RAILWAY WORKSHOPS (Hansard, 26 March 1964)

§ Mr. G. R. Strauss (Vauxhall)
The subject I want to raise today is the refusal of the Minister of Transport to permit British Railways workshops to tender for the manufacture of any privately-owned railway equipment for use on the railways. We have only an hour and a half in which to discuss this decision, which has outraged all railway men and angered everyone from top to bottom in the railway workshops' organisation. As many of us on this side want to speak, some with direct union or constituency interests, we have agreed to do so as briefly as possible.
692 I must, however, express my amazement that, in view of the seriousness of the indictment against the Minister of Transport, which impugns not only his good sense, but his good faith, he has not considered it necessary to answer the debate himself, but has decided to "pass the buck" to a Parliamentary Secretary who has been only a short time in the Ministry. That will not prevent us, however, from saying what we think about the Minister's behaviour.
The facts are not in dispute. The Minister has turned down Dr. Beeching's request that the railway workshops should be permitted to tender for privately-owned equipment which is to be used exclusively on British Railways lines, and specifically, oil wagons, where the value of the possible orders may run into many millions of pounds and provide employment in one or more of the workshops over many years to come. He has turned down this request on three grounds, which he stated in reply, on 3rd March, to a Question by my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Popplewell).
The first is: The primary task of the British Railways Board is to provide railway services… That is obvious, and irrelevant. It is nonsense to suggest that the manufacture of equipment by the railway workshops could in any way inhibit the Board from running the railways efficiently. Dr. Beeching obviously thinks that it is nonsense. Otherwise, he would not have made his request. The Minister's second argument is: This proposal would not have been in accordance with the Government's policy, which was made clear on several occasions when the Transport Act, 1962, was before Parliament. We challenge the Parliamentary Secretary to quote a single sentence in support of this statement. The Act, which is the only thing that matters, specifically permits the railway workshops to manufacture equipment for use by the Railways Board, and the equipment we are discussing will be used exclusively by the Railways Board.
The Minister's third reason is that there is at present no justification for the nationalised transport undertakings entering the field of manufacture for outside customers."—[OFFICIAL REPORT, 3rd March, 1964; Vol. 690. c. 212.] 693 That is a pronunciamento, not an argument. Surely, in this case, there is every justification.
If the railway workshops are efficient enough in fair competition, properly allowing in the tendered prices for overheads and a reasonable margin of profit, to make wagons cheaper than private manufacture can do, it is highly desirable, on every ground, that they should be permitted to do so. Is it not in the interests of the purchasers of the wagons? Is it not in the interests of the railway workshops staffs, many of them elderly, with long years of service, who are under the threat of becoming redundant and having to seek work in other towns? Is it not in the interests of the workshop managements and technicians who have succeeded in making those railway workshops efficient and competitive? And is it not in the national interest that national resources should not be wasted?
I ask the Parliamentary Secretary: what has become of the Government's much-vaunted beliefs in the virtues of competition, about which we have been hearing so much, particularly recently in connection with the Resale Prices Bill? Is this all my eye and Betty Martin? Will he tell us, perhaps, whether, in the view of the Government, competition is a good thing only when it is between two privately-owned companies, and is a bad thing when it is between a publicly-owned company and a privately-owned one?
What about the pledge to the unions, when they expressed to the Railways Board the deep concern and resentment of the workshops employees at the decision to make progressive and substantial curtailment in orders? They were then told that if those employed in the workshops co-operated in the modernisation plan to maximise efficiency every effort would be made to keep the workshops as busy as possible. To violate that pledge, as the Minister is now forcing the Board to do, is not only to betray the workers concerned, but to discourage rationalisation and efficiency.
How does the Minister reconcile this decision with the directive to Dr. Beeching to do everything possible to make the railways pay? In pursuit of that objective Dr. Beeching has proposed 694 railway closures on a large scale which are bound to make life harder for very many people. But, at the same time, Dr. Beeching is prevented by the Minister from being allowed to increase the railways' revenue by tendering for large and profitable contracts. This makes nonsense of the whole closure objective, and will add to the resentment of those who have to suffer by its implementation.
There can be only one possible explanation of the Minister's behaviour. His concern for the private wagon builders is greater than his concern for the profitability of the railways, the interests of the taxpayer, the railway workers, and the public welfare. His policy is utterly indefensible, and that is probably why he is not here today to defend it himself.
I can give this pledge. It will be one of the first acts of any new Labour Government to reverse this decision; and the sooner the better.

§ Mr. Ernest Popplewell (Newcastle-upon-Tyne West)
In view of the large number of hon. Members who wish to contribute to the debate. I intend, like my right hon. Friend the Member for Vauxhall (Mr. Strauss), to be brief. I want to add to my right hon. Friend's protest. Here we have the Minister's decision which prevents the Railways Board from increasing its efficiency and reducing its loss. The Minister's political decision is responsible and it is a shocking state of affairs that he is not present to defend it today. We admire his Parliamentary Secretary, but this is a top-rank Ministerial decision and it is disgraceful that the Minister himself is not here to defend it.
As far as we can gather, according to a reply which I have received from Dr. Beeching, between 5,000 and 6,000 of the special oil tank wagons which will be required for use on the "liner" trains are likely to be built during the next four or five years. We are told that the cost is between £2,000 and £3,000 for each wagon. When we analyse the accounts of the Transport Commission—and the Minister has shown with pride that Dr. Beeching has reduced the loss by £32 million—we find that this reduction in the loss has been brought about, not by increased efficiency, but by the 695 dismissal of railwaymen. Compared with two years ago, the figure of ton-miles per wagon shows a considerable decrease in efficiency of operation.
With that picture in mind, it is indefensible that the railway workshops are not being allowed to tender for the production of these wagons. That is all that is asked. The railway management, which is keen and desirous of doing it, is disturbed. The unions are raging mad about the whole thing, which will have dire consequences. Let us make no mistake about it.
Up to now, the unions and the Railways Board have faced closure of about 12 of these railway workshops. They have seen a reduction of about 20,000 in manpower when, according to railway management, in the person of the then Sir Brian Robertson before the Select Committee of 1959–60, the railway workshops were well equipped to produce this special type of wagon. Now, the Minister refuses to permit their production.
The Minister will be aware of the tremendous discussion that is going on about whether the "liner" trains will ever be allowed to run. The 15 routes which have been suggested for the "liner" trains are held very much in jeopardy and the Minister's decision is one of the causes. The Railways Board is trying to enforce upon the unions the use of the free terminals for all kinds of road hauliers. The unions do not mind the C-licence holders, British Road Services or the railway C and D delivery vehicles, but they object to the long-distance private road haulier being invited to use the free terminal points.
If the Minister wants good will and wishes to get this proposal across to the unions, to accept a further reduction in railway staff by allowing outside private enterprise firms to use railway equipment and to make railwaymen redundant is not the way to go about it. By refusing to allow the railway workshops to produce these wagons, he is increasing redundancy. It is no wonder, therefore, that there is strong feeling on the part of all the men engaged in railways.
This is all part of a campaign. We have seen hon. Members opposite conducting a smear campaign against 696 publicly-owned undertakings, preventing them from having the ordinary commercial freedom of which they have spoken so much from time to time. They want ordinary commercial freedom for private enterprise, but when it comes to publicly-owned undertakings they prevent these ordinary rules of commercial freedom from operating.
This is a matter that will not end with this short debate. An important principle is involved. The Parliamentary Secretary will be aware of Motion No. 75 which is on the Order Paper, and which has been signed by a large number of hon. Members on this side of the House. The number of those signatures is likely to increase considerably.
[That this House deplores the refusal of the Minister of Transport to allow British Railways to tender for the manufacture of wagons and containers for private rail users which has thus prevented free competition between the public and private sectors of the railway manufacturing industry.]
I assure the Minister that he will hear a lot more about this matter. I whole-heartedly endorse the pledge given by my right hon. Friend the Member for Vauxhall, that after the election, when we on this side come back to power, as we shall, we will reverse the Minister's decision and give British Railways workshops the utmost freedom to compete on ordinary commercial terms in the same way as any private enterprise undertaking.

§ Mr. Tom Bradley (Leicester, North-East)
We are discussing this afternoon a decision by the Minister which is the most brazen example we have yet had of his built-in anti-railway bias. He has created, once again, a situation in which the railway trade unions are side by side with the railway management in opposing and resisting him.
The railways have always desired to manufacture their own equipment. Notwithstanding that, the work has always been offered to contract, both within the railway industry and to outside firms. Three-quarters of the value of existing new locomotive orders is placed with outside private industry. Now, however, when it comes to the manufacturing of privately-owned equipment for use on 697 the Board's railway network, the British Railways workshops are not to be allowed to tender for its construction and the contracts are to be confined to private firms. In other words, there is to be one law for the public industry and another for the private sector. The former is to be subject to restriction, but the latter is to have complete freedom.
The Minister's decision prevents free competition between public and private sectors of the railway manufacturing industry. Could anything be more doctrinaire? How far does the Minister want to take his hatred of nationalisation? I remind him of his party's declaration in the 1950 election manifesto that they would do everything possible to improve the commercial standards in nationalised industries. What kind of contribution is this to that aspiration? It makes a complete mockery of the Minister's instruction to Dr. Beaching to run the railways as he would run a business. It may have far more serious consequences.
I recall vividly the meeting on 19th September, 1962, when the appropriate railway unions were suddenly summoned to a meeting to discuss the new workshop modernisation plan, when Sir Steuart Mitchell, in unfolding that plan before the unions—without any prior consultation—told us that it was the Board's intention to rationalise its workshops, which would involve redundancies amounting to nearly 20,000 men. Sir Steuart Mitchell told us on that occasion that it was the Board's intention to re-equip, re-plan and re-layout the continuing works so that they can compete successfully with private industry and maintain steady employment. As to the allocation of work between railway workshops and outside industry, Sir Steuart Mitchell told us that it was the Commission's policy. in principle to utilise the cheapest source. The report of his remarks goes on to state: However he had no doubts at all that the railway workshsops could always be the cheapest source given three things:

(a) A heavy and steady work load—planning was aimed at this:

(b) The best equipment available—this would be acquired; and

(c) The co-operation of the staff."

698 Does the Minister think that he has contributed to the stall's confidence in the future, from which these operations must stem? Notwithstanding the workshop redundancy involved in the plan outlined two years ago, the unions accepted the plan. Today, the unions in the railways and outside are often accused of thwarting the modernisation of industry and are taunted accordingly. But the railway unions and the others associated with the workshops accepted repeated assurances that there would be full opportunity in the future to tender over the whole range of railway requirements.
The management is playing its part and I am sure that the statements made to the unions two years ago by the management were in good faith. The management hopes to spend £10 million in the next few years on modernisation of the workshops and, indeed, £1million has already been spent for that purpose.
Now, the Minister strikes this blow. We are entitled to ask how many further redundancies will flow from it. The Railways Board must be planning its workshop programme and capacity in expectation of getting some orders for private rolling stock. The capacity and the staff ate there to do the job. But, by this decision, the Minister has stopped the tendering for 4,600 oil wagons over the next four years.
If the right hon. Member maintains his decision one wonders what will happen about the private tenders for the new "lines" trains, the prototype of which we recently had the privilege of seeing. Railway workshop tenders are highly competitive and they are based on true costs plus overheads, including a small profit margin. The workshops have great experience of these things but the right hon. Gentleman is prepared to squander all that for the sake of protecting the private sector of industry.

§ Mr. David Webster (Weston-super-Mare)
During the hearings of the Select Committee on the Nationalised Industries, in 1960, the hon. Member for Edmonton (Mr. Albu), a member of that Committee, asked—this is Question 1417—whether the railway workshops had profit and loss accounts. The answer was "No".

§ Mr. Bradley
My hon. Friend the Member for Edmonton (Mr. Albu) told me that the hon. Member for Weston-super-Mare (Mr. Webster) would probably raise this matter. My hon. Friend was good enough to write to me about it. He tells me that he is prepared to see British Railways workshops put on a profit and loss basis with separate accounting facilities. But the hon. Member's quarrel is with my hon. Friend the Member for Edmonton and not with me.
In view of this decision, and in relation to the wider plan of the reshaping of British Railways, is it the Minister's intention to dismember not only the network of the railways, but the apparatus as well? British Railways have been striving for years and are now beginning to have some success in reducing the huge financial deficits which are such a burden on the taxpayers. But the taxpayers are also electors and it is as well that they should know that the Minister's animosity is deliberately preventing British Railways from making money where they can.

§ Mr. Francis Noel-Baker (Swindon)
As my right hon. Friend the Member for Vauxhall (Mr. Strauss) has indicated, we shall seek to return to this subject after the Easter Recess if we are given the opportunity and, therefore, like my hon. Friends, I shall be very brief. This is a deplorable example of narrow, doctrinaire, party bias, but essentially it is quite a simple matter. The Transport Act, 1962, quite clearly gives the Railways Board power to do this work. I do not think there is any dispute about that.
The Railways Board's lawyers have given a clear opinion and the Minister himself admits—I have a letter from him here—that this is not the issue. Indeed, only last Tuesday the Ministry's spokesman in another place made it plain that the Act permitted the Board to tender for and to do this work.
Of course, the demand for these wagons and containers is a new development. It arises from Dr. Beeching's plans for the new liner trains and from the very big ten-year contract, signed in 1963 with the oil companies, for the railways 700 to transport their products. I agree that it is possible that, if the Minister had foreseen these developments when he was putting the Act through Parliament, his dislike of public enterprise and bias against railways might have made him make the Act even worse than it is and forbid the railway workshops to do this work. But he did not, and the Act does permit it.
Therefore, we are dealing with a specific action of the Minister, deliberately directed against the workshops to deprive them of the right the law gives them to compete against private firms and to win, as the Railways Board is convinced that it would have won, orders worth many millions of pounds. That can only be described as a blatant display of pure political prejudice and bias. Indeed, the Minister himself has not produced any explanation of his action except to say, as he does in his letter to me, that it is the Government's policy. That means that this is how he has decided to treat the railways despite his own Act.
In the meantime, various allegations have been made to explain the Minister's attitude. They were made by his spokesman in another place yesterday and by the hon. Member for Weston-super-Mare (Mr. Webster), who is Chairman of the Conservative Party Transport Committee, in a political broadcast, when he was using a Ministry of Transport brief. These allegations deserve a little examination.
The first is that, despite the wording of the Transport Act, certain commitments were entered into either by the previous Parliamentary Secretary or by the Minister himself during the passage of the Act and that these commitments compel the Minister to discriminate against the railway workshops in the way he is doing. Indeed the hon. Member for Weston-super-Mare spoke of a breach of an undertaking which the Minister had made to Parliament.
I have been very carefully right through HANSARD'S reports of all the debate, including the Committee stage, on the Transport Act, and I can find nothing that would substantiate this allegation which I understand is being made. If the Parliamentary Secretary wishes to repeat the allegation that the Minister is bound by some undertaking 701 to Parliament, then he is under an obligation to produce chapter and verse. But, whatever the Minister may claim to have said, the Act permits the Board to do this work.
The second allegation, which is a very serious one, is that there is something unfair about the way in which the workshops have tendered and that their costing is not realistic. Indeed, this was said by the hon. Member for Weston-super-Mare who followed the same line in his interjection in the speech of my hon. Friend the Member for Leicester, North-East (Mr. Bradley). In the broadcast to which I have referred, the hon. Member specifically mentioned a concealed subsidy. He said that it was impossible to make sure that there was adequate and sound competition.
All kinds of insinuations are being made about the fact that the railway workshops are not really competing on a fair basis with private firms. One can imagine the feelings of Dr. Beeching and his businessmen about these allegations. I took the matter up with the Minister and got a thoroughly evasive answer. He said I am assured by the Board that they make this allocation"— that is to say, of overheads— quite fairly But he does not say whether he accepted the assurances or that he agrees that the Board is costing properly in the workshops. He adds …but I have thought it proper, as I have already told the House, to reserve my right at any time to examine the validity of the costing arrangements of the Board's workshops". Does the Minister accept the Railways Board's costings or does he accept the charges, made by the hon. Member for Weston-super-Mare and others, that there is something "fishy" about them, that they are misusing Government subsidies and concealing overheads. This matter must be cleared up in the House.

§ Mr. Webster
I never used that expression.

§ Mr. Noel-Baker
I did not quote the hon. Gentleman. I was saying that the allegation was being made widely that there is something "fishy", which is a very good adjective to describe the way in which the Railways Board has been treated.

§ Mr. Webster
rose—

§ Mr. Noel-Baker
The hon. Gentleman will have an opportunity to make his own speech in a moment. Perhaps that would be a better time for him to raise this issue.
I do not raise this subject as a constituency point, although it is of the greatest interest to all the railwaymen in the workshops in Swindon, at all levels. I raise it because I think that it draws attention to an important matter of principle—the Government's whole attitude to the nationalised industries, about which we will hear something during the coming election, and the sincerity of Ministers when they speak about competition between the public and private. sector.
My hon. Friend the Member for Leicester, North-East has referred to the large proportion of railway work which is going out to private firms. There are strong feelings about that in the workshops in Swindon—and about some of the defective locomotives which are made by private firms and which go to the Swindon workshops to be put right there. Since the Transport Act and since the Minister has been in his present position, the whole economy has been loaded against the public sector at every possible opportunity.
We observe the presence of the hon. Member for Darlington (Mr. Bourne-Arton) in the Chamber. We note that he put down an admirable Motion complaining about the Government's behave-our but that he withdrew it without explanation. We hope that we will hear his views during the debate.

Mr. A. Bourne-Acton (Darlington)
I am afraid that the hon. Gentleman has seen only half the manoeuvre. I withdrew my Motion into workshops for a minor modification and drove it out the following morning in a rather better form.

§ Mr. Noel-Baker
I observe that it is not on the Order Paper now. I regret that very much, as I do the fact that the hon. Gentleman is not to give us his opinion. I am sure that the electors of Darlington will draw their own conclusions from his action.

§ Mr. Bourne-Arton
I am not allowed to speak again without leave of the House, and no doubt the hon. Member's hon. Friends will be relieved to hear 703 that I am not seeking it. I have already spoken on the Motion for the Adjournment.

§ Mr. Noel-Baker
I repeat that the electors in the railway workshops in Darlington will draw their own conclusions.

§ Mr. Bourne-Arton
They can draw their own conclusions from the terms of my Motion, which is quite clear.

§ Mr. Noel-Baker
This matter is of the greatest importance to all Members representing railway constituencies. My right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) has asked me to express his regret at not being present in the debate. I apologise to the House that he has been inevitably detained elsewhere. However, the Parliamentary Secretary may have seen a letter in The Times today signed by my right hon. Friend and a number of my hon. Friends.
I end by saying that this disgraceful decision should be reversed at the earliest possible opportunity. My right hon. Friend has pledged the Labour Party to reverse it as soon as it comes to power. It is a blatant example of political bias and prejudice and it makes nonsense of all the fine talk which we have heard, day in, day out, from the Minister of Transport and his colleagues about competition between the public and private sectors.

§ Mr. David Webster (Weston-super-Mare)
The Motion of my hon. Friend the Member for Darlington (Mr. Bourne-Arton) is on the Order Paper in the clearest terms. It seemed rather odd to me that the hon. Member for Swindon (Mr. F. Noel-Baker) should attack my hon. Friend, who has already made a very useful speech on another subject, when the hon. Member was not here, and should say that my hon. Friend's constituents will draw their own conclusions, and, at the same time, apologise for his right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) not being here. That is charity being slightly one-sided.
Having read the Report of the Select Committee on Nationalised Industries, I am well aware that there are many towns and constituencies dependent on railway workshops as one of their major 704 sources of industry. I sympathise with them very much in this problem, for that makes it increasingly difficult and arouses passions on the subject. I hope that I may also remind the House that there are other constituencies and trade unions involved in the private enterprise side which are also deeply concerned about redundancies because of the reduction of rolling stock requirements. That is fair. This is not a case of political dogma. The figures of the number of wagons and carriages divided between railway workshops and manufacturing industry show a tremendous bias towards the railway workshops. I am not saying that that is wrong, but it puts the matter in perspective. There is a general rundown in the requirement because of the reduction of rolling stock. These things should be equally shared between the two contributors involved in the manufacture.
The hon. Member for Swindon has attacked me and used expressions such as "fishy" for a broadcast interview about a fortnight ago, which he called a party political broadcast. I gather that he was the person who was asked to go on the wireless. That shows how party political it was. He said that I was accusing the railways of fiddling the books. I resent that type of expression and I have certainly never used it. I said that it was very difficult to deny that there was a concealed subsidy. I propose to let the House be the judge, because this problem was considered by the Select Committee on Nationalised Industries, which is not a partisan body. The Select Committee's views on the subject of costs and their allocation to overheads is a matter of which the House should be reminded.
The hon. Member for Leicester, North-East (Mr. Bradley) was kind enough to say that I informed the hon. Member for Edmonton (Mr. Albu) that I would probably refer to certain of the questions asked by the hon. Member for Edmonton when the Select Committee was taking evidence. Speaking to the railway workshop people, in Question No. 1393 the hon. Member for Edmonton asked: You are able to check that the allocation of your overheads is right?—Yes. 1394. Because it would seem to take no account of the difference in requirements 705 between production on the one hand and the repair on the other of heavy and expensive capital equipment?—Oh yes, that is the very thing it does do. 1395. With the greatest respect, your check does not take any account at all, because you have said so. When that situation occurs, it is very difficult for the hen. Member for Swindon to be justified when he rises in his wrath and accuses me of saying that the railways are fiddling with the accounts.

§ Mr. Popplewell
To be logical, the hon. Member should see what the Select Committee for Nationalised Industries, of which I was a member, said in 1959. The matter was discussed then. In deference to the Select Committee's views, the British Transport Commission brought in an outside firm of accountants to see if greater clarity could be brought into the costing system, but that outside firm of accountants was not able to find any method better than that then in operation.

§ Mr. Webster
I thank the hon. Member for that intervention, because it shows that the same situation exists today.
The hon. Member for Edmonton asked about the profit and loss account. I am not quoting someone from my own side but the hon. Member for Edmonton, who is unbiased on this subject as I would be the first to acknowledge. At Question No. 1422 he asked: So it is not possible to draw up a revenue and expenditure account and profit and loss account for the workshops because you have not even a notional figure of revenue?—No sale value, even in the form of an estimate; only in the new construction. These questions and answers show the tremendous difficulty of proving accounts on this subject.
Account must be taken of the fact that in the accounts of 1962 the British Transport Commission, as it then was for the last time, had a rail deficit of £81 million out of a total deficit of £103 million with central charges of £55 million. This is where the Government are the banker, which means that the taxpayers are the banker and are paying money to the railways. When it is remembered that advances by the Minister under the 1957 Act, as amended, are £690 million and under the Transport (Railway Finances) Act, 1957, as amended, £302 million it will be appre- 706 ciated that a tremendous amount of taxpayers' money goes into this activity.
I feel that while this is the case the remark that I made is justified. I am a former member of the Select Committee on Estimates and I have found how difficult it is to judge these matters in relation to different public bodies, and to discover the true profit and loss figure and a true criterion of efficiency. So long as this situation persists I shall go on saying that it is taxpayers' money that is being used, in competition with industries which are also taxpayers.

§ Mr. J. T. Price (Westhoughton)
We do not have time to debate this issue, but since the hon. Member has mentioned the difficulties he found when visiting various large nationalised undertakings, is he not aware that the same difficulty arises in the cases of all large-scale activities, especially I.C.I., which is one of the biggest private enterprises in this country? Other enterprises could be quoted. It is the size of the concern which makes it difficult. But if the hon. Member is basing his argument on the ground of a failure to provide proper accountability, the Minister of Transport and his predecessors in Conservative Governments have been responsible for this system for the last 12 or 13 years during which they have been in charge.

§ Mr. Deputy-Speaker (Sir Robert Grimston)
Order. The hon. Member is not in possession of the Floor. It is an abuse of our procedure to try to make a speech within a speech.

§ Mr. Webster
I thank the hon. Member for allowing me to get my breath back. I.C.I. has a profit and loss account, and that proves my case.
I have no constituency interest in the matter, and so I shall be brief. I was a member of the Standing Committee on the 1962 Act, which took away the common carrier liability from the railways, and also their liability to publish their charges. I took the view that it was entirely wrong that the railways should have to publish their charges, because their competitors would then know where it was profitable for them to vary their rates. It was commercially prudent so to do. In the same way, the present Railways Board is practically a monopoly user. It buys from outside. I admit 707 that by doing so it nourishes private industry, but at the same time it receives tenders from many large private enterprise carriage and wagon makers. They have to put in their tenders, so that in that case the private manufacturer is in exactly the same difficulty as were the railways in respect of charges.
To extend the ability of nationalised railways to compete against private industry at a time of overall reduction would throw private industry into jeopardy. We have heard of the Marxist philosophy about the withering away of the State; I would not subscribe to the withering away of private enterprise. I am proud to say so.

§ Mr. James Boyden (Bishop Auckland)
The announcement on 26th February was a shattering blow to the workers in Shildon, in my constituency. By a curious irony of fate, on the day of the announcement I was attending a transport users' consultative committee which was considering the closing of the very last passenger service in my constituency. With respect to Darlington, Shildon happens to be the home of the railways. Its workshops and the fate of the town are bound up with each other. Everyone knows that the unemployment rate in my constituency is between 2½ and 3 times the national average. The situation is slightly better than it was six months ago, but in broad terms it has deteriorated steadily since the last General Election.
This morning the Prime Minister said that one of the purposes of the North-East Study and the South-East Study was to enable people to live and work in their own area. I cannot imagine the Minister of Transport subcribing to that doctrine, because his refusal to allow the Shildon works to compete for these private containers means that the future of the workshops is in considerable doubt. The trade unions in the works, and also the local council, are seriously alarmed at the decision.
In the last year I have been very pleased at the way in which British Railways have been modernising and improving their works at Shildon. Compared with the situation two years ago 708 there is a much greater air of efficiency. Men are now treated reasonably, with toilets and other things of that description. The whole atmosphere is much better, and the men and their union leaders are pulling their weight. They are doing this against intolerable pressure from the management to cut their piece-work rates in order to compete with private enterprise. The only comment I would make on that is that it seems a very strange reward, in return for the full co-operation of the workers, to deprive the works of the ability to compete for a very large order.
I do not say that Shildon should be given the whole order, but at least a share of it would give some security to the town, which so much depends upon the railways. If I could see signs that the Government really intended to carry out the intentions of the Hailsham Plan I would not mind, but although Shildon is adjacent to the town of Newton Aycliffe it is excluded from the growth area. Only one small advance factory is being built on the trading estate, and the outlook for the town is very bleak.
British Railways recognise their responsibility to Shildon. They desire, in their own interest, that the town should prosper, but I can tell the Parliamentary Secretary that if he does not do very much more by way of long-term provisions for the Shildon workshops the welfare of Shildon and the adjacent area will be undermined more rapidly than it would be improved through the factories being put up in the adjacent town of Newton Aycliffe.
Few people in other parts of the country understand the community life and the close activities of a town like Shildon. It has a very progressive council. It is steadily improving its amenities, and it is therefore absolutely disastrous that a Minister with almost the power of life and death over the economic welfare of the town should take steps, by way of one sentence in a document, which can do more damage to Shildon than all the good that has been done by the years and years of devoted work of trade unionists and councillors.
I have asked the Minister of Transport to receive a deputation from the council and trade unions, and I hope that he will. 709 I ask the Parliamentary Secretary to give us, today, some reassurance about the future of the workshops at Shildon, and to tell us that there will be a retraction of the disastrous decision that he has made.

§ Mr. Niall MacDermot (Derby, North)
I hope that I shall be able to emulate the brevity of my hon. Friends, even if I cannot match the force and cogency of their arguments. On behalf of my right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) and myself I wish to protest—and this is also the protest of Derby and the Derby workshops—against the Minister's iniquitous decision.
I also wish to join in the protest at the absence of the Minister. He knew that this debate was to take place; indeed, he gave it as a reason for refusing to answer certain Questions which were addressed to him the other day. One would have thought from that, and from the gravity of the matter, arising from the high-handed policy decision that he has taken, that he would have sought to justify himself in the House today.
In a sense, this is where I came in. The first speech that I made in this House after having had the honour of being returned as Member for Derby, North, was in the 1962 debate on the Transport Commission Report. Then we were debating the great anxiety of railway workshops all over the country at the proposed closures.
I remember referring in that debate to the fact that the then recent contracts for new Pullmans had been put out to private firms without the railway workshops being given an opportunity to tender. I asked then that the Minister should give an assurance that at least in future there would be fair competition between the railway workshops and privately-owned industries. I asked for a specific assurance that no work would be contracted out without an opportunity being given to the railway workshops to tender. In the somewhat shabby reply, as I submit it was, on this point, which was made by the then Parliamentary Secretary, not only did he fail to give any such assurance, but saw fit to make insinuations against the genuineness of the prices quoted by the workshops. 710 We have heard the same sort of arguments put forward today by the hon. Member for Weston-super-Mare (Mr. Webster).
I hope that we shall have a clear and frank answer from the Parliamentary Secretary today. He must know, even if the hon. Member for Weston-super-Mare does not, that independent accountants have investigated this matter and reported that it is not practicable in a nationalised industry of this kind to produce accounts on the same basis as in a private industry for direct comparison. He will also know that under the Beeching régime great care is being taken to overhaul the whole of the costings arrangements of all sections of the industry. On a recent visit to the Derby works I was assured of the very great care which is taken to ensure proper costings.
The Minister must make his position on this matter quite clear. It is not enough for him to say, "I have been assured by the Railways Board that proper deductions are being made for overheads" and so on. Either he backs Dr. Beeching and the attitude and stand he has taken with his assistants, or he does not. If he says that these are dishonest figures, let him state it openly and give reasons, not allow this kind of sniping and insinuation to go on against the industry unsupported by any facts or figures. Apart from anything else, it is a complete reflection on Dr. Beeching and the work he is carrying out.
My belief is that this is yet another step in a consistent campaign of discrimination against the public sector of this industry. Last year we had the decision that the railway workshops should not be allowed to tender for passenger vehicles for the Victoria Line. That was put out to private tender alone. Arguments were put forward that there were special reasons in that case. It was said that the railway workshops had not the design staffs available for that contract. From my inquiries, whatever may have been the view of the management side, I find that the staffs themselves did not accept the basis of that argument. Although they were busy at the time, there was plenty of time for them to do that development work on the design side.
If this kind of argument is to be put forward it means that monopolies of the 711 private sector will be established and it will never be possible for the publicly-owned workshops to breach those monopolies. There can be no question about the ability of the railway workshops to pioneer in these new fields. They have been the pioneers in many fields of work in connection with rollingstock. It was in Derby that the first all-steel carriages were built. The standard wagons for coals and minerals were built and pioneered there. Since 1935 they have been manufacturing diesel cars and have manufactured a high proportion of all the diesel cars on the railways today. The railway workshops have constantly shown and proved their ability to manufacture a great variety of vehicles with at least as great, if not greater, efficiency, and at less cost than any outside firm.
We have the latest decision that the workshops are not to be allowed to tender for tankers on the liner trains and tank wagons for the oil companies. I am told that a decision has recently been communicated to the staffs that it is intended that the railway workshops shall cease the work of breaking up condemned coach stock as from 31st March. I am told that this decision was taken without prior consultation with the men and that in future this work is to be done by private firms.
The Minister must know that there is not in fact fair competition between the publicly-owned railway workshops and private firms for a number of reasons. One well-known and often-argued reason is that whereas the private firms have the advantage of being able to sell in the export markets as well as manufacturing for our industry, that is denied to the railway workshops. The railway workshops are confined to manufacturing for the home industry and are not allowed to develop ordinary by-products and sidelines as is done in private industry.
I have been given a simple example of this by the new manager of the carriage works in Derby. In one section of the works which was at that time slack there were considerable amounts of off-cuts of materials which had to be sold purely as scrap. If the railway workshops had been allowed, they could have used available labour in the manufacture from those off-cuts of things such as table mats. 712 That would have been lucrative work for the workshops, but, because this is a nationalised industry, they were not allowed to do so.
Now we have the decision that they are not to be permitted to tender for rollingstock for private users. I look forward to hearing from the Minister the arguments he can put forward to support this decision. There is no doubt whatever that it is seriously undermining the confidence of the staffs and the men in the workshops. We regard it as a decision taken purely on political grounds and one which we shall see is reversed as soon as we are returned to power.

§ Mr. John Hynd (Sheffield, Attercliffe)
It is clear from this debate and from the whole history of Government policy in regard to the railways that the Conservative Party is coming out more openly than ever as the champion of private profit makers as against the national interests. The Parliamentary Secretary to the Ministry of Transport smiles and shakes his head, but this is clear.
When he was talking about costings the hon. Member for Weston-super-Mare (Mr. Webster) pointed out that the more the railways developed their workshops and other activities the less there will be for private enterprise. But what is private enterprise? It is a collection of individuals and groups of individuals concerned with making private profit and is not concerned with the interests of the nation as a whole, for that is not their business. A nationalised concern is an important national service recognised as such, even by the Conservative Government and which it is, therefore, in the interests of the nation to serve and develop. Otherwise, there would be no case for having the railways nationalised whereas the Conservatives have admitted that there is such a case.
It is interesting in these debates on nationalised industries to find that from hon. Members opposite we have a defence of the right of private individuals to make profit out of the country's needs and out of essential social services while on this side of the House there is no personal private interest whatever. We are not concerned individually or as a party with whether 713 the railways are nationalised or not, from our personal, private point of view.
On the other side of the House private profit is the one motive. That was clearly demonstrated today by the hon. Member for Weston-super-Mare. This is the vital difference between us: we are concerned to defend the public interest; the Tories are concerned to defend private profit-making. Normally, the Tory Party tries to preserve a public image of being a genuine political party concerned with the public good and not merely with private motives. It is not doing that very well at present, particularly in the case of the railways. Tory policy on the railways has been one of persistent sabotage of the development of this nationalised concern.
This was demonstrated when the Tories interfered with the reinvestment and modernisation policy. It was demonstrated by the present Minister of Transport in January, 1961, when he announced his new Beeching policy and admitted that the Government had deliberately held up the electrification of the London Midland line and then subsequently decided that it would be a good thing to go ahead.
Large electrification policies cannot be carried out on such a basis, with large investments held up for months and then allowed to continue. The Minister added this: the Government approval of this electrification work does not mean that other major main line electrification will necessarily be approved. This was a policy which even Aims of Industry denounced in round terms as unsatisfactory and confusing and against the public interest. This has been the policy of the Government, and they are going still further now.
What was the policy which the railways were supposed to pursue under Dr. Beeching? In the debate on 30th January, 1961, the present Minister said this: We aim to give managements full opportunities to give of their best. They will have the means and tools of good management and be able to feel and bear the weight of personal responsibility for their actions. Is Dr. Beeching being afforded that facility at present, or is he not being interfered with by the Minister and 714 being prevented from having personal responsibility?
The Minister continued in this way: This is of particular importance as regards the railways. Nowhere is a single-minded direction needed more. He later made this very relevant statement: The Board will have particularly important responsibilities in fruitful modernisation investment and in getting the best value for money.…The man on the spot does not give of his lest looking over his shoulder and having to wait upon decisions relating to his own job taken at levels remote from him."—[OFFICIAL REPORT, 30th January, 1961; Vol. 633, c. 617–27.] This is what the present Minister said when giving Dr. Beeching his mandate to make the railways a commercial profit-making concern. Dr. Beeching is trying to do precisely what the Minister told him he had to do. In this case Dr. Beeching has asked the Minister to agree that the Board's primary policy is to place its available manufacturing work with the most economical source.
What is wrong with that under this policy? What is wrong with it even under the conceptions of the hon. Member for Weston-super-Mare or any other defender of private enterprise on the other side of the House? I read from Dr. Beeching's memorandum to the Ministry: The Board's primary policy is to place the available manufacturing work with the most economical source. Economics in this context comprise not only price, but factors such as satisfactory delivery. There are other things to be taken into account in assessing costs. Dr. Beeching said, quite frankly: Where on the above basis the quotations from railway workshops and private firms are comparable in their essential features, the Board will allocate the work to railway workshops. This is the gravamen of the case to be met by the Minister. What is wrong with that? The hon. Member for Weston-super-Mare talked about costing and the importance of all railway workshops being on a commercial basis. Is it suggested that Dr. Beeching is betraying either his own commercial instincts or the confidence placed in him by the Minister to exercise his commercial instincts and experience in ensuring that the production of an article in railway 715 workshops is more advantageous commercially for the railway industry than placing it outside, taking all factors into consideration?
Is that the suggestion? I would like to hear clearly from the Minister what he is suggesting. Either he is accusing Dr. Beeching of having insufficient commercial instincts or betraying them if he has sufficient commercial instincts, or he is accusing Dr. Beeching of betraying the confidence he has placed in him to ensure that these commercial rules are observed.
Personally, I am not so much concerned about whether there is a costing system which ensures that every single item is costed exactly, because that is not possible in an organisation of this kind. The hon. Member for Weston-super-Mare said that the difference was that I.C.I. has a profit and loss account. So have the railways. Did not the hon. Gentleman know that? British Railways also publishes a profit and loss account. A full set of accounts is published every year. The accounts of the railways are made even more public than those of I.C.I.

§ Mr. Webster
I was talking about the workshops.

§ Mr. Hynd
I know that, but the hon. Gentleman was not talking about sections of I.C.I.'s activities. Does the hon. Gentleman assert that every section of I.C.I.'s activities is costed? Of course it is not. I.C.I. has an overall responsibility to its shareholders, and Dr. Beeching has an overall responsibility to the Minister and, therefore, to the public, to ensure that the overall undertaking is run with the best commercial results. It is the responsibility of Dr. Beeching and of the head of I.C.I. to ensure that the total operations of their respective concerns are carried out in that way. The head of I.C.I. and Dr. Beeching must, therefore, be satisfied that every individual aspect of the organisation's operations is carried out in the most advantageous way.
The hon. Gentleman spoke of the public money which had been lost on the railways. We are trying to save public money, and, therefore, we oppose the Minister's decision. The Minister is causing the loss of more public money 716 by preventing the railways carrying out this work. The hon. Gentleman spoke of the public money spent on the railways, and mentioned the "fantastic" figure of £169 million. What about the cost of the roads? It has been estimated that £40 million is the cost of accidents alone on the roads each year. Is that sum taken into account in assessing the value of the railways? Is the total cost of the roads taken into account in assessing whether they are commercially viable?
Is there any proposal to close every mile of road which is not making a profit? On the contrary, is it not said, "This is public money, but it is public money well spent "? The railways, too, are a method of transport and conveyance, just as the roads are. Why should there be such hypocrisy about the money lost by the railways, whereas the money spent on the roads is supposed to be well spent in the public interest?
Why should the railways be subjected to discriminatory treatment? They are confined to certain activities. They are prevented from carrying out other activities directly affecting their own operations and directly affecting their own interests, according to Dr. Beeching's conception. They are forced to put these things out to private enterprise. Can any hon. Gentleman tell us of any single private concern in this country which is instructed by legislation that it must not produce anything outside a defined limited scope of activities and which is not allowed to extend its business and use its by-products and operations to its own best advantage? Of course not.
This is always the case with nationalised industries so long as there is a Tory Government. The railways are hemmed in on every quarter. Their operations are chopped off. Last year they were prevented from building passenger vehicles. They were prevented from carrying out modernisation schemes. They were prevented from getting the capital to go on with modernisation schemes. Now they are prevented altogether, not even on the basis of commercial competition on price with private concerns, from producing these types of vehicle which are essential to their operations and which are 717 directly concerned with their operations. There can be no justification for this.
The simple fact is that we are approaching a General Election. The Tories have maintained a constant propaganda, aided by their newspapers and big advertisers, against nationalised enterprises. They have failed to show a case for denationalising one single nationalised enterprise. They are now becoming concerned about the continued and growing success of these enterprises. They will try at all costs to reduce the image of success of nationalised enterprises. This is one of the ways in which they are trying to do it.

§ The Parliamentary Secretary to the Ministry of Transport (Mr. T. G. D. Galbraith)
We have had some fairly fiery speeches from hon. Members today, and I am delighted to have this opportunity to try to answer them. It is out of no disrespect to the House that my right hon. Friend the Minister is not here personally. Normally these sort of Adjournment debates are taken by the Parliamentary Secretary, and my right hon. Friend thought that the case today was so clear and simple that it would be a suitable occasion for his Parliamentary Secretary to speak. One advantage I may have is that I was not personally involved in the legislation and, therefore, I have a comparatively clear and unbiased mind on the issues involved.
My right hon. Friend is certainly not afraid of his record or anything else. He is certainly not afraid of defending his record, which is a good one. He has only recently approved the Board's proposals involving the expenditure of £1½ million on modernising the St. Rollox Works, which is close to my constituency in Glasgow. [HON. MEMBERS: "Oh."] I said "close", but it is not in my constituency. Some of the containers will be made there for the liner trains to which reference has been made.
The subject of this debate, like so many subjects, has two sides to it, and the Government, in reaching their decision, have carefully weighed up where the balance of justice and commonsense seems to lie. The House has today heard from hon. Members opposite their side of the case and, in the short time left to me, I would like 718 to put the other side and, in so doing, remove some of what I believe are inaccurate impressions that have been created.
One of these is that my right hon. Friend has initiated something new by his decision. That is not the case and it is not new by any means. I have made exhaustive inquiries and, so far as I can find out, never once in the history of the railways have they manufactured for private concerns, either before or after nationalisation. They have manufactured for themselves. They can still do that and they can also manufacture for other nationalised transport industries, but they have not in the past ever manufactured for outsiders.

Several Hon. Members
rose—

§ Mr. Galbraith
Hon. Members opposite must accept what I am saying and hear me out. They may be interested, for example, to know that the right hon. Gentleman the Minister of Transport said: This Bill is drafted for the purpose of dealing with transport. Later he said: …the Government have no intention…to bring in by a side door industries that are engaged in he manufacture of equipment…"—[OFFICIAL REPORT, 13th February, 1947; Vol. 433, c 230.] That was what the Minister of Transport said when the Bill was going through Parliament—but I do not mean my right hon. Friend the present Minister. I mean Mr. Barnes, and the right hon. Member for Vauxhall (Mr. Strauss) should know all about that because he was the Parliamentary Secretary at the time.

§ Mr. Strauss
That is not relevant.

§ Mr. Galbraith
It certainly is and presumably the right hon. Gentleman approved of his own Government's policy to limit and restrict, exactly the way the present Government have followed this policy of limitation in this respect.
Having given the House that quotation, if there is still any doubt about the position created by the party opposite, let us consider the evidence of the Chairman of the B.T.C., Sir Brian Robertson, as he then was, testifying 719 before the Select Committee in 1960. He said: We cannot manufacture save for our own requirements… That was absolutely specific and definite. Thus, under the Socialist 1947 Act the very restriction which hon. Members opposite are now complaining about was plainly in operation then, and the railways could not manufacture except for their own requirements.

§ Mr. Strauss
The Parliamentary Secretary is making an argument that is wholly false. Is he not aware that the wagons about which we have been speaking will be required for the railways and will be an essential part of the railways? Is he not aware that the "liner" trains will use these wagons? What does he think the railways are for?

§ Mr. Galbraith
I am pointing out that this situation existed under the Socialists—[HON. MEMBERS: "No."]—and hon. Members opposite are aware that the railways have always had on them wagons belonging to private firms. They have never manufactured the equipment themselves, and that is all I am saying.

Several Hon. Members
rose—

§ Mr. Galbraith
Not much time remains for me in which to reply.

§ Mr. F. Noel-Baker
The hon. Gentleman should give way.

§ Mr. Galbraith
I will not. As I have said, under the Socialist 1947 Act, the very restriction which hon. Members opposite are now complaining about was plainly in operation. This is not surprising. The purpose of both Acts—the 1947 and 1962 Measures—was the organisation of transport; not a revision of the ancillary functions which had grown up for historical reasons.
In his 1962 Act my right hon. Friend left the ancillary functions essentially the same as they were under the 1947 Act and—

§ Mr. J. T. Price
On a point order. The Minister is making statements which are not in accordance with the facts and I rise on this point of order, Mr. Speaker, because the subject before us will have to be debated later, at which point the Parliamentary Secretary will probably 720 say that he made these statements and they were not challenged by hon. Members on this side of the House. I want to make it clear, for the record, that my hon. Friends and I do not accept what he is saying.

§ Mr. Speaker
It is unkind of hon. Members to rise on points of order which are not points of order.

§ Mr. Galbraith
I am, as hon. Members know, only too delighted to give way, but on this occasion they must realise the difficulty I am in in view of the time remaining to me, particularly since I want to get my point of view on the record. I was explaining that in his 1962 Act my right hon. Friend left the ancillary functions essentially the same as they were under the 1947 Act. If he had been actuated by doctrinaire considerations he would have had ample justification for making changes and restricting the powers of the railways. He did not do that. He did not restrict their powers or extend them, but almost echoing the sentiments of his predecessor in the 1947 Act, he said: The object of the Commission is transport, not necessarily the manufacture of articles. If this were not sufficient, the then Parliamentary Secretary said: Let them manufacture what they need for themselves…but do not let them go into wider manufacture".—[OFFICIAL REPORT. Standing Committee E, 1st March, 1962; c. 1029.] There could be nothing more definite. When there are clear and categoric statements of policy from both parties, coupled with the views of the former Chairman as to the powers and practice of the railways, I do not see how my right hon. Friend's refusal to consent to this new extension of the railways' activities can be construed as an unexpected or unfair blow at the prospect of the railway workshops. What they are doing is seeking something new and they are being told, "No, you cannot have it." The principle is exactly the same as it was in 1962 and 1947.
The hon. Member for Swindon (Mr. F. Noel-Baker) asked about the legal position. This, with respect, is a complete red herring. Presumably Dr. Beeching must think that he has legal powers, otherwise he would not have made the proposal. But Sir Brian Robertson clearly did not think that he 721 had powers—and the private manufacturers certainly believe the Board's proposals to be ultra vires. However, the legal issue is irrelevant because this is a decision of policy. It does not rest on the legality or otherwise of the Board's position. It was not admitted either by my noble Friend in another place or by my right hon. Friend in his letter—and it is not for me to judge because I am not a lawyer, nor is the right hon. Member for Vauxhall, and certainly the hon. Member for Swindon is not a lawyer—

§ Mr. F. Noel-Baker
rose—

§ Mr. Galbraith
I will not give way. It is no good the hon. Member for Swindon continually interrupting.

§ Mr. Noel-Baker
Nonsense.

§ Mr. Galbraith
The hon. Member for Swindon need not shout "nonsense", because had we thought that the railways' power could be construed in this way we would certainly have stopped the loophole—that is, if one actually exists. That is what only a court of law can determine. The legal issue, however, is utterly irrelevant because, as I say, this is a decision of policy. It is a reaffirmation of what has been consistent Government policy and rail practice all along. The Minister's decision is not a change at all. It does not affect the railways' power to manufacture for themselces. It merely says that they must not extend into outside trade. Incidentally, the cement wagons about which the hon. and learned Member for Crewe (Mr. Scholefield Allen) spoke so heatedly the other day were not for private ownership. They were to be the property of the railways. They were not affected by this decision. This is an example of the false impression which can be created by people speaking too heatedly on the subject.
This brings me to the issue of competition, and here the fairness of the railways' tendering machinery is not in question. The problem is not one of disguised subsidy or concealed overheads. It is the inevitable issue of allocating overheads in an organisation carrying out a large volume of repair work as well as new manufacture. The hon. Member for Swindon and the hon. Member for Derby, North said that they were not satisfied when my right 722 hon. Friend said that he had been assured by the Board that it makes this allocation quite fairly. This is so, and he is so assured, but because of the inevitable difference between a nationalised industry and a private industry he thought it proper, as he told the House, to reserve his right at any time to examine thy: validity of the costings of the Board. [HON. MEMBERS: "Oh."] It is no food hon. Members getting angry. This is the position. Hon. Members asked what was the position and I am telling them.

§ Mr. Popplewell
On a point of order. Can you advise my hon. Friends, Mr. Speaker, how we can take the Minister to task when he is engaged in a smear campaign, deliberately, from the Dispatch Box, and when there is no semblance of truth in his observations? It is a deliberate smear.

§ Mr. Speaker
There is some misconception about what points of order are. We always get into trouble about shortage of time on days such as this, and we must do our best to oblige everybody. I hope that we can stay off points of order.

§ Mr. Webster
On a point of order. Is "smear" a Parliamentary word?

§ Mr. Speaker
If it is not addressed to an individual, it is not out of order. The phrase was "a smear campaign", and I see nothing unparliamentary about that.

§ Mr. Galbraith
In view of what you have said, Mr. Speaker, I will spend no more time on this fishy, smeary business, whatever it is, but will return to the question of competition.
While it is proper for the railways to manufacture for themselves, because they have always done so, and to do this manufacturing on the basis of competitive tendering, there is surely something inherently different when it comes to going into the market for the first time and seeking to manufacture for outsiders—something they have never done before. This is not competition in the world of transport, which is what we are anxious to encourage; it is an extension of nationalisation into a manufacturing, non-transport field.
The argument normally used to justify a nationalised industry in doing this is 723 that private industry has fallen down on the job. But in this case private industry has not fallen down on the job. It is very well able to do the job. Indeed, private industry might retort to this charge that, if anything, the railways have fallen down on the job, and that they could not exist for a moment without the vast subsidies provided by the taxpayers, towards which private manufacturers have to contribute their share. Surely it cannot be regarded as normal competition that we should be forced, through taxation, to keep in existence a transport organisation which is then free to launch out into new and competitive non-transport, manufacturing activities.

§ Mr. Popplewell
It is not non-transport.

§ Mr. Galbraith
Certainly it is non-transport. Transport is moving a person from A to B. This is not moving a person from A to B. This is building wagons.
Next, there is the question of under-used resources in the railway workshop.

§ Mr. Popplewell
rose—

§ Mr. Galbraith
I have a good speech to make, and I wish that hon. Members would listen to it, if they are interested.
It is suggested that surely it would be more businesslike to occupy these resources fully. This argument has to a certain extent a specious attraction, but economically it is thoroughly unsound. The argument seems to be that as there has once been a need for resources of a certain kind at a certain level, that level must be maintained for ever. We have this sort of Luddite reaction from hon. Members opposite each time that an industry is modernised. I expect that if the Labour Party had existed when the railways were starting they would have been as active in condemning them and in championing the old coaching industry, with its under-used resources of blacksmiths and saddlers, as they are now in doing the very reverse. I am afraid that it is the Labour Party which is the more reactionary of the two parties.
This takes me to the question of redundancy, which several hon. Members have raised. The right hon. Gentleman the Leader of the Opposition spoke of the 724 Minister's decision as adding to the problems of redundancy in the railway towns. Which railway towns did he mean? Is he concerned only with the towns which have nationalised railway workshops? Does he not care about the towns which have private rail workshops?
The work at issue here is only of marginal importance to the railways; their workshops will keep going anyway. Furthermore, there will be no redundancy as a result of this decision. But without the prospect of this sort of work which we are discussing, private firms may go out of this business altogether, and plenty of them have already done so.
Several hon. Members have said that this decision of my right hon. Friend would be reversed by a Labour Government. I do not know whether that statement was made by the right hon. Gentleman on behalf of his party or whether it was just an idle threat because they know that they will not win the election. But if it is a statement on behalf of the party, it means that in all those towns and seats with private firms—and Cardiff is a good example; and I notice that one seat there is held by the marginal majority of 868—Conservative candidates can very well campaign that to vote for Labour means the possibility of voting oneself out of a job. Powell Duffryn, in Cardiff, a firm which has benefited from a wagon contract, might well not have had the work if the Labour Party had been in power and had been following the policy which they have advocated today.
I sympathise with and understand the view of hon. Members who have rail workshops in their constituencies and who wish to get as much custom for them as possible. This is very proper. This is what we are all engaged in doing; it is the sort of activity which we undertake on behalf of our constituents. Hon. Members who have railway workshops in their constituencies are mainly those who have been speaking from the opposite benches, and they want to have the work for a nationalised industry. For that reason they are seeking to create an innovation and an enlargement here.
But other hon. Members on both sides of the House who have private firms in their constituencies, such as the right 725 hon. Members for Smethwick (Mr. Gordon Walker) and Wakefield (Mr. Creech Jones) who both sit on the opposite benches, have expressed concern to the Government at the shortage of orders for private firms. They seem to take the opposite view and to believe in the status quo.
Frankly, when, as we all know, there is a reduced demand for wagons due to modernisation, it seems to me to be very odd, and indeed not quite fair, that an alteration should be proposed in the arrangements which have existed for so long simply to insulate the railway workshops from the process of change. This is something which affects everybody. Adjustments have to be made both by private industry and by nationalised industry to move with the times. It is a great mistake to use this situation as an excuse either for an attack on nationalised industries or for an attack on private industries, because such attacks are entirely irrelevant to the changed situation.

§ Mr. Strauss
Can the hon. Member tell us why Dr. Beeching asked for permission to build these wagons in railway workshops?

§ Mr. Galbraith
Not without notice.
I have given a number of reasons why this extension should not be granted, but that which weighs most heavily with the Minister is that he considers that the Board has quite a big enough task in trying to run the railways efficiently and does not want it to enter into a new activity which could distract the Board from its real job, which is movement. This is primarily a transport undertaking and not a manufacturing undertaking. It is most important that the Board should be free to give all its energies to this and to attend to the difficult task of transport. This is not a narrow-minded doctrinaire decision. It is not aimed at hurting the transport industry at all and I wish that right hon. and hon. Gentlemen opposite could get that nagging and unworthy suspicion out of their minds.
There has been no change in the outlook of the Government. Our policy and purpose is simply to ensure that nothing stops the Board from concentrating wholeheartedly on making its section of the transport industry the most efficient 726 railway system in the world. The more it can concentrate on that, undisturbed by ancillary activities which are well catered for elsewhere, the more likely is it to succeed in the vital national job which only it can do.