not answer my question. Whatever his relation with that body will be, will he create a large railway department and a series of other departments in the Ministry to enable him to intervene effectively in the ways that the Bill sets out? We should very much like that question answered.

I emphasise that I hope that my hon. Friends will do their very best during the rest of the Second Reading debate and in Committee to turn the Bill inside out and get rid of very many of its features which we consider to be reactionary, out of step with the times and disastrous for our transport system.

7.52 p.m.

Mr. John Arbuthnot (Dover)

I find myself very much in the position of my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner), who supported the Bill as a whole but criticised certain Clauses. Oddly enough, the Clauses of which I feel a little critical are not the ones that my hon. and gallant Friend criticised. One of the Clauses of which I am rather critical is that mentioned by the hon. Member for Swindon (Mr. F. Noel-Baker), dealing with pipelines. I am very much in sympathy with what the hon. Gentleman said, and shall return to this subject later.

On the whole, I feel that the Bill is a good one, since it gives more freedom to those who run the railways and also gives incentives to operate them commercially. It introduces a degree of financial realism into rail transport, and that, in particular, is most welcome.

My criticisms should not be taken as in any way detracting from my general welcome for the Bill. The criticisms that I make refer in particular to the Clauses dealing with docks and pipelines. Since the Bill was published, I have been having discussions with the Dock and Harbour Authorities Association, with which I am in close contact.

I quote back to my right hon. Friend the statement which he made in opening the debate this afternoon, when he prayed in aid the principle that a public undertaking works best if it has the same conditions as those which apply to its commercial competitors. In the light of that statement by my right hon. Friend, with which I find myself in complete agreement, I ask him to look again at the proposals that he is putting forward with regard to the Docks Board.

The Dock and Harbour Authorities Association represents the principal dock, harbour and conservancy authorities, which deal with about 70 per cent. of the goods which go through United Kingdom ports. It is only the remaining 30 per cent. which will be handled by the proposed Docks Board. The Board will be subject to much Ministerial control, and, in particular, the control provided under Clause 27, which is similar in its terms to Section 4 of the Transport Act, 1947. I see no reason why this Ministerial control over a third of the docks industry is necessary at all. I would much rather see a financially independent, autonomous body; in fact, as the last Royal Commission on Transport put it: "a public trust such as exists in London, at Liverpool, on the Clyde and elsewhere."

The Minister may say that he does not intend to interfere. In that case, it would be very much better if he were to remain completely outside. He may say that he intends to stimulate the Docks Board. That would seem to be unfair to the other public undertakings which run 70 per cent. of the docks that they are to be in competition with a Board which has the advantage of Government help and stimulation. He may say that he intends to curb the exuberance of the Board. In that case, 30 per cent. of the docks authorities will be unfairly penalised vis-à-vis their competitors. Consequently, I suggest that my right hon. Friend keeps right out.

My next point relates to the same Clause. If 30 per cent. of the docks trade is done through a body which is in association, through a Holding Company, with the railways, it may well be that the railways might impose a condition in accepting traffic that it should be channelled through docks run by the Docks Board. This would be extremely unfair to the other docks.

On finance, I have two points. The first point is that each of the independent docks authorities is required to be self-supporting. In the case of the docks run by the Docks Board, however, it may well be that docks making a loss will be able to be financially supported by other docks making a profit This would give docks run by the Board an advantage over their independent competitors. There ought at the very least to be a requirement that the accounts of each one of the docks under the Docks Board should be published separately so that we can see what is happening and who is subsidising whom.

My second financial consideration is that whereas the independent dock authorities have to raise their money from the public, and may have to raise it as a loan in adverse circumstances in anticipation of works which they expect to have to carry out, the Docks Board will raise its capital from the Government and need raise it only at the moment when it requires it. This will give the Board a substantial financial advantage over its competitors, which seems to be unfair. For these reasons, I urge the Government to put the Docks Board on all fours with the independent dock authorities and make the Board an independent, autonomous Public Trust.

I now turn to pipelines. The main provisions are in Clause 12. A public Bill on pipelines was foreshadowed in the Gracious Speech, but Clause 12 of this Bill seems to anticipate this to a very serious extent. There are, so to speak, several "horses" in "the pipeline stakes," and the Bill would seem to let one of the "horses" start before the others have approached the starting gate.

One of the reasons for having public legislation on pipelines, as proposed by the Committee which considered the Esso Bill, was to ensure a proper system of pipeline development and to avoid the construction of overlapping and criss-crossing pipelines. Judging by the answers to Questions, asked by myself and others, the new pipeline Bill will presumably be the responsibility of the Minister of Power. It follows that if the House passes Clause 12 of this Bill, as it now stands, two different Ministries will be issuing safety instructions about pipelines.

Incidentally, I notice that there is nothing in Clause 12 about standards of safety in the construction of pipelines, which is, perhaps, even more important, if possible, than safety in their operation. In any case, Clause 12 seems to conflict with Clause 13 in the matter of pipeline construction and Ministerial consent. Clause 12 (3) says, in effect, that if a pipeline is constructed for a Board's own purposes no Ministerial consent is necessary, wherease Clause 13 (4) requires a board to submit proposals to the Minister about its powers of construction and for the Minister to have power to approve or modify them or, indeed, to discontinue them if he thinks fit.

All in all, it seems to me that it would be better if my right hon. Friend the Minister of Transport withdrew Clause 12 and left the Boards to be placed in exactly the same position as any other pipeline developer under the Bill, which, we presume, will come before us shortly. I hope that he will feel it appropriate to drop Clause 12, since I believe that everybody ought to start on all fours in this pipeline race and that we should see what the Minister of Power has to propose before we put these boards into a privileged category by giving them the special powers envisaged in this Bill.

8.2 p.m.

Mr. George Darling (Sheffield, Hillsborough)

I hope that the hon. Member for Dover (Mr. Arbuthnot) will not misunderstand me when I say that I know nothing about docks and, therefore, cannot follow him in that part of his speech, but I agree with him to a large extent about pipelines. My hon. Friend the Member for Swindon (Mr. F. Noel-Baker) has asked me to apologise to the hon. Member for his being called out of the Chamber when the hon. Member was dealing with this matter.

What struck me most in the hon. Member's speech, and about which I can say something, is his assertion that the Bill brings what I believe he called "a note of financial realism" to our railway system. I notice that when Members opposite are talking about financial realism for the railways, none of them mentions the fact that British Railways, as now organised, operate under a terrific financial handicap, as compared with most of the continental railway systems, in that they did not start off as a State railway system. They had to be bought by the Government.

Many of us on this side of the House believe that the Government paid much too high a price for the system and that, in consequence, the railways are having to carry a tremendous capital and compensation burden which most continental systems do not.

Mr. Arbuthnot

The hon. Gentleman will recollect that it was his own Government which decided what the price and the conditions should be.

Mr. Darling

I have said that I thought a mistake was made. I do not want to go back in history, but in the circumstances I must point out that the Government found it difficult to avoid the formula laid down for market prices and share values. Nevertheless, all this is a financial handicap which is carried by British Railways. I have not the figures with me, but I guess that the total amount paid in interest on this great debt paid by the railways since 1947 is very much greater than the accumulated deficit carried by the railways. That, of course, is a burden which most, if not all, continental railways do not carry.

This Bill is a very strange one to come from a party which says that it does not believe in State bureaucracy. It is a bureaucrat's dream. It places everything, all the control, in the hands of a Minister. It sets up a very rigid system of administration for which the Minister and his Department are almost entirely responsible. It is well to note just what the duties of the Minister are in this regard, because, as my hon. Friends have said, there are about 100 points in the Bill, concerning the administration of this new railway organisation, where the Minister can, and in many cases will have to, intervene. We should look at these cases in which he will be able to intervene in the light of the tremendous amount of time which the right hon. Gentleman has at his disposal to devote to the railways.

The right hon. Gentleman is not only in charge of railways, but of ports, harbours and all sea transport administration as far as the Government are concerned; British shipping operations and policy; foreign shipping relations; the shipbuilding industry, and the ship-repairing industry. He is also responsible for land in association with highways, and for roads and road development. He is in charge of London traffic; road engineering; road transport regulations and road safety; vehicle registration; canals and inland waterways. Now he has the railways to look after under this very bureaucratic system.

As a matter of personal capacity, I do not think that there is a person in this country who is capable of carrying all these burdens efficiently. I would not place the right hon. Gentleman in the category of a superhuman, being able to take on all these operations and carry them out efficiently. Up to now he has shown no exceptional capacities which pick him out as being the person capable of doing all this work.

As I mentioned in an intervention, the right hon. Gentleman will also have on his shoulders another very important duty. This country has applied to join the Common Market. It is laid down in the Rome Treaty that the Council of Ministers will have certain duties to perform in the co-ordination of transport in Europe. This will be a duty which the right hon. Gentleman will not be able to avoid, for it is laid down that the Council, in dealing with transport, will consist of the Transport Ministers of the member countries.

I do not want to pursue this, but it will mean further burdens placed upon him which he must carry out—and he will also have a conflict of policy to deal with. The Rome Treaty provides that, as it develops, there shall be a system of co-ordinated transport in Europe, and we know that that means that the roads, rail, canal and river services of Western Europe will be co-ordinated, with Britain and the right hon. Gentleman having to play their part.

We shall then, presumably, hear the right hon. Gentlemen defending the breaking up of a co-ordinated system in this country while advocating a co-ordinated system in Europe. Modesty is not one of his most notable characteristics, but even he cannot believe that he can properly carry out all these duties. He will have to devolve some of them to others.

This is where we begin to ask some serious questions. Upon whom is the Minister to devolve not the rubber stamping of decisions—that is what he will do himself—but the job of making the decisions? It is perfectly clear to me that the whole Bill is designed to give far greater authority than one realises from a first reading of the Bill to the Transport Commission, or the Railways Board, as it is to become, and the chairman of that Board.

Because of all the duties which are placed upon his shoulders, the Minister himself will have neither the time nor the opportunity to go into details, as one would expect of a person with the responsibilities which the Bill places upon him. He will be just a rubber stamp and the decisions will be taken by others. We want to know, therefore, what policy will be pursued by the Board for whose decisions the Minister will be the rubber stamp.

From what we know of the policies to be pursued, I believe that they will cause a great deal of unnecessary and unjustified damage to the railway system. I do not believe that the organisation of the railways will be improved by the Bill. One of the factors, not recently, not since nationalisation, but since 1922—and I was working on the railways soon after 1922—which has inhibited and handicapped the railway system has been that the managerial units within it have been too large. I do not mean that we do not want central control and central direction of some things. Of course we do. There must be strong central control and we need central control of general policy and a great deal of standardisation of installation and equipment. We need a common investment policy and, to a large extent, common fares and freight charges, although with much elasticity for special traffics. We also need central control for co-ordination of services.

I am convinced that the managerial set-up which came about in 1922, when we had the four big railway companies, was altogether wrong. I worked for the London Midland and Scottish Railways, in a very minor capacity, but I know that in the locomotive shed in which I worked it was impossible to get day-to-day decisions, which should have been given by the management on the spot, because all the decisions had to go back to headquarters at Euston and not enough managerial responsibility was given to the local people.

I admit that it is a very difficult problem, a problem involving all large organisations, not only like the railways, but like Imperial Chemical Industries. I.C.I. has taken a great deal of trouble to find out the optimum size of management within its massive organisation. It has tried to break down its administration so that the management units are more or less of that optimum size. If Dr. Beeching's former organisation can do that sort of thing, I see no reason why, under his administration, it cannot be done for British Railways.

I take it a stage further, because the top-heavy structure of administration in the Bill, this bureaucratic nightmare, will stimulate many people in higher management down the line to get rid of difficult problems and difficult services. It will stimulate them to get burdens off their shoulders, because they will have too many burdens and because their management units will be too large. It will stimulate them into getting rid of difficulties, whereas if there were smaller managerial units they would deal with difficulties by solving them rather than by closing services.

Here we reach a point at which the Bill is thoroughly reactionary. I have never believed that the system of transport users' consultative committees, set up by the 1947 Act, was wholly satisfactory. It was an experiment. It is a pity that the weaknesses of that experiment, when one was trying to bring the public interest directly into the social and economic administration, were not corrected by the people responsible for the initial organisation. The Government have taken a completely wrong view of the job of those committees. They should be representative of the public interest and able to tell the railway organisation of the grievances and needs of passengers and of the needs of industrialists for well-organised, efficiently conducted freight traffic. There should be a link—because a link is needed—between the railway organisation and the public.

These consultative committees were not properly organised in the 1947 Act for that purpose. Their main weakness was that they had no independent organisation of their own and had to depend on the Transport Commission, and now on the regional boards, for the information they needed. They will have to depend upon the boards for secretarial assistance and will not be in a position to bring independent judgment to bear on the problems with which, according to Clause 57, they are supposed to deal.

The Bill is thoroughly reactionary in this respect, because even some of the weak duties of the consultative committees are to be removed under the new dispensation, especially those involving closures. As hon. Members who have heard me raise questions about it and who are probably getting bored with it know, I am interested in the closing of the Great Central Line. I have made some rather serious charges against the Transport Commission about the evidence which it has tried to produce to show that this line does not pay, never will pay, and ought to be closed. Those who support the Commission in this make such categorical statements, but nobody has produced any evidence.

Mr. G. Wilson

It never did pay.

Mr. Darling

I will answer that if the hon. Member wishes me to do so.

The line was opened for traffic in 1900. I agree that it was a badly designed line and ought not to have taken the route it has. From 1900 to 1914 it was not a profitable line, but no independent accounts have been presented since the First World War. Since that time there has been much industrial and residential development along the line. Without independent accounts, it is impossible to say whether the services have paid or not, but we have had proposals for closing the Great Central Line.

I shall not go into the subject in detail, but the Minister referred to a train somewhere in Scotland which was running at a loss. I do not know whether his figures are correct. If they are on the same basis as the figures produced here as evidence for the closure of the Great Central Line, I think that they are greatly open to question. In any case, the Minister cannot say that a line ought to be closed because one train on the line carries few passengers. We want to know the circumstances.

There are a lot of trains which, having taken a peak load from point A to point B, go back at a non-peak period to point A to start picking up a peak load again. Many of them deliberately travel back empty. Some do not even call at stations on the way back so that they can get where they want to be to start over again. It is possible that this train was in that category.

Here we get the evidence. We are told that if all these services up and down this former Great Central Line are closed, the Transport Commission will make a net saving of £230,000 a year. That sounds a lot of money until one looks closely at the figures. The next item is rather buried in the figures, but they admit in a sentence that if the steam services on this line, on which the figures were based, were switched over to diesel services, the net loss would be in the region of £140,000.

These figures were made up after the three managements which look after the Great Central Line had agreed to close many of the services. I do not want to go into detail about this. I want to make only two points. First, in giving the detailed figures of the train services they give the number of people who get on and off the train throughout a certain period, but the figures never meet at all. I would have thought that as a mathematical probability the average number of people who got on a train would equal the average number who got off, but it never does.

Some of the trains referred to as not paying are trains which do not run in the way they are set down here. For instance, there are references to Sunday trains from St. Marylebone to Nottingham. Sunday after Sunday, for the last five years, they have closed the line between Woodford Halse and Rugby to carry out track repairs. They could have taken the track up and put it down again four hundred times in the time they have so far spent on repairs. They have been closing the line for five years to get these figures to show that people are not travelling on it.

I know that is a serious charge, but I believe it to be true for the very good reason I gave earlier, that unless you have properly organised managerial units in this railway business, in certain circumstances you will stimulate the management to get rid of its difficulties, and, as I have said before, this line is an administrative nuisance. I can understand the view of the managers who are responsible for it. It is a difficult line to run, but the passengers who ought to he using it ought to receive far better treatment than they have received.

I gave that example because now that the transport users' consultative committees are not to be allowed to inquire too closely into the closures of lines, how do the passengers, like myself, who question the figures which the Transport Commission or the railway boards bring forward, who want a proper examination of the facts before anything is done, make our opinions heard? This is the kind of thing for which many of us have been pressing in other matters. How do users of railway services make their opinions felt? How do they raise their questions? How do they bring forward their grievances? How do they get their points of view over to the Government and the railway administration in such a way that they can be looked into and their interests safeguarded? How can they present a case to a management which wants to get rid of a difficulty in the easiest way, and prevent it doing something which is detrimental to the transport system? How do they do it?

This is a question to which I hope we shall receive an answer to night. Does the Bill mean that we are to be barred from making our representations to the transport users' consultative committees? As the Minister is taking responsibility for decisions and closures, and so on, can we raise questions in the House? I would prefer to ask questions here. These consultative committees have never been as useful as the Labour Government expected them to be when they were set up. If we can ask questions in the House without being ruled out of order, if we can raise Adjournment debates, if we can kick up a row here—and I like kicking up a row about this—I shall be satisfied, but it will be the only point in the Bill about which I shall be satisfied.

8.25 p.m.

Mr. J. A. Stodart (Edinburgh, West)

I think that the general outlook which has inspired this Bill is a good one. It is thoroughly sound that it should be laid down that it is the job of the railway boards to run the railways, certainly economically, preferably profitably, and that it should not be their job to have to consider such things as social considerations but that these should be matters for the Minister. I also think it is a good thing that considerable efforts are to he made to pinpoint profits and losses on individual services.

The hon. Member for Sheffield, Hillsborough (Mr. Darling) said that no accounts of the profitability of the Great Central Line had ever been publicised or presented, nor, I gather, had any attempt been made to get them.

Mr. Darling

Since the First World War.

Mr. Stodart

It is surely essential for any concern which wants to achieve success to know where money is being made, and where losses are occurring, for then one can take whatever action one's responsibility leads one to take. All the same, I have reservations about the Bill. I have reservations about the Government's plans for dealing with what may, perhaps, be described as essential services which continue to lose money. The Government's intentions are far from clear.

My hon. Friend the Member for Guildford (Sir R. Nugent) made a point with which I cannot altogther agree. He said that the only standard to be used for keeping railway lines open was whether they were profitable. I think that the only exceptions he made were in connection with the commuter traffic round London, and I think he thought favourably of that difficult section of the line which lies in the North of Scotland. But if one were to apply that yardstick to the General Post Office, presumably no mail would be delivered north of Edinburgh—certainly not for threepence.

It is true that one Clause deals with the strategic necessity for keeping a line open, but that Clause will by no means embrace all the difficulties with which Scotland will be faced if a solely economic policy is followed on the railways. I have no doubt that the problems of the railways in Scotland are similar to those of certain areas in England and Wales, although they are considerably aggravated because of the much more scattered population. I am sure it is safe to say that no organisation, even if it were backed by all the genius of Dr. Beeching, could make the system north of Perth viable. I doubt whether re-organisation can make the Scottish Region profitable on its own.

Applications have already been made to curtail certain services and to close certain lines, and I believe that more applications are to follow. It is proper that they should be made, if we accept the dictum that it is the job of the railway boards to run the railways economically. But I very much regret that the Government seem to have rejected the advice of the Select Committee concerning the paying of a direct, open, above-board subsidy, based on social needs. It is worth considering what that recommendation was. It is contained in paragraphs 423–425 of the Report, and reads: The consideration of profitability…should be left to the Commission. But if decisions are to be taken on grounds of the national economy or of social needs, then they must be taken by the Minister, and submitted by him for the approval of Parliament. Furthermore, if Parliament is to specify that certain services should be undertaken, despite the fact that the Commission cannot profitably undertake them, then the additional cost of them should be provided…out of public funds. If subsidies of this kind are to be paid to the Commission, then they should be paid for specific purposes, and they should be paid openly. They should not be disguised, as, for instance, a payment of the track costs…nor as the writing-off of the burden of interest; and they should not be hidden away in the Commission's accounts. The procedure proposed seems to be very much less straightforward than that recommended by the Select Committee. My hon. Friend the Member for Guildford asked the Minister if he would make clear what the procedure was to be. It appears that what the Select Committee recommended is exactly the opposite of the step that is to be taken, and that any losses are to be covered up by a blanket subsidy of £90 million a year for the next five years.

What grounds could there be for maintaining uneconomical services in Scotland? I would say that one was that we have to do our best to arrest further depopulation and any decline in commercial trading. It is true that, whether or not railway lines are closed within the next ten years, more people will own motor cars of their own: but there is substance in the interjection made by the hon. Member for Central Ayrshire (Mr. Manuel), that with the road system as it is at the moment there would be considerable difficulty in getting coal to the outlying communities in the North of Scotland. That is a practical point that must be remembered.

A second reason for keeping possibly uneconomic services going is that we want to avoid congestion in city streets. My hon. Friend the Member for Guildford said that that must apply in London. I very much doubt whether, if the Blue Trains in Glasgow were taken off the streets of Glasgow could accommodate the extra buses and motor cars and all the traffic at the peak hours every morning and evening. Indeed, my right hon. Friend the Secretary of State for Scotland has said that any increase in peak hour traffic as a result of closing the line from Edinburgh to Leith, or possibly other suburban lines, would be most unwelcome.

To close all the branch lines could have most unpleasant repercussions upon any future efforts by the Board of Trade to get industry into Scotland. It may be a hypothetical proposition, but if, by any chance, in five, six or seven years' time, Peebles—the county town the line to which is now under threat of closure—has a large amount of unemployment I cannot think that it would be a great attraction to firms to tell them, "Do come to Peebles. Of course, there is no railway line."

Although I put it well down the list, it could also be argued that certain selected lines should be kept open for the benefit of the tourist industry. I am thinking of lines such as that from Aberdeen to Ballater, where a battery car carries very heavy traffic in the summer. Given considerable publicity, the West Highland line could also carry many passengers in the summer. The Government are not particularly generous—and that is a masterly under-statement—in their contribution to the Scottish Tourist Board. Therefore, this might be a way of making one.

I ask my hon. Friend the Parliamentary Secretary when replying to say specifically whether, when closures of lines in Scotland are being contemplated, any views which the Secretary of State may express will be most carefully taken into account. In view of the figures which were quoted earlier we cannot grumble at individual trains being taken off, but we must remember that the running of a train forms a very minor part of the cost of running the railways. Not very much money will thus be saved by taking off the 7.48 a.m. from one place to another, and it is logical to claim that a greater burden will be placed on the fewer services which remain. The proper answer to the problem is surely to try to attract more passengers, get more fares, and carry more goods. But I doubt whether any form of transport can possibly be profitable in the Highlands. After all, the services which British European Airways run—

Mr. E. G. Willis (Edinburgh, East) rose—

Mr. Stodart

I am sorry that I cannot give way, because other hon. Members want to speak. British European Airways lose on the services they run to the Outer Islands. I do not think that bus services in Highland areas can pay on their own without some form of subsidy or cross-subsidisation. I reiterate that if there is a need for a subsidy—and subsidies must be payable to many Scottish services—it should be paid openly and clearly so that people can understand what is being done.

8.41 p.m.

Mr. Thomas Steele (Dunbartonshire, West)

As I have sat here throughout most of the debate my notes have become longer and longer, but because of the time available to me my speech must be much shorter than I had originally intended. I welcome the contribution of the hon. Member for Edinburgh, West (Mr. Stodart) and I shall look forward to seeing him with us in the Lobby tomorrow night, because it is clear that he opposes the Bill.

I was interested at the lukewarm support from the Government benches, but I have noticed that those hon. Members opposite who attacked the Minister during the debate on the White Paper have been absent today. I do not know whether this is by design or not. It is clear that today the Minister gave us no more information than he gave us in his speech in the debate on the White Paper. I was disappointed that the right hon. Gentleman did not apply himself today to answering the points of criticism made then by the right hon. Members for Birmingham, Hall Green (Mr. Aubrey Jones) and Blackpool North (Sir T. Low), the hon. Member for Yeovil (Mr. Peyton), and my right hon. Friend the Member for Vauxhall (Mr. Strauss).

Surely the right hon. Gentleman meant what he said in the last debate, when he told us that the Government would take account of all the points made in the debate. During the whole course of his speech today he made no mention of any criticism or point which was made during the previous debate. I understand that in winding up that debate the Parliamentary Secretary said nothing. I can sympathise with him. I was a Parliamentary Secretary myself. I know the instructions—that one has to wind up a debate and say nothing. I have had to do it. The Minister should have taken the opportunity today to say something about the criticisms which were made during the last debate.

The only hon. Member opposite who supported the proposals on the last occasion was the hon. Member for Truro (Mr. G. Wilson). He supported the 1953 Act. I was interested in the Minister's comment about vested interests. He said that it only came to him when he became Minister of Transport. During the passage of the 1921 Act the then Minister, Sir Eric Geddes, made it quite clear that the railway companies had plenty of friends in the House of Commons. There were plenty of railway directors looking after the interests of the railway companies at that time. But in 1945 those people disappeared, in that sense, and the only vested interest that has been evident in this debate has been that of coastal shipping, and hon. Members have made their views clear on this matter.

The hon. Gentleman the Member for Dorset, West (Mr. Wingfield Digby) said that he had studied the Bill in an effort to discover the philosophy and principle with which the Government were working. I have looked at the Bill carefully and I confess that I must ask; if there is a new approach, if a new philosophy exists, what is it? The principle seems to be free competition and voluntary coordination. Unfortunately, the Bill does not permit voluntary co-ordination to be carried to a point where amalgamations can take place. It makes co-ordination impossible.

There has been a lot of discussion today about free competition and what it means. In 1921, Sir Eric Geddes expressed doubts in the House about what it meant and said that free competition was wasteful. I regret that time does not permit me to go into the details of this, but it would be useful if the Minister would read Sir Eric's speech of 1921 when introducing the Railways Act.

Unfortunately, since 1945 the transport industry has been bedevilled and highly charged with politics and it is clear that the 1953 Act was brought in by a Tory Government not because they believed that it was essential for the industry but merely because they had discussed and attacked nationalisation from 1945 to 1951 and they had to do something about it to satisfy their friends in the road transport industry.

Viscount Boyd, when introducing the 1953 Act—he was then Minister of Transport—said that competition gave a better service than monopoly. That was different from 1921, when the then Minister said that competition was wasteful. In 1953, I said that the 1953 Act would not work and that another Bill would be forthcoming. That has happened. But having read the comments of Dr. Beeching and the Minister's pronouncement, it seems that the Government still believe in free competition as presented in the 1953 Act.

In his address to the Institute of Transport, Dr. Beeching said: What we have to do is to make up our mind what traffic is best suited to be transported by rail. That is a good idea and I am all for it, but the problem, the challenge, is that once Dr. Beeching has made that discovery how will he get this traffic, since I am doubtful whether time is on his side? Having made the study Dr. Beeching is bound to tell the Ministry, in effect, that the railways must be protected in some way—as they are on the Continent—against the ravages of road haulage competition. If Dr. Beeching is the man I believe him to be, I am sure that that is what he will do. Otherwise, he will undoubtedly fail.

There are many other aspects of the Bill with which I would like to deal, but since time is short I will concentrate on one aspect of it; that which applies to Scotland. During the passage of the 1921 Act, there was a great deal of interest in Scotland about what would happen. There was tremendous agitation and Scottish hon. Members on both sides of the House were united against the Government's proposals. As a result of the agitation and the work of Scottish Members of Parliament at that time, a considerable alteration was made in the Government's proposals for the formation of the companies under the 1921 Act. In Scotland, in those days, both workers and industrialists expressed a general fear that Scotland could not become a profitable unit by itself, but it had to be linked to the English companies south of the Border if there was to be a n effective and efficient Scottish railway service.

In 1947, there was no general agitation in Scotland. Why? The position of Scotland was recognised by the Labour Government. The Labour Government went further and made special provision in the 1947 Act for Scottish representation on the Commission and on the Railway Executive. The Minister gave an undertaking that one member of the Commission would represent Scottish interests and one member of the Executive would represent Scottish interests. They were Sir Ian Bolton on the Commission and Sir Wilfred Ayre on the Railway Executive.

In 1953, the membership of the Commission was increased from nine to 14, and it was specifically provided in Section 25 (2) of the 1953 Act that . least two shall be persons appointed after consultation with the Secretary of State for Scotland as being persons likely to be conversant with the circumstances and special requirements of Scotland. We voted against the 1953 Act. Scottish Members put down an Amendment to take Scotland out of the Act altogether, and we had a very good debate about it. However, despite the fact that we voted against it and asked for Scotland to be taken out of the Act, it is true that special provision was made by the Minister in the 1953 Act for Scottish representation.

If the Minister reads the OFFICIAL REPORT of that discussion, he will see that Conservative back benchers, too, were concerned about the effect of the 1953 Act. A deputation of them went to the then Minister of Transport. The Scottish Press was up in arms about what would happen. What did the Minister of Transport do? At a later stage of the Bill, he said that he had solved the problem; he would create a new special body called the Scottish Transport Council, the function of which would be similar to what we find in this Bill, with the Minister co-ordinating the nationalised services in Scotland. I criticised that at the time and said that the proposed new body would not be effective because it had no powers.

The Minister of Transport said that he would not be a party to the appointment of a special transport council for Scotland, asking important people to serve on it, if that body would not have any powers or anything to do. What happened? The Scottish Transport Council was formed. It had one meeting only. Having met, it decided that there was nothing it could do. The Council has never met since. That was the outcome of the undertaking we had then. I am not surprised that there is no mention in this Bill of the Scottish Transport Council.

What is even worse is that there is no provision in the Bill for any of the four boards, the Holding Company or the Nationalised Transport Advisory Council to have any Scottish representation whatever. No doubt, the Minister will say that it is laid down in the Bill that he must have regard to the desirability of having members on those bodies who are familiar with the special requirements and circumstances of particular regions and areas. Here is another Minister who has to be informed that Scotland is neither a region nor an area. I know that the Minister dislikes railways, but now he dislikes Scotland as well. What hope is there for Scotland with a man who dislikes both of them?

I am disappointed that the Secretary of State for Scotland has allowed this to pass. His name is on the Bill. It was night that we should have caused some trouble in the early part of the day because no Scottish Minister was to speak from the Front Bench, even though the Secretary of State's name is on the Bill. However, looking at these new bodies, let me say quickly what I think must be done; and I hope that the Minister will provide Amendments to this effect in the Standing Committee.

On the Railways Board, we want at least two Scottish members. On the British Transport Docks Board, we want at least one Scottish member. On the Inland Waterways Authority, we want at least one Scottish representative—even if, as a friend of mine said, it is only to have the Loch Ness monster represented in that Authority. In the Holding Company, we want two Scottish members, and on the Nationalised Transport Advisory Council we want one member from Scotland. As for the Hotels Board, we do not yet know how it will be composed, but Scottish representation on it is necessary because of the importance of the tourist industry in that country.

Had time permitted, I would have said something about the Central Transport Consultative Committee, but I will come back to that during the Committee stage.

For Scotland, this Bill sends us backwards instead of forwards, because it will create a situation which private enterprise tried to avoid thirty years ago. Then, we had two railway companies—the L.M.S. and the L.N.E.R. Where they had competing lines, they had pooling arrangements for fares. At that time, they owned the docks—what will happen to the docks now? Under the Bill they will be run by a separate board—no doubt from London. What about the hotels? They are to be run by a separate board, also from London—and these were owned by the railway companies at that time.

What about the other interests? Thirty years ago, these two railway companies had a 50 per cent. interest in Scottish Omnibuses. That part of the business is now to be run by the Holding Company, from London. The companies had a 50 per cent. interest in Wordies and in Cowans, of Glasgow, who were very large haulage companies. Those will now be run by the Holding Company, from London. Thirty years ago, through their own Scottish representatives, those companies could ensure proper co-ordination, and prevent cutthroat and wasteful competition. Under the Bill, the railways, the docks, the hotels, Scottish Omnibuses and B.R.S. will be under separate management in Scotland, and the only machinery for co-ordination will be through the Nationalised Transport Advisory Council, in London—and, as has already been pointed out, that Council is purely advisory.

Speaking to the Institute of Transport, Dr. Beeching asked: Will our proposals led to more wasteful competition? I think that, in Scotland, the answer is clear; they certainly will because, in effect, they will put the clock back 30 years. In effect, as the right hon. Member for Hall Green said on 30th January, legislation in transport has always been behind the event. When the 1921 Railways Bill was going through the House, road transport competition was just around the corner. That competition was met in Scotland by private enterprise taking a financial interest in road haulage, in bus services and various other things to secure co-ordination and to meet the competition. Today's Bill will bring about in Scotland the situation which private enterprise was taking steps to avoid over 30 years ago.

I believe that the Bill will not solve the problem. Like the 1953 Act, it will fail, because Dr. Beeching, big man as he may be, is facing a problem which he will be quite unable to solve. My grave fear is that not only will the railways be closed in Scotland, but that as the rural bus services, also, are unable to pay their way, and Dr. Beeching's conception is that the only yardstick must be the economic one, Scotland will be left with neither railway nor road services.

9.2 p.m.

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

I wonder what reaction the Minister will have after listening to the debate today when he finds that he has only one Member on his side of the House who gives him unqualified support. If the Minister has any feeling at all, he must be somewhat embarrassed. I say "if he has any feeling", because the way he commenced to address the House this afternoon when moving the Second Reading of the Bill makes me wonder.

The Minister had the audacity when introducing the Bill to say that the reason for it was that the Transport Commission was overloaded with work and that each type of undertaking should have a separate establishment because it was all too big for one undertaking. The Minister said he was convinced that the railways should have a separate Board. He gave not one word of apology for the fact that his Government broke that up in 1953. In the 1947 Act, we had the very structure—separate executive committees for each undertaking—which the Minister today attempts to suggest is necessary for the operations of transport. Therefore, I wonder whether the Minister has any feeling at all. His is a remarkable performance to say the least.

Many of us felt that the return of a Tory Government in 1951 spelt the end of any form of co-ordination or integration of transport. We were justified in that belief by the fact that the then Prime Minister at once refused to allow London Transport to increase its fares, even when the Transport Charges Tribunal had decided that increased costs of raw material warranted higher fares. Many of us felt that such political interference meant a sad day again for transport, and how justified we have been by the course of events.

This Bill justifies our worst fears. It segregates transport completely and suggests that each form of transport must justify itself purely and simply on a profit and loss account. It ignores completely any obligations to the nation for social needs in regard to transport. It ignores completely the fact that free, unfettered competition in transport seriously interferes with the national economy and considerably slows down our productive effort.

These statements are borne out by the events that are taking place. We have seen a steady growth in the number of C-licences on the roads to something like 1,200,000. The vast majority of these consist of the small vans of the tinker and the grocer and such like. We say "Jolly good luck to them", but we also see this increase of 200 per cent. since 1948 in the number of C-licence vehicles of 2½ tons unladen carrying capacity going on our roads. We also see the empire-building that is going on in industry to maintain these fleets, and, in consequence, we see the empty running and the resultant terrific congestion that arises in our cities and large towns as a result of this tremendous growth. These vehicles play a very important part indeed in all the traffic congestion which has developed.

We have seen it estimated that in 1960 road congestion alone cost this nation about £640 million. That was the cost to industry directly due to traffic congestion, and we suggest that the tremendous growth of C-licences played a very important part in that congestion. We also note the terrific jump in the accident rate. Apart from the human suffering involved, it is estimated that accidents cost the nation about £240 million a year, and we suggest that the traffic congestion which has developed plays a contributory part in the accident rate. Even this Government, by their very policy, are persisting in bringing these things about.

The British Transport Commission started its task in January, 1948, looking over its shoulder, as it were, at a deficiency of £60 million which had developed in the last days of private enterprise in 1947. It commenced to co-ordinate its schemes, and we see that, according to the Commission's Report for 1960—and it does not seem that we shall have the opportunity of debating it—the chairman of the Commission stated that up to 1955, with the co-ordinated policy then in operation, the affairs of the Commission were, broadly speaking, in balance. We know that in the years 1951, 1952 and 1953, not only were they in balance, but were showing a profit after paying all interest and central charges. Now we see that, at the end of this year, the Commission will show a deficiency of £680 million. What a contrast.

What has brought this about? This was an industry which, within a few short years and with Government support, had wiped off a £60 million deficiency and shown a credit balance, something which had not been done in transport for many decades in pre-war days. It did it with a co-ordinated system, but I do not say an integrated system, because we had not got it integrated as we would have liked to have done, and what could have been accomplished with an integrated system would have been very remarkable. Now, we see that the end of this year, the Commission will have a deficiency of £680 million. There is the Government's complete failure to show a balance, and now they are asking the nation to pay this very heavy bill instead of letting transport as a whole show a profit.

But the Government go further through this Bill. They say the nation must pay £680 million and, in the next five years, pay another £450 million—£1,100 million, directly due to Tory Government policy. The nation should take note of this "squandermania". Hon. Members on the Government side of the House when fighting in elections say, "We will reduce Government expenditure," and yet they support a policy, and have done through the years, which encourages this tremendous amount of Government subsidy which has to be paid out of the taxpayers' money. On the other hand they increase the medical prescription charges for a miserable £23 million, or something like that, when squandering money in this direction.

The loss today is accumulating. The hon. Gentleman the Member for Guildford (Sir R. Nugent) said it was £112 million in 1960. This year, 1961, it is estimated that the loss will have increased to £130 million. Incidentally, we on this side of the House nearly two years ago advocated that the Government should take control of the Commission's stock. At long last the Government are having to follow our advice in this direction, but they are not going far enough. Let it be noted that the Minister said, when all this hullabaloo over the Government taking over the Commission's stock, that the new Board will have to commence to meet a £65 million interest bill right from its very start. If we take the capital which is ploughed back, we can see that the present rate of £100 million a year which is now running will continue under the new regime. The Minister knows this, because he suggested to the House that this Bill is only a temporary Measure in effect, and that within two years or so, the Minister said, he will probably have to come to the House and ask for new powers because he did not think the financial arrangements would be sufficient.

There, and in the speeches today, we see the difference in outlook between the two sides of the House. We on our side of the House say transport cannot be separated into separate units, that in this densely populated island of ours transport must be looked upon as a whole and that there should be criteria to decide which is the best form. The hon. Member for Guildford suggested that there should be a non-political approach to transport. I regretted that he became very political in his next sentence or two.

We on this side of the House set criteria for transport. We think the challenge of transport is to provide an adequate service by whatever is the best means suited to the circumstances; that it must deliver consignments safely and in undamaged condition; that it should give speedy service and deliver certain classes of goods almost overnight from one part of the country to another, almost like the Post Office; that costs play a very important part and must be carefully watched; that transport is a responsible undertaking; and, above all, that there must be good wages and there must be good conditions of employment to attract the right type of personnel.

Both sides of the House would probably agree roughly on these criteria, but on the means to accomplish these aims there is a wide difference of opinion. We propose integration and co-ordination and getting the tremendous growth of traffic on the roads back to the railways which have a greater carrying potential for all classes of goods than any other form of transport. Road and rail systems must be utilised together.

The approach to transport on the other side of the House is not on the basis of service value. Service went out of the transport window with the passing of the 1953 Act. The word "adequate" was then deleted and ever since then the Commission has had an extremely difficult task in marrying its social obligations with the instruction from the Government that it should pay no attention to those obligations.

We who were members of the Select Committee which dealt with these matters made certain suggestions to the Government because we knew what problems would arise. We suggested, among other things, that non-productive transport which nevertheless met social needs should be carried at Government expense. In the Commission's Report for 1960, its chairman indicated how difficult it was for the Commission to adjust these social balances. Now the Commission's undertaking is being broken up into its profitable units.

Many of my hon. Friends have already referred to the Minister's power of veto or consent under the Bill. It is interesting to note that when any development is to take place the new Board must approach the Minister for his consent. Even if the Board wants to manufacture its own goods it must produce schemes and inform the Minister; who has power to give or withhold his consent. It should be noted by those of my hon. Friends who represent constituencies where railway works are situated that there is nothing in the Bill to allow the Railways Board to produce its own motive power. It is now being produced outside the railway undertaking, and we can take it that it will continue to be so produced. Knowing the Minister as we do, and knowing that his permission would have to be sought, we realise that there is no prospect of his breaking through the locomotive ring which has existed for so many years. We are compelled to face the practical realities in this matter.

It is also interesting to note that whereas anything which is progressive must receive the Minister's consent, whenever the Holding Company which will hold shares in the many companies listed in Part IV of the Fourth Schedule wants to sell the shares of any of those companies, it can do so. It does not need to approach the Minister for his consent.

What a peculiar position? Many of the public transport people have developed a very good relationship with railway interests in the running of bus services. Like the coastal shipping people they dread what is now to take place with the establishment of a new finance Holding Company, which means that in future the shares of that company can be subjected to take-over bids and the company can be at anyone's mercy. Previously when the shares were held by the railways themselves it was known that there would be continuity, but under the suggested structure there is every possibility of take-over bidders casting their eyes in this direction. That is not a very healthy sign, to say the least.

The coastal shipping interests are seriously perturbed. I shall not say much about this because my hon. Friend the Member for Bermondsey (Mr. Mellish) will be dealing with it more fully tomorrow. It is proposed to break up the Coastal Shipping Advisory Committee, which has done very useful work. Its parentage goes back to 1921, and it had a revised constitution under the 1947 Act. Coastal shipping interests have paid a wonderful tribute to the work of that Advisory Committee in connection with the arrangement of fares and charges both by road and rail, but they can now see some difficulties developing. The Minister tried to put the House off by saying, "Oh, they can appeal to me if they feel that they are being unjustly dealt with." He carefully refrained from telling the House that that would be only for a period of five years, because at the end of five years the first two subsections of this Clause will disappear and the power of appealing to the Minister will go out of the window.

The Minister might have been a little more forthright and a little more honest in that direction. The effect of this Clause—and I am sure that it will be altered because of the Lobby pressure by hon. Members opposite which is far greater than we can exert—if it is not altered may be extremely harmful to say the least in respect of our maritime power. One difficulty which the Commission has had to face and which has prevented the Commission keeping clear of subsidies is not the Commission's own methods of running the show but the deliberate interference of the Government.

We have found that when the Commission has been in difficulties due to the increasing cost of raw materials and its application for increased fares to meet the increased costs—some of the costs of the raw materials used by the Commission have gone up by 500 and even 575 per cent., but the Commission's fares have not increased nearly so much—has been granted by the Transport Tribunal, the Government have deliberately stepped in and refused to allow the award to be implemented. The Government refuse to allow the Commission to implement 25 per cent. of the applications granted by the tribunal. It is disgraceful.

The Commission has also been placed in difficulty because of the length of time before an application is heard. The net effect of Government interference has been that in no case has the tribunal granted an application in toto. It has always cheesepared and cut it because of the Government influence behind the scenes. That is the sad story of the situation. This came out very clearly in the Select Committee. It is not only that the Government have done this. There is evidence of day-to-day interference behind the scenes—not written directives—to hold up the modernisation programme. There has been a stopping and starting of modernisation. This happened in 1952 and 1954. A £1,200 million modernisation scheme was put forward, and then the Government put the brake on. Its policy was such that it found it necessary to curtail development.

The Commission undertook vast expenditure in connection with the old main lines, such as the East Coast route, which was to be electrified, and bridges increased in height. Then the "dead hand" of the Government stepped in. The Government's next reappraisal threw that electrification out of the window, and they turned to dieselisation. They told the nation, "Pin our rail transport to imported oil, instead of using indigenous fuels to provide electricity." This means that if the nation gets into difficulties, if war takes place, we shall have hamstrung our economy considerably by tying it more and more to oil.

It is the same story throughout. Since 1951 there have been 23 attempts to legislate on transport. Twelve of them resulted in legislation. This is the thirteenth Measure. Is it any wonder that everyone connected with the transport industry, from the top to the bottom, is uncertain? Is it any wonder that uncertainty is attached to the workings of the Commission itself? Is it any wonder that there has been a general lowering of morale among the workers in the industry? Is it any wonder that this situation exists when management has been subjected to this starting and stopping so that it does not know where it is going next?

The Minister says—it is nauseating to hear the speeches of hon. Member's opposite as well—that the railway employees must co-operate, that we must have work study schemes, that we must increase productivity and that the men must look to a contracting industry. It is nauseating, to say the least. The industry has contracted in manpower by 21 per cent. since 1948. Today about 540,000 people are engaged on the railways—a contraction of 21 per cent. The men have co-operated magnificently in bringing this about. Their unions have shown statesmanship to which tribute should be paid, and work studies have been going ahead gradually but surely.

Yet the men get little recompense. Instead, they are told, when they register applications for increased wages: "Do not quote Guillebaud, for that was once for all." When they challenge this, they are told, "How can you expect an increase in wages when the undertaking is running into such a heavy deficit?" But that is no adequate answer to give to them.

The Government have brought about this difficult situation. They have now appointed a man, at £24,000 a year, to be a butcher for the transport system. The railwaymen can justly say that they admire at least something in Dr. Beeching in that he stuck out for what he thought the job was worth—double what the previous chairman earned. But nothing less than the same type of treatment will satisfy the railwaymen. It will not be the teachers, or the mental health service employees or the civil servants who will be involved when the struggle eventually develops. It will be the railwaymen as well—a more militant body.

The railwaymen are proud of their undertaking, but they are tired of being underwritten in their responsibilities for the life of the nation. The pattern has been set, both in the amount paid to the new chairman and also in the £12,000 compensation paid to his predecessor for premature loss of office. Now the railwaymen say, "If this is good for the top, then it is good for the bottom."

The right hon. Gentleman must face up to these things. He is to face a deficit of £450 million for the first five years. Let us hope, however, that in his future Estimates he will budget so that the men on the railways are given full recognition of their worth. In running this proud system, we must pay regard to their needs.

9.33 p.m.

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

I am sure that the House will welcome the fact that, at long last, the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) has been able to speak from the Front Bench opposite. While I congratulate him on his appearance, however, I cannot congratulate him on the choice of material. I have seldom heard more distortion of the Government's policy towards transport and of what led to this Bill. I say that to him in a friendly spirit. No doubt, as the Bill proceeds, he and I will have further opportunities of crossing swords.

As this is a two-day debate, my reply is an interim one to a number of points that have been raised so far. The debate has already shown, however, the fundamental difference of approach to the problems of the British Transport Commission between the two sides of the House. In a speech which I thought was most well-phrased and very closely argued, the hon. Member for Dunbartonshire, West (Mr. Steele)—who is, unfortunately, not with us at the moment—said that we on this side were animated by a new philosophy of transport, that our policy seemed to be one of free competition and voluntary co-operation.

The hon. Member seemed to think that there was something reprehensible in that, but I assure him, and any other hon. Member opposite who may think the same, that we do not regard this as reprehensible at all, because our approach to the problems of the Commission—and, as the House knows, these are many, varied and serious—has been to try to propound practical remedies for the difficulties with which it is faced. As I said when we were debating the White Paper last January, we have not approached these problems in any spirit of dogma. We have tried not to blind ourselves with any particular doctrine. We have sought to find practical remedies to deal with these difficulties.

During the course of the debate, as was not unexpected, we have had a number of speeches from hon. Members opposite criticising us because, it was said, we were dismembering the Transport Commission and finally abandoning any attempt to have integration of transport in this country. Over the last few months, I have read practically every speech on transport made in the House for a good many years back. I am still in a difficulty about understanding precisely what it is the party opposite means when it talks of integration of transport, because there seem to be as many definitions as there are speakers from the party opposite.

On the one hand, there are those people to whom integration of transport means the co-ordination of services at the operational level. On the other hand, at the other extreme there are those who believe that integration means the welding into a single whole of every piece of transport machinery in the country.

I am still puzzled about what it is that the party opposite would like us to do. If it believes that we should seek to obtain operational co-ordination between the various types of transport in the public sector, represented apt the moment by the Transport Commission, then I can say frankly and truthfully that the Bill provides exactly that framework. If, on the other hand, what hon. Members opposite are saying is that we are not providing and ought to provide a unitary structure in which all the various parts of transport are brought together under one control and one ownership, then I say that in the past they have had the opportunity to create such a structure. They had an unparalled opportunity of doing it, had they wished, in the 1945 Parliament, but it is a matter of history that, when it came to the point, they retreated in some disorder from the ideas which they themselves had put forward.

Mr. Steele

I am very interested in the hon. Gentleman's explanation about the co-ordination of transport which, he says, the Bill brings into effect. Can he explain how it does?

Mr. Hay

I was hoping to say something about that later, but perhaps I can turn to it straight away.

As I said, our object is to provide a framework within which co-ordination can take place. My right hon. Friend pointed out that co-ordination could take two forms. First, there is the coordination of policy and investment in the public sector of transport, a matter particularly for the Minister because he is responsible to Parliament and he is the custodian, as it were, of the public interest and he, more than any other Minister, can take account of what is happening in the private sector of transport as well as the public sector for which he has some responsibility.

In the Bill we provide that the Nationalised Transport Advisory Council will have as one of its duties advice to the Minister on problems of co-ordination, and that includes co-ordination of broad overall policy for the public sector and of investment. On that side we have made provision for co-ordination.

Mr. Manuel

Can the hon. Gentleman explain how this co-ordination is to operate in the seven Highland counties of Scotland?

Mr. Hay

Being of Scottish descent, I have been interested in the concern about Scottish affairs which has been shown, but I hope that we will not concentrate too much upon the repercussions, as it were, of the Bill and its policy on any particular part of the United Kingdom.

Mr. Manuel

Oh.

Mr. Hay

May I give the reason before I am interrupted? It has always been said—and it was one of the principles of the 1947 Act—that the railways, in particular, were a unitary system and that, therefore, there should not be fragmentation into geographical areas.

The railways are a comprehensive national system, and they must be regarded in that light. Therefore, I cannot answer the hon. Gentleman's question in the form in which he posed it. I cannot tell him how the Nationalised Transport Advisory Council will reflect the problems of the different geographical parts of Great Britain. All I can say is that quite obviously there will be representation of the boards and the Holding Company on the Council. The Minister takes power to appoint other members to that body from outside the public sector, and of course he will have regard to the desirability of ensuring that regional interests, if I may use that word without offence to the hon. Member for Dunbartonshire, West, are properly represented and taken account of.

Secondly, there is the co-ordination of operations. Here again, the Council will provide a forum in which the chairmen of the boards and of the Holding Company can come together. Broad matters of operational co-ordination can obviously be raised there, and will be.

Thirdly, where there is a specific need to co-ordinate the services, for example, in the London area there is provision in the Bill for this to be done.

Fourthly, and I believe this is very important, I do not think we should forget that the self-interest of those who run the various boards at all levels will itself throw up a great deal of co-ordination, because the plain fact is that when a train arrives at its destination it is in the interests both of the railways and of the bus company that buses are there to meet the passengers, and, vice versa, that the buses deliver the passengers to the station before the train pulls out.

That is practical day-to-day co-ordination. It happens now. It has happened for a great many years, and there is nothing in the Bill that will stop it happening in the future.

Mr. Manuel

There will be no trains to meet in the Highlands.

Mr. Hay

The hon. Gentleman says that there will be no trains to meet in the Highlands. If he and some of his hon. Friends have their way, there will be a superfluity of trains in the Highlands.

Mr. Gresham Cooke

With one passenger in each train.

Mr. Hay

As my hon. Friend says, with the risk of one passenger in each train. I hope that that situation will not come about.

The right hon. Member for Vauxhall (Mr. Strauss) asked questions about the Nationalised Transport Advisory Council. It is intended to be a forum. It is not intended to be an executive body with powers of direction and control. It is not intended to be a substitute for the Transport Commission itself. This is a useful piece of machinery which we wish to create. We cannot immediately foretell how it will develop over the years, but it is the intention of the Minister to make use of this body for high level advice as a means of bringing together the views of the heads of the boards and of the Holding Company.

I come next to the regional railway boards, about which there has been some discussion. The right hon. Member for Vauxhall again asked questions about this. He asked why it was necessary to have regional railway boards. If I might refer him to paragraphs 14 to 18 of the White Paper, he will see there that we drew a clear distinction between those railway matters which are of national concern and which should properly be reserved to the Railways Board, and those which are matters of management, and we said that many of these management matters could be devolved on an organisation lower down in the structure than the Railways Board itself.

We believe that it is necessary to have some regional management, and I cannot at this stage say, as my right hon. Friend made clear when he opened the debate, which will be the precise functions that will be devolved in this way by the central Railways Board to the regional railway boards. Such a question has to be decided by the Railways Board when it is set up, in the light of the experience that it will acquire.

Mr. Strauss

The question that I put was: why do the proposed regional boards require more functions than the present area boards possess, which, according to the people serving on the area boards, are not only adequate but are all that could possibly be required?

Mr. Hay

The right hon. Gentleman may say that they are adequate, but we must look at the facts of the situation. We are not in the presence of a highly successful and highly profitable organisation. We are in the presence of an organisation that, over the years, has lost a large amount of money, which is obviously in great difficulties—as has been emphasised in speeches made today—and which we have to reorganise. This is part of the reorganisation. We also have to give greater responsibility at a lower level than the Railways Board level. The functions will be decided by the Board in the light of experience.

The hon. Member for Sheffield, Hillsborough (Mr. Darling), in what I understand was a very good speech—I regret that I was not present to hear it—asked how this was to be done. As we say in the Bill, the scheme of devolution will be on lines settled from time to time by the Railways Board and the Minister, so that the Minister will have an interest in the degree and amount of devolution of functions and management that takes place.

Mr. Ross

The hon. Member cannot tell us anything about it now.

Mr. Hay

I cannot say anything about it now, because I have less than a quarter of an hour to deal with the remainder of the questions which have been asked.

I want to say something about the powers of manufacture. The hon. and learned Member for Crewe (Mr. Scholefield Allen) and the hon. Member for Swindon (Mr. F. Noel-Baker) both referred to the problem of the railway workshops in their constituencies. I understand that there was some competition between them as to which railway workshops were best—an issue upon which I do not intend to arbitrate. I shall leave it to them to fight it out between themselves. There are two important factors to be taken account of when looking at the provisions relating to the Boards' powers of manufacture.

First, inside the railway structure at the moment there is excess capacity in railway workshops. There is mare capacity than they require, or will ever require. That fact has been accepted and acknowledged by the B.T.C. for several years now, and it is not news to mention it. Secondly, this excess capacity is only part of a national picture of excess capacity of railway equipment manufacturing, because many of the private firms which do an extremely valuable and important export trade in locomotives and rolling stock also have excess capacity. We therefore start with a position in which there is too much manufacturing capacity on the railways.

The Bill gives the various boards wide capacity powers—as we call them—to manufacture. They can manufacture for each other, for themselves, or for those companies which are true subsidiaries of the Holding Company. As the Bill also provides, those boards must from time to time submit to the Minister their proposals for handling the manufacturing problem, and the Minister will then have the power to oversee what they intend to do.

The hon. and learned Member for Crewe said, "There is nothing in the Bill to stop the Minister ordering the Railways Board to get rid of all its workshops, or to get rid of all the workshops in Crewe." Technically speaking, under the terms of the Bill that is so, but, as the hon. and learned Member will readily realise, no Minister would lightly take a decision of that kind. Conversely, when considering the proposals of the Railways Board, the Minister might spot a case in which it was proposing to get rid of capacity at too fast a rate, with the result that too many people might be put out of their jobs too quickly.

My right hon. Friend has the power of oversight in that situation. After all, it must be remembered that he is responsible to Parliament. It would be open to the hon. and learned Member for Crewe or any hon. Member to raise such matters in Questions to the Minister or in debate. That is what happened in the past and will, no doubt, happen again.

Mr. F. Noel-Baker

Not in Questions.

Mr. Hay

I remember answering an Adjournment debate raised by the hon. Member for Swindon about railway workships. This was at a very early stage of my career in this office.

Mr. F. Noel-Baker

The hon. Gentleman said that these matters could be raised in Questions.

Mr. Hay

I said that they can be raised in debate.

Mr. F. Noel-Baker

The hon. Gentleman said in Questions.

Mr. Hay

We must remember that the primary duty of the Railways Board in all this is not to manufacture. Its primary duty is to provide transport. That is what it is in business to do. Therefore, the manufacturing powers are incidental to that duty and we must not allow them to become a major activity of the Boards.

Mr. J. T. Price (Westhoughton)

I missed the speeches to which the Parliamentary Secretary has just referred. He must surely recognise that if this theory or principle were applied to vast stretches of British industry the Government would be advising the Steel Board, for example, to put out of commission many of the great steel works in this country which are at the moment working at only 60 per cent. of capacity.

Before he leaves the question of railway workshops, may I ask him this question? Is he aware that some railway workshops not only serviced the railways, but also did the maintenance? I am thinking particularly of the railway workshops at Horwich, in Lancashire, which I have the honour to represent. They also built the old Lancashire and Yorkshire Railway. The men today are very much demoralised, not only because their security in the future is being threatened but also because they are being deprived of functions which they and their families have held for generations.

Mr. Hay

That is all very interesting, but I do not accept that it is a valid analogy. The situation in the steel industry is entirely different from that in the railway industry. The steel industry is making substantial profits. The railway industry is incurring substantial losses. We have to look at it with our minds conditioned to some extent by that fact.

I turn now to another aspect of the Bill which has created a great deal of interest, namely, the Holding Company. It is true that this is a novel concept in nationalisation in this country, but it is not novel elsewhere. I was interested the other day to see that something very similar to this has been operating for many years highly successfully in Scandinavia. We on this side have by no means doctrinaire views about this, as I said at the beginning. After all, if there is any way in which we can improve the pattern of nationalisation established by the party opposite when it was in power there is nothing whatever to stop us doing it. In this case we are entering into an unusual but, I hope, hopeful experiment.

Questions were asked, however, about the Minister's powers in relation to the Holding Company. Some hon. Members took the view that what the Minister was trying to do was to manage the Holding Company and, through it, its various subsidiaries himself. This is literally not true. This is not the intention of the Minister, nor is it implicit in the Bill that the Minister will have any greater powers of management of the Holding Company or its subsidiaries than a single shareholder would. In effect the Minister will be the single shareholder, but it is not his intention to preoccupy himself with the way in which the Holding Company and its subsidiaries operate.

The Minister has quite enough to do already, and the last thing he wants to do is to get himself involved in the management matters of the Holding Company and its subsidiaries. But he does retain the power to give directions to the Holding Company, because, here again, he is responsible to Parliament. He must have regard to the broad question of the national interest and must exercise some control over what the Holding Company and its subsidiaries do in the light of that consideration.

The hon. Member for Newcastle-upon-Tyne, West asked me about the disposal of assets. He alleged that the Minister would have power to direct the Holding Company to dispose of some of its subsidiaries, if he wished. This is true. Under Clause 29 (2), the power is conferred upon the Minister to give the Holding Company a direction to sell some of its assets, but he can also give it a direction not to dispose of some of its assets or of any of them without his express consent. This is a double power—positive and negative.

When the hon. Gentleman talked about take-over bids, and so on, I think that he forgot completely that the Minister would have this reserve power. This is an advance on the present situation, because now these are owned by the B.T.C. and they could, if they wished, dispose of any of them without asking for the Minister's consent. In future, the holding Company would be obliged to get the Minister's consent if it wished to dispose of these assets.

Mr. Steele

Who is to appoint the members of the Holding Company?

Mr. Hay

Perhaps we can go into all these matters in Committee. We look forward to debating this in future. I believe that the hon. Gentleman the Member for Dunbartonshire, West said that he would be a member of the Committee.

The right hon. Gentleman the Member for Vauxhall described the powers of direction which are taken by the Minister as highly excessive. I do not think that the right hon. Gentleman has studied the 1947 Transport Act, with the care that he usually devotes to these matters, because what the Minister is taking in the way of additional powers is, comparatively speaking, marginal compared with the powers already in the 1947 Act.

They fall, broadly, into four groups. First, the general power of the Minister to give a direction in the national interest. This is contained in Clause 27 and there are other provisions in that Clause similar to those contained in Section 4 of the Transport Act. The financial powers are control by the Minister over borrowing and control over every form of account. Secondly, power over the ability of boards to carry out duties ancillary to their main duty of providing transport. The object of this is to keep the boards to the set task we have tried to delineate in the Bill. This is designed to make sure that in the public interest they do not stray too far from the field marked out for them.

Thirdly, a new power. This is a power to ensure that they make the best use of all their assets; for example, the power to develop land must have the control of the Minister both in respect of the amount of money to be invested in the development of the land or in questions of the amount of land required for development. The public interest—to which the right hon. Gentleman the Member for Vauxhall and my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) drew attention—is fully safeguarded by the fact that the Minister is there and can give this direction. Questions of safety and operation of pipelines and other matters of this kind can be subject to directions by the Minister.

The fourth group of powers will enable the Minister to deal with the machinery of apportioning the various pieces of property, rights, liabilities, duties and obligations of the B.T.C. between the four boards and the Holding Company. Hon Members will find these in Part II and the Schedules, particularly in the Fifth and Sixth Schedules.

We are trying to give the Minister adequate powers to safeguard the national interest and those powers, of course, will be open to debate and discussion in Committee, but I believe that they are necessary. We will go into a great many issues as the Bill proceeds. I hope that our debates will be as equally good tempered as has been today's, but the House must make up its mind, on Second Reading, whether it wishes the public sector transport services in Britain to be run as a social service, in which case hon. Members must be prepared to ask the taxpayer to continue indefinitely to foot substantial bills of over £100 million a year for as far as we can foresee or, alternatively, hon. Members must say that for a time, at any rate, the social duty of the Transport Commission and its various undertakings must be bought under the financial discipline of making a profit.

We believe that we have the balance right. We realise that all these transport services have social undertones, but we believe that they have for too long forgotten their duty to pay their way and this is something that we shall attempt to redress.

Debate adjourned.—[Mr. Hughes Young.]

Debate to be resumed Tomorrow.