HC Deb 22 February 1965 vol 707 cc190-202

Motion made, and Question proposed, That this House do now adjourn.—[Mr. O'Malley.]

11.33 p.m.

Mr. Bernard Braine (Essex, South-East)

No subject has aroused greater anger and frustration among my constituents in recent years than the arbitrary and unfair way in which British Railways increased fares on 1st February. I am grateful to you, Mr. Speaker, for making it possible for me to ventilate the matter, and to my colleagues, in particular my hon. Friends the Members for Southend, East (Sir S. McAdden) and Southend, West (Mr. Channon), my hon. and learned Friend the Member for Billericay (Mr. Gardner) and my hon. Friend the Member for Harwich (Mr. Ridsdale), whose constituents, like mine, are affected, for giving me their support.

Considerable increases in rail fares have been inflicted on Essex commuters with monotonous regularity in recent years. Season ticket charges went up by 10 per cent. in 1963, by 7½ per cent. in 1964 and now over 6 per cent. on 1st February. This represents an increase of about 25 per cent, over a period of 20 months. As far as I am aware, an increase of such magnitude has not been imposed on any other area in the country. I want to know why we in Essex have been singled out in this way.

Moreover, this is not the whole story. For a proportion of Essex commuters, those who are obliged to use off-peak tickets, the alterations from 1st February were not limited to increases of 6 per cent. or even of 10 per cent., but of 70 and 75 per cent., a crippling impost if there ever was one, and one which is causing great hardship.

It is the basis of my argument that these new increases were made in circumstances which call for the strongest possible protest and for an assurance that some action will be taken by the Minister. I will outline the sequence of events. In July last year, season ticket fares were increased by 7½ per cent. on the commuter lines into London, yet within three months the British Railways Board announced its intention to increase these fares by a further 5 per cent., and, at the same time, to abolish day return tickets for distances of over 10 miles.

As regards inner London, as we all know, it was necessary for the Board to lodge its applications with the Transport Tribunal, the reason being that, within the London fares area, as it was statutorily defined in 1933, alterations in passenger fares have to be submitted for confirmation to the Tribunal, and cannot be raised anyway by more than 10 per cent. Outside the London fares area, on the other hand, the railways have not been required since 1962 to submit their proposals to the Tribunal.

I submit that, had the Tribunal considered that a case for a 5 per cent. increase within the London fares area had been made out, it would have been hardly inequitable to apply a similar increase to commuter lines outside the London area. I concede that. But, in the event, the Tribunal, after hearing the applications, rejected them. It did not accept that British Rail had made out its case. However, far from this causing the Board to reflect on the position, it rushed straight ahead with an announcement that it would increase fares on the outer London commuter lines by 5 per cent.

While the Board was, of course, legally free to do this, it was a singularly unfortunate move, to put it no higher, in the light of its failure to establish a case for increases within the London fares area. This in itself was hard enough for my constituents to bear, but the House will readily understand their anger when they discovered, without any explanation being given, that the proposed increases for them were in excess of the published 5 per cent.

Here are some illustrations of the actual increases on the two lines serving my constituency. First, on the Liverpool Street line, the quarterly season ticket from Hockley went up from £26 4s. to £27 17s., an increase not of 5 per cent., as British Railways had announced, but of 6.3 per cent. Second, on the Fen-church Street line, the quarterly season ticket from Leigh-on-Sea, in the constituency of my hon. Friend the Member for Southend, West but used also by my constituents, went up from £25 19s. to £27 11s., an increase not of 5 per cent., but of 6.17 per cent.

One looks in vain for any principle in these figures. It seems that the only principle which guides this vast monopoly, when it does not have to justify itself to the Transport Tribunal, is that there shall be no principles at all. These increases come on top of the 7½ per cent. increase last July, and now thousands of my constituents, and tens of thousands of people elsewhere in Essex, have had to accept within seven months a rise of about 13½ per cent. in their cost of travel. This must be about the steepest rise in any item of personal expenditure. But when one considers the effect of the withdrawal of the off-peak tickets, it is little short of catastrophic.

I have had some pitiful letters on the subject. I have one here from a postman who works at Mount Pleasant. He writes: Until last week, I used the five-day off-peak ticket to Farringdon Street from Benfleet, at a cost of 30s. 6d. weekly. Off-peak tickets from this station are now abolished. I have to take a weekly ticket, cost 55s., an increase of 24s. 6d. weekly. I am one of many who have been shabbily treated. Many of these people find the increases almost more than they can stand, with meeting their other payments. Is it surprising that I have letters of that kind coming to me?

Here is another from a married man with one child aged two, who writes: I am purchasing my own home, and I find that I have no alternative but to sell my property and move back to London. Another writes: We are asked to move out of London, and are then held up to ransom by people who cannot have any idea what trouble they cause. I have been in my present job for 16 years. Am I expected to give this up, or move back to London? In anticipation of the storm that was about to break, I wrote to the Minister in January drawing his attention to two points. The first was the impropriety of British Rail in persisting in going ahead in imposing on outer London commuters what was not only a 5 per cent. increase in season tickets and alterations in other fares after the Transport Tribunal's rejection of similar increases for inner London commuters. The second was the unfairness of the increases which, when actually imposed, were seen to be in excess of the published 5 per cent.

I asked the Minister if he would intervene to stop the increases. The right hon. Gentleman did not write to me until after the new fares had been imposed. He then told me that fares as such were not for him, but were a matter for British Rail. He said that he had no power to intervene, and, accordingly, had forwarded the correspondence to Dr. Beeching.

I do not wish to argue here the difficulties of railway finance. I recognise that there are difficulties. It may well be that over the country as a whole we should pay an economic rate for the services that the railways provide—

Mr. Julian Ridsdale (Harwich)

Does not my hon. Friend consider it disturbing that, although there has been public investment of £1,200,000,000 over the last I0 years, British Rail has not yet been able to contain its costs better than this?

Mr. Braine

That takes the matter a little wider, but I agree with my hon. Friend. His constituents as well as mine are gravely affected. To the people he and I represent, the railways are a monopoly. There is simply no alternative way of getting to and from work. When a monopoly uses its position to levy charges which cause hardship, someone must speak and someone must act.

I dispute that the Minister has no powers to intervene. In 1952 the then Minister of Transport intervened to stop the 20 per cent. fares increase in the London area, which then included the Fenchurch Street line which serves my constituency, and he did so under Section 4 of the 1947 Act. That power, modified in a way which is essentially fair to the railways, is continued in the Transport Act, 1962.

Mr. Edward Gardner (Billericay)

This is a very important point. Would not my hon. Friend agree that if the Government can, without statutory powers, persuade private industries to keep their prices down, the Minister, with statutory powers like those in Section 27 of the Act, should be able to ensure that the nationalised railways follow the example which the Government expect private industry to set?

Mr. Braine

I entirely agree. Section 27 says that the Minister may, after consultation with any board, give to that board directions of a general character as to the exercise and performance by the board of its functions in relation to matters which appear to him to affect the national interest.

In short, it is my contention that the Minister could at least have consulted the railway authorities about the advisability of not proceeding with the proposed increases in the light of the decision of the Transport Tribunal over similar increases in the London area, or at least, if it felt that it must go ahead, he could have advised them to be careful not to increase any fares by more than 5 per cent. But the Minister decided to do nothing.

The situation which I have described is one which in the national interest requires the Minister to intervene. I will explain briefly why I hold that view. Without arguing whether the then Minister's intervention in 1952 was justified or not, the then Home Secretary said: The principle upon which the Government are acting is that, while the public generally can rightly be called upon to pay the cost of providing them with reasonable transport services, it is unfair to call upon particular classes of passengers to pay increases which are out of all proportion to those applicable to the public generally and which cause an unexpected upset in their daily lives. To give a single example: it is a severe hardship upon a man who has taken his season ticket rate into account in choosing his place of residence to have such an increase as 42 per cent. suddenly added to a figure which may already bulk very large in his domestic budget"—[OFFICIAL REPORT, 28th April, 1952; Vol. 499, c. 1024.] That principle illustrates perfectly the present position, except that for many of my constituents who have come to live in south-east Essex and whose limited means force them to use off-peak tickets the increase is not 42 per cent. but between 70 and 75 per cent. The effect is not merely to create severe hardship but an intolerable situation which is unsettling their household budgets, undermining their security and disturbing their peace of mind.

Indeed, when one considers what has been said by right hon. Gentlemen opposite about the need to keep prices under control it is all the more incredible that a public monopoly should be allowed to inflict increases of this kind on people who have, for the most part, no alternative means of getting to work. For those with cars, the only effect is to drive them on to the already congested roads.

The House will recall the flourish of trumpets with which the Secretary of State announced on 11th February the steps the Government have taken to provide machinery designed to keep the movement of prices and incomes constantly under review and to examine particular cases. Whatever our other differences here, all of us wish the Government well in these endeavours, but it is in the light of these endeavours that I find it astonishing that the Minister of Transport did not take steps to intervene to prevent these savage, punitive rises in fare, inflicted on my constituents without explanation as to how they were calculated and without justification as to their necessity.

After all, to whom can my constituents turn if not to the Minister of Transport? They are not protected by the Transport Tribunal. They cannot complain to the transport users' consultative committee. But the Minister has the power to intervene to ensure fair play in the national interest if he chooses to exercise it. Nor can the matter be left there. Whatever view the Joint Parliamentary Secretary—who has had a busy stint today, so I do not want to press him too hard—may take tonight of the grievance I have laid before the House it is utterly unsatisfactory to leave complete powers to a transport monopoly to vary charges as it pleases without regard to social and economic consequences.

I am aware that tonight I am precluded from asking for changes in the law but I hope that the hon. Gentleman will indicate when he replies whether he sees the possibility of widening the jurisdiction of the Transport Tribunal or providing in some other way effective safeguards for transport users against what, I am afraid, must be regarded as arbitrary and unfair treatment.

11.48 p.m.

Sir Stephen McAdden (Southend, East)

My hon. Friend has stressed that the Secretary of State for Economic Affairs is keen to keep prices down. Why then, in this House, does the Secretary of State refuse to answer questions on what steps he should take to keep rail fares down? The right hon. Gentleman "passes the buck" to the Minister of Transport, who passes it on to Dr. Beeching.

Tonight, an Eastern Region spokesman had something interesting to say. At a time when British Rail is reducing fares from Upminster it is to increase fares on the rest of the line. Another aspect is partly historical. The spokesman said that in the past British Rail had tried to persuade people to go to Southend by making fares cheaper. But now, having persuaded many of my constituents to go there, buy houses and take on other commitments, British Rail is extorting these increases in fares.

I support what my hon. Friend the Member for Essex, South-East (Mr. Braine) has said.

11.49 p.m.

Mr. H. P. G. Channon (Southend, West)

I wish to draw attention to the tremendous feeling of unfairness that exists in my constituency. Southend has frequently been treated in the past as being part of the London area when fares have been increased. But now, British Rail, unable to get increases for the London area, treats Southend as being outside it. This is regarded as being particularly unfair on the people in south-east Essex who have a tremendous extra burden to bear because of it.

I urge the Joint Parliamentary Secretary to say something tonight that will give help to my constituents.

11.50 p.m.

Mr. Gardner

May I draw to the attention of the Parliamentary Secretary the sense of outrage felt in places like Billericay, where people have bought houses on budgets which are not easily increased, people who now find themselves being crippled by these increases in fares? I ask him to do all he can and to use all his statutory powers to alleviate the present position.

Mr. Ridsdale

Is the Parliamentary Secretary aware that much of what has been said applies to north-east Essex as well?

11.51 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Stephen Swingler)

One of the fascinations of my job is the variety of problems thrown at one even during the space of a very few hours. I think that I have had a fair spectrum today and in a sense it may be appropriate that we should end by discussing what I regard as a very serious and important matter.

I have had a look at all the files of correspondence and representations made by the hon. Member for Essex, South-East (Mr. Braine) and his hon. Friends. Some of us had the benefit of discussing the matter some time ago. I understand and entirely sympathise with his feelings and those of the constituents represented by hon. Members who feel aggrieved by a whole series of fares increases over a long time—not all of which I can speak about—and who suspect that they are the victims of unjust treatment as compared with travellers in other parts of the country. I regard these feelings as natural and very understandable in present circumstances, but I hope to be able tonight to refute any suggestion that in this matter of raising fares the British Railways Board has in any way acted improperly. However, first, I want briefly to review the statutory framework which lays down the responsibilities of the Board.

Under the Transport Act, 1962, the Board has complete freedom outside the statutory area, the London Passenger Transpert area, to set its fares and other charges at whatever level it thinks fit. Inside the London Passenger Transport area, which has been designated as such for a long time, it can vary the fares within maxima laid down by the Transport Tribunal and, of course, it must apply to the Tribunal on any occasion on which it wishes those maxima to be raised.

Furthermore, Section 46 of the Act lays a duty on the Board to make higher charges as it considers necessary to meet the costs of its services. This provision is quite specific. Section 46(4) says: The London Board and the Railways Board shall make such applications under this section as appear to them to be necessary in order to secure that their charges subject to the London fares orders make a proper contribution to the discharge of their financial duty … We have to consider the situation which has confronted the Railways Board in recent months. As everybody know, the Board is a very long way from meeting its financial duty, imposed by the 1962 Act and previous legislation, to pay its way, Even before the recent wage award, the Board was running at a deficit, which had to be covered by the taxpayer, of some £100 million a year. In the Board's view, the London commuter services were responsible for part of this not inconsiderable deficit.

This is why the Board felt obliged last August to apply to the London Transport Tribunal among other things to raise season tickets in the London statutory area by 5 per cent.—this was before the more recent wage award—announcing at the same time that it was raising fares equivalently in the fringe outside area up to a distance of 80 miles from London.

This was the position when, in December last year, the railwaymen were given a substantial wage increase of about 9 per cent. which was estimated to cost the Board an additional £30 million per annum. It was this wage award last December which led the Board to announce a countrywide fare increase designed to recoup—let me be fair to the Board—not the £30 million a year which the extra wage award would cost, but about £10 million, one-third of the increased cost.

I must emphasise that it is the Railway Board's intention to absorb the other two-thirds, the remaining £20 million per annum in the additional wages bill, by means of increased productivity. It has, therefore, limited the season ticket fare increase to a countrywide average of 5 per cent. Thus, the Board made the 5 per cent. increase to finance one-third of the national wage award and, quite properly, according to its statutory duties and responsibilities, applied this increase wherever it could apply it.

It so happened that outer London was at that time, as hon. Members have said, expecting the level of its fares to move with those within the statutory London area on which the Tribunal was at that time about to make and to announce its decision. Therefore, it is understandable that because of this coincidence in timing, many people in outer London, constituents of hon. Members who have spoken tonight, should have thought that the Railways Board was jumping the gun and prejudging the decision of the London Transport Tribunal.

In fact, the Railways Board was not prejudging the Tribunal's decision. The application under consideration by the Tribunal and the countrywide fare increases which came into effect on 1st February arose from entirely different sets of circumstances: the one from the position last August when, at the wage levels then current, the Board considered that the commuter services did not cover its costs; the other from the entirely new position which confronted the Board when the substantial wage award was given last December.

I must, therefore, emphasise that the Board did not apply the increase to outer London because its application for the statutory area had been refused by the Tribunal. The Board announced its decision on this on 4th January, some weeks before the Tribunal announced its decision rejecting the Board's proposal on 22nd January, although the actual application of the fares increase, as the hon. Member for Essex, South-East has said, did not come into force until 1st February.

Mr. Braine

Does the Minister appreciate that my charge of impropriety against the Board is that it increased fares by more than the published 5 per cent. and in some cases, for those who use off-peak season tickets, the increase was of the order of 70 per cent.? Where is the justification in that?

Mr. Swingler

Two points are involved here. First, the Board has power and responsibility to fix these charges at a level which it considers necessary to cover its costs, except in the statutory London Transport area, where they are subject to the judgment of the Tribunal and the Board must submit its proposals to the Tribunal and attempt to justify them. The Board, therefore, had the power and the capacity to impose this increase, which it regarded as necessary, not only because of things that had happened previously, but because of the substantial award given to the railwaymen last December, in the whole of the country outside the statutory London area. That is why the hon. Member's constituents have suffered these increases.

As to the detailed matters which have been raised, I understand that Dr. Beeching has communicated with the hon. Member about the details of the way in which some fare increases have been slightly more than others for various reasons such as, I understand, to bring them up to round sums. This is a managerial matter for the Railways Board, on which the hon. Member can carry on correspondence with the Chairman of the Board, and I have no doubt that explanations will be given.

Let me say, in conclusion—

Mr. Braine


Mr. Swingler

Unless the hon. Gentleman wishes to intervene—

Mr. Braine

I was hoping that the hon. Gentleman would make a reference to possible future safeguards.

Mr. Swingler

This, of course, is a matter which falls under our general consideration of transport policy for the future. No doubt the hon. Gentleman noticed that my right hon. Friend, during the course of the first Question Time in which he appeared at the House, referred to what he regarded as the foolish conception which lay behind the Transport Act of 1962. We by no means regard all the provisions of the Act under which these things are dealt with as perfect instruments for trying to ensure either justice or efficiency. But I think that we must be quite clear about this, that the fixing of fares in relation to operating costs must be a managerial responsibility of the national board.

The Board must be responsible to my right hon. friend for the general financial and investment policy which it carries out, but the means and methods by which it fixes fares must be left to the Board.

Mr. Braine

Is the hon. Gentleman saying that these increases were fair, and that that is the reason the Minister was not willing to intervene under the powers which I quoted?

Mr. Swingler

I think that it is not for my right hon. Friend to sit in judgment on the Board on these matters. They clearly come within the Board's managerial responsibility. The Board must be responsible to him for its general financial and investment policy, but, clearly, we must give the Board both the power and the discretion to make decisions and to vary decisions on the level of fares, except where Parliament, in its wisdom, in the past, has laid down—as it has in the London statutory area—that special procedures should be applied whereby a public monopoly of this kind has to justify its fare proposals.

What I have said is in explanation of the position which has caused grievance among the hon. Gentleman's constituents. As I said at the beginning, I fully sympathise with them. In reviewing the financial policies of the nationalised boards in relation to our intention to try to hold prices as well as to apply an incomes policy, the Government will take fully into account the serious burden of travelling costs which falls upon so many of the working people of the outer London area.

Question put and agreed to.

Adjourned accordingly at three minutes past Twelve o'clock.