Eleventh Schedule.—(REPEALS.)

HC Deb 18 April 1962 vol 658 cc579-647

Amendments made: In page 136, line 41, column 3, leave out "Sections one to eleven".

In page 136, leave out lines 45 to 47.

In page 140, line 34, at end insert:

"4 & 5 Eliz. 2. c. 56.

The Transport (Disposal of Road Haulage Property) Act, 1956.

The whole Act."

In line 51, at end insert:

"8 & 9 Eliz. 2. c. 16.

The Road Traffic Act, 1960.

In the Seventeenth Schedule, the amendments of the Transport Act, 1947, and of the Transport Act, 1953."

—[Mr. Marples.]

7.4 p.m.

Mr. Marples

I beg to move, That the Bill be now read the Third time.

We have come to the end of a rather long road. I am sure that hon. Members opposite will agree that the Bill has emerged as a carefully thought out Measure on which there has been a wide degree of consultation. At any rate, they will probably agree that the White Paper, which first announced the Government's intentions, was published as far back as December, 1960. Vesting day under the Bill is January, 1963, which means that we have given an immense amount of time to our consideration of this Measure, which is an important one.

The Government will wish to introduce some Amendments in another place. For instance, we shall seek to change the name of the Inland Waterways Authority. That would have taken about fifty minutes on the Floor of the House, and we thought that if this was dealt with in another place it would save time.

I am grateful to hon. Members on both sides of the House for the care and attention which they have given to the Bill, both on the Floor of the House and in Committee. We have debated in full matters of principle and detail. I do not wish to be controversial and to discuss the timetable Motion, because very little has not been discussed in Committee. We had one session in hand when we finished, which means that it could not have been such a severe Guillotine.

Although some changes have been made the principles contained in the Bill are still practically the same as mentioned in the White Paper. They are three in number.

Mr. Spriggs

The Minister has said that we discussed the Bill in full. But we did not. Many Clauses were not discussed, because of the Guillotine.

Mr. Marples

I did not wish to be controversial, because it is not my nature. I am being provoked into being controversial by the intervention of the hon. Member, when I wish to be peaceful. This is an intolerable situation for a pacific Minister.

Mr. Spriggs

Let us have the truth.

Mr. Marples

The hon. Member has asked for the truth. The Bill has 91 Clauses and 11 Schedules, making a total of 102. The 1947 Act had 127 Clauses and 13 Schedules, making a total of 140. In other words, the 1947 Act was one-third larger than this one. We have had 35 Committee meetings on this Bill, whereas we had 31 on the 1947 Measure. I did not wish to say all this, and I am only doing so in deference to the wishes of the hon. Member for St. Helens (Mr. Spriggs). The number of hours spent in discussing this Bill in Committee was 95, whereas there were 76 hours of discussion on the 1947 Measure. That means that we have spent 25 per cent. more time on this Bill, although it has fewer Clauses and Schedules.

The number of Amendments guillotined and not selected in this Bill was 62, whereas it was 279 in 1947, which means that four and a half times as many Amendments were guillotined or not selected in 1947. The number of Clauses not discussed amounted to seven, whereas the total was 35, and seven Schedules, on the 1947 Measure. It was only the provocation of the hon. Member which caused me to give these figures. I was trying to be as favourable as I could to the Socialist Government of 1945, but I have not been allowed to do so. I ask my hon. Friends to acquit me of any responsibility for this digression. It was forced on me.

Mr. Spriggs

Now get on with the Bill.

Mr. Marples

The hon. Member has told me to get on with the Bill. I would have done so in the first place if he had not interrupted me. There are three principles in the Bill, and they were all set out in the White Paper. First, each undertaking must have a clearly defined task within a set field. From this follows the second principle, that each undertaking must have a proper financial structure and be vested with its own assets and be responsible for its own capital debt and financial performance. Thirdly, each undertaking must, as far as possible, be freed from outdated statutory restrictions, such as common carrier liabilities, and be given greater commercial freedom.

In spite of all the debates that we have had neither the Government nor their supporters have been shaken into changing their views on one cardinal point. The British Transport Commission was too big. It was running not only the railways but a wide variety of other undertakings and its task was too large to be performed by any single undertaking. That was the cardinal factor.

Mr. Spriggs

Who decided that?

Mr. Marples

The Government of the day decided, after prolonged consideration. I am certain that if they are not careful, hon. Members opposite will make the fatal mistake of thinking that size, by itself, is a virtue. That is not necessarily so. If an organisation gets too large, one does not get efficiency.

Mr. Jack Jones (Rotherham)

What about I.C.I.?

Mr. Marples

The hon. Member for Rotherham (Mr. Jack Jones)—who knows so much about the steel industry —asks, "What about I.C.I.?" I.C.I. would be lost in this organisation, which is much bigger in every respect. I.C.I. is nothing like as large as this organisation, which employs over half-a-million people. So far as I can gather it is the biggest single undertaking in the world, including America. It is too big. That was the basic mistake. We have tried to alter that and I am sure that in our endeavour we carry with us the hon. Member for Rotherham.

There is a deep cleavage of views between the two sides of the House. The Government have tried to be practical. We have adopted an empirical approach. The idea of four statutory boards and a Holding Company has received a wide measure of support. For the first time since 1948 there will be a body which, in the words of the Select Committee, on which there were representatives of the parties on both sides of the House—I do not think that included a representative of the Liberal Party—but at any rate, in the words of the Select Committee it has the single minded task of running the railways.

In my view the task of running the railways is about the most difficult job anybody can have in this country. We all ought to be sympathetic rather than critical of those who are trying to do it. On the financial reorganisation we have written off a great deal of the debt for obsolete railway assets, and that had support from hon. Members on both sides of the House. But I must remind hon. Members that although the debts are written off, the taxpayers will still have to find the cost of servicing the debt and will have to bear the burden. It has been shifted from the railways to the shoulders of the taxpayers. Therefore, in spite of what has been written off, which represents a huge amount by any standards, we must not under-rats the difficult task confronting the Railways Board and the Waterways Authority if they are to achieve financial viability in five years. It will be necessary to review the financial position as the situation develops.

I turn now to the problem of commercial freedom about which there has been a great deal of discussion. It is fundamental to reorganisation. Fears have been expressed about the removal of control over railway fares outside the London area. Within the London area certain machinery is to be kept in being, but outside there is not this machinery. I think that those running the railways will use good sense in this respect. We have to make up our minds that it is not the British Transport Commission nor will it be the Railways Board, as it will exist in future, which is responsible for closing railways. The people who decide to close railways are those customers who decide that they do not want to use the railways any longer.

Recently, I met a deputation from South Wales on the subject of railways being closed. There the railways were carrying 7 per cent. of the passenger traffic and 93 per cent. went by road. Many years ago the proportions were reversed. If only 7 per cent. is now carried by rail, it is pretty clear that the customers' preference is not for railways but for some other form of transport. I do not blame the customers for that. But I do not think that they can choose some other form of transport—scooter, private car, or bus—and still say, "You must keep going a form of transport to which I do not now wish to subscribe."

Mr. S. O. Davies (Merthyr Tydvil)

The Minister has mentioned my country. Will he not admit that the British Transport Commission contributed substantially to the fact that these railways have lost money? Nothing whatever has been done to bring the railways up to date. They are precisely the same railways as were being operated 60, 70 or 80 years ago. Nothing has been done to modernise them.

Mr. Marples

The hon. Member for Merthyr Tydvil (Mr. S. O. Davies) is quite right. If conditions were the same today as they were 60, 70 or 80 years ago, these railways would be making huge profits because there would be no alternative form of transport. But there has been a technical change in the methods of transport. The mass transport of the nineteenth century, when a thousand people went in a train from one fixed point to another fixed point at a given time, has been replaced by a situation in Which there is individual transport from one mobile point to another mobile point at any time. That is a cardinal difference. Under the conditions which obtained sixty and seventy years ago, railways were bound to succeed. But they cannot succeed now because of the competition. I think that outside London, with the transport users' consultative committees, and inside London, with the new procedure, we shall find that there are adequate safeguards for the traveling public.

During our debates upon this Bill a number of controversial points have been raised and one of the most controversial concerns coastal shipping. I should like now to say a few words about coastal shipping, confining myself, as I must, to what is within the Bill. I should like to say something about matters which are not in the Bill, but to do so would be out of order.

I have given a great deal of thought to this difficult problem, as have my two Parliamentary Secretaries and the officials in my Department. Throughout I have had special regard to the user and to the taxpayer. I have discussed this at innumerable meetings with the Commission and with representatives of the coastal shipping interests. I have tried to hold the balance between the railways on the one hand and coastal shipping on the other. That is my responsibility as Minister. The position of the railways is no longer what it was. The competition from the roads entitles them to a greater freedom in respect of charges than is allowed under the present arrangements. On the other hand, coastal shipowners fear two possibilities. First, that on long hauls—for example, if coal is being brought from Newcastle to London or to Bristol—the railways will use the Government subsidy which they are getting to undercut the coastal shippers and take business from them. That is a quite justifiable complaint and one which merits great attention.

The second fear of the coastal shipowners is that on short hauls the railways will raise their charges. For example, if a pit is producing coal which has to be taken by rail five miles to a port, in order to be conveyed by coastal shipping, the shipowners fear that the railways will raise their charges to an extremely high level and put the coastal shipping people out of business.

During the Second Reading debate my right hon. Friend the Home Secretary explained that I was having discussions about this whole problem. I hope that the many discussions which took place, and which led to a Government Amendment to Clause 53, will go a considerable way to allay the fears of the coastal shipowners. The effect of the Amendment is to provide protection for coastal shipping from railway competition in two ways, in relation to long hauls and short hauls. The charges for long hauls, to which I must apply myself as Minister if complaints are received, are such as appear to the Minister to be inadequate having regard to the full cost of affording the service or services for which they are made, and which are made while the railways are in receipt of grants to meet a deficit on revenue account. In other words, for long hauls the railways have to quote a figure which is adequate, having regard to the full cost of affording the service. In defining that criteria by which railway charges should be judged we have accepted the form of words desired by the shipping industry and contained in the Amendment.

Mr. Bruce Millan (Glasgow, Craigton)

The Amendment to which the Minister is referring was guillotined yesterday and we did not discuss it. There is quite a difference between the Bill as it is drafted and what the Minister said during the Committee stage discussions. He said that it would be required that railways would not recover the direct cost but would make a significant contribution to the indirect cost. Why has the Minister introduced these quite different words which place a far more onerous obligation on the railways? Will the right hon. Gentleman explain that more fully?

Mr. Marples

I discussed this with a leading firm of chartered accountants which looked at the figures of the Transport Commission. I also discussed it with the coastal shipping interests which stated that they preferred this form of words and, therefore, as the accountants advised me that this was reasonable and fair—providing that this criterion should be applied not only to the long haul but to the short haul—I was prepared to accept it. After all, if it is fair on the long haul for the railways to charge what is called the "full cost" it is fair on the short haul, too. For that reason I was prepared to accept it, as long as the principle applies to both the long and the short hauls and, I might add, the medium hauls as well. For those reasons, I accepted the wording which the coastal shipping industry thought was desirable to protect its interests.

Mr. Charles Mapp (Oldham, East)

It is important to get this clear. In Committee we understood the Minister to mean, if he did not use the actual words, that something beyond the direct costs—a noticeable or important contribution to the indirect costs—would be involved, but that the present words "revenue account" mean considerably more. I understand that "revenue account" will include not only the revenue receipts but the whole of the central charges, including profits and subsidies. This is a significant difference.

Mr. Marples

I should be out of order if I went over everything that was said in Committee, but the right hon. Member for Vauxhall (Mr. Strauss) said in Committee that he thought it should be the full cost. By the Amendment I have got the B.T.C. and the coastal shippers to agree—and I thought that I had done a brilliant job, but, from the remarks that have been made so far, it appears that I did not do as well as I had thought.

Therefore, regarding charges on short hauls I must consider those which appear to be excessive, having regard to the full cost of offering the service. Regarding the short haul—and this is a significant point which appears to have escaped many people, including most of the Press—that provision remains in force after the railways have ceased to be in receipt of a grant to meet the deficit on revenue account Thus, on the short haul, the protection remains, even though the railways are not in deficit.

I want to explain how I propose to deal with this matter during my tenure of office as Minister. I do not know how long that will be but I think it will be for a long time.

Mr. Jack Jones

A short haul.

Mr. Marples

When complaints are made I propose to appoint an accountant of very high standing to investigate impartially and then to report to me. The railway costs in relation to the charges proposed would be analysed by him before his report was made. It will be like an inspector of taxes considering a company's affairs who will always want an auditor's certificate. I will want one in this case.

Mr. Popplewell rose—

Mr. Marples

Only three and a half hours remain for the Third Reading debate, and if I keep giving way I will be cutting down the time during which other hon. Members will be able to speak.

Mr. Popplewell

I admit that the Minister is on a good point in trying to adjust the charges between coastal shipping and the railways, but has he considered road haulage? Has any approach been made to the Road Haulage Association in an effort to get reasonable rates to prevent unnecessary competition?

Mr. Marples

No.

Mr. Popplewell

Why?

Mr. Marples

I did not want to. We believe in an entirely different philosophy. We believe that the consumer should decide the way by which he wishes to send his goods—whether by road, rail or sea. The consumer must assess which one is to his advantage and I prefer to allow the customer to be free to make his own assessment and choose which method he prefers. I do not wish to be a dictator like some hon. Gentlemen opposite. [HON. MEMBERS: "Shame."] That is the last thing I want to be. Therefore. I hope that we have met the coastal shipping point of view.

On many occasions hon. Members have raised the question of the powers of manufacture, particularly of the Holding Company. My noble Friend Lord Mills said in the House of Lords on 7th November, 1960, that there was no intention that the Bill should be a denationalisation Bill. This is not a Bill to denationalise what is already there. It is to reorganise—we have said this from the beginning—the main function of British Railways—its structure —and to concentrate management on the railways. We alter the organisation but not the national ownership. As I say, it is not a denationalisation Measure.

Of course, there are powers in the Bill, as in previous Measures, to direct. There is no specific provision to dispose of any particular asset and no such direction is written into the Bill. It is primarily a matter for management.

My hon. Friend the Member for Lowestoft (Mr. Prior) made a quiet, sensible and reasonable speech which was empiric in its approach. He mentioned three companies which have been the subject of some controversy—Star Bodies (B.T.C.) Limited, Bristol Commercial Vehicles Limited and Eastern Coach Works Limited. I can inform my hon. Friend that there is nothing to prevent them from being sold off nor to force them to be sold off in the Bill. I think that the test is this: is what these companies are doing the main purpose and duty of a board or is it ancillary to it? If it is the main duty then we have no intention of selling them off, but if it is ancillary we have the right to do so. That is reasonable enough in all conscience because the main purpose of these transport undertakings should not be disturbed.

Mr. Frank McLeavy (Bradford, East)

What will be the position if they are complementary to the boards?

Mr. Marples

If it is a major part of a board, that is one thing, but if it is ancillary, then that is another. The business of the Holding Company is to administer and control, but there is no need for the Holding Company's group to develop manufacturing activities either for purposes of its own activities or for sale generally. These three companies engaged in the manufacture of road motor bodies and chassis are, therefore, in this sense, anomalies, but to prohibit them from manufacturing would destroy their purpose and seriously affect the value of the public investment in them.

They must, therefore, be allowed to continue on more or less their present scale. In fact, we have allowed those activities to be free, by use of the Minister's discretion, instead of by fixing a limitation on them. They do not need to sell outside the nationalised transport field. In fact, they cannot do so under the Commission's present structure, and the Amendment to Clause 29 does no more than continue this restriction.

There is no need, on grounds of public policy, to keep these three companies in national ownership if an acceptable price is offered for them. Indeed, if a good offer is received I should be ready to see them disposed of. There is no purpose in saying that an offer which was at a knock-out price would be accepted, because it would not be. Any offer I would accept would have to be examined by an independent firm of accountants. If an offer were received and it was for £½ million more than the accountant thought it was worth, I would think that it should be accepted On the other hand, if the offer were £½ million less, I should say that it should not be accepted.

I distinguish between the main purpose and duty of the Board and what is ancillary to it. I think that manufacturing is ancillary to the running of our transport system and I hope, therefore, that I have made the position clear. I can inform the hon. Member for Lowestoft that more than the price would have to be considered if a satisfactory offer were received. The terms of employment, continuity of business, and so on, would have to be taken into account.

Mr. Popplewell

The right hon. Gentleman is offering them three times what he offered road haulage.

Mr. Marples

No, there is going to be no forced sale about this.

On the question of the transport users' consultative committees, we have tried to clarify the procedure so that those committees consider the hardship that is caused to passengers. When they are considering hardship I am particularly anxious that they should at the same time consider alternative methods of transport. They may consider that extra buses or larger buses or different types would be suitable. These Amendments —we made some to the inland waterways and pipe-lines provisions—do not vitiate the principle of giving commercial freedom to the undertakings.

There are a number of people to whom I should like to express my gratitude. First, I should like to thank the Chairman of the Standing Committee, my hon. Friend the Member for Stretford (Sir S. Storey). I think that Stretford is a wonderful place. I was brought up there. I am sure that we were all grateful to him for the way in which he conducted the Committee proceedings.

I should also like to thank the right hon. Member for Vauxhall because Whenever he was under great provocation he never lost his temper once, though I nearly lost mine several times. I am grateful to him for the reasoned way in which he brought forward all the points he had in mind. We must remember that there is a deep cleavage in principle between the two sides of the House on this matter, and, considering that deep cleavage, it is remarkable that tempers were as even as they are in the House.

I should also like to thank my hon. Friend the Parliamentary Secretary. I had read Lord Attlee's book on delegation by Ministers to their Parliamentary Secretaries. I took it to heart; I delegated to my hon. Friend a good deal, and he has been well worthy of that delegated power. He has been sorely tried at times, but he, too, kept his temper. He keeps the temperature down whereas I sometimes tend to raise it. The one function that I cannot be expected to delegate to him is the raising of temperature, because by nature I seem to be well fitted to do that anyway.

Now I come to the final word that I should like to say about the future of the railways. When I first became Minister of Transport I hoped—it was a vain hope—that, as has often been said by the hon. Member for Bermondsey (Mr. Mellish), we should stop using the railways as a political shuttlecock. [HON. MEMBERS: "Oh."] That is exactly what happens whenever one mentions it. I have given up that hope now. But it is not really a political problem. It is a technical and social problem. Indeed, several new factors have crept in. First, there are new competitors. There are road and air travel. What about air travel from London to Glasgow and Edinburgh? They make an immense difference to the future of the railways. On social grounds people have decided that they want cars or scooters. They have opted for cars or scooters. They may be right or they may be wrong.

The third factor is that it is going to be a shrinking business, and therefore it is going to be difficult. It is easy enough to manage an expanding business —it is too easy for words—but when it is bound to contract it is difficult. It is contracting because of its competitors. At the same time, let us face the facts of life. The railways must find their true rôle in this country. They have a future, but it is not the future they thought it was 20 or 30 years ago. It is a different future.

We have got to get the right size and shape, and the quicker we get that size and shape and get the suitable traffic to carry, the better it will be. Until we do, it is no good thinking that an organisation structure by itself will make it pay. It will not pay unless we have the men to manage and work it. If we can get the right sized shape and structure, and modernise it we shall have fewer men employed in it looking after those who are redundant.

I have paid special attention to that; and I am certain that we have got to get the right management. We have a difficult task—the most difficult in the country—but I think we shall get the right leadership.

I shall do my best to make the industry pay. I know that I shall be criticised, whatever I do, but I say in all sincerity that I shall do my best. I can promise the House that. The difficulties are simply enormous, but that is no reason why they should not be tackled.

In that spirit, I ask the House to give the Bill a Third Reading.

7.35 p.m.

Mr. Strauss

I endorse the tributes paid by the Minister of Transport to various Members. I am excluding myself, of course. He was quite right to pay tribute to the hon. Member for Stretford (Sir S. Storey), who was Chairman of the Standing Committee, and to the Parliamentary Secretary, who certainly kept his temper throughout the proceedings and whose general behaviour was most acceptable to both sides of the Committee. I believe that the Minister of Transport would have done the same if he had been there. But he was there so seldom that it was not difficult for him to keep his temper.

Before I proceed to deal with the various points which the right hon. Gentleman has raised, I want to pick out one thing which he said, as otherwise I may forget it. I refer to the alarming comments that he made about the prospects of these three vehicle-building companies which we discussed earlier in the day. It is clear from what he said —we were not told this when we were discussing the Amendments—that it is the desire of the Minister to sell these companies if possible. His only interest is to ensure that they go to the highest bidder.

Therefore, the hon. Member for Lowestoft (Mr. Prior) and others who are interested must realise that the Government are continuing their Conserva- tive policy, and that just as they sold off the profitable road haulage section, or as much of it as they could, they are now going further as a result of the pressure which we know has been put upon the Minister, particularly by the hon. Member for Kidderminster (Mr. Nabarro), and are determined to sell off these three very successful and profitable small companies as soon as possible to the highest bidder.

I emphasise that fact at the beginning of my remarks as it shows how Tory policy is continuing in connection with the transport problem. The Minister talks about ignoring politics and dealing with these problems purely factually, jammed in between highly political statements based on Conservative philosophy. We cannot accept the suggestion that he or anybody else can consider the transport policies of the country devoid of political ideas. It cannot be done. We do not pretend it is possible, but the Minister does.

The Bill emerges from its Committee and Report stages practically unaltered. It is as bad today as it was when we first saw it. There were very large numbers of Amendments on the Notice Paper on Report, and some hon. Members might have come to the conclusion that they were concessions to requests made by the Opposition in Committee and that the Government were meeting us. Nothing of the sort. They were merely examples of the inefficient drafting of the Bill which the Government have now put right. The Government have given practically no concessions to us as a result of our long and arduous discussions in Committee. The Bill today is exactly the same as it was when we first saw it.

What does the Bill propose to do? The Minister has outlined the three essential proposals which are embodied in the Bill and which represent the Government's transport policy. The central factor is that the railways are losing substantial sums of money—£150 million a year—and it is that which has driven the Government to seek to rectify that state of affairs. We do not blame the Government for doing so. The problem we have to consider is whether the steps that the Government propose will be effective and what damage to the nation will be done by permitting commercial freedom and all that it implies to the railways.

The Government are tackling this problem in three ways. First, by breaking up the existing structure of publicly-owned British transport into various elements on the ground that the Transport Commission, as it is, has too heavy a task. We have never quarrelled with that statement. What we say is that abolishing the executives which had the separate tasks, as the Conservative Government did in 1953, and putting all the executives into the Transport Commission was an error. If the Transport Commission today has too large a responsibility that is the fault of the Conservative Party, and it could easily have been remedied without the complete disintegration on which the Government are now embarked.

We believe that this aspect of Government policy, the breaking up the Transport Commission, will do an ill service to transport and an ill service to the nation. We have not had any argument from the Minister or from anybody else as to how the breaking up the transport services into a number of separate watertight compartments, loosely integrated by an Advisory Council, which is going to meet now and again, will be in the interest of any transport service or of the public. I would have thought that it was obvious to everyone with a knowledge of transport that we needed a high degree of co-ordination and integration, We cannot see how the proposed disintegration can possibly do any good; and it certainly cannot improve the finances of the railways.

The Government's other proposal— and it is a very important one—is the financial reorganisation. The Government, here, are doing what we think to be right. They are taking a realistic view of the situation. We have been advocating something of that sort for a considerable time and we have no quarrel at all with the proposals that the Government have put forward. But we give this warning. At present, the working loss of the railways is about £90 million a year and interest charges are about £50 million, making altogether about £140 million. The interest charges will grow, and in the next five years they will be £50 million higher. So in five years' time the deficit is likely to be about £190 million a year.

Anyone who believes that it is possible for the railways, however much fares are raised and expenses cut, to make up that deficit in five years' time is living in a dream world. I repeat what I said at an earlier stage, that the problem for the Government and the country today is not to try completely to eliminate railway losses. That just cannot be done, any more than in most of Europe and a large part of America. The problem, with the national interest as a whole in mind, is to what extent the losses can be properly cut down, to what extent this burden can be borne by the rail traveller, and what proportion should be paid by the State. That some proportion will have to be borne by the State is certain.

The other thing—and this is really the most important thing that the Government are proposing to do in trying to reduce the serious losses falling on the railways—is giving the railways what they call commercial freedom. What does that mean? Commercial freedom to do what? In fact, it means commercial freedom to cut down the railway services on a scale hitherto never contemplated, doing great damage to a very large section of the community and putting up fares right and left wherever it is possible; in short, eliminating completely all pretence of public service from the country's railway system.

The Government have admitted that. The Minister, in yesterday's debate, said that the railways "could no longer be regarded as a milch cow torn between considerations of public service and profitability." What he meant by that is that profitability is the only thing that will matter in the future. Public service is to be eliminated. All the people living in constituencies such as that of the hon. Lady the Member for Tynemouth (Dame Irene Ward) will suffer very much as a consequence.

Dame Irene Ward (Tynemouth)

If the right hon. Gentleman will forgive me saying so, I do not intend to give up the fight.

Mr. Strauss

The hon. Lady never gives up any fight. She has never been known to do so.

I was telling her that damage to her constituents will arise from the fact that the directive of the Government to Dr. Beeching is, "Be quite ruthless. Run only those services which are profitable. Public service does not matter at all— only profitability." If we accept that point of view, which the Government have accepted, it will be very serious for the nation's needs.

Mr. Charles Loughlin (Gloucestershire, West)

Will the hon. Lady vote against the Bill?

Mr. Strauss

My hon. Friend says that he hopes that the hon. Lady, in view of her militant attitude, will vote against a Bill which will lead to the closing of many of the services in her area.

Dame Irene Ward indicated dissent.

Hon. Members

Running away.

Mr. Strauss

It would not be the first time that the hon. Lady had revolted against the policy of the Government and voted with us against them.

The Government say that unprofitable services have to be eliminated. To do that they propose various remedies. It is entirely wrong to suggest as the Minister did, that in any transport service, whether public or private, the idea of public service is absent. It is not. When a bus operator gets a licence from the traffic commissioners they insist that he should run some services in unprofitable areas, which is a public service, as a condition to being allowed to run in profitable areas. That is really acknowledging that anyone who runs a transport service is willingly running it, or is forced to run some part of it as a public service. We see no reason why the railways should be the one exception.

One of the ways in which the Government hope that the railways will pay is, of course, by putting up fares as rapidly and as much as the traffic will bear. It will not bear very much on freight. We know that when freight charges are put up to any significant extent the traffic drops and there is a net fall in revenue, so there is not much scope there. We can raise all passenger fares sharply, but as we put them up fewer people travel on the railways. The railways may gain something in revenue, but they will lose in passengers. We were told that the recent rise in fares imposed by Dr. Beeching meant that if everybody continued to travel on the railways the revenue would be increased by £12 million a year, but as many would go by road instead it would rise by only £9 million. Many people who used the railway services before will in future use the roads.

The point that I want to make is this. When the Government operate their railway policy, either by closing services or putting up fares, what they ought to do, and do not do, is to look at the picture as a whole and the broad national consequences. One of the national consequences of putting up fares is that people such as commuters, and a large number of others, go on to the roads instead. The roads become congested. There is a demand, which becomes insistent, that road improvements should be made and that urban highways should be built, often at the cost of considerable destruction of amenity.

There is an enormous financial cost as a result of diverting large numbers of people from the railways to the roads, and there is a great social cost in the waste of time of those who suffer delay as a result of traffic congestion on their way to work. That is an aspect of the Government's policy which should be considered. What will be the effect on the roads? What will be the demand for building new roads and widening existing ones which will inevitably follow if railway fares are raised to any considerable extent?

The Minister says that the railways are not a monopoly. It was right, when they were a monopoly, to insist that they should perform some form of public service but, he says, they are not a monopoly now, but are operating in competition. This is only a half-truth. The railways are a monopoly in certain very important ways. For the transport of heavy goods, the railways are a monopoly; these goods cannot travel by any other means. It is not practicable for a very large part of the freight tonnage to be carried except on the railways. The Minister told us that 17,000 million ton miles of freight went by rail last year. A large proportion of that must go on the railways, and to that extent the railways are a monopoly.

Millions of commuters travelling to and from the big towns every day must go by rail. They could not possibly go by road. The roads would be completely blocked if they tried. To that extent the railways are still a monopoly over a very wide field. Because they are a monopoly they should be prohibited from levying excessive or punitive charges on their customers just as any other monopoly. Therefore, to say that the railways, because they are no longer a monopoly, should not be subject to control in regard to fares or should not be asked to operate as a public service is, I suggest, nonsense.

The Minister, says, also, that "the test of public need is what the customer will pay for". Again, this is a half-truth. The Minister supports that contention by a reference to what the Select Committee said, but the Select Committee did not say that that was the only test. It is one of the tests. There are very many circumstances where it cannot be the test. A community, perhaps a large community, may depend on a railway service. A large section of the community may no longer use the railway service because many find it more convenient to use some other form of transport, and, therefore, that particular railway service does not pay any longer. Nevertheless, very many people still must use it.

Then the test of the need for the railway is determined not by whether the remainder, which may consist of tens of thousands of people, are prepared to pay excessive fares, but by whether it is performing a vital social service. In our view, where there is such social need, there should be an effective railway service, which should not be discontinued as Dr. Beeching proposes to do under the general directive given to him by the Minister of Transport to eliminate everything which is not profitable.

It seems to us that the Government's basic policy for the railways, "Put up the fares as much as possible and cut services wherever they do not pay" is wrong. It is a foolish policy which may, though we doubt it, bring short-term benefits but which, in the long term, will cause grave harm to the country. I am sure that it is not recognised generally in the country, and is not fully realised even in the House, to what extent the policy of the Government is likely to interfere with existing transport arrangements. The railway services are an essential part of the social structure of the country, and interference with them to any marked degree must change the habits of life of millions of people and put burdens on them which they never expected to have to bear and which no one has the right to call upon them to bear.

I have been reading all the literature I can about the prospects of railway closures, fares, and so forth. The more I read the more am I alarmed. For example, to quote only one source, there was what seemed to be a very authoritative article in the Observer on 1st April by an expert on the railways.

Mr. Hay

It was wrong.

Mr. Strauss

If it is wrong, I shall be glad to hear the Parliamentary Secretary say so. The writer's name is Alan Day. He said that the logic of what Dr. Beeching is doing and what, inevitably, he will have to do, is this: Most of the remaining branch lines outside suburban areas will almost certainly go, which will mean that some quite large towns, such as Mansfield or even Lincoln, may lose their rail services … Towns like Yeovil, Scarborough and Inverness are likely to have to learn to do without rail services, either for passengers or goods. If he is wrong, I shall be delighted. He gives examples of the sort of thing which will happen throughout the country. Services will be cut to an extent which is not yet appreciated.

A report of a very authoritative statement appeared on the tape this evening. It was an extract from a speech made by Mr. Green, the General Secretary of the National Union of Railway-men, made to the Scottish T.U.C. today. Mr. Green is a most responsible person and he would only say this after meeting Dr. Beeching, as we know he has, and discussing the matter with him. The report of what he says is: One hundred and fifty thousand railwaymen's jobs are in jeopardy. Of 2,750 trains running in Scotland only 750 pay, and Dr. Beeching is determined to get rid of the 2,000". This is a most serious situation.

Of course, the Government can succeed in eliminating some, though not all, of the losses on the railways by drastic cuts of this sort, but what will the social consequences be? In a proper contemplation of the problem, should not a balance of advantages and disadvantages be made and the social consequences of any action carefully considered? From all we have heard from the Minister, the answer is that that is not being done. Social consequences do not count. Profitability is the only criterion which will count in the future. To pave the way for that sort of policy, we have the Bill now before us. We think that, on the whole, it is bad and dangerous. Its consequences will be serious for the country. It will impose damage on industry and it will impose damage on the public, far more than ought to be imposed or is necessary even in present circumstances.

For those reasons, we propose to go into the Lobby and vote against the Bill tonight.

7.58 p.m.

Colonel Sir Leonard Ropner (Barkston Ash)

In the Second Reading debate I was glad to take the opportunity to congratulate the Minister of Transport on the skill with Which the Bill bad been drafted and for introducing it. Tonight, I add my congratulations to my right hon. Friend and to the Parliamentary Secretary for having, with great ability and considerable patience, brought the Bill to its present stage.

I propose to make a short speech dealing only with Clause 53. It is no good disguising the fact that coastal shipowners and those engaged in this not unimportant section of the shipping industry have held the view—the opinion has been shared by some hon. Members —that the Minister of Transport has been biassed in favour of the railways when considering the far from easy problem of ensuring fair competition between the heavily subsidised railways, on the one hand, and coastal shipping on the other.

Having said that, however, I am glad to add that the Amendments tabled by my right hon. Friend yesterday on Recommittal do, to a considerable extent, meet the views of hon. Members who have tried to help him to find a solution to this problem. But, in my view—and I know that it is shared by other hon. Members—those Amendments do not carry out to the full what we considered was an undertaking given by the Minister during the frequent and fairly intensive discussions over the last few days.

As my right hon. Friend pointed out this afternoon, the trouble is that it will be extremely difficult—I am not sure that it will not be impossible—accurately to calculate the charges which can fairly be assessed in the case of both the short hauls and the long hauls. The charges for the long hauls may be inadequate and the charges for the short hauls may be excessive. My right hon. Friend the Minister recognised this difficulty and gave an undertaking that he would appoint a highly qualified accountant as an independent arbitrator to advise him.

My right hon. Friend repeated that pledge today, and I am glad that he did. But, of course, he speaks only for himself unless the appointment of the arbitrator is written into the Bill. I should be out of order on Third Reading if I discussed further amendment of the Bill, but what I think I can say is that we can fairly assume that my right hon. Friend will not be Minister of Transport for ever. Indeed, in giving a promise to appoint an independent arbitrator he limited that pledge to his own tenure of office. Some day we may have a Minister of Transport who is wholly sympathetic towards the railways and totally uninterested in coastal shipping. Such a Minister could dismiss the independent arbitrator at a moment's notice. Since my right hon. Friend intends to appoint an arbitrator, because apparently he believes that it is an essential part of the necessary machinery to bring fair competition between coastal shipowners and the railways, steps should be taken to make such an appointment obligatory on his successors.

It seems to me that it is not unfair to expect that coastal shipping should receive this measure of security and be confident of the future. It should not remain dependent on the whim of some future and unknown Minister of Transport who may be biassed in favour of the railways and who may not come within miles of the degree of ability which has been displayed by my right hon. Friend, the incumbent at the Ministry of Transport.

8.5 p.m.

Mr. Walter Monslow (Barrow-in-Furness)

I do not propose to speak at length, but there are one or two points that I desire to make arising out of the Minister's speech. The right hon. Gentleman mentioned the question of redundancy on which I feel we need some clarification. I sincerely hope that the Parliamentary Secretary will deal with this aspect of the human problem at greater length when he winds up. We have talked about protection for coastal shipping and for certain other interests purely on a materialistic basis. We have not had much regard to those engaged in the industry.

I wish to ask the Minister about the regulations to which reference is made in Clause 78, which in the original Bill was Clause 79. The Clause reads: The Minister shall by regulations contained in a statutory instrument require the appropriate body as defined in this section to pay, in such cases and to such extent as may be specified in the regulations, compensation to persons who are at the passing of this Act officers or servants of the Commission and who suffer loss of employment or loss or diminution of emoluments or pension rights, or whose position is worsened, in consequence of the reorganisation effected by this Act. If I may say a word or two in retrospect, those of us who have had a very long association with the railway industry will recall the Railways Act, 1921, when the four railway companies were amalgamated. As a consequence of the terrific reorganisation which took place, there was redundancy which affected the staff very seriously. This involved not only the loss of men's livelihoods but the breaking up of homes. Large numbers of drivers and firemen had to transfer, for example, from Scotland to Birmingham and from Birmingham to Bristol. The cleaners who were then employed were dismissed the service.

I should like to know exactly what is meant by "compensation" under Clause 78. There is no indication in the Bill that there is any serious intention to deal with this problem in a way that one would expect. Under the 1921 Act, directors who became redundant were compensated in a very liberal way, whereas the staff received no compensation whatsoever. There was discrimination in the payment of compensation. The white collar workers—I do not use that term in any derogatory sense—received reasonably generous compensation whereas the operating grades, the drivers, firemen and cleaners, received no compensation.

Can the Parliamentary Secretary indicate whether there is to be discrimination as between grade and grade when compensation is paid under the Clause and what will be the basis of it? The Minister is nodding his head as though he is trying to convey that something will be done about this matter. I know it has been said that there will be consultation with the trade unions. I believe that that is necessary. But I think that we should have a clear declaration tonight that there will be no discrimination as between grade and grade when the basis of compensation is determined. It should be much more liberal than it was under the Acts of 1921, 1947 and 1953.

The Minister indicated tonight that the size of the railways is likely to shrink still further. It will shrink if the suicidal policy which has been pursued in recent years continues.

Road saturation has reached the stage that it is impossible to move on some roads and certain heavy traffic holds up the private motorist. The Minister says that the customer should have the right to choose how to send his goods. I do not want to deny him that right, but we should consider everything that is involved when he gets it. With road saturation at its present level, the number of deaths on the road alone should mean that any Government who believe in the philosophy of safety first, which is preached continuously, should direct certain heavy traffic off the roads and on to the railways. This would enable us to say that we had resolved the problem by facing it realistically.

Mr. Hay

I am sorry to have to revert to the earlier part of the hon. Member's speech when he spoke about Clause 78, but I wish tonight to give him whatever assurance I can and I should like to be a little clearer about his meaning in referring to discrimination between grade and grade. Can the hon. Member elaborate?

Mr. Monslow

Perhaps I may refer to the circumstances which prevailed in the old days under the 1921 Act. In saying this, I make no reflection upon any organisation within the railways. I am dealing with the matter on the basis of equity and justice. Suppose that an engine driver had done forty-five years' service on the railway. His son might have had only ten years' service on the railways, but in his conditions of service relating to holidays and redundancy provisions, for example, he had a far greater measure of protection than his father who had done treble the son's length of service.

I am asking that there should be no discrimination as between, say, the Stationmaster and the railway fireman or cleaner. The basis of compensation should be one of equity as between the respective grades within the railway service. I know that there is to be consultation with the unions and I believe that the best will be done in the circumstances. My right hon. Friend the Member for Vauxhall (Mr. Strauss) has dealt with the social implications of the statement by the General Secretary of the National Union of Railwaymen. It was dealt with also by my hon. Friend the Member for Central Ayrshire (Mr. Manuel) on Second Reading and by other hon. Members who have directed attention to the social implications of policy.

Whatever may be said about the Bill, it has gone through all its stages in this House without being altered one iota in principle. To argue whether or not it is a denationalisation Measure is merely playing with words. In my view, the crisis in the railway industry will be a recurring one unless we have a policy of integration and co-ordination whereby all forms of transport—road, rail and canal—work in conjunction to achieve the results that we desire.

8.14 p.m.

Mr. Grant-Ferris (Nantwich)

I should like to say a few words of godspeed and good will to the Bill on its passage to another place. It has had a long and arduous course. We began early in December and, apart from the Christmas Recess, we have been hard at it ever since. It is probably the longest and most difficult Bill which most of us have had to tackle.

Two things have struck me about the conduct of our proceedings in Committee which redound very much to the excel- lence of Parliament generally. I refer, first, to the extraordinary good will and good temper of everybody in the Committee. Hon. Members opposite who feel extremely deeply about these matters, have conducted themselves in a wholly admirable manner and have put their case in a way in which they were entitled to do and with the utmost good temper and good feeling all round.

I have appreciated very much the kind and generous treatment which I and those who support the inland waterway interests in the Bill have received from my hon. Friend the Parliamentary Secretary. The amount of time of my hon. Friend and of the civil servants in his Ministry which our interest has taken up has, perhaps, been out of proportion to the importance of the subject vis-à-vis the railway system.

This is, however, the first time that we have been able to do anything in a big, comprehensive way for the inland waterways. I am pleased to say that we have done a great deal. I am deeply grateful to my hon. Friend for the time he has given to hearing us and for the interviews which he has given to us, to our legal advisers and to all concerned. He has taken a great deal of trouble. I also thank my hon. Friend for his kind letter to me in which he thanked us for what he regards as a useful contribution in helping him and his Department to improve the Bill. All this tends to show up Parliament in an excellent light.

I should like also to say—and this is not said patronisingly but with admiration and respect—how much I have admired the leadership by the right hon. Member for Vauxhall (Mr. Strauss) of his side of the House and the Committee. Whenever he rose, I always saw a man who truly had claim to the name "statesman". After a few years in this House, I think I know what that sort of man looks and sounds like. Those are the two things which I have noticed and appreciated most in our proceedings in Committee.

There is no doubt that the Bill can be a godsend for the inland waterways. The great thing that we have been struggling for years to get is an independent board responsible entirely to the Minister and in no way subservient to any other branch of transport. That we have got. Indeed, the whole system can, and, I sincerely hope, will, benefit greatly from that. We also have the necessary money to do the job and to do it well. With £10 million of grant to be spent over the first five years and a further £11 million, in practice, of loan powers, the new board should be able in that time to make a very good showing. With the advent of the pipe-lines and the most perfect right of way which the canal towpath offers for them we shall be making very soon a substantial profit on the new board.

I am reliably informed, and it may surprise the House to know, that on the pipe-line from the docks in the estuary of the Thames to Birmingham, along the Grand Union Canal, the annual profit should be as much as £250,000. When one considers that the whole deficit on the inland waterways system is under £1 million a year one realises how that can be changed into a profit when on one route alone a profit of £250,000 can be made.

Unfortunately, some people outside the House think that my right hon. Friend managed to secure the sum of money which he has been able to obtain from the Treasury only in order to close down waterways. I do not think that they are justified in making that suggestion, because even the Treasury should know that it is more expensive to close waterways than to rejuvenate them. I prefer to judge my right hon. Friend on what he does rather than what he says.

In saying that I have my right hon. Friend's own words for it, because in the main debate on Clause 10, my right hon. Friend said in Committee: I was a little puzzled on Tuesday when my hon. Friend the Member for Nantwich (Mr. Grant-Ferris) said that the Government had given no word of encouragement to those who have the future of the inland waterways at heart. I wonder if that statement really bears examination. It is not so much what a man says, as what he does. Hon. Members then said, "Hear, hear," and my right hon. Friend went on to say: I shall explain what we have done. As Dr. Johnson said, we cannot pry into the hearts of men but their actions are open to observation." —[OFFICIAL REPORT, Standing Committee E, 22nd February, 1962; c. 848.] This is what we shall look for from my right hon. Friend in the months that lie ahead. We shall look for action by him speaking louder than his words, and we shall look forward to having a board which will have the confidence of everyone who understands the problem.

If my right hon. Friend provides this, we shall give him and the board such enthusiastic support that this wonderful heritage of the inland waterways will be transformed into something not to be ashamed of but into something of which we can all be proud. I would not contemplate for a moment what would happen if this did not take place. An hon. Member opposite said something rather controversial the other night about the canal authority, but we have not yet got moving. I believe that the Minister will do what we want him to do and what is the right thing to do. If he does, he will have a great wave of enthusiastic support behind him and eventually we shall have something of which we can be proud.

8.24 p.m.

Mr. Manuel

I do not intend to make a long speech, but I think that I should say something on Third Reading after following the Bill through Committee as often as I could, although, at the same time, I had to attend another very important Committee dealing with the Housing (Scotland) Bill.

We have felt great concern on Second Reading, in Committee, on Report, and now again on Third Reading about the anomalies which we think will accrue through the operation of the Bill. We on this side of the House cannot claim to have been in any way successful in altering the Bill from what it was when the Minister presented it. Nevertheless, on Third Reading we should take the opportunity to reiterate that the sole purpose of the Bill is to establish the principle that railways should operate where profitability can be proved.

Under the direction of the Minister, Dr. Beeching has undoubtedly had his instructions to present a report which will lay down the economic argument applying to British Railways. This economic reappraisal will be based on conclusions concerning the closing down of certain branch lines and sections of main lines for economic reasons.

In the bouts that we have had on this topic, especially applying to Scotland, we have been unable to wring from the Minister or the Parliamentary Secretary exactly how they will approach the question in the political sense, quite apart from the economic aspect of Dr. Beeching's reappraisal. We cannot in any way say that Dr. Beeching is not carrying out the job he has been appointed to do, but I would emphasise that a great responsibility now rests on Parliament, and I hope that the Minister will allow Parliament to assume its responsibility and make decisions. This responsibility will rest on Parliament following Dr. Beeching's report to the Minister.

I have in mind particularly vast stretches of the railways in Scotland, including the main lines stretching into the crofter counties, which are very busy during the restricted summer holiday period in Scotland, but are not paying, when I say that I should like the Parliamentary Secretary to tell us that Parliament will have some say about their being lopped off. It should be borne in mind that already about 30,000 workers migrate from Scotland to England and abroad every year. I am concerned that the cutting down of railway services in Scotland will cause a further exodus of population, especially from the Highland counties, because there will be no livelihood there for the people concerned. It certainly will mean the exodus of all the railwaymen there, for it will mean the closing down of depôts.

I do not know whether English or Irish Members of Parliament are anxious about the problem. I hope that they are and that they recognise that this House has an obligation to outlying districts as well as to the large aggregations of population where lucrative trade can be an inducement to better railway services. I hope that the Parliamentary Secretary will be able to reassure us that, following Dr. Beeching's report to the Minister, Parliament will have an opportunity to decide what areas ought to be kept open, in spite of the fact that the services there are losing money, because of the social consequences which would follow closure. The problem applies not only to Scotland. Large areas of the country west of Bristol and right into Wales will also be affected.

The Minister rather glibly answers us by pointing to the Post Office occasionally when we draw a comparison. A 3d. stamp has to take a letter to all the outlying areas, from Ross and Cromarty down to Argyllshire and various other parts of Scotland. The postman has to go to isolated Highland crofts to deliver letters on which is a 3d. stamp. The Minister says that this argument does not apply to the rail-ways, however, because the Post Office is a monopoly and the railways are not.

The right hon. Gentleman is quite wrong, however. In many respects, as my right hon. Friend said, the railways are a monopoly in certain areas. Indeed, in more and more areas are they becoming a monopoly. For the edification of the Parliamentary Secretary, I will explain, having been a working railwayman, how in some parts they have a complete monopoly of certain goods traffic. There are also many areas where, because of uneconomic returns, the bus services have been withdrawn so that the only transport available is the railways. That means a monopoly in passenger traffic.

Mr. Hay

Can the hon. Gentleman tell me of any part of Britain, even in remote parts of Scotland, which has railway lines but no roads? Private transport can travel on the roads.

Mr. Manuel

That would be a very good argument if everybody were earning a salary similar to that of the hon. Gentleman and could own a car. But there are many thousands of poor Scottish fishermen and Highland crofters and many thousands of people in Wales and other areas which are to be denuded of transport who cannot afford a scooter, far less a car.

That sort of thing must be recognised. We have between 8 million and 9 million workpeople still earning £9 a week or less. A man cannot run a car on that wage. Indeed, it is difficult enough to keep a family on it. There are many people in steady employment who are, nevertheless, almost on the National Assistance line. That is the position under the Tory Government. It is another side to the picture, and I hope that the hon. Gentleman will look at that as well.

I said that I would make a few remarks about monopoly in traffic. Our various steelworks produce very heavy castings. I have taken many trains out of Glengarnock, in Ayrshire, carrying 60 ft. steel rails for export. Does the hon. Gentleman say that they should go by road? Could they go by road? If they cannot, is not their carriage a complete monopoly for the railways?

Mr. Mellish

If they are not economic loads for the railways, they will have to go by road.

Mr. Manuel

That is so. I hope that the Parliamentary Secretary will recognise that, in certain respects, the railways are in a monopoly position for the carriage of certain goods. It is with this aspect that I am concerned.

Much has been made of the possibility of pipe-lines being laid alongside our railways. There could be a good economic return to the Railways Board in laying and owning pipe-lines for the conveyance of oils or other effluents over fairly lengthy distances. In Committee, I expressed my hope that there would be a protective Clause in the Bill in connection with this, but the hon. Gentleman said that we should wait for the Pipelines Bill, which is now in another place. I have not studied the implications of that Bill yet, but we must bear in mind the importance of pipe-lines in this context.

We have in many areas—I think everywhere where there are railways—local authority sewerage pipes or water mains on railway embankments, and, in many cases, crossing the railway lines. If we have an important pipe-line going through, it will possibly cause some disturbance, so that the compensation aspect of this matter from the point of view of the local authorities should be kept in mind. I do not think that these old customers, if I can call them that, should be treated as if they did not matter. We ought to be polite about this, take them into consultation, if we are to have these pipe-lines, and make certain, as I think we could, that the whole thing is carried out in a harmonious manner.

My hon. Friend the Member for Barrow-in-Furness (Mr. Monslow) has referred to compensation arising from various aspects of redundancy. I dealt with that at some length at Committee, and I do not want to go over it again now. Undoubtedly, as I see it, Mr. Sidney Greene might not be far out in the estimate, which he made today in speaking at the Scottish Trades Union conference in Aberdeen, that 150,000 jobs will be redundant. We do not know the length to which Dr. Beeching's economic reappraisal will go, or how the Minister will apply it. This is a mystery. We have not been able to probe the greater minds who are dealing with this problem, but there will undoubtedly be dismissals. There will undoubtedly be many thousands of men who will have their grade position worsened, and it is these men about whom I am concerned.

We might have a man reduced from being a locomotive driver on a main line to a fireman on a lesser one, and having to shift his home because his former locomotive depot has closed down. I do not know how we shall face the question of the provision of houses. There will be great hardship. Clause 78 of the Bill makes provision for any worsening in a man's position, but if a man is moved down from being a top driver to receiving the bottom rate of pay in that grade, and possibly losing £2 or 30s. a week, or whatever it may be, I think that he ought to be compensated if it is a direct result of the operation of the Bill, or because of a contraction through Dr. Beeching's economic reappraisal.

Mr. Hay

I am sorry to interrupt the hon. Gentleman again, but a very clear distinction is made in the Bill between people whose position is worsened as a consequence of the reorganisation effected by the Bill and people whose position may be worsened as a result of any contraction of the system which is due largely to operating, financial, economic and other causes. What we do here is to take power for the Minister to make the regulations under Clause 78, as was done in the case of the 1947 Act, to deal with cases in which people's position is worsened simply and solely because of the reorganisation effected by the Bill.

Mr. Manuel

I appreciated what the Parliamentary Secretary has said, but this will be very difficult. I know what happened after the 1921 and 1947 Acts.

Mr. G. Wilson

I have been listening very carefully to what the hon. Member has said. He can remember the 1920s, as I can, and what happened in the railway service. Is he not exaggerating this matter, because in the 1920s there was heavy unemployment and contracting industries throughout the country, whereas today the reverse is the case. These men, who are highly skilled, might very possibly find bettter paid jobs than they now have.

Mr. Manuel

But a locomotive driver is not like a solicitor, who can move from one office to another and get a job in another type of business, possibly dealing with pipe-lines or conveyancing. That is very easy to do, but if a man has been driving locomotives for forty years he cannot go into another job as easily as that. His job is part of him; it is his life. I have been dabbling in politics all my working life, and have possibly been attending meetings for as long as I have been working on the railway. Nevertheless, I say quite seriously that this would be a very serious thing indeed for a driver who has been in the railway service for forty years and who cannot expect to get another job. I hope that that will be considered.

I hope that when the regulations are brought in to deal with the various facets of redundancy arising from reorganisation, all this will be considered. I want the regulations to be flexible enough to allow the trade unions to be able to prove whether that is so. We have already had an assurance from the Parliamentary Secretary, in Committee, that when the regulations are introduced, under the affirmative Resolution pro, we will have an opportunity to debate them and to strengthen them if we can manage to do so.

My right hon. Friend the Member for Vauxhall (Mr. Strauss) mentioned the policy that thought success could be achieved merely by putting up fares and getting a return large enough to make operations worth while, even though several thousand more railway customers were lost. That is happening whether we like it or not, because of the competition of air travel. The railways are having their largest percentage losses on routes between Scotland and England because first-class travellers have found that it pays them to fly to London and spend an extra day here. I do not blame them. We must recognise that this traffic will not return to the railways.

A constituent wrote to me last week and pointed out that he lives near Kilmarnock and travels to London by rail as a first-class passenger. He is one of those who prefer to stick to the railways. The first-class return fare from London to Kilmarnock is £11 17s. Kilmarnock is one hour short of Glasgow, two hours short on the return journey, but the first-class return fare from Glasgow is £10 16s., a guinea cheaper. My constituent remonstrated about this and found his loyalty as a railway passenger was strained to the utmost. He was told that because of the competition of air travel from Glasgow, the railways had had to lower their fares from Glasgow.

That was not much of an answer. Nor was it very realistic, because the first-class air return fare from Glasgow to London is £18 and I would have thought that there was a large enough margin between that and £10 16s. or £11 17s. for the railways to be able to compete. My constituent wrote to the area railway manager and said that he objected to paying the extra guinea. He asked whether it would be all right if, when he was in Glasgow on business, he bought a ticket for £10 16s., but joined the train at Kilmarnock, thus saving a guinea. He was told that that would be permissible. In fact, he was advised that he could do it. That is a completely ludicrous situation.

I should like Parliament to give an impetus to the trial of a cheap fares policy. It has never been tried, but I am convinced that thousands of people who come from Aberdeen, Glasgow, Dundee and Edinburgh to London by bus every summer do not do so because they like coming by bus, but because it is cheaper than coming by train. If we could compete with the buses by having cheap fares, I am sure that we could draw passengers back to the railways. I hope that we shall approach the future in that sort of spirit rather than in a spirit of contraction of services and higher fares, which, inevitably, can only lead to smaller and less profitable railways.

8.45 p.m.

Mr. John Howard (Southampton, Test)

I do not wish to follow the hon. Member for Central Ayrshire (Mr. Manuel) in his comments on the respective merits of fares from Kilmarnock or Glasgow to London, but I think that we all note the point made by him. We admire his athletic prowess in serving on two Committees upstairs and in being able to get from one Committee Room to another to register his approval or disapproval from time to time on various Amendments.

In his opening remarks the right hon. Member for Vauxhall (Mr. Strauss) said that the Bill was practically unaltered. I want to restrict my comments to Clause 53 which has been materially altered by the Amendments which my right hon. Friend tabled and which have been incorporated in the Bill. Until these Amendments were incorporated in the Bill, coastal shipping was open to the full blast of unrestricted competition from the railways. The old safeguards in the old 1921 Act had been swept away and coastal shipping was left virtually defenceless.

The question now arises, particularly on Clause 53 as redrawn, whether the present provisions will prevent coastal shipping from becoming a casualty, or whether it will be able to continue to operate competitively with the railways. If we are examining the new provisions, we must look at the formula which the Minister enunciated this evening, the formula for dealing with the particular problems which the coastal shipping interests have put to him.

I make no apology for devoting the whole of this time to coastal shipping because it is an aspect of transport which has been neglected in the debates on this Bill. There has not been the same opportunity to speak about it as about railways, but from reading the reports of the proceedings upstairs I think that the most telling speech on this subject was made by my hon. Friend the Member for Brighton, Kemptown (Mr. David James) who outlined the problems with which coastal shipping would be faced if Clause 54 as it was, and Clause 53 as it now is, went through without Amendment.

There are certain tests which I think we should at this stage apply to Clause 53 if we are to express an opinion on whether it has achieved its objective. The first test that I apply is to ask myself whether there are means of preventing the railways from taking freights from coastal shipping on the long haul by quoting rates which are unrealistically low. In other words, can the railway companies be prevented from quoting unrealistically low rates, rates which would ignore, or partially ignore normal overheads, interest and depreciation, together with additions for the replacement of assets in the normal course of business? These are normal items which must feature in the costing of any commercial and competitive undertaking, and coastal shipping falls within that definition.

As I read Clause 53 (2, a), the Minister may make directions if the charges by the railway on a long haul are inadequate having regard to the full cost of affording the … services which are the subject of those charges. I hope that the word "may" which has appeared instead of the word "shall" does not indicate any lack of determination on the part of my right hon. Friend to make directions if the case is proved.

Mr. Popplewell

Does the hon. Member agree that it would also be in the best interests of safeguarding our coastal shipping—a very important feature of our national life—that some discussions should take place with the road hauliers, who are also very severe competitors of coastal shipping?

Mr. Howard

I observed the hon. Member's intervention when the Minister opened the Third Reading debate, and I know his views. I do not intend to be drawn into that aspect of consultation, although I hope that there will be a degree of consultation between the coastal shipping industry and the railways on the subject of freights, thus perhaps avoiding the need for any arbitration, or any necessity for the referee to intervene, so that the problem of deciding what full charges are may never have to be asked.

The second test which applies to the short haul can best be expressed by asking this question: does the Bill prevent the railways from making excessive charges on short hauls—that is to say, where the railway has a monopoly? A classic example is the track connecting a coal mine to a port. The pit to port charges may be monopoly charges, and if the railways raise their freight charges to unrealistically high figures the coastal shipping freight rates must be adjusted to take account of the railway charges which coastal shipping must incur in collecting freight, especially coal freight, from the pit.

Mr. Manuel

If there is a monopoly.

Mr. Howard

Exactly—where a monopoly exists on that stretch of track.

The same formula seems to be applied, with the exception that in this case the test is whether or not the full cost of affording the services is excessive in relation to the conveyance of coal freight from pit to port. I notice that the short haul, as defined in the Bill, is restricted to the haul from the original destination, from the pit to the port, and does not cover the journey from the port to the ultimate destination of the cargo—in other words, at the far end of the journey, when the coastal ship discharges at the port and then has the task of delivering the cargo to the customer. I do not quarrel with my right hon. Friend for omitting this section of the journey from the provisions of the Bill provided he is satisfied that alternative means of transport are available at this end of the journey, thereby avoiding the creation of the monopoly situation to which the hon. Member for Central Ayrshire has just referred.

The third test of the adequacy of my right hon. Friend's Amendments to Clause 53 hinges on the way in which the formula for the full cost of affording those services is to be operated. The formula seems quite reasonable, and the decision to ask accountants to apply it also seems acceptable. I must declare an interest in that I am an accountant—

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

A very good job, too.

Mr. Howard

—and I can see that it should be possible to work a formula Which incorporates this phrase, the fall cost of affording a service. I should like to make one proviso. This formula can be worked only if the information about railway costs and freight rates is available. It must be available to the accountant, or the referee, or whoever it may be who has the task of applying the formula, before he can determine the full cost.

There is a further qualification, that of time. The Minister's intervention, his decision to make a direction where there is cause for such a direction, must be rapid. Otherwise the freights which are the subject of the dispute will be lost to the railways, by coastal shipping. They will be lost not just for that journey but for ever.

In the original Clause 53, to which I must not now refer, some reliance was placed on the introduction of a referee. I should like to know that the introduction of accountants covers this desire— a very necessary desire—for a referee, not only to obtain information from the Railways Board but also to interpret and apply it to the freight rates which may be in dispute. Certainly, as I have already intimated, accountants would be acceptable to me provided prompt action can be taken when recommendations are made to the Minister and also on the assurance that there will be full information available to enable the accountants to carry out their work.

All hon. Members interested in coastal shipping will make a careful study of what the Minister said earlier in this debate. The right hon. Gentleman mentioned the need to decide on the size and shape of the railways. It would be disastrous if, in achieving a right silhouette for the railways we swept out of existence another industry, a private enterprise industry, such as coastal shipping. Clearly it would be quite wrong if by ignoring proper commercial costs a nationalised industry was enabled to compete unfairly with a private industry, particularly one with the fine traditions of coastal shipping, which provides its own finances and which has to face the commercial facts of life.

The Amendments to Clause 53 provide the minimum safeguards, and it is to be hoped that the coastal shipowners and seafarers—because they are at one in their approach to this problem—will receive what they desire, namely, fair trading conditions. If that has been achieved by the Amendments, I feel that the industry will be satisfied.

Mr. Mapp

I am anxious that the coastwise shipping trade should have a square deal. But it is the fact that operators in that trade are also interested in trade to the Continent and in other forms of trade. Would the hon. Member be prepared to ensure that the freight rates for the coastal trade carried out by these people—many of whose vessels are foreign-owned and operated —have no built-in subsidies? Would he be prepared to agree that their rates should be examined as closely as he is asking that the rates of the Railways Board should be examined?

Mr. Howard

I think that the point there is that the coastal shipping rates are publicly quoted. It is not possible to obtain quotations from the railways, otherwise railway rates would be disclosed not only to competitors in coastal shipping but also in road haulage. However, I appreciate the point made by the hon. Member for Oldham, East (Mr. Mapp). It may well be that there is a case for examining the whole of the coastal shipping operations not only in relation to trade round our coasts but also trade on this and on the other side of the Channel by vessels operated from Continental ports. I thank my right hon. Friend for his Amendments to the Bill which certainly goes a good way towards meeting the Amendments which some of my hon. Friends had originally proposed.

9.0 p.m.

Mr. Spriggs

The most significant aspect of the Committee stage was that the Minister refused to accept any Amendments. There were thirty-odd sittings at which hon. Members exerted great patience and as a result of which they were obliged to take their meals often late in the evenings. I regret that the Minister put in very little time in Committee, but threw the burden on the Parliamentary Secretary who, on a number of occasions, found it difficult to answer questions put to him.

Both the Minister, when he attended, and the Parliamentary Secretary said in Committee that the Government's intention was to give the boards greater commercial freedom. I regret that their interpretation of that phrase is not in line even with the views of hon. Gentlemen opposite. If the same kind of commercial freedom were offered to the Minister's personal friends and hon. Gentlemen opposite they would soon tell him and the Government where to get off, for they would not have it.

I wish tonight to refer to certain figures which I mentioned only briefly in Committee. It must be remembered that when the Minister refers to commercial freedom he had, by the terms of the Bill, put himself in such a position that none of the boards may take a major decision without first referring their proposals to him and gaining his permission, apart from that of the Holding Company.

Just what will the Holding Company take over? In an attempt to answer this question, I will consider What happened between 1955 and 1960. I could consider other years but I do not wish to weary the House. The figures for 1955 to 1960 are very telling and they provide the reason for the Government's action and also for the wording of the Bill, particularly Clause 29 (9). I have taken from the Fourth Schedule the names of seventeen undertakings which will go over to the Holding Company, including provincial and Scottish bus companies, the Tilling group and the Scottish group. I am sure that these figures are correct, but if any hon. Member wishes to contradict them I will willingly give way.

In 1955 £7,400,339 was received by the British Transport Commission by way of receipts from investments. In 1956 the total was £6,645,130 and in 1957—and I am taking the same companies—the figure was £6,243,679. In 1958 the figure was £7,214,038; in 1959 it was £7,878,136; and in 1960 total receipts from investments in these same undertakings amounted to £7,833,934.

When one looks at these very healthy investments one can see the motive for wording subsection (9) of Clause 29 as it appears in the Bill. Let me read this subsection, because it is very important. (9) The Holding Company's surpluses may with the consent of the Minister, given with the approval of the Treasury, be retained for the purposes of the conduct of their business, and, except so far as they are so retained, shall be paid over to the Minister and be paid by him into the Exchequer; and so much of the sums so paid into the Exchequer as is of a capital nature shall be issued out of the Consolidated Fund at such times as the Treasury may direct, and shall be applied by the Treasury in redeeming or paying off debt of such description as the Treasury think fit. If the Government had any principles at all they would withdraw the Bill now. The Minister and other hon. Members today referred to the deficit being written off. I say to the Minister and to his hon. Friends that if the railwaymen had received fair wages for their labours over many years the deficit would have been far larger. The reason why the deficit is not much larger than it is today is that much of the railway work of the transport services has been carried on the backs of railwaymen who have been sadly underpaid. When the Minister talks of commercial freedom one has to look around to see where that freedom is.

Criticism has been made of the British Transport Commission losses. As a railwayman who has played a leading part in trying to get justice for railwaymen, I also want justice for the railway management. It is unfair to talk about the use of public funds for publicly-owned industries. If we look at the 1961–62 Estimates of aid to private industry by way of grants, subsidies and so on, it is interesting to see what the railways would get if they were given 50 per cent. of what is given to private industry. From what the Minister told us this afternoon, it would seem that the railways constitute the biggest industry in the world, employing over 500,000 men who have suffered for years. The Minister now refuses to accept the principle of Guillebaud in future wage negotiations. Here we have the railwaymen rapidly falling behind the rest of the industrial workers in their standard of life.

Let the House consider the effect of treating the railways only half as well as private industry is treated. We are in favour of putting money into industry to revitalise it. We do not say to the farming fraternity, "You are not entitled to this." We are in favour of it. We support the development of industry. We will vote with any Government which will keep the various industries on their feet and keep the workers fully employed, giving our craftsmen the ability to show that British workmanship is the finest in the world.

If there could be agreement to subsidise the railways as freely and without repayment of any kind as we do those industries to which I have referred that would greatly help the industry. Agriculture receives £348 million a year. If we gave the railways half as much, that would be £174 million a year. If we took half the amount which we give to the distribution of industry, which was a total of £8 million, the railways would have a further £4 million. If we took half of what we give by way of grants to the aircraft industry, a total of £8 million, that would be a further £4 million to help this great transport industry of ours. Research and development in the aircraft industry receives £160 million. Only half that amount would be £80 million for the railways. A further £10 million is given for the development, improvement and production of transport aircraft, half of which would be £5 million a year for the railways. Are we asking too much for this great transport undertaking?

I submit to the House that hon. Members opposite today have proved beyond doubt that they believe in discrimination to the disadvantage of publicly-owned industry. Back benchers on the Government side have stated that they have no qualms about Tory philosophy. Clause 29 (9) was referred to this afternoon, and one hon. Member opposite stated that his right hon. Friend should not hesitate to sell off these very lucrative undertakings. We took notice of the very important statement of the Minister when he followed up his hon. Friend by referring to the selling off of these undertakings. There is no doubt at all that there is room for serious disquiet in the railway industry. I believe that we have a duty to look at the reason why the holdings which are listed in the Fourth Schedule, in lists A and B. should remain in the hands of the Railways Board when this Bill becomes law. They represent the income of the Transport Commission until such time as the Bill becomes law. From that date onwards the Holding Company will collect all these profits from investments and will hand them over to the Minister who in turn will hand them to the Exchequer.

If this is commercial freedom, as the Minister calls it, I believe that we should give publicly-owned enterprise, no matter what it is, through the boards that are to be set up, commercial freedom. Commercial freedom should mean freedom and not the empty, meaningless words which we have had poured out in Committee upstairs and later yesterday and today on the Floor of the House. There is no intention of giving publicly-owned enterprise any commercial freedom. If the same standards were to be applied to private industry, hon. Members opposite know that they would not have commercial freedom. They know that the Minister's statement is nothing less than a lot of humbug and hypocrisy. He is covering up this very important Clause 29. In Committee, we opposed Clause after Clause for months, but, of all the Clauses in the Bill, Clause 29 is the most important. The rest of it is dressing to cover up what, in my opinion, is the first step towards denationalising the publicly-owned railway undertaking.

9.15 p.m.

Mr. Prior

I cannot agree with the hon. Member for St. Helens (Mr. Spriggs) in much of what he said. He referred to the wages paid to railway workers. I am sorry that the hon. Member for Norfolk, South-West (Mr. Hilton), who represents the National Union of Agricultural Workers, has gone out. He will know that for years I have been saying that the only way to ensure that agricultural workers are paid a decent wage is to get a lot of men off the land and run the farming industry efficiently and economically. I am sure that the same applies completely to the railway industry. We must get men off the railways in order to pay those who are left a proper decent wage. Once that happens, we shall have a far better railway service than we have today.

Mr. Popplewell

Good heavens.

Mr. Prior

Anything which we say to the contrary is plain bad economics and will not help the very men that the Opposition always say they want to help. I am firmly convinced that that is so. However, that is not my main purpose in rising to speak. I wish to discuss Clause 29 and to examine the principle underlying the possibility of selling the manufacturing interests.

I am not against the denationalisation of anything. I do not believe in nationalisation and, therefore, I cannot possibly object to denationalisation. I think that it was wrong in principle to allow the nationalised industries, with their opportunities of borrowing or obtaining credit from the Government, and with someone else standing their losses, to manufacture in competition with private enterprise. I accept that entirely, but I think that in the case of Bristol Commercial Vehicles and Eastern Coach Works a rather different principle is at stake.

In this case we have the principle of a private enterprise company, as a matter of prudent investment and management of its affairs, using these two companies to build its commercial vehicles, the companies having been nationalised along with the bus operators under the 1947 Act and continuing in that way. In this case, I think it is a mistake to think of selling off those companies and leaving the bus operators separate from them. Since they were part and parcel of the organisation, they should stay in that position.

I took the Minister's words tonight not quite in the way that the right hon. Member for Vauxhall (Mr. Strauss) took them. I understood from what my right hon. Friend said that he is willing to direct, or will direct, the Chairman of the Holding Company that he may sell off the three manufacturing companies if he receives offers which independent accountants regard as reasonable and good. I do not think that I can object to that, but we want a guarantee that if those companies are sold the price paid for them will be a good one and that the advantages to the Holding Company in selling those undertakings are greater than their loss would be if they lost them. I hope that the Chairman of the Holding Company and the Chairman of the Tilling Group will be closely consulted before any such move is made.

I wish to examine the attitude of the workers in the factories concerned. My opinion is that they have nothing to lose. They will either go on working for the Holding Company or, if the companies are sold, they will be working for private enterprise. I do not think that there will be any disadvantage to them in working for private enterprise because the Chairman of the Holding Company will have received a sum for those companies which will mean that the factories will have to be worked in much the same way as they were before because the companies which bought the Eastern Coach Works Limited or Bristol Commercial Vehicles Limited would lose a lot of money which they could not afford to do. I am assuming that they would be sold at a very good price. Provided that happens, the workers would not suffer in any way.

There are, however, certain conditions which should be fulfilled in fairness to the workers. From now on, they will undergo a period of some uncertainty. They have now a full order book and future employment for them for the next year or two will be no trouble. But they will feel from now on that there is a chance that they will have a fresh management. This period of uncertainty should be as short as possible. I hope that my right hon. Friend, when he winds up, will say that he will not extend this period of uncertainty any longer than he thinks is absolutely necessary. If, for example, he says that from vesting date he will allow a year for a decision to be reached and that after that time the Holding Company, if the companies are not sold, will have full powers to carry on under Clause 29, that will be fair to the workers. However, at the moment, I feel that the workers need have no fear, and I am glad about what my right hon. Friend said on the decision that he hopes will be reached.

Clause 9, which sets up the Docks Board, will have a considerable bearing on my constituency. I am not sure what powers the Board will have to sell ports if it wishes to do so. My own port of Lowestoft, mostly a fishing port, has recently had considerably increased charges levied on it by the British Transport Commission. There is a feeling in the fishing industry that the port is not being run as efficiently as it should be run and that these charges are rather higher than is necessary. I am wondering whether when the Docks Board is in being there will be an opportunity for the fishing industry or for some other corporation to buy out the harbour and to run it. I wonder what my right hon. Friend would have to say about that.

All these things apart, I think that the Bill is a good Bill. Change is unpleasant for everyone. We always like to keep the status quo. I am, however, certain that these changes have to be made and will be to the great advantage not only of those who travel, not only of the taxpayers who foot the bill, but also, in the long run, of those who, cer- tainly in my eyes, are most important— that is, the people who work daily on the railways, on the roads and in the workshops. In the long run, these measures, although they may seem unpopular now because they involve change, will be to the advantage of those people.

9.25 p.m.

Mr. Mapp

In reflecting on the Bill, I wish to make a comment on the speech that we have just heard from the hon. Member for Lowestoft (Mr. Prior). Star Bodies, one of the three firms that seems to have occupied the attention of the House—and bearing in mind the big picture with which we are involved, these relatively small firms do obviously useful work for the appropriate parts of the Commission—is located in the town part of which I represent. I can say unreservedly that any assurances concerning the movement from general employment within the nationalised industry to private enterprise will not afford these people any satisfaction.

I happen to belong to the same kind of organisation of Transport Commission employees as they do. In saying that I have, perhaps, declared an interest in that I was recently with the railways. Having said that, however, I want to think aloud a little because we have now reached the stage when, before long, the Bill will become an Act.

When I reflect on the causes which have given rise to the Bill I am bound to say that it is a problem which has been forced upon the Government. It is not a decision arrived at by rational thinking. The Bill is born of necessity. The Minister and his Government cannot in any way feel that it represents constructive thinking to meet the new age and the new pattern of railways that we shall want.

Let us be quite frank. The Bill is the result of two major problems. One is the tremendous financial liabilities that have overtaken the Commission over the last six years. I do not want to be too political, but it is obvious that those financial liabilities have coincided with the present Government and their predecessors. That is a statement of fact. I do not wish to draw any great significance from it apart from moving away from the political field to new directions in which most of us—I do not confine myself to either side of the House—consider that we must move.

Allied with the financial problem, the Government were faced with industrial difficulties arising from the fact that railwaymen were underpaid, as they have been for many years and are likely to be for some time. I understand the lives of these people well enough to know that the Government, therefore, will not necessarily have a contented labour force. One hopes otherwise. I would be the last to do other than try to get a happy and contented team. I beg the Minister and others to be careful in those relationships. What has happened was accentuated by the fact that two years ago the Prime Minister himself had to intervene. We now see the long-drawn-out consequences.

The Bill contains nothing apart from the generous recognition and writing off of the financial liabilities of the past. Any Government would have had to face this. It should then become necessary, however, for the Ministry of Transport as a result of its researches to indicate the lines of strategy by which the losses of the past can be avoided.

The Bill is full of hopes and promises, but there is not one economic yardstick in it which will show to the Railways Board how it can obtain a better financial return in the next five years. The Minister and the Government this year and next year are to put in the hands of a railways head, with not much more than a few month's experience, an Exchequer grant of £150 million a year over which the House will have practically no control. The out-turn next year which the Chancellor will meet is not a figure which the House will be able to decide at all. It will be decided by the B.T.C. this year and by the Railways Board and the Inland Waterways Board the year after. Is this the kind of financial scrupulousness that one would expect from the other side of the House? I am always interested in making sure that financially both ends meet, but we have here, as I said in Committee, an open-ended subsidy which has latent dangers, as everyone will recognise.

I tried in Committee to make a suggestion which represented a minority view. I wish to have applied some yard- stick by which subsidies could be measured in future. I should like the railways to become viable. I doubt whether that is possible on this crowded island, but I am sure that the House will agree that what subsidy is paid should be as small as possible, having regard to the fact that railways are a national service and we want efficiency throughout the system. I believe that before long the pundits will reach a conclusion which I reached long ago. The Parliamentary Secretary said that the railways were losing their public, who were preferring some other means of transport. But to say that is to beg the whole question. Eight out of nine people depend upon shanks's pony, public transport or a bicycle. All people do not own motor cars. We have been neglecting those who have to rely upon the more elementary forms of transport. We must provide for them.

Anyone who costs transport by rail in terms of movement of freight traffic, and similar transport by motor fleet on the roads, finds before long, politics apart, that road freight traffic travelling one-third of the time empty and two-thirds of the time reasonably loaded does not pay anything like its share towards the maintenance of the roads, which are provided free, and towards the cost of policing them. The Minister will have this headache in the autumn. It would be useful during the next few months, without prejudice, to find a fair basis of costing between railway movement and road movement, particularly on the freight-carrying side.

Invariably, when we discuss railway finances we are presented with the figures for the private motorists, who must always be permitted to have their own choice, though it is noticeable, in passing, that three-quarters of the private cars are not owned by those who use them. The business world is itself finding motor cars useful for its executives and salesmen. Consequently, the railways have to face this menace.

The basic costings of the direct overheads falling on railways as opposed to freight road operators are uneven, let alone the operations of the Chancellor of the Exchequer. It is not just a question of people deserting the railways. Let us be analytical about this. People are deserting the railways because of the cost. The chief considerations affecting the choice of a means of transport are speed allied with comfort, safety and cost, and in the long run the cost factor prevails.

The basic costs have been uneven ever since we have had railways. The railways have to carry all their own track costs, policing costs, and so on. When in the autunm the very nebulous statements about the costings of freight and other types of traffic on railways are put forward by Dr. Beeching, I hope that every hon. Member will try to appreciate what is happening. First, these costings are based on insecure basic costings to start with. Also, there is involved in this picture of unfair costings something which anyone in transport recognises, and that is the problem of the rigid track as against the road. These are some of the problems.

As to the problem of track costing, I hope that from the subsidy will be allocated a sum—this sort of thing is regularly done on the railways—to the Railways Board to meet its track maintenance needs and safety precautions which we insist upon to a greater degree in respect of the railways than we do on the public thoroughfares.

If the House is prepared to face what is already faced in many other countries, we shall have a yardstick which will enable us to measure and which can be tied to a given cost. This will help us to deal with the vexed problem of branch lines. I am not one of those who argue that branch lines must be retained in every case because history is that way. My view, frankly, is that once we have allocated to the branch lines a fair share of money from the public purse to deal with their tracks and policing and we find that the public are not using certain lines, those lines should be closed. Do not let us be afraid of moving into the new world.

I would say, in passing, that I do not lack the courage to tell my railway colleagues that we must begin to visualise the country station of the future, and even stations for towns of 10,000 or 15,000 inhabitants—with all the toilet facilities, booking offices and other things that we have been used to in the past—in a different form. The time is coming when tickets will be bought on the trains and when only in the major centres will a central booking office be justified. I hope that my brother railwaymen will not be afraid of this sort of development. The railways should not be expected to put in toilets and weighbridges, any more than are bus companies. I see no reason, in this new era, why all trains should be moved under the custody of two people—the driver and the guard.

My last point concerns the position of the Minister himself vis-à-vis the proposed Advisory Council. I have felt throughout that this proposal was a piece of window-dressing. I should like to feel that that is not the case, but the Bill destroys the very close and defined links between the British Transport Commission and its various associated bodies. The Bill does not give many teeth to the new Council, although I am still prepared to hope that the right hon. Gentleman will see the light.

The Minister could get that Council to do a real job of work. Not many Clauses of the Bill deal with the Council, and not a lot has been written into the Bill prohibiting the Council from doing a big job of work. Obviously, much will depend on the Minister. If he merely uses it as a tool for achieving what he wants to achieve, following the political dogma of his party, then the Advisory Council will become illusory.

On the other hand, if we have a Minister interested in giving Britain a transport system able to do the necessary job of work, and one who is prepared to give the Advisory Council a first-class backroom staff and allow it to initiate ideas and thoughts, it may be able to do something worth while. But if the Minister, as the Bill more or less implies, makes sure that the Council thinks only of those things he wants it to think about, it might as well not be born.

There is still, of course, hope that time and tide will change. There is a chance for the right hon. Gentleman to introduce into the Advisory Council not only the chairmen of the respective boards but also people from outside—from industry and the unions and elsewhere. I beg him not to take in yes-men but the type of man who is, perhaps, not too interested in politics but is concerned with seeing that the sinews of movement for people and goods shall be responsive, efficient and effective. The right hon. Gentleman can bring that about. I trust that he may live up to that hope.

9.44 p.m.

Mr. Popplewell

We are now coming to the end of what has been a hectic time for many of us. There have been 35 sittings of the Standing Committee, filling about 1,829 columns of HANSARD. That shows the amount of work which has been done in Committee on the Bill.

I want to join with the Minister and my right hon. Friend the Member for Vauxhall (Mr. Strauss) in paying a compliment to the Parliamentary Secretary. These will be about the only words I am going to say during my contribution to this debate which will be palatable to that side of the House. Although we have opposed the Parliamentary Secretary vehemently during the passage of the Bill, we on this side of the House realise the terrific task which he has had to undertake, and how he has had to take the full weight of the Committee stage on his own shoulders.

The Minister himself came into the Committee only every now and then, entertaining us with some witty observations, but evading the real issues, while the Parliamentary Secretary has nobly defended the position on an extremely sticky wicket, to say the least. Though the Parliamentary Secretary may not like it, we on this side are quite sincere in the observations which I have made about him.

Having said that, I also agree with the Minister that the Bill illustrates the very wide difference of opinion between the two sides of the House. We both accept that, and we approach the whole matter from that point of view, but when he tries to tie that up with his regret that there should be political interference in transport matters, and suggests that there should be a more reasonable line of approach, I think that this is very odd, especially when the right hon. Gentleman is the sponsor of such an atrocious Bill as this.

The Tories seem to suggest that this matter should be approached in a non-political way. They do that not only in transport, but in many other things, provided that everyone accepts their point of view. It is then all right and becomes a non-political question. What a lot of nonsense this is. We have seen since 1951—and I do not hesitate to repeat here what I said in the Second Reading debate—23 attempts to legislate on transport matters since the Tory Party took office. Not all of them have been official Tory Party Bills. Many have been private Members' Motions, but 12 have reached the Statute Book and this is the thirteenth in ten years.

The Minister talks about approaching this matter from a non-political point of view. The whole essence of what has taken place during these ten years indicates the political nature of the line of approach of the Tories on transport questions. First, they attempt by purely doctrinaire measures to break up a system which has been developed efficiently and which was paying its way, in spite of the attempts of the Conservative Central Office, Ministerial handouts and propaganda points made by Tory back-benchers to suggest that the 1947 Act was a failure.

The 1947 Act was a complete success, for not only did the railway system pay its way, something which was never done in transport in the years between the wars, not only did it meet all obligations, but it made a profit. It is since the Tory Party took control in 1951 that we have had this accumulated deficit of £850 million, which the taxpayer is having to meet.

Alongside this, we have had a spate of transport legislation. The first major Measure of hon. Members opposite was the 1953 legislation which tried to denationalise the transport system. The Minister has made great play with the fact that a noble Lord in another place said that it was not an attempt at denationalisation. But who else has said so? We have said that it was an attempt to cripple the publicly-owned transport system. The 1953 Act broke up many parts of the publicly-owned system and left the holding companies and subsidiaries wide open to take-over bids from any Mr. Clore.

The hon. Member for Lowestoft (Mr. Prior) has shown some concern for the works which have been mentioned, but he must not under-estimate the significance of what the Minister said. The hon. Gentleman said that selling off vehicle construction companies would not mean that the workers would suffer, because they would simply be working for a new private company. Surely he is not so naïve as to believe that. Surely he realises that if these little irritants prove to be a sore in the side of big business, big business will willingly buy them up and close them down and concentrate activities in another area. That is the sort of thing that has taken place all over the country. In my own area at the end of the war big undertakings came along and set up small offshoots, but when the first breath of ill-will came, they closed them down. The hon. Member's constituents are liable to receive the same treatment.

Mr. Prior

I do not think that they are little irritants. They are something bigger than that. If they were little irritants, there would be no case, for they would be inefficient. In fact, they are not inefficient. As private enterprise will be made to pay a very good price for them, it will have to keep them going.

Mr. Popplewell

I appreciate what the hon. Gentleman says. Three firms are involved and their output capacity is about 2,000 vehicles—about 750 bus bodies and most of the rest road haulage vehicles. That is to be compared with the production of 474,000 vehicles throughout the country during the year.

As I have said, we have now reached the ridiculous position when the nation has to subsidise the railways to the tune of £150 million a year. This has been brought about through the ineptitude of Government policy, not only in connection with transport, but in connection with high interest charges and the whole mixture which goes into the orbit. It has arisen because of the Government's ridiculous policy in its Bills of 1957 and 1959 when it instructed the British Transport Commission to go to the open market and borrow money at 6½ per cent. to pay interest charges on money which had already been borrowed at far lower rates of interest. That is the topsyturvy sort of legislation which has been introduced, and I believe that the Parliamentary Secretary assisted in piloting through the 1959 Bill.

Mr. Hay indicated dissent.

Mr. Popplewell

We are now faced with a deficit of £850 million which the taxpayer has to pay to an undertaking which was previously showing a profit. But that is not the whole story. Even the Minister said that his five-year estimate of £450 million investment from vesting day was much too low a figure. He and the Financial Secretary to the Treasury admitted that in about two years they would have to ask the House to reconsider the situation.

We have been reduced to a ridiculous state of affairs. We see in the Bill almost a complete circle of events. My right hon. Friend the Member for Vauxhall referred to the various Executives set up under the 1946 Act and abolished in the 1953 Act, and now we are again setting up separate boards plus a Holding Company, but without the umbrella of the British Transport Commission to co-ordinate their work.

There is this big difference. The 1946 Act set up the Transport Commission consisting of nine members, with 45 members to deal with docks, the railways, inland waterways, hotels, and so on, making a total of 54 members, Under the 1953 Act the Transport Com-mission was increased to 14 members, and the number of members on the other authorities was increased to 61. What is the position today? The number of people to be appointed to the Railways Board and the other authorities is 125.

Mr. H. Hynd (Accrington)

Jobs for the boys.

Mr. Popplewell

Absolutely.

The Bill provides an additional 71 jobs for the boys. This state of affairs has been deliberately created by hon. Gentlemen opposite, and at the same time they are asking the taxpayers to foot a bill of £150 million, or to use the words of the Parliamentary Secretary, to pay 8d. in the £ by way of Income Tax.

The Bill perpetuates the weaknesses that were discovered in the transport system betwen the wars. On more than one occasion in Committee upstairs the Parliamentary Secretary referred to the vertical structure of the Bill. He said that each board had to be a self-contained unit. The hon. Gentleman completely ignored the lessons that we learnt before and during the war.

It is impossible to regard the various branches of transport as separate entities. If we want an efficient transport system, we must forget the idea of keeping roads, railways and inland waterways separate from one another, and regard transport as a whole, and then decide on the best means of moving traffic or people from point A to point B. If we could be assured that the Tory Party will make a genuine attempt to look at the situation from that point of view, there might be some way in which we could get a reasonable line of approach to the problem.

Instead of regarding transport as a whole, we are putting the clock back. We are returning to the old cut-throat days when railwaymen who were receiving £2 a week were asked to accept a voluntary pay reduction of 5 per cent. That was the type of structure which was responsible for the various Transport Acts during the war, which insisted upon the safety of loads, and upon lorry drivers keeping log sheets. That is the situation to which the hon. Member for Twickenham (Mr. Gresham Cooke) wants to return. If his constituents approach him because of a closure of a branch line, or any cutting down in railway services, that is the type of answer he should give them.

Mr. Gresham Cooke

The hon. Member seems to forget that the square deal for the railways was produced in 1947, in an effort to obtain fair competition between road and rail.

Mr. Popplewell

The square deal was proposed at that time because of the cut-throat competition. It is well known that the railways and lorry owners were opposing each other by making applications for licences before the traffic commissioners.

Mr. G. Wilson

The square deal campaign was the result of a demand for the freeing of railways from restrictions, Only later was it diverted to an attempt to restrict road competition.

Mr. Popplewell

That only enforces my point. Since then we have managed to reach a reasonable state of coordination, but hon. Members opposite want to lead us back to the old days.

The consequence of their policy has been a tremendous curtailment in railway services. I was astonished when the hon. Member for Lowestoft said, in effect, that the best way to make the railways pay was to reduce the staff, in the way that agriculture had been mechanised and made more efficient.

Mr. Prior

No.

Mr. Popplewell

That was my interpretation of the hon. Member's observation. Let us see what has happened.

Since the closures began there has been a reduction in railway staff of about 163,980, and we understand that in discussions at the consultative meeting on Monday Dr. Beeching intimated to the trade unions concerned the fact that there might be a further reduction of 100,000 in railway personnel. It is against that background that the Minister deliberately insulted the railwaymen, when, in effect, he said there were none of sufficient calibre to fill the higher appointments under the terms of the Bill. At the following meeting of the Committee he tried to contradict what he had said. He blamed the acoustics of the room. But all those who were in Committee know that the Press reports at the time were quite correct.

Only today we were told that 148 shopmen have received their notices at York; 62 at the North Road shops, Darlington, and 22 at Faverdale. This is all linked up with what we understand to be the policy of Dr. Beeching, which is to close one-third of the railway system. What does this mean? It would appear that in future there will be no railway services west of Plymouth, or west of Carmarthen, or east of a route along the East Coast. If the present policy is pursued to its logical conclusion there will be no railway services at all north of a line from Glasgow to Edinburgh. In that area of Scotland it is likely that there will be no railway services.

There have been 467 closures of parts of the railway service and this includes not only branch lines, but large sections of the railway track. We are fold that this is only the beginning. The policy which is being carried out by Dr. Beeching at the direction of the Government disregards the need to provide a social service. The criteria for the successful operation of the rail transport system is to be the profit and loss account. It is possible that sur- burban traffic may pay its way but big losses are building up in the commuter services and a drastic curtailment of such services is possible.

The hon. Member for Tynemouth (Dame Irene Ward), and other hon. Members representing constituencies in the North-East, are upset at the proposed closure of the North and South Tyneside electric service. Other hon. Members are concerned about what may happen to commuter services in their constituencies. I suggest to the hon. Lady the Member for Tynemouth and other hon. Members opposite that when their constituents approach them on these matters, they should not shuffle off their responsibilities but rather they should say, "I am responsible for this because I supported a Government which deliberately brought about this state of affairs."

I agreed with the Parliamentary Secretary to share the last three-quarters of an hour of the time of the House and I have come to the end of the time alloted to me. I wish to conclude by saying that we regard the Bill as a shocking Measure, but look upon it as temporary legislation. Let there be no misunderstanding of the fact that when we are returned to power, as we shall be after the next General Election, one of the first tasks of a Labour Government will be to establish a co-ordinated, integrated transport system based on the need to provide a service for the community and to meet the requirements of the nation.

10.8 p.m.

Mr. Hay

On one thing the hon Member for Newcastle-upon-Tyne, West (Mr. Popplewell) and I agree. We are both rather glad to come to the end of this very long road. The hon. Member is lucky in some respects. I suppose that now he may have a well deserved rest for a little while. But as soon as the House reassembles after the Easter Recess my right hon. Friend and I must turn our attention to the Road Traffic Bill and that again is a Measure which is likely to lead us along a rather long road—[HON. MEMBERS: "Resign."]— we are not prepared to resign. We are prepared to carry on with the job which we know has to be done.

I wish to say one other thing before replying to the debate and I say it on behalf of my right hon. Friend as well as myself. We are extremely grateful, as I am sure is the House as a whole, to those behind the scenes who have assisted us with this Measure. The House will realise the vast amount of work involved behind the scenes, and my right hon. Friend and I are grateful for the help we have had.

I would take the attention of the House back to the start of the Bill. Why did we decide to introduce a Measure of this kind? It is essential to go back to the situation we found when my right hon. Friend was appointed—a situation which was outlined to a large extent by the Report of the Select Committee on Nationalised Industries dealing with British Railways. We discovered that three major things were wrong.

First, the financial situation of the British Transport Commission. The accumulated deficits at present amount to no less than £625 million and this figure does not include the capitalised interests. If one takes British Railways alone, the accumulated deficits since nationalisation, since 1947, have mounted until they are now £700 million. That was the first thing we had to deal with.

Secondly, we had to look at the structure of the B.T.C. It is true that in 1953 alterations to that structure were made but, nevertheless, basically the structure of the B.T.C. today is the same as it was in 1947 when the party opposite nationalised it. It is still a large, unified structure, very cumbersome and, as our colleagues on the Select Committee found and stated clearly in their Report, one in which the attentions of those in charge were divided—on the one hand between those things which were socially desirable and which they felt they must try to fulfil in the light of the statutory duty placed on them and, on the other, those things which were economically right.

The third thing we found was that the B.T.C. was saddled with a whole mass of commercial restrictions, things which prevented it from making a profit out of its undertaking, things which have their origin way back in the early history of the railway industry and things which were imposed by Parliament in the interests of the Community on an organisation which then had a virtual monopoly of transport—such things as the control over fares and charges and the common carrier obligation. These things were said by those who know anything about the railways to be inimical to any kind of economic operation.

We turned our attention to these problems and we produced this Bill, the provisions of which I will describe and which deal with each of these problems. The hon. Member for Newcastle-upon-Tyne, West, the right hon. Member for Vauxhall (Mr. Strauss) and other hon. Members opposite, have complained today that in Committee and on Report few, if any, of their Amendments were accepted. Really, they can hardly be surprised at that, because they have, in the same breath, often told us that they are dead against this Measure, that it is a wicked and improper one and that it is founded on a political policy which is entirely different from their own. In those circumstances, they can hardly expect us to accept the Amendments they put forward, many of which, frankly, were in the form of wrecking Amendments.

Mr. Spriggs

What an excuse!

Mr. Hay

Where reasonable Amendments were put down by hon. Gentlemen opposite we have sought, where we could, to meet their points. There are quite a number of them, but I will not rehearse them now. In other cases we have given assurances and, in others, we have tried to do what we can to meet the problems raised in some other way than by legislation.

I come to the details of the Bill. Regarding the financial problems I have outlined, few hon. Members have emphasised the tremendous nature of the financial reconstruction which is being carried out by the Bill. It is an essential part of the Bill because we are writing off, remember, £475 million of accumulated deficits. At the same time, we are placing to suspense between £650 million and £700 million. These are very large sums of money indeed, and I am surprised that we have not heard a little more from some of the financial purists, of whom there are quite a number in this House, about these proposals. Nevertheless, we have got through successfully so far, and I hope that we shall succeed.

Next let me say a word about the structure. As I said, we discovered that the British Transport Commission structure was cumbersome, top-heavy and out of date for the sort of job that the nationalised transport undertakings today have to do. Therefore, what we sought to do, as the hon. Member for Newcastle-upon-Tyne, West reminded the House just now, was to divide the undertaking into its component parts. Whereas we find today that the British Transport Commission is a horizontal structure, the Bill will provide for a vertical structure to divide up the undertakings into their component parts—the railways, London Transport, the docks, the British Waterways Board and the Holding Company, which is a new concept in nationalisation in this country.

To each of these boards we have given a set task in a clearly defined field, and it is our intention that the boards and the Holding Company should stay within their set task. We have been obliged to resist Amendments from hon. Members opposite which would have sought to enlarge the scope of each of these boards because we want them to concentrate on the job that they have to do and not find themselves back in the same situation as the British Transport Commission has done.

I should like to say a word on the regional railway boards, a matter of some importance. The right hon. Member for Vauxhall and others asked questions about the extent to which there would be delegation of functions by the Railways Board to the regional railway boards. As I have said on a number of occasions, we have deliberately not written into the Bill any precise provisions of this kind simply because we believe that the interests of the undertakings will best be served by the maximum degree of flexibility. Moreover, until the Railways Board itself is established and the regional boards, too, we shall not be in a position to have the benefit of their views upon the subject.

During our debates in Standing Commitee the Opposition pressed for the disclosure of information on the way in which the Railways Board would delegate functions to the regional boards under the provisions of Clause 2 (4). The right hon. Member for Vauxhall and the hon. Member for Oldham, East (Mr. Mapp) participated in a discussion on this subject on 30th January last. They will remember that I undertook to consider then what we should do about it.

Our conclusion is that it is desirable for Parliament and the public to be informed about the Railways Board's delegation to the regions. After the Railways Board has been set up and the initial decisions have been come to, my right hon. Friend will take a suitable opportunity of acquainting the House of them. This might be in an answer to a Parliamentary Question or by way of a statement. We shall see.

We shall also see that the Railways Board's annual report will include each year a specific reference to this point, which again will enable Parliament to review the policy which is involved. As the House knows, it can debate these matters in any debates that take place on the Railways Board's report and accounts from time to time.

My right hon. Friend, moreover, has consulted Dr. Beeching about these matters, and I can tell the House that Dr. Beeching, who will be Chairman of the Railways Board, agrees to our proposals and he will, of course, be in a position to ensure that the undertaking I have given about the annual Report will be fulfilled.

May I next say a word about a point which was raised by the hon. Member for Barrow-in-Furness (Mr. Monslow) about Clause 78, because I am talking about the reorganisation side of the operation that we are undertaking. He was concerned, as indeed were other hon. Members in Standing Committee, lest under Clause 78 there might be some discrimination between the different grades of staff who might suffer a worsening of their position as a consequence of the reorganisation, and who might, therefore, get differing amounts of compensation.

I must make it clear to him, as I did in an intervention in the speech of the hon. Member for Central Ayrshire (Mr. Manuel), that Clause 78 is concerned only with the situation where a person in the employ of the Commission at the moment suffers some loss as a result of the worsening of his position directly resulting from the reorganisation. We do not in that Clause, nor anywhere else in the Bill, take power to deal with the case of people who are redundant as a consequence of the ordinary operational changes in the undertaking. If, for example, a branch line is closed, that is not a consequence of the reorganisation effected by this Bill. It is part of the operational change in the railway system. So far as the cases falling directly under Clause 78 are concerned, I can give the hon. Gentleman the assurance that there will be no discrimination in the way I understood him to make the point.

The third thing that we are trying to do by this Bill is to give the railways in particular and, indeed, all the undertakings a greater degree of commercial freedom. I hope that it will be understood and appreciated by the House, as it certainly must come to be appreciated by the public as a whole, that the railways in this country no longer operate in monopoly circumstances. Indeed, the very fact that throughout the country there are other forms of transport or other media of transport is in itself an adequate check against any possible abuse by the railways of the commercial freedom that we are conferring upon them by this Bill.

It is all very well for the hon. Member for Newcastle-upon-Tyne, West, the right hon. Member for Vauxhall and other hon. Members opposite to say that all the troubles of the railways today, all this accumulated deficit, losses and so on are the direct consequences of Conservative Party policy. [HON. MEMBERS: "They are."] It is easy for them to say that, but it is very far from the truth. Those of us who know anything about these matters know perfectly well that the reason why the railways in particular are in difficulty today is simply and solely because, over the last fifty years, there has been a steady and recently a quickening movement from rail to road, both for personal transport and the transport of goods.

At the same time, to complicate the issue still further, there has been a drift from public transport of all kinds to private transport. It is a combination of these two things—the drift from rail to road and from public to private transport—which has put the railways in the mess in which they are today. It is that which is really responsible. If, in fact, as obviously will be the case, railway lines have to be closed, it is simply and solely because they just do not pay.

We must ask ourselves: why do they not pay? The answer is a simple one. Because they are just not being used. That is to say that already people are deciding how they want to travel. They have decided that they want to go by road and, where possible, in their own private transport. This is the decision that the public is making, and the job of the railways is to accommodate itself to that situation.

As we see it, we have a clear choice We can follow the course that the Opposition have urged upon us from the time we debated the White Paper right the way through until tonight, that is, to retain as much as possible of the present system virtually intact on the ground that we need a railway system of that sort and shape because of social needs. Hon. and right hon. Members opposite have made no bones about this. They have said that we need to maintain our railways on social grounds.

There may be an argument—I concede this point—that we should have railways in some parts of the country on social grounds for passengers. But I ask the Opposition: do they carry this argument about social needs to the extent of saying that we should have a railway system of its present size and shape for freight? If that is what they say, let them remember how costly this would be and how costly it has been.

In 1955, the railway deficit was £38 million. In 1958, it had risen to £97 million. In 1961, it was £151 million. If we are to maintain our railway system as a social service and meet the cost out of the taxpayers' pockets, where do we stop? What is the point at which the cut-off would come? Do we go on subsidising our railways to the tune of these many millions of pounds and many more, indefinitely, not just for the benefit of passengers, but also for the benefit of those who send their goods by rail? We must remember that all this money is not fairy gold. We are talking about money which has to be found by the taxpayer.

Mr. Mapp rose—

Mr. Hay

I ask the hon. Gentleman to forgive me. He knows that I usually give way, but time is rather short and I am speaking against the clock

The alternative course we can take is the sort of course to which the Bill itself is a signpost. As I have explained, we seek by the Bill to do three things: first, to reconstruct the nationalised transport undertakings; second, to impose upon them some degree of financial discipline; third, to give them commercial freedom to an extent which is justified and which is, indeed, vital in these modern days.

Of course, in all this we do not ignore the social needs of the country. We do not blind ourselves to the social consequences. What we say is that the test of what the consumer is prepared to pay should be the correct and proper test for our railways and for the other transport undertakings with which we are here concerned.

I do not pretend, and we have never during all the debates pretended, that the Bill will solve all our problems. It is not intended to solve all our problems, and, in the nature of things, it would not do so. What I do claim firmly is that it will provide us with a framework for the necessary action which we must take to give these great transport undertakings, particularly the railways, and those who work in them a new deal in modern conditions.

We on this side of the House have approached the whole problem from a strictly practical point of view. We have not approached it in any spirit of dogma. We have not said that, because these undertakings are nationalised, we should approach them in a hostile spirit. We conceive it to be the duty of the Government and of the Conservative Party, in the middle of the twentieth century, to deal with these problems in a practical way. The contest between the two sides of the House is not about more nationalisation or less, but about how those industries and services which are nationalised can best be made to work. I do not pretend that the Bill is a final solution. I claim that it is a useful and necessary Measure which we must have if these undertakings are to be given again an opportunity to serve our nation as it should be served.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 277, Noes 206.

Division No. 171.]	AYES	[10.29 p.m.
Agnew, Sir Peter	Forrest, George	Maclay, Rt. Hon. John
Aitken, W. T.	Foster, John	Maclean, Sir Fitzroy (Bute&N. Ayrs.)
Allan, Robert (Paddington, S.)	Fraser, Hn. Hugh (Stafford & Stone)	McLean, Neil (Inverness)
Allason, James	Fraser, Ian (Plymouth, Sutton)	Macleod, Rt. Hn, Iain (Enfield, W.)
Amery, Rt. Hon. Julian	Freeth, Denzil	Macmillan, Maurice (Halifax)
Arbuthnot, John	Gammans, Lady	Maddan, Martin
Ashton, Sir Hubert	Gardner, Edward	Maitland, Sir John
Atkins, Humphrey	Gibson-Watt, David	Manningham-Buller, Rt. Hn. Sir R.
Balniel, Lord	Glover, Sir Douglas	Markham, Major Sir Frank
Barlow, Sir John	Glyn, Sir Richard (Dorset, N.)	Marlowe, Anthony
Barter, John	Goodhart, Philip	Marples, Rt. Hon. Ernest
Batsford, Brian	Goodhew, victor	Mathew, Robert (Honiton)
Baxter, Sir Beverley (Southgate)	Gough, Frederick	Matthews, Gordon (Meriden)
Beamish, Col. Sir Tufton	Gower, Raymond	Mawby, Ray
Bell, Ronald	Grant, Rt. Hon. William	Maxwell-Hyslop, L. L.
Berkeley, Humphry	Grant-Ferris, Wg. Cdr. R.	Maydon, Lt.-Cmdr. S. L. C.
Bevins, Rt. Hon. Reginald	Green, Alan	Mills, Stratton
Bidgood, John C.	Gresham Cooke, R.	Montgomery, Fergus
Biffen, John	Grimond, Rt. Hon. J.	More, Jasper (Ludlow)
Bingham, R. M.	Gurden, Harold	Morgan, William
Birch, Rt. Hon. Nigel	Hall, John (Wycombe)	Morrison, John
Bishop, F. P.	Hamilton, Michael (Wellingborough)	Mott-Radclyffe, Sir Charles
Black, Sir Cyril	Hare, Rt. Hon. John	Nabarro, Gerald
Bossom, Clive	Harris, Reader (Heston)	Neave, Alrey
Bourne-Arton, A.	Harrison, Brian (Maldon)	Noble, Michael
Box, Donald	Harrison, Col. Sir Harwood (Eye)	Nugent, Rt. Hon. Sir Richard
Boyd-Carpenter, Rt. Hon. J.	Harvey, Sir Arthur Vere (Macclesf'd)	Oakshott, Sir Hendrie
Boyle, Sir Edward	Harvie Anderson, Miss	Orr, Capt L. P. S.
Braine, Bernard	Hay, John	Orr-Ewing, C. Ian
Brewis, John	Heald, Rt. Hon. Sir Lionel	Osborn, John (Hallam)
Brooke, Rt. Hon. Henry	Henderson, John (Cathcart)	Osborne, Sir Cyril (Louth)
Brooman-White, R.	Hicks Beach, Maj. W.	Page, Graham (Crosby)
Brown, Alan (Tottenham)	Hiley, Joseph	Page, John (Harrow, West)
Browne, Percy (Torrington)	Hill, Mrs. Eveline (Wythenshawe)	Pearson, Frank (Clitheroe)
Bryan, Paul	Hill, J. E. B. (S. Norfolk)	Peel, John
Buck, Antony	Hirst, Geoffrey	Percival, Ian
Bullard, Denys	Hobson, Sir John	Peyton, John
Bullus, Wing Commander Eric	Hocking, Philip N.	Pilkington, Sir Richard
Butler, Rt. Hn. R. A. (Saffron Walden)	Holland, Philip	Pitman, Sir James
Campbell, Gordon (Moray & Nairn)	Holt, Arthur	Pitt, Miss Edith
Carr, Compton (Barons Court)	Hope, Rt. Hon. Lord John	Pott, Percivall
Cary, Sir Robert	Hornby, R. P.	Powell, Rt. Hon. J. Enoch
Channon, H. P. G.	Hornsby-Smith, Rt. Hon. Dame P.	Price, David (Eastleigh)
Chataway, Christopher	Howard, John (Southampton, Test)	Prior, J. M. L.
Clark, Henry (Antrim, N.)	Hughes Hallett, Vice-Admiral John	Prior-Palmer, Brig. Sir Otho
Clark, William (Nottingham, S.)	Hughes-Young, Michael	Profumo, Rt. Hon. John
Cleaver, Leonard	Irvine, Bryant Godman (Rye)	Proudfoot, Wilfred
Cole, Norman	Jenkins, Robert (Dulwich)	Pym, Francis
Collard, Richard	Jennings, J. C.	Quonnell, Miss J. M.
Cooper, A. E.	Johnson, Dr. Donald (Carlisle)	Ramsden, James
Cooper-Key, Sir Neill	Johnson, Eric (Blackley)	Rawlinson, Peter
Corfield, F. V.	Johnson Smith, Geoffrey	Redmayne, Rt. Hon. Martin
Costain, A. P.	Jones, Rt. Hn. Aubrey (Hall Green)	Rees, Hugh
Coulson, Michael	Joseph, Sir Keith	Rees-Davies, W. R.
Craddock, Sir Beresford	Kerans, Cdr. J. S.	Renton, David
Critchley, Julian	Kerby, Capt. Henry	Ridley, Hon. Nicholas
Crosthwaite-Eyre, Col. Sir Oliver	Kerr, Sir Hamilton	Ridsdale, Julian
Crowder, F. P.	Kimball, Marcus	Rippon, Geoffrey
Cunningham, Knox	Kirk, Peter	Robson Brown, Sir William
Curran, Charles	Kitson, Timothy	Roots, William
Dalkeith, Earl of	Langford-Holt, Sir John	Ropner, Col. Sir Leonard
Dance, James	Leather, E. H. C.	Russell, Ronald
Deedes, W. F.	Leavey, J. A.	Scott-Hopkins, James
de Ferranti, Basll	Legge-Bourke, Sir Harry	Seymour, Leslie
Digby, Simon Wingfield	Lewis, Kenneth (Rutland)	Sharples, Richard
Donaldson, Cmdr. C. E. M.	Lilley, F. J. P.	Shaw, M.
Drayson, G. B.	Lindsay, Sir Martin	Skeet, T. H. H.
du Cann, Edward	Litchfield, Capt. John	Smith, Dudley (Br'ntf'd & Chiswick)
Duncan, Sir James	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)	Smyth, Brig. Sir John (Norwood)
Eccles, Rt. Hon. Sir David	Lloyd, Rt. Hon. Selwyn (Wirral)	Soames, Rt. Hon. Christopher
Eden, John	Longden, Gilbert	Spearman, Sir Alexander
Elliot, Capt. Walter (Carshalton)	Loveys, Walter H.	Speir, Rupert
Emery, Peter	Lubbock, Eric	Stanley, Hon. Richard
Errington, Sir Eric	Lucas, Sir Jocelyn	Stevens, Geoffrey
Erroll, Rt. Hon. F. J.	Lucas-Tooth, Sir Hugh	Steward, Harold (Stockport, S.)
Farey-Jones, F. W.	McAdden, Stephen	Stoddart-Scott, Col. Sir Malcolm
Farr, John	MacArthur, Ian	Storey, Sir Samuel
Fisher, Nigel	McLaren, Martin	Studholme, Sir Henry
Fletcher-Cooke, Charles	McLaughlin, Mrs. Patricia	Summers, Sir Spencer (Aylesbury)
Tapsell, Peter	Turton, Rt. Hon. R. H.	Whitelaw, William
Taylor, Sir Charles (Eastbourne)	van Straubenzee, W. R.	Williams, Dudley (Exeter)
Taylor, Edwin (Bolton, E.)	Vane, W. M. F.	Williams, Paul (Sunderland, S.)
Taylor, Frank (M'ch'st'r, Moss Side)	Vaughan-Morgan, Rt. Hon. Sir John	Wills, Sir Gerald (Bridgwater)
Teeling, Sir William	Vosper, Rt. Hon. Dennis	Wilson, Geoffrey (Truro)
Thatcher, Mrs. Margaret	Wade, Donald	Wise, A. R.
Thomas, Leslie (Canterbury)	Walder, David	Wood, Rt. Hon. Richard
Thomas, Peter (Conway)	Walker, Peter	Woodhouse, C. M.
Thorneycroft, Rt. Hon. Peter	Walker-Smith, Rt. Hon. Sir Derek	Woodnutt, Mark
Thornton-Kemsley, Sir Colin	Wail, Patrick	Woollam, John
Tiley, Arthur (Bradford, W.)	Ward, Dame Irene	Worsley, Marcus
Tilney, John (Wavertree)	Watkinson, Rt. Hon. Harold
Touche, Rt. Hon. Sir Gordon	Webster, David	TELLERS FOR THE AYES:
Turner, Colin	Wells, John (Maidstone)	Mr. Chichester-Clark and Mr. Finlay.
NOES
Abse, Leo	Hayman, F. H.	Owen, Will
Ainsley, William	Healey, Denis	Padley, W. E.
Albu, Austen	Henderson, Rt. Hn. Arthur (Rwly Regis)	Paget, R. T.
Allaun, Frank (Salford, E.)	Herbison, Miss Margaret	Pannell, Charles (Leeds, W.)
Allen, Scholefield (Crewe)	Hewitson, Capt. M.	Pargiter, G. A.
Awbery, Stan	Hill, J. (Midlothian)	Parker, John
Baird, John	Hilton, A. V.	Parkin, B. T.
Beaney, Alan	Holman, Percy	Pavitt, Laurence
Bence, Cyril	Houghton, Douglas	Pearson, Arthur (Pontypridd)
Bennett, J. (Glasgow, Bridgeton)	Howell, Charles A. (Perry Barr)	Peart, Frederick
Benson, Sir George	Howell, Denis (Small Heath)	Pentland, Norman
Blackburn, F.	Hoy, James H.	Plummer, Sir Leslie
Blyton, William	Hughes, Cledwyn (Anglesey)	Popplewell, Ernest
Boardman, H,	Hughes, Emrys (S. Ayrshire)	Prentice, R. E.
Bottomley, Rt. Hon. A. G.	Hughes, Hector (Aberdeen, N.)	Price, J. T. (Westhoughton)
Bowden, Rt. Hn. H. W.(Leics, S. W.)	Hunter, A. E.	Probert, Arthur
Bowles, Frank	Hynd, H. (Accrington)	Proctor, W. T.
Boyden, James	Hynd, John (Attercliffe)	Pursey, Cmdr. Harry
Braddock, Mrs. E. M.	Irving, Sydney (Dartford)	Randall, Harry
Brockway, A. Fenner	Jay, Rt. Hon. Douglas	Rankin, John
Broughton, Dr. A. D. D.	Jeger, George	Redhead, E. C.
Brown, Rt. Hon. George (Belper)	Jenkins, Roy (Stechford)	Reid, William
Butler, Herbert (Hackney, C.)	Jones, Dan (Burnley)	Reynolds, G. W.
Butler, Mrs. Joyce (Wood Green)	Jones, Elwyn (West Ham, S.)	Roberts, Albert (Normanton)
Callaghan, James	Jones, Jack (Rotherham)	Roberts, Goronwy (Caernarvon)
Castle, Mrs. Barbara	Jones, J. Idwal (Wrexham)	Robertson, John (Paisley)
Chapman, Donald	Jones, T. W. (Merioneth)	Robinson, Kenneth (St. Pancras, N.)
Cliffe, Michael	Kelley, Richard	Rodgers, W. T. (Stockton)
Corbet, Mrs. Freda	Kenyon, Clifford	Ross, William
Craddock, George (Bradford, S.)	Key, Rt. Hon. C. W.	Shinwell, Rt. Hon. E.
Cronin, John	Lawson, George	Silverman, Julius (Aston)
Cullen, Mrs. Alice	Ledger, Ron	Slater, Mrs. Harriet (Stoke, N.)
Darling, George	Lee, Frederick (Newton)	Slater, Joseph (Sedgefield)
Davies, G. Elfed (Rhondda, E.)	Lee, Miss Jennie (Cannock)	Small, William
Davies, Harold (Leek)	Lever, Harold (Cheetham)	Smith, Ellis (Stoke, S.)
Davies, Ifor (Gower)	Lever, L. M. (Ardwick)	Snow, Julian
Deer, George	Lewis, Arthur (West Ham N.)	Spriggs, Leslie
Delargy, Hugh	Loughlin, Charles	Stewart, Michael (Fulham)
Dempsey, James	Mabon, Dr. J, Dickson	Stonehouse, John
Diamond, John	McCann, John	Stones, William
Dodds, Norman	MacColl, James	Strachey, Rt. Hon. John
Donnelly, Desmond	McInnes, James	Strauss, Rt. Hn. G. R. (Vauxhall)
Dugdale, Rt. Hon. John	McKay, John (Wallsend)	Swain, Thomas
Edelman, Maurice	McLeavy, Frank	Swingler, Stephen
Edwards, Rt. Hon. Ness (Caerphilly)	MacMillan, Malcolm (Western Isles)	Taverne, D.
Edwards, Robert (Bilston)	MacPherson, Malcolm (Stirling)	Taylor, Bernard (Mansfield)
Edwards, Walter (Stepney)	Mallalieu, E. L. (Brigg)	Thomas, George (Cardiff, W.)
Evans, Albert	Mallalieu, J. P. W. (Huddersfield, E.)	Thomas, Iorwerth (Rhondda, W.)
Finch, Harold	Manuel, Archie	Thompson, Dr. Alan (Dunfermline)
Fitch, Alan	Mapp, Charles	Thomson, G. M. (Dundee, E.)
Fletcher, Eric	Marsh, Richard	Thornton, Ernest
Foot, Dingle (Ipswich)	Mason, Roy	Tomney, Frank
Forman, J. C.	Mayhew, Christopher	Wainwright, Edwin
Gaitskell, Rt. Hon. Hugh	Mellish, R. J.	Warbey, William
Ginsburg, David	Mendelson, J. J.	Watkins, Tudor
Gordon Walker, Rt. Hon. P. C.	Millan, Bruce	Wells, Percy (Faversham)
Greenwood, Anthony	Milne, Edward	Wells, William (Walsall, N.)
Grey, Charles	Mitchison, G. R.	Whitlock, William
Griffiths, David (Rother Valley)	Monslow, Walter	Wigg, George
Griffiths, Rt. Hon. James (Llanelly)	Moody, A. S.	Wilkins, W. A.
Griffiths, W. (Exchange)	Morris, John	Willey, Frederick
Gunter, Ray	Moyle, Arthur	Williams, D. J. (Neath)
Hall, Rt. Hn. Glenvil (Colne Valley)	Mulley, Frederick	Williams, LI. (Abertillery)
Hamilton, William (West Fife)	Neal, Harold	Williams, W. R. (Openshaw)
Hannan, William	Oliver, G. H.	Williams, W. T. (Warrington)
Harper, Joseph	Oram, A. E.	Willis, E. G. (Edinburgh, E.)
Hart, Mrs. Judith	Oswald, Thomas

Winterbottom, R. E.	Wyatt, Woodrow	TELLERS FOR THE NOES:
Woodburn, Rt. Hon. A.	Yates, Victor (Ladywood)	Mr. Short and Mr. Rogers.
Woof, Robert	Zilliacus, K.

Bill accordingly read the Third time and passed.