BRITISH RAILWAYS (DEFICIT)

HC Deb 26 June 1967 vol 749 cc110-72

Mr. Speaker

Before calling the first speaker in the debate, perhaps I may announce that I have selected the Amendment in the name of the Prime Minister and some of his hon. Friends—in line 1, leave out from 'regrets' to end and add: 'the financial situation of British Railways and congratulates Her Majesty's Government on the steps being taken, together with the British Railways Board, and with the help of the Joint Steering Group, to identify and provide for the socially necessary lines; to give to British Railways a realistic efficiency target; to modernise freight handling; and to enable the railways to respond to changing traffic demands'.

4.30 p.m.

Mr. Peter Walker (Worcester)

I beg to move, That this House regrets the mounting deficit of British Railways and the failure of Her Majesty's Government to take measures to bring about the elimination of the working deficit and the increase in productivity that would, as a result of the associated lower costs and lower manpower requirements, make a significant contribution to the nation's economic growth. I regret that this debate should take place in an atmosphere of an important labour dispute between British Rail and the National Union of Railwaymen. The object of the Motion was not particularly to comment upon or to discuss that dispute. It was put down because of our concern at the announcement by the Minister of Transport that the railway deficit was likely to increase this year.

All that I would like to say about the present dispute is that I hope that it will be speedily settled, that good sense will be seen in the interests of the success of the new terminal, and certainly that a settlement will be reached between the management of British Rail and the unions without any need for Government intervention. I regard it as vital and important that the management should be respected as the negotiating body and that on major disputes its place should not constantly be taken by the Minister or by the Government in coming to an ultimate settlement.

The reason for this debate was the news, given by the Minister a few weeks ago in the House, that she expected the deficit this year to increase, and, secondly, the fact that the Minister is, we know, drafting her proposals for legislation in the autumn, and that during the next three or four weeks she will be considering the report of the Joint Steering Group. We regard it, therefore, as a good time both to express our concern at the present situation and to make our suggestions about the considerations which the Minister should take into account in drafting her proposals for action in the autumn.

The Motion is worded to remind the Government of their own proposals. The words which the Government by their Amendment would delete are primarily the words which were included in the National Plan. We took the wording of our Motion from the National Plan, Chapter 12, which, dealing with transport, states in paragraph 12: The elimination of the working deficit and the increased productivity, and the associated lower costs and lower manpower requirements, would be a significant contribution to the nation's economic growth objectives. Earlier in that same National Plan, the Government stated—and this, it will be remembered, was a year after they came into office, at a time when they knew what the economic situation was and when they were well aware of the current state of British Rail: British Railways … estimate that they should be able to eliminate the working deficit by 1970, provided that, in addition to early inauguration of freight liner services,

1. (a) substantial progress continues to be made in implementing closure proposals,
2. (b) a start is made within the period with the process of concentrating on selected trunk routes,
3. (c) co-operation of the unions is secured in increasing productivity and in particular on the question of train manning."

We want, therefore, to know why the Government seemingly have not been successful in achieving those objectives, which they stated as their objectives in the National Plan in the autumn of 1965.

I remind the House of the position concerning the deficit. At the peak period of the railway deficit in 1962, it reached £159 million. In 1963 it was reduced to £133 million and in 1964 to £120 million. In 1965 it went up again to £132 million. We were, however, comforted at that time by the forecast, which was made by the Railways Board and was repeated in May, 1966, by the Joint Parliamentary Secretary to the Ministry of Transport, that in 1966 the deficit would fall to £115 million, which would have been the lowest deficit for six years.

There was, therefore, every indication that the enormous investment in British Railways which had taken place in the previous decade and the basic proposals made by Lord Beeching when he was Chairman of British Rail were beginning to have the downward trend in the deficit which we all would like to see. Alas, however, the target for 1966, which was repeated even in May of that year, was not reached. The deficit did not fall but increased. Now we are told by the Minister that it will be increasing again.

The magnitude of the deficit is alarming. There is on both sides an acceptance that when people start talking in figures of £140 million, they are the type of figure which is rather beyond normal comprehension. It is, therefore, easy for these enormous figures to have no real meaning.

When one considers that a deficit of that size means that for every route mile of British Rail there is a deficit of £10,000 a year, when one realises that if the deficit had to be financed in the form of a National Insurance stamp type of taxation every family of four would be paying 4s. a week simply to meet the deficit on British Rail, and when one also recognises some of the fundamental statistics concerning British Rail, one realises the urgent need for action.

There is, for example, the statistic that in the past decade, by both Governments, there has been an enormous capital investment programme, a total of £1,200 million having been invested in new plant and equipment and new capital development during that time. One would naturally hope that with such an investment there would be a good return and an improving financial position. One would particularly hope that the labour content of British Rail's costs would have been substantially reduced as a result of the modernisation which has taken place.

It is, however, an alarming fact that of every £100 received by British Rail, £77 is needed to meet wages and salaries alone. One would not expect this figure to be so high after an investment programme amounting to £1,200 million, but we have not as yet received the benefit in terms of lowering the labour intensity of the industry as a result of our plans.

Certainly, there has been a substantial reduction in the total labour force, to which will refer presently. Certainly, there has been a welcome rise in railway wages and salaries. Hon. Members, on both sides, recognise that wages and salaries on the railways were behind wage and salary levels elsewhere, and adjustment has been made as a result. Having granted all that, however, I feel that there has not been sufficient increase in productivity in relation to the enormous capital investment programme.

Part of that failure has been due to the Government. For example, in February, 1965—admittedly, six weeks before a General Election—the Prime Minister and the present Foreign Secretary intervened in the pay dispute and eliminated from the agreement between British Rail and the unions all mention of productivity agreements. That was negotiated over the heads of the management and it resulted in all the productivity agreements that the management required being eliminated from the settlement.

Something similar has happened this year. In April, when there were further threats of a go-slow, the Government again intervened, this time by the Minister of Labour. Once again, no agreements were obtained concerning improved productivity. There were simply vague promises for the future.

Today's debate could take the form of discussing who had done more for the railways in the past and who had helped to modernise them. There could be a dispute as to whether we on this side were right in our past legislation or whether the Government are right in their forthcoming legislation. I would much rather concentrate, however, on looking at the basic proposals which are before us for endeavouring to tackle the problem.

The Amendment draws attention to three factors in Government policy. The first is the Joint Steering Group, which the Government set up to look into the finances of the industry. In this context, it is important to recognise the definition that was given by the Minister of Transport last February, when she said: The Group is reviewing many aspects of railway policy, not only the identification and costing of the unremunerative services but also methods of improving efficiency, new ideas on management structure and the long-term financial prospects, all of which are essential if we are to tackle the problem of the deficit."—[OFFICIAL REPORT, 22nd February, 1967; Vol. 741, c. 1732.] One was encouraged by those terms of reference. One is now profoundly discouraged; first, at the Minister now saying that she has no intention of publishing the report of that Committee—in other words, that it will be available to nobody but herself—and, secondly, to have found that major decisions have been taken about the future of British Rail before the report of the Joint Steering Group has come out. I refer particularly to the decision to go ahead with the stabilising of 11,000 route miles. That decision could not have been better summarised than it was in a leader in The Times on 10th May, which stated: … but it was sheer stupidity to stabilize the network at 11,000 miles before current investigations by the Minister's joint steering group were complete, and when two of the railways' best traffics, coal and ore, are going into a sharp decline". The possible good which that Committee could do has been completely undermined. First, we are told that nobody is to know the results of its deliberations—because its report will not be published—and, secondly, we realise that major decisions of this type have been taken before the completion of that inquiry.

The Government Amendment goes on to refer to the necessity to modernise freight handling, and the most basic proposal about this is the forthcoming National Freight Authority. I do not believe that that has any contribution to make to modernising freight handling. From all that we know about this body, it will do much more to undermine management confidence in British Rail than to modernise freight handling. The Amendment then refers to the need … to enable the railways to respond to changing traffic demands". It is remarkable that a Government who have stipulated that there is to be a stabilised 11,000 route miles should then refer to having a system which can … respond to changing traffic demands". This search for the stabilisation of a dynamic industry like the railways is a mistake. The management of every industry would like to have a stable position, in which they know that no further change is necessary. But the realities of economic life are such that no great industry, least of all an industry like the railways—which is dependent on the fortunes of many other industries—can have a fixed and stabilised position.

When one examines the proposals of the Government to improve the efficiency and performance of British Rail, one finds that they come down to two basic considerations; first, the stabilising of 11,000 route miles—which, in itself, I do not think will contribute to efficiency—and, secondly, a National Freight Authority, which certainly the management of British Rail did not ask for, which the management of the Transport Holding Company has not asked for—and which, it has pointed out, is already having an adverse effect on its present activities—and which only last week the Confederation of British Industries condemned. These are the basic proposals inherent in Government policy.

Having said that, I turn to what our proposals would be. I will make six constructive suggestions about the action that should take place now to tackle this serious problem. The first is the need for an up-to-date review of manpower requirements. We have witnessed a considerable reduction in the labour force of the railways, and over the years it has been reduced from 515,000 to 365,000. I pay credit to the unions and management for the manner in which this reduction has taken place. It is, by any measure, a substantial reduction.

Having reduced it to that level, there can be no doubt—and this will be agreed by all who are aware of the current problems of British Rail—that there is need for still further substantial reductions. The Chairman of British Rail, in a recent speech to the unions, stated the need for further savings and improvements and said that they could come about only as a result of manpower reductions. However, I fear that at present both sides are trying to tackle this problem of overmanning by phasing out over a quite long period of years, which I do not believe to be in the interests of the railwaymen or of management. In a recent, I presume a well-informed, article in the Sun, Mr. Geoffrey Goodman wrote: At Bristol Mr. Donald Gronow, the depot engineer, told me he was having to carry 66 men—30 per cent. of the total—more than he needed. The majority of them are between 18 and 40 and clinging to their jobs in the hope that something will turn up. 'It will not,' said Mr. Gronow. But carrying them costs us well over £50,000 a year. Firemen average £18 a week and drivers about £28. Work it out for yourself.' Sometimes these men do a spare turn on the footplate. Sometimes they help to clean the locomotives. ('But in fact there is really no cleaning to do,' says Donald Gronow.) Sometimes they sit in the canteen waiting for a call. This is happening in locomotive depots all over the rail system, according to the Railways Board. An example of that type—and I obviously cannot say whether or not that example is true—shows what a responsible journalist considers to be—

Mr. Archie Manuel (Central Ayrshire)

The hon. Gentleman recognises the interest I have in footplate and locomotive men. Is he aware that that quotation shows the colossal ignorance that exists about working arrangements and manning necessities at a locomotive depot; the spare turns, duty and other work that must be catered for?

Mr. Walker

I accept that the hon. Gentleman has considerable knowledge of this subject. I was not quoting the view of a politician but the reported view of someone who is in the management side of British Rail. Few people will deny that there are considerable overmanning problems.

It is in the interests of British Rail that we should discover what real working force is required for a modern railway system. I believe that present plans envisage a substantial reduction in the labour force over the years and I would prefer to see it reduced quickly, though certainly generously. I would criticise no generosity in redundancy payments and I agree that every facility for retraining should be made available. I hope the Railways Board, which has stated that there is overmanning—the Chairman of the Board has said precisely that—will be allowed to tackle this problem quickly and that this overmanning will not be allowed to paralyse effective management.

There cannot be anything but overmanning in the administrative set-up of the present British Rail organisation when one considers that in London there is the headquarters of British Rail nationally, with three regional headquarters also situated in London. There must be a considerable amount of administrative duplication in this set-up. The sooner problems such as this are tackled, and the whole system streamlined, the better. Hence, the first need is a manpower review; and then action to get the right manpower force.

My second suggestion is the negotiating of a completely new wage structure for the industry. When one examines the detail of the present wage structure, one finds that it is the result of 50 years of wage negotiations, bits and pieces having been added on here and there in an effort to bring it up to date. It must be brought completely up to date, instead of management and unions having to operate within this old structure.

Trying to be objective, I cannot believe it to be in the interests of the men to continue with two unions with specific interests, as at present. I fully agree with British Rail's proposal that the two should get together. At present, we have cases of bonuses paid to freight drivers that are related to the days when firemen received bonuses because of the relation between mileage and the number of shovelfulls of coal that had to be handled. We have a position in which drivers doing difficult shunting jobs are paid far less in bonus than those doing the fairly simple long run. There is a fundamental need to negotiate a new wage structure, and also a new apprenticeship scheme.

Thirdly, much more must be made of British Rail's assets. I very much regret that Government policy, for other reasons, has resulted in British Rail not being able to exploit its property to the full potential. I very much regret that developments and improvements at rail terminals have not taken place because, in terms of congestion problems, to have vast buildings at railway stations is a way of handling the travelling public with the minimum of congestion on the roads. I hope that British Rail will very quickly be given the go-ahead fully to develop its property potential and exploit commercially those areas where crowds of people are potential consumers of goods.

Fourthly, there is need to recruit better management. It was a great mistake on the Government's part to halve the salary of the chairman of British Rail when Lord Beeching left. One of the most important things done previously was to create the precedent that if we wanted a top man for a top job we paid the full price. During his period as Chairman, Lord Beeching was well worth the salary he obtained. Either the present Chairman is worth the salary that Lord Beeching was paid, in which case let him be paid it or, if he is not worth it, find someone who is worth it. To halve the Chairman's salary was a basic mistake.

If I have one major criticism of the period of Lord Beeching's chairmanship it is of his failure to persuade the Treasury to allow the salary structure for top management which is needed if we are to attract the best people in management to this great industry. Although British Rail is recruiting some high-calibre people from the universities as a result of the electrification programme and some of the exciting new things that are happening, there is an alarming indication that it is, perhaps, also losing quite a few men of good calibre. I wonder how many of the 9,000 salaried staff who left during the course of last year were people whom British Rail management was sorry to lose.

If we are to recruit the best in management to this great industry, the Minister must arrange the relationship between the Ministry and the Railways Board on the basis that management is allowed to manage. As it is, in many investment decisions, some of them quite small, the Ministry intervenes, and when it comes to other developments the Ministry is always there. We do not know the Minister's specific proposals about special subsidies for special lines for social reasons. We do not know their form or base, but I plead with her, in this respect, not to put things on a basis that will mean more interference with day-to-day management than now exists. We will not attract people of the best management calibre if they constantly face the intervention by a Minister and civil servants. The real task is to select the type of management in which the Minister can have confidence: there is then no need for interference.

In my fifth suggestion I disagree with the Minister. I believe that the whole freightliner system should be retained and developed by British Railways. To take away this exciting new development is bad for the morale of railway management. I do not believe that management wants it. I do not believe that the unions want it. I do not believe that the users of transport want it. It takes from British Rail a tremendous opportunity for expansion—and for what purpose? Seemingly, it is purely for the purpose of linking it with the 5 per cent. of haulage that is owned by the Transport Holding Company—an efficient, commercially-run company that would certainly happily link up on a day-to-day basis with British Rail, as it certainly does already.

When the original reports on the freightliner trains were prepared it was stated that three-fifths of the traffic that could be expected for them would come from professional hauliers. I believe that by setting up a national freight authority we are, if anything, frightening away those professional hauliers who should be bringing business to British Rail.

If the concept of the freightliner trains is correct commercially, as I think it is, if we can take goods from Glasgow to London more cheaply and more efficiently by freightliner trains than by road, and I think that in the majority of cases we can, then to negotiate with hauliers of all descriptions to carry their goods at a proper economic rate is the best way to get the maximum use out of the freightliner trains. I hope that the Government will think again about this concept and allow British Rail to develop it fully.

The figures I quote may be slightly out of date, but in the original Beeching Report an investment of £100 million in freightliner trains was expected to show a profit of £18 million a year and to eliminate a loss of £32 million a year. That means that if the freightliner trains were to be developed in that way it would improve railway finances by no less than £50 million. It is criminal to take away such a potential as the freightliner terminals. British Rail should be seeking ways to co-operate with other interests and other industries.

That brings me to my sixth point. Instead of British Rail being forced, as it is now, to look at ways of eliminating certain types of competition or of acquiring it into its ownership, it should make a serious search for useful and fruitful co-operation with other industries. For example, I should like to see British Rail making more progress with the shipping companies in containerisation. Let us have plenty of joint types of establishment and work in together. If British Rail is to continue in the hovercraft business—and I am not quite certain that it is right that it should—why should it not get together with other operators in the hovercraft business who, perhaps, have greater know-how in the management of hovercraft than British Rail itself has at present?

Do not let British Rail shy off from the Tartan Arrow technique of joining companies where private management and private interest is retained, to the benefit of both sides. Let us see British Rail collaborating with those in the civil engineering industry and sub-contracting some of the work more properly theirs. Let it endeavour to collaborate with motorists in providing parking facilities to a much greater extent than is the case at present.

I recall the words of Mr. Len Neal, who is heavily engaged at present in difficult negotiations. Referring to the conflict at Stratford, he said that collaboration with the forwarding agencies, not competing with them, is the way for the new terminals to succeed. That is a principle that can be applied in quite a number of areas.

What is needed to tackle the railway deficit in a more dynamic way than it is now being tackled is this series of practical suggestions: an end to overmanning, a proper wage structure, better management better paid, full development of the freightliner train, full exploitation by British Rail of its assets, and a proper partnership with other parts of the industry. I think that it is the opposite to the policies the Government will pursue, because I fear that they will take away the freightliner train and leave British Rail with the rump of the less profitable traffic. At this moment management in British Rail is certainly depressed at this prospect. Labour relations have certainly known better times than the present. The deficit is mounting.

This is a tragic picture for what potentially is a great industry of the future. As one who certainly holds the view that Britain's greatness in the future depends on ach eying a new commercial greatness, I wish to see practical policies to assist the railways to make their full contribution. Because at present I do not detect those policies taking place, because at present one fears that other considerations are entering into the decisions of the Government in the creation of the National Freight Authority, and because I believe a dramatic change in atmosphere is called for, I move this Motion this afternoon.

5.1 p.m.

The Minister of Transport (Mrs. Barbara Castle)

I beg to move to leave out from 'regrets' to the end of the Question and to add instead thereof: 'the financial situation of British Railways and congratulates Her Majesty's Government on the steps being taken, together with the British Railways Board, and with the help of the Joint Steering Group, to identify and provide for the socially necessary lines; to give to British Railways a realistic efficiency target; to modernise freight handling; and to enable the railways to respond to changing traffic demands'. Despite, or perhaps because of, the background against which this debate is taking place, I think it could be a very useful one because naturally we are all concerned, and must be concerned, with the financial position of British Railways. We all ought to be anxious to see our railways play an effective part in a modern and co-ordinated transport system. I very much welcome the fact that, perhaps for the first time, from the hon. Member for Worcester (Mr. Peter Walker) we had a series of concrete and constructive points. I listened to them with very great attention and made a careful note of them.

The first thing which struck me was not only that they were too limited in scope, but that in reference to about three-quarters of his points he was knocking at an open door. It is remarkable that the Opposition should intend to divide the House and censure the Government for not having done certain things which, if the hon. Member dares to be specific, he must admit we have in fact been doing for a large number of months. What does he think is the purpose of the work of the Joint Steering Group between ourselves and the British Railways Board if it is not to enable us to have a forward look at British Railways' difficulties, including the implications for manpower, in fact the very up-to-date review of manpower requirements for which he asked? What about his demand that there should be negotiated a completely new wage structure? A little earlier in his speech the hon. Member dismissed with contempt what the Prime Minister set on foot following those long discussions with the N.U.R. when, I am glad to say, a railway strike was averted. What we set on foot was the negotiation of a completely new wage structure. It is going on now and it is not only a question of pay but of pay linked with productivity. Of course we agree, and I am sure that my hon. Friends who are interested in the industry would agree, that the present structure has developed piecemeal, is full of anomalies and ought to be overhauled. This is going on.

The hon. Member complained that we have not had results so far, but surely he has more imagination than that. Surely he can appreciate that we are dealing here in a field which bristles with complexities and difficulties, which are made all the greater because we are dealing with an industry for which he is calling for still more far-reaching manpower cuts. Everybody knows that that is not the easiest atmosphere in which these negotiations could be carried on.

I could refer to his point about making more use of the assets of British Rail. Of course we encourage British Rail to make the fullest use of its assets, but we cannot do that to the tune of enabling it to cut across the Government's carefully planned dispersal policy.

Take the need to recruit better staff. To double the Chairman's salary might be attractive, but I do not think that that is a sufficiently profound study of what is implied in management. This is going on in the Joint Steering Group. The hon. Member said that the Ministry should leave British Railways management to manage, but I would remind him that this is a unique review. We are not bringing in an outside body and imposing an examination on the British Railways Board. This is a joint effort between us and British Railways management. British Railways is the first to welcome it—why? Because here we are up against a fundamental problem. The hon. Member made no reference at all to the kernel of that problem. The kernel of the problem is that, even when we have done all that, we recognise that we shall not have got rid of the British Railways deficit.

Here we have to decide what sort of size and shape and rùle of a railway system we want. This is the question I have asked the hon. Member time and again and which he has dodged. He dodged it again this afternoon. It is the key question to which we are waiting an answer. Without it we cannot have a coherent railway policy. The question I put to the hon. Member is: do the Opposition believe that British Railways should be expected to pay its way without Government help?

This is cardinal. This was the principle which underlay the 1962 Transport Act, which enshrined the expectation that British Railways would break even by 1970. It is this that I have been in process of re-examining and rejecting in order to get the only basis which I think will be workable and acceptable, whether we are thinking of the social needs of the country or the economic ones. I want the hon. Member to let us know the answer to this.

If the Opposition believe that the railways should be expected to pay their way without Government help, then do the Opposition believe it is my duty as Minister of Transport to be pressing ahead now to that greatly reduced level of route mileage envisaged in the succession of Beeching Reports? Do they believe that we should now be in process of reducing the passenger route miles and the railway freight miles overall from the figures we have established in the network of 11,000 to 12,000 down to 8,000 and less, which is the only basis on which we could begin to get commercial viability?

Do the Opposition believe that we should have in this country merely a skeleton railway network? If so, it is time we had the abandonment of the sort of hypocrisy we have from the benches opposite about railway closures. Every time I accept some pruning in some local area as unfortunately inescapable, an hon. Member opposite puts down a Parliamentary Question, or writes a letter to me, or attacks me in his local newspaper. We had some discussion earlier this afternoon about the need to avoid double talk. Let us begin by avoiding double talk on one of the issues—

Sir Harry Legge-Bourke (Isle of Ely) rose—

Mrs. Castle

I am sorry, I cannot give way. The debate has been very much curtailed, and I wish to give backbenchers a chance.

How are we to get all these fundamental changes of modernisation or of manpower contraction, which we know must still come about, if we are having this double talk about the railways? Having studied the requirements we have for railway passenger services, having discussed these with the regional economic planning councils, with the local authorities, with the T.U.C.C.s, and so on, I believe that we are right to make an assessment of the sort of mileage we need and then to say that, as far as can be foreseen—nothing is permanent in this transitory life—that is the basis on which we will stand.

If hon. Members opposite want to attack us about closures, they should make up their minds; but it appears that they cannot do so. A short while ago in the House, I think in the last debate, they were reeling off figures to maintain that I was closing more railway lines than ever they had. They had better make up their minds. Do they, or do they not, want the Beeching objective? I do not. Perhaps they will let me know where they stand. If they are not happy about railway closures, are they prepared to support an amendment to the Transport Act, 1962? If they will not support such an amendment, why not?

Sir H. Legge-Bourke rose—

Hon. Members

Give way.

Mrs. Castle

No. The hon. Gentleman will get plenty of chance to catch Mr. Speaker's eye. There are barely two hours left for the debate. I cannot afford to give way to interruptions. Who gets the chance to speak must depend on whom Mr. Speaker selects. The point can no doubt be answered in the winding-up speech.

Are the Opposition prepared to support an amendment to the 1962 Act? The hon. Member for Worcester gave us a lot of talk about the need for efficiency. Does he really believe that it helps railway efficiency to saddle the operating deficit with the cost of keeping open railway lines that even Conservative Members of Parliament maintain are socially necessary? I was interested, on reading today's very excellent article in The Times, to find that in that quarter at any rate I have support for my policy. It says, referring to the work of the Joint Steering Group: It is better to define subsidies in this way rather than to provide an unquantified excuse for deficits piling up. This is the whole purpose of my railway policy, to define the lines the country wants kept open, then to cost the burden to the community of so doing, and to put those payments in a separate account, thus giving British Railways an efficiency target.

Do the Opposition want the British Railways Board or the Government to ride roughshod over the men's anxieties in an industry which has suffered a reduction of 142,000 jobs in the last four years and where still further reductions will be necessary? I am not running away from that any more than the Board is. Containerisation alone is having its impact on manpower needs throughout the whole transport field. If we are to give the men the standard of life we want them to have, this and other factors must be constantly borne in mind. If we are to modernise, there are implications here for manpower.

Do not let anyone in the House underestimate the difficulties involved in edging the men in the industry forward on this difficult path. There is nothing easier or more superficial than to jibe about the mounting deficit. As The Times said this morning, there is no material here for petty debating points. [HON. MEMBERS: "Hear hear."] The truth is that the deficit has been mounting over since 1955, the last year in which the Board broke even on operating account. It is the operating account which is our real guide to where action is not succeeding and where we need to direct our policies. The capital account is influenced at various stages by the different capital obligations and different kinds of capital reconstruction which have taken place.

The working deficit of British Railways rose steadily from £l6½ million in 1956 to £87 million in 1961. The Transport Act, 1962 was supposed to solve all that. It was the Tory panacea—" Wind up the British Transport Commission. Let us have a capital reconstruction. Bring in the Beeching economies and we will break even by 1970". The 1962 Act has cured nothing and the operating deficit has remained pretty steady at about the £70 million to £80 million a year mark.

I have been perfectly frank with the House in saying that the deficit for 1967 looks like being higher than last year's. In 1966 the deficit on operating account was £71½ million. The signs are that it will be up this year. If we are to find a remedy, we must analyse the causes. I want to take some time with the House in examining the break-down of the operating loss.

On the passenger side, receipts have risen steadily in the past four years. They were £6 million higher in 1966 than they were in 1965. I am glad to say that up to May of this year there is a further improvement of about £1 million.

Sir William Robson Brown (Esher)

Higher prices.

Mrs. Castle

Not merely higher prices. Let us give credit to the Board where credit is due. Let us give credit for the great improvement in the inter-city services. There has been a dramatic rise in revenues and receipts from the electrified services. I hope we can all rejoice in that. This is one of the hopeful signs—the brighter spots—to which the leading article in The Times refers. It is true that we are getting increased revenues from the inter-city services.

There is still a substantial loss on stopping and suburban services. Out of the total deficit last year of £134 million —that is not just the operating deficit, but the total one—the stopping and suburban services accounted for about £50 million. The only answer is to decide which of these unremunerative lines are socially necessary—this we have done in the railway network plan—and then to compute the cost of these services to the Board, which is now being done by the Joint Steering Group.

Once again I want to pay a tribute to all those who are working in the Joint Steering Group, not only to my hon. Friend the Joint Parliamentary Secretary, who is doing a superb job in chairing the Group, but to the independent outside consultants who joined us, and to the members of the Board, in at last coming to grips with the problem, in at last looking at the unremunerative lines, in at last deciding which of them are socially necessary, and in at last trying to put a cost on them to see where there might be operating economies which would not reduce the quality of the service. There is much of be done by operating techniques, by singling of the track, which, combined with signalling, can give better services, in some cases at very greatly reduced cost. All these things are being examined very carefully.

A special Economic Unit in my Ministry will help me in assessing the case for a grant in each case. In appropriate cases, where we think it would be valuable in helping us to make a decision, we shall carry out cost-benefit studies to get an assessment of which of these lines we should retain. Having done this, we shall then be able to say, "This is a cost which ought to be borne openly by the community in a separate account and be met by a specific grant from the community".

Do the Opposition prefer closures to the payment of these grants? That is crucial. When we are talking about the size of the deficit, we are talking here about £50 million. How would the Opposition meet it? Would they meet it by closing these railway lines, or would they meet it, as we intend, by a carefully costed and assessed open subsidy?

The real worsening is on the freight side, where both tonnages and receipts have been on the decline. The less favourable prospects for 1967 are due to this. Of the £10 million decline in receipts up to May 1967, no less than £8½ million is due to the decline in the traditional traffics of coal, coke, iron and steel. Unfortunately, over 80 per cent. of British Railways' total freight tonnage and nearly half of its receipts are in these traditional traffics. This is something which is beyond the Railways Board's control. If natural gas is found beneath the North Sea, one cannot blame the British Railways Board for the decline in coal traffics which may ensure. The Board has been making Herculean efforts to offset the loss, first, by keeping down working expenses, despite increased wages and other costs, and second, by joining with the Ministry in the joint survey in order to help us all to adjust to the long-term trends.

Perhaps I should say at this point that, although it is not intended to publish the group's reports as such, as they may well cover discussion of the Board's organisation, structure and commercial policy, matters which it would not be appropriate to publish in full, the implications of the reports will nevertheless be made available to the House, because it is my intention to base my legislation firmly upon them.

The Board is trying to offset the loss of traditional traffics by expanding the freightliner service. We are all glad, I am sure, that, whereas in January, 1966, the Board was handling only 350 containers a week, in December, 1966, it was handling 4,600 containers. When the hon. Gentleman talks about the effect of the National Freight Organisation, I ask him to realise that the effect of the coming of the container has been, technically, to reintegrate movements by road and rail. They are not apart now; the separation, division and competition between the publicly owned road sector and the publicly owned rail sector is an anomaly and out of date. This is why we intend to reintegrate them in the N.F.O. British Rail stands only to benefit. By being able to offer in the public sector a fully integrated door-to-door movement by road and rail, we can visualise an expansion of traffics greater than if the reintegration did not take place.

The very importance of the freightliners to British Railways in this changing situation makes the dispute at Stratford all the more tragic. I was delighted, and so was the House, when railwaymen, after long months of doubt and argument, dropped their opposition to open terminals. It is important to make clear to the House that they are still willing to have file private haulier come into the ordinary freightliner terminal. They have not reneged on that principle, and they are standing firm by that agreement.

I understand the railwaymen's opposition to private terminals where the road haulier runs a private freightliner service in opposition to British Railways owned freightliner services. That was the basis of the opposition in regard to Tartan Arrow. Then men were able to say, legitimately, I think, that there was absolutely no guarantee that Tartan Arrow running in competition with their own liner service would not take traffic from them and, therefore, unfairly undermine their jobs.

In the case of Stratford, however, we have a new development. We have not just a terminal here but what is, virtually, an inland port, where forwarding agents have their own private tenancies within railway property. As we know, the forwarding agents do a comprehensive job. They see goods through Customs, they clear health checks in the case of perishable goods, they have to deal with all the documentation, they have to offer a personal service to the customer, they have to know which piece of traffic to promote ahead of another and to which to give priority.

If the railways' Continental business is to expand, if we are to have an increasing amount of shipborne traffics coming not only by ship and container but straight from ship on to rail and so to be distributed, the forwarding agents must be given facilities in this new type of inland port to handle their business as they think best. These private tenancies are like a private siding at a mine or factory. This is a concept on which British Railways were built and to which railwaymen have never had opposition in the past. There would have been no railway industry if they had. There is no argument in the case of Stratford about forwarding agents having their private tenancies and premises there. The argument is only about whether they should handle the goods. The agents have made perfectly clear that, if they are to give to the customer the service which they feel they are obliged to give, they must be free to employ and to organise their own staffs. I am sorry to tell the House that we are in deadlock on this important matter.

I had a long discussion with the chair- man of the Railways Board again this morning. We have gone anxiously and fully into all the implications, making quite sure that neither is he nor am I in any way cutting across our joint policy of trying to guarantee expanding employment to railwaymen. I am satisfied that the fullest consultation has taken place at every stage over many months, both locally and nationally.

I am satisfied, too, that the chairman of the Railways Board has leaned over backwards in making concessions to the men concerned. He has offered that all the staff affected by the move from the terminals which have closed will be employed at Stratford. He has gone further and said, so confident is he that this will be a growth point for British Railways, that he is prepared to guarantee that the total number of established jobs for railwaymen in the terminal would be maintained. Indeed, there will be more British Railways jobs at this terminal than agents jobs.

Unfortunately, the unions insist on a new principle, that all loading and unloading at Stratford and new depots of similar kind must be done by railway men. This is a totally new principle. For many years, without union complaint, agents' own staff have been loading and unloading all their export traffic at the old depots, and they did not unload imports only because all these came into the Chobham Farm depot where the agents had no premises.

If this new principle were accepted, it could have quite astonishing consequences. One might as well say that coal wagons at railway sidings should not be loaded or unloaded by coal merchants, or that Post Office letter mail should not be loaded or unloaded by G.P.O. staff. Equally logically, one might say that all jobs at these inland ports should be done by dockers, because, after all, these inland ports are taking away or threatening to take away many a docker's job by carrying freight through in containers right to the heart of the inland port. I have no doubt that the Railways Board has done its utmost to meet the legitimate anxieties of these railwaymen and that it cannot accede to their demand for this new principle.

I should like the House to send out a message to these men tonight, saying that we, of course, understand their concern for their future and their jobs, saying that it is the intention of the House that we shall have a stable and thriving railway system, and that railwaymen will have their full share in the employment at these new growth points. Already, with the seven freightliner depots in operation, we have created 500 new railway jobs. Nine more depots are planned, offering at least 300 more jobs. But if we go on like this, we shall have no growth with which to guarantee the employment of the future.

The freightliner services into London are at a standstill. There is a danger of contracts being permanently lost, such as the contract for bringing Aberdeen beef into London by freightliner and that for bringing steel traffic from South Wales to London, and once those contracts are lost there is no guarantee that we can get them back onto rail.

I welcome the debate because we are right to have a sense of urgency about the railway deficit. Of course, we must attack it in a planned and efficient way. We must say to railwaymen that if the country is to put its money behind a railway system they must lose no time in ensuring that that system is used to the utmost. I therefore hope that the men will now agree that they should get back to work, and let us get on with the job of expanding traffics on rail which alone can guarantee their jobs.

Sir H. Legge-Bourke

Before the right hon. Lady sits down, may I say that, while I endorse her concluding remarks, when she asked a specific question earlier I sought to intervene but she would not give way. She will be aware, as is the Joint Parliamentary Secretary, that there has already been one closure in my constituency and that we are now threatened with another. Would she accept that before we start scrapping any of the routes originally proposed to be abolished by Lord Beeching we should at least not start approving closures which were not included in his plan?

5.33 p.m.

Mr. Peter Bessell (Bodmin)

I propose to speak very briefly, because the debate must be short, and I do not want to restrict the opportunities of other back-benchers to speak on this important subject.

In her opening remarks, the Minister congratulated the hon. Member for Worcester (Mr. Peter Walker) on the constructive aspects of his speech. I listened to it with great care because I wondered if we should hear a declaration by the Opposition this afternoon that if they became a Government again they intended to go back to the original Beeching Plan. The electorate are greatly concerned about this matter. We remember how Phase One of the Beeching Plan called for a large number of closures, particularly in areas of high unemployment and under-development. For that reason, I and the Liberal Party opposed the plan when we realised its consequence for the outlying and under-developed areas.

I remember, in particular, how Phase One would have affected Cornwall if it had been put into effect. There would not have been a single branch line left in the county. When Phase Two was eventually published we saw that the Westbury Loop, the main fast link to the West Country, would also have been abolished, and the main line throughout Cornwall, from Plymouth to Penzance, would have become no more than a branch line.

I was so concerned about this that I went with my right hon. Friend the Member for Devon, North (Mr. Thorpe) to see Lord Beeching just before he retired from office and asked him bluntly whether Phase Three of his plan would have shown the abolition of the main line throughout Cornwall. He said that it would, and that there would have been no railway from Plymouth to Penzance.

Mr. Geoffrey Wilson (Truro)

Is the hon. Gentleman aware that that was not what Lord Beeching told me? As I have mentioned in the House before, he told me the contrary.

Mr. Bessell

I am aware of this. As I told the hon. Gentleman in private, and I repeat it now in public, Lord Beeching said categorically to me and my right hon. Friend the Member for Devon, North—we saw him together—that the line from Plymouth to Penzance would have been closed under Phase Three of the Beeching Plan.

In any case, under Phase Two it was shown as no more than a branch line, with all existing branch lines in Cornwall closed. The hon. Member for Truro (Mr. Geoffrey Wilson) has been consistent in his support for the Beeching Plan. I do not quarrel with this. I am only saying why I oppose it.

If it had been possible to provide enough money to give the West Country, and other parts of England which are under-populated and have special problems, the kind of road development which is necessary for their economic growth, it might have been possible to carry out something on the lines of the Beeching Plan. But in the absence of that kind of expenditure it would have caused the maximum hardship to the people who live in such areas, and prevented any hope of regional development and their growth in the way we all want to see. These are the realistic facts of life, and therefore any suggestion that there should be a return to the Beeching Plan would not only be a disaster to the under-developed areas but would completely ruin any possibility of regional development on the lines envisaged by the Government.

I cannot deal at length with the points raised by the hon. Member for Worcester because I intend to be brief, but I take his point that there should be an up-to-date review of British Rail's manpower requirements. However, in the next sentence he said that there have been in the past few years "very substantial reductions in the manpower force". Allowing for the obvious difficulties which exist when we start to run down the manpower force of any industry, I do not think that British Rail should be criticised on this score. It has done a good job, and the unions have co-operated well. It would be less than grateful to pretend that they have not. But I accept that it is necessary that the reductions should continue, and where there is a surplus of manpower every effort must be made to eradicate it.

Secondly, the hon. Gentleman suggested that better use should be made of the assets of British Rail. I agree, but I think that in the past 12 or 18 months there has been an attempt by the management of British Rail to do just that. The hon. Gentleman mentioned that the car parking facilities could be used more effectively. Again, allowing for the difficulties of obtaining or using land for that purpose, there is no doubt that the management has done as much as it can within the limited resources at its disposal to improve its capital assets. But there is much more to be done, and it is right that the attention of the House should be drawn to this matter.

I agree with the hon. Gentleman that the freightliner system should remain an integral part of British Rail. I should like to develop that argument at length. I hope that the Minister will consider the matter carefully, because to hive the system off from the main rail service would be detrimental to the progress of British Rail as a whole.

There is also the question of cooperation with other industries, which was raised by the hon. Gentleman. I agree that more can be done in this direction, but let us be fair about it. I have noticed, for example, that in the West Country in the past two or three years there has been an all-out effort by the management of British Rail. I pay specific tribute to the present Chairman of the Western Region, Mr. Lance Ibbotson, who has done much, with the help of his colleagues, to attract additional traffic to British Rail. A good deal of that sort of thing has happened in other parts of the country also, and it should be encouraged. It would be unfair to British Rail to pretend that no effort is being made.

We should face the realities. If we are to have a better service from British Railways, it means that there must be a very much better wage rate for all sections in the industry. Wage increases will have to take place to match the increases in the cost of living.

If passenger services are to improve—and they are already improving, as reflected by the increase in revenue—this will largely depend upon further improvements to track, rolling stock and terminal facilities. That means considerable capital expenditure within the next 10 years. Until roads are provided in the rural areas and we have the necessary motorways to link together the various parts of the country, it is essential that rail services should continue and —let us face it—they may always run at a substantial loss. We have to recognise that as a fact and accept it.

Freight services are also dependent on good service. Freight will not be sent by rail unless the shippers can be assured that the service provided is at least as competitive as road services.

Although I do not endorse everything the right hon. Lady and her Ministry are doing about British Railways, and although there are many things which could still be improved, at the same time I believe that she and the Ministry have made remarkable progress in the very short time she has been at its head. I do not believe that it would be right to do other than to ask my right hon. and hon. Friends to vote with her tonight and to encourage her in the work she is carrying out.

5.42 p.m.

Mr. Archie Manuel (Central Ayrshire)

I shall not detain the House long because we are labouring under a great handicap through shortage of time, Question Time having gone over its period. I understand that there are to be winding-up speeches, which is alarming in such a short debate. I hope that action will be taken to avoid this state of affairs in future. I shall make only one or two points so as to allow as much time as possible for others.

I have crossed swords with the hon. Member for Worcester (Mr. Peter Walker) before. Today he made great play with the deficit. That is the basis of the Motion. He tried to put forward some progressive views as to how the deficit could be reduced. But we have heard it all before. The hon. Gentleman knows that, in the present circumstances, the deficit of British Railways cannot be cleared up. It is impossible.

British Railways are in a situation conjured up, decided upon and operated because of legislative action by the last Government. We are tied down to these present restrictions. Everyone is agreed that every effort consistent with justice to our railwaymen should be made to get rid of the deficit. I have discussed this with very many raiwaymen and all are terribly keen to do what they can to get rid of the deficit.

The railwaymen would be jubilant if they managed a substantial reduction in the deficit. It would give them greater heart and give greater impetus to the success of British Railways than anything else. Nothing would give more beneficial results than to get rid of this financial load weighting down the railways and the railwaymen themselves.

Right hon. and hon. Members opposite have no claim to criticise the railways. What right have they to belittle what the Government have done since taking office? Whenever a possible line closure is brought forward, there are urgent representations to the Minister. There is a completely united front opposite. I have never heard anyone getting up from the Front Bench opposite and saying, as I and many of my colleagues have said, that if no one is travelling on a line it is no use keeping it open.

I have also crossed swords before with the hon. Member for Glasgow, Hillhead (Mr. Galbraith). He has talked about his station being closed. He has not lost his line but he has lost his station. But I am afraid that nowadays we do not put down stations in order to serve ancestral castles. Those days have gone. Large estates do not get private railway stations.

We in this House when we see proposals for modernisation should realise that modernisation carries problems which we must meet and that we must adapt our legislative measures to suit them. I did not realise that there was any support from the Opposition when my right hon. Friend brought forward her proposals to increase the network of 8,000 miles to 11,000 miles. The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) is to wind up for the Opposition. He has such a knowledge of railways, having steeped himself in the subject, and knows about the 1962 Act, although he was not here at the time for the long Committee sittings. He must tell us whether the Opposition want an 8,000 miles network or the 11,000 miles the Government propose. Those are the sort of things the hon. Gentleman must answer tonight and not try to brush them off in a few words.

It is absolutely necessary that certain lines be kept in operation because of their social value. I am thinking primarily here of the many Highland lines, but, of course, there are many other examples in Wales and in England, where the arguments are just as strong. The hon. Member for Bodmin (Mr. Bessell) mentioned Cornwall, where the road network is not suitable for the traffic which follows the closing down of railways. This, of course, is a valid point and we must not endanger passengers as they are being endangered in certain areas now because the roads are not suitable for buses which have replaced rail services. I have written about some of these cases to my hon. Friend the Joint Parliamentary Secretary.

The Opposition must also make up their minds about socially necessary lines. I hope that they will say that they agree with us that such lines should not be an on-cost on British Railways' finances but carried by the Treasury, thereby giving the railways some hope of breaking even. I do not want to give the impression that I believe that the outlook for British Railways is black, dismal and without hope. I believe that the railways have a great future and that there are many bright aspects.

I had an opportunity with some of my colleagues several weeks ago to go through the Railways Research Centre at Derby. It is a heartening thing for any one who is interested in railways to see the type of staff that we are recruiting into that centre, the young scientists attracted from other big concerns and going into the railway work because they believe that there is a future for the railways and that they can add to it. It is the same with the Derby railway workshops.

The opening Opposition speech illustrated the tender corner that the hon. Member for Worcester has for railway workshops; he never mentioned them. I am positive that when we bring forward our new legislation greater freedom will be given to the railway workshops to manufacture all sorts of things and supply more of the railway equipment than they are doing today. I believe that we can do this more cheaply and that this can he proved in many instances. If we can prove that we can produce railway material more cheaply that private concerns that are now doing it, ought they to be doing the work? If we can prove in open competition with private enterprise fiat we can do outside work more cheaply and beat private enterprise to it on contract price, ought not the railway workshops to be allowed to extend their operations to cover these things? I am all for it.

I hope that we shall have the railway workshops freed from the shackles that they had on them under Toryism. They were not even allowed to compete for railway material. Indeed, private enterprise was given contracts that the railway workshops ought to have had. I am convinced on the basis of data that I have examined that much of the material can be produced more cheaply than private firms are now doing it. I hope that hon. Members will agree that where private enterprise falls down in competition, British Railways workshops ought to be allowed to carry out the work.

I concur in the case put forward by my right hon. Friend, and I hope that we shall not have to wait too long before we get the new legislation which will allow British Railways efficiently to tackle the present deficit.

5.52 p.m.

Mr. David Webster (Weston-super-Mare)

I am glad to follow in the debate the hon. Member for Central Ayrshire (Mr. Manuel). He had a tiff with my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor). It was not my hon. Friend's fault that he was not a Member of the House when the 1962 Act came in.

However, the hon. Member for Central Ayrshire forgets part of the Act. I remember that on one occasion he was serving on two Standing Committees at the same time. There was a shout of "Division" and the hon. Member arrived in time to get the door shut in his face, and he slipped and sat down on the mat, and that as the safest seat that he has ever had in the House. I remember the hon. Gentleman's occasional disappearances from the Standing Committee in between his speeches.

In that Act we provided the opportunity for British Railways to abolish the common carrier liability. We gave freedom to British Railways not necessarily in every case to have its charges published. We also gave British Railways for the first time the right to develop its properties. When the hon. Gentleman says that that Act is a restricting Act, he is to a great extent making a debating point.

I was sorry that the Minister was not able to give us a progress report on the subject of the assets and properties that we gave British Railways the right to develop. Many of them are in the heart of our great cities. Many of them rather duplicate facilities, and if they had been closed they could have been sold for considerable property value. We have given British Railways the right to develop these properties, and I feel that the Minister has not had enough to tell us and that we should learn a great deal more.

I listened, as always, to the right hon. Lady's speech. I am a student of her speeches. I have followed them with a great deal of interest for a number of years. I thought that, apart from one thing of great importance which I wish the right hon. Lady had said some years ago, in what she had to say the charm was greater than the substance.

The right hon. Lady talked about the six constructive proposals of my hon. Friend the Member for Worcester (Mr. Peter Walker), and said rather lamely that she was trying to carry out some of them. She as able to give no progress report. There was no substance in what she said about what my hon. Friend had suggested. My hon. Friend talked about manning. The right hon. Lady said "We are already trying to do it", and she quoted certain figures of the Beeching Plan. From time to time she supported the plan; from time to time she abused it. She came to wage structures and said that she was trying to do what had been said but had nothing to tell us. She talked about assets but had nothing to tell us, and talked about management but had little to tell us. I should have thought that this was an opportunity for the Minister of Transport to tell us a great deal about what she is doing. This is what a debate such as this is for.

I want to correct an impression that the right hon. Lady left with us. She talked, rightly, about the trend away from freight and to passengers. I remember, and so will the hon. Member for Central Ayrshire, that when we had the 1962 Act the passenger receipts were about one-third of the total receipts of the railway. The figure has now gone from £151 million to £179 million, while at the same time freight receipts have declined from £316 million to £275 million. One appreciates that at present the railways are very sensitive to any credit squeeze, any form of freeze, any form of stop-go. The stop always hits the railways because they are big mineral carriers. But there is a tendency away from this.

The Minister of Transport took immense credit for herself and her Department because passenger receipts had risen. But I think she overlooks the fact that in the case of season tickets there have been increases of between 12 per cent. and 17 per cent. and in the case of second class return tickets the increase is about 8 per cent. I am afraid that this erodes and takes away a large section of the increase in the passenger receipts which has occurred since she became Minister of Transport.

But these are probably small points compared with the point of substance regarding Stratford. Stratford is a tragedy. I welcomed a great deal of what the Minister had to say. I thought it was time that a Minister of Transport supported in the House the determination of the management of British Railways to make the freightliner depots work. What she said was right. I would just say—at this time one has to be careful—that I wish she had said it before. I wish she had been as robust when we came to the Tartan Arrow issue, and I wish she had been as robust all the time in standing up for the management of British Railways. We frequently find the Minister going on publicised visits to N.U.R. depots and N.U.R. supporters, but we hear less publicity about visits giving the support of her prestige and authority to the management of British Railways. I only wish she had said these things before, and, that being so, I only wish that she might have used her authority to limit the more aggressive nature of certain elements in the union. As I say, Stratford is a tragedy.

What the railways have been trying to do is to use the container as a medium between road and rail and, as the right hon. Lady rightly said, maritime transport. This is something which, if handled without political dogma and on the best management principles, without political interference, can bring about one of the greatest revolutions in the history of transport and, as I have already said in the House, a great revolution in communications almost comparable to the assembly line in manufacturing industry. We in this House and the railway management have been seeking for years a form of interaction between the different forms of transport.

It is in the handling of this matter without political dogma and on proper administrative and management criteria that the real hope for the railways lies. This is why it is so wrong that Part I of the Transport Bill, which we shall see next year, envisages the taking away from the railways, at a time when they have their greatest opportunity to make progress and improve their morale, their right to the freightliner depots and giving them to an anonymous, amorphous National Freight Authority responsible to no one. This was the greatest opportunity for the railways to improve their morale and their finances. It is tragic that the Minister seeks to destroy what the railways have built up, fostered and cherished.

6.1 p.m.

Mr. Tom Bradley (Leicester, North-East)

We are all conscious of the present tragic labour dispute in London, and I am sure the whole House hopes that there will soon be a speedy and satisfactory settlement.

Quite apart from this crisis, railways always seem to be in the news and it is in the very nature of things that more attention is paid to matters that go wrong and less to those which go right and which represent real achievement. It seems that everybody knows how to run a railway far more effectively and efficiently than those who are paid to do it. This is one of the favourite armchair occupations of the British people. The hon. Member for Worcester (Mr. Peter Walker) is no exception. We can only be thankful that he is not in charge of the industry's destiny. His bustling approach to more immediate and massive dismissals of further staff would make the Stratford affair a picnic compared with the havoc which would result from his approach to the industry's problems.

We can become too preoccupied with this question of the deficit. It tends to detract from some really positive results of rationalisation. What are some of these results? The hon. Member for Worcester seemed to imply that British Railways had done very little apart from adopting a negative approach to railway line closures.

I am glad that my hon. Friend the Member for Central Ayrshire (Mr. Manuel) referred to the new centre at Derby. The management there has provided a modern research and technical centre foremost in the world in terms of its technical and scientific contribution to railway knowledge and development. It has brought together research, design and development processes. It has studied high-speed transport guiding systems and characteristics of rolling stock at high speeds. We can design vehicles capable of being stable at speeds of 200 m.p.h., although nobody is suggesting, of course, that it is intended to travel at that speed. But fast speeds on British Railways are now possible. We can gear them to commercial considerations as distinct from engineering restrictions.

I am glad that the hon. Member for Worcester referred to the hovercraft company. The railways have endeavoured to form a subsidiary company to examine the potentialities. They hold a large interest in short-distance shipping in this country, and this form of transport is now operating in the Solent very successfully. I hope nobody will take it away from British Railways, as the hon. Member for Worcester seemed to desire. For far too long have the railways had many of their profitable sidelines stripped away from them. Steam traction has given way to electrification. We now have clean, fast, comfortable and convenient services which are highly popular and are proving extremely worrying to the railway's main competitors. We now have company trains carrying petrol and cement, and liner trains and containerisation. Then there is the coal concentration scheme involving block trains from the collieries to all parts of the country. All these represent remarkable advances in efficient working.

A national signalling plan is under way with the object of increasing line capacity and the more effective use of manpower. One large electronic box today replaces 40 or 50 manual types. These and many other examples which could be quoted tend to be overshadowed as positive achievements of British Railways by this preoccupation with the deficit, to which I now turn.

I remind the House that this deficit is not a problem peculiar to Great Britain. Nearly all the major railways of the western world have deficits on our basis of accounting. They are all financed by the State in different ways. Take the latest available figures for 1965. We see that the Italian State railways had a working deficit of 126,925 million lire; French railways had a deficit of 842 million francs, and German railways 2,248 million deutschmarks as an overall deficit.

What are some of the factors involved in our deficit? I remind the House that the level of demand for railway services is not entirely within the competence of the British Railways Board. They are affected by Government policy, short and long term. The July, 1966, economic measures reduced demand for transport generally, particularly iron and steel traffics, and had a very severe effect on rail carryings. It is creditable, therefore, that against this background the railways almost maintained their total traffic receipts. The actual working deficit showed a slight improvement of £1.2 million over 1965.

The House must recognise that railways become the residuary legatees of everybody else's economic problems. That is why future Government policy in respect of fuel and power is so important at present and is of vital consequence to British Railways. Coal has been the lifeblood of the railways for years. The railways carry 80 per cent. of all coal mined, which is 61 per cent. of all the traffic they carry. The first 16 weeks in this year revealed a down-turn of £6 million in receipts compared with 1966. If the total production of coal falls to 135 million tons, which is being speculated upon elsewhere, this will have a catastrophic effect on railway accounts.

Iron and steel carryings were down in 1966 by about 7 million tons, or 15.6 per cent., compared with 1965. The future of the home ore industry is of crucial consequence in this respect. We are told that the future of the home ore industry is in considerable doubt. If imported ore arrives in this country it will come in on the Clyde, at Immingham and South Wales, close to the centre of production, meaning shorter rail hauls and less revenue.

Apart from the effect of the Government's economic measures, the biggest single factor is the general transport policy of the Government of the day. This has certainly applied since the railways were nationalised in 1948. The 1953 legislation denationalising road haulage, and that of 1962 breaking up the British Transport Commission and isolating the railways, stripping them of their profitable sidelines, has had dire consequences for the railways and has made forward planning extremely difficult. It is significant that in 1951 the railways had an operating profit of £33 million. In 1954 it was still £16½ million. Then the 1953 wrecking Act and the 1962 Act, which was supposed to make the railways independent and viable, started the long drift into insolvency.

A large part also of the deficit is attributable to the provision of the social services, which ought to be a national or local and not a railway responsibility. So long as the railways are required by the nation to provide services—and I refer to commuters travelling at peak periods, stopping passenger services, rural lines and stand-by capacity—which cannot possibly be conducted on a commercial basis, they will never be able to produce a respectable balance sheet.

Take the present deficit of £135 million. Sir Stanley Raymond, in his evidence to the Select Committee on Nationalised Industries on 27th April, estimated that the total cost of the social element stands at about £100 million. The Minister this afternoon referred to the figures in the Annual Report attributing £60 million to stopping services and suburban commuters travelling at peak periods.

On the other side, there is the question of track costs estimated to involve the railways in an expenditure of £130 million per annum alone. A large part of the track would not be there if strictly commercial considerations are applied to it.

We have to ask ourselves: ought the balance sheet to continue to show what are considerable stand-by and capacity costs involved in retaining a track as part of a private highway? A new look is required at the entire question of track cost, especially having regard to the undeniable fact that the road haulage industry competes unfairly with British Rail in that it demonstrably does not pay its full share of its own track costs. The French Government recognised this problem, concerning their railways, and it makes a large direct contribution to its railway track costs. This is something that our own Government should be looking at in the future.

Criticisms are continually based on the railway' failure to pay their own way as a commercial undertaking. The railways have not been able to function as a commercial concern, and much of their failure to satisfy the normal business criteria of success is due entirely to external factors. The most important of these have been the various restrictions placed on them in the interests of general social and economic policies. We all know what used to happen with the interference of the previous Government in increases in fares applied for before the Transport Tribunal. Many times they were put and arrived at a lower level at the dictation of the Government, despite what was recommended by an independent tribunal.

The existing situation is that the Railways Board have tried three times to put up their London fares, because it was economically necessary to do so. But, because of other considerations, they have had to be postponed and they are now three stages behind. It is well to recognise these facts. How can we blame the railways for not increasing their revenue when we deliberately prevent them from raising it?

These are considerations which we should bear in mind when we tend to criticise the railways for not behaving as a profitable lucrative commercial undertaking.

Railway financial difficulties arise because they are required to fulfil public obligations. This should be openly recognised and accepted. That is why so many of us involved in the industry on the trade union side very much welcome the setting up of the Joint Steering Group under the chairmanship of my hon. Friend the Parliamentary Secretary to identify costs, to give us a clear remit arising out of their studies and a fair yardstick on which to operate in the future.

The hon. Gentleman the Member for Worcester complained that the evidence will not become available. I would remind him of the Stedeford Committee which the previous Government set up comprised of outsiders—not men within the industry—coming to look at us. One of the members of that Committee was Dr. Beeching. The right hon. Gentleman the Member for Wallasey (Mr. Marples), who was then the Minister of Transport, and Mr. Harold Macmillan, who was the Prime Minister at the time, never allowed us to see that Committee's conclusions. We have never known how much was in the 1962 Act which that Committee recommended and how much was left out. The hon. Gentleman the Member for Worcester must be very careful when he launches a complaint that we are keeping things secret, having regard to the history of his own Government.

Finally, I would say a word about manpower and productivity. As some hon. Members and right hon. Members will know, because of my trade union position I am intimately concerned in the discussions going on. I will be at the Ministry of Labour tomorrow morning drawing to a conclusion the threads of a discussion which has now been going on since May, 1966, on these vital topics.

The hon. Gentleman the Member for Worcester implied that we were doing nothing about productivity. We are, and talking about a new pay structure. This has been going on since last May and now we are drawing the threads to a conclusion. There has been a great deal of talk in these discussions about the unions making a contribution towards greater productivity, which is always difficult to measure in any event in a service industry which moves traffic and does not make it. The unions involved in the discussions have indicated again and again their willingness to agree to multiplication of duties and a greater versatility within the labour force. There is no lack of willingness amongst the railway trade unions to come to terms with this problem of the more efficient use of manpower.

Mention has been made that the total reduction of staff since 1961 is over 160,000–32 per cent. of the labour force. Has any other industry lost 32 per cent. of its labour force through the national economy without some display of bitterness? It is a great tribute to the statesmanship of the unions and the response of the management as well that arrangements have been made to release so easily these redundant workers into the main stream of the economy. Having regard to what has happened elsewhere, it is a wonder that there have not been more Stratfords.

The hon. Gentleman the Member for Worcester says that he wants to see more generous redundancy payments. I would agree, but he must bear in mind that they will only add to the deficit of which he is complaining. In the Accounts this year we see a figure of £5 million attributable to redundancy payments—£6 million in the 1965 accounts. Therefore, because of what has gone on, because of some of the irritations, because of some of the upheaval involved in men changing their jobs and moving their homes, it is a great wonder there has not been more trouble. When there are hints that the present labour force of 338,000 may be reduced even further to 250,000, we get the kind of industrial explosion that has been referred to taking place at the present time in Stratford, and one can understand the incentive of management—and this is where the hon. Gentleman the Member for Worcester makes his point of entry—because rail staff costs form 60 per cent. of their total budget; in other words, a 5 per cent. increase on pay, which is 3 per cent. on the total costs of this labour-intensive industry.

We appreciate that the management wants to get the labour force down, but we want to do this sensibly, rationally and with some understanding of the human problems involved. We do not want to rush precipitately and headlong into this great human problem as the hon. Gentleman the Member for Worcester inferred that he would be doing.

The railwayman knows all about change. He has been involved in one administrative upheaval after another. If we are to prevent the kind of crisis which now confronts us we must improve our consultation methods and lines of communication into the lower reaches of management where so much is allowed to go sour before the crisis manifests itself at top level. Railwaymen for their part must recognise, however, that they now have a most sympathetic Minister of Transport—the most rail-minded Minister of Transport that we have ever had—who has improved their overall prospects by publishing a network map retaining a 40 to 50 per cent. improvement on that in- tended by Dr. Beeching in 1963. What must not be allowed to happen through legitimate misunderstandings is the kind of incident we are witnessing which could place in peril the entire plan for the redevelopment and the solvency of the industry in which so many of us have invested our lives.

6.19 p.m.

Mr. Edward M. Taylor (Glasgow, Cathcart)

This has been a short but interesting debate in which by a self-denying ordinance, a number of hon. Gentlemen with very real knowledge of the railways have been enabled to speak. They have spoken briefly, but with knowledge and sincerity and I am sure that we have enjoyed their contributions.

It is rather tragic that this debate should take place at a time when there is a very serious labour dispute in the industry, and what I say is in no way designed to harm or prevent a settlement being arrived at.

Mr. William Molloy (Ealing, North)

The hon. Member should say that to the hon. Member for Weston-super-Mare (Mr. Webster).

Mr. Taylor

I will ignore that interruption, which was unjustified and unfair. We were pleased that the Minister endorsed the view of my hon. Friend the Member for Worcester (Mr. Peter Walker) that the Board should be fully supported in the stand they are taking. I think we all know that at the present time it is the railways alone that are suffering.

I was very disappointed, after the forward-looking and constructive speech of my hon. Friend the Member for Worcester, to hear the contrast of the Minister's speech, which appeared to be appallingly complacent and to offer us no hope of limiting this dreadful deficit in future. The right hon. Lady appeared to be satisfied with the progress being made. She seemed to say that the deficit was impossible to eliminate. But many of us were reminded of the words in the National Plan, published by this very Government only a few months ago, planning the elimination of the railways deficit by 1970. We have heard from various hon. Members opposite that that is impossible to be achieved. Was this merely a happy hallucination of the National Plan? Should we forget about it and discard it completely? When we suggested that to the Government only a few days after the National Plan was published, we were accused of being too destructive. But now it seems that we must forget it completely and that the deficit is here to stay.

The deficit is not only enormous, but exceeds by about £20 million an estimate made earlier this year, and the deficit appears to be rising. In these circumstances, the very least to which we were entitled was that the Minister would take this opportunity to present constructive policies which she believed would lead to the reduction or elimination of the deficit. She had plenty of opportunities to follow the comments of my hon. Friend.

One of the things which we must not forget and which my hon. Friend mentioned very carefully is the sheer size of the deficit. Participation in public life and in business tends to make people somewhat immune to millions, and it is possible that the enormity of this deficit tends to cause confusion. However, my hon. Friend expressed it by saying that for the average family it meant a charge of about 4s. a week—that if the deficit did not the average family would pay 4s. a week less in taxation. Speaking recently at a conference, the Minister herself expressed it by saying that it meant 6d. on Income Tax. That gives some idea of the size of the burden.

The deficit cannot be considered in isolation from the huge burden of State spending in the community. We talk about the social costs of railway closures, but we should also think of the social costs of railway deficits and what higher taxation and higher Government expenditure can mean to initiative and enterprise. It is a tragic fact that about 26 per cent. of all spending in this country is undertaken by the Government, whereas in France and Italy the figure is 22 per cent.; in the United States, 18 per cent.; in Germany and Canada, less than 15 per cent.; in Japan, 12 per cent.; and in Switzerland, 10 per cent. To the Prime Minister, who used to enjoy talking in terms of league tables, it can be no satisfaction to know that this is one league of which we are the top and that the position is deteriorating. In three years the burden of taxation has risen from £6,600 million to about £9,000 million, a rise of about one-third.

Mr. Ronald Atkins (Preston, North) rose—

Mr. Taylor

I am sorry, but I do not have time to give way; the right hon. Lady did not give way once.

This deficit is coverable so long as there is a prospect of improvement, so long as there is a prospect of some return from the massive capital investment of about £1,200 million in ten years, but at present there is no prospect of improvement. The estimated loss for 1966–67 was £115 million, but the final result was £20 million more than that and it has been suggested that in 1967 it will be worse. This situation is intolerable and all the indications are that the Minister's existing policies can only make it worse. We therefore appeal to the House to accept the positive and constructive policies which my hon. Friend has put forward.

What are the mistakes? One of them was mentioned in his admirable speech by the hon. Member for Bodmin (Mr. Bessell) and it was also mentioned by the hon. Member for Leicester, North-East (Mr. Bradley). This is the subject of responsibility for freightliner trains. This is a revolutionary concept in freight transport which has been developed by the enthusiastic work of British Railways. The Minister referred to its enormous potential when she said that 350 containers were carried by British Railways in January, 1966, while by December of that year the number had risen to 4,600. Last year, more than 27,000 containers were carried by British Railways. There was the prospect of substantial profitability. We have heard, for example, of the contract to transport meat between Aberdeen and London—about 7,000 tons of meat, or the equivalent of 30,000 cattle.

In these circumstances, the Minister's decision to set up a National Freight Authority was a tragic blunder. Unquestionably, it was a body blow to the railway staff which had put so much effort and so much enterprise into this new development. I ask the Joint Parliamentary Secretary to answer one straight question: who is in favour of the National Freight Authority? Do British Railways want the National Freight Authority; does the British Transport Holding Company; does the National Union of Railwaymen; do the customers? Who wants this new authority, which is taking from British Railways the one development which has the greatest potential and the greatest profitability?

The best thing the Minister could do would be to abandon this plan and assure the railwaymen that they can retain this profitable growth potential of liner trains which they have developed themselves. It is tragic that the future of the freightliners should be very much affected by the present strike, but our aim must be for the freightliners to remain the responsibility of British Railways, who should be encouraged to co-operate with every form of private enterprise and encouraged to go for every bit of business which they can get in fair competition.

There is a second major blunder which can lead only to a worsening of the situation. That is the Minister's decision rigidly to adhere to a framework of 11,000 miles of railway line. The right hon. Lady spoke of the size of the system required in future. At the same time, a Steering Committee has been set up to look into all aspects of the future profitability of the railways. The Steering Committee is a high-powered body and has expert advice and assistance, and it will be of value to all those who are interested in the future of the railways. But what is the point of setting up a committee of that sort and calibre, with expert advice and assistance, and then giving it the answer to its inquiries before it starts its job? This is commercial and administrative nonsense.

Even if we disregard that, we have to consider the uncertainties in the future of the railways. Coal is probably the most important item of freight carried by the railways—about 130 million tons last year. This year the figure will probably be 120 million, perhaps even less. We are all looking forward with keen anticipation to the publication by the Minister of Power of a national fuel plan. My hon. Friend the Member for Yeovil (Mr. Peyton) and others have been pressing the Government for a long time to publish that plan. We do not know what is in it and we do not know what is to be the future of the coal and other industries in which the Government have a major interest. Unfortunately, we are soon to have the National Steel Corporation. My party has no great confidence in the future of the steel industry under nationalisation, but unquestionably major changes will have to take place.

These two major developments will have a significant effect on the future of the railways. In these circumstances what utter nonsense it is to arrive at such a rigid figure of 11,000 miles, before we have even begun to look at the consequences of such major changes.

Then there is surplus property. My hon. Friend the Member for Westonsuper-Mare (Mr. Webster) pointed out that this was a new development allowed by legislation passed when we were in power. The potential here is enormous. Surplus properties are valued at about £70 million. Last year £10 million extra was brought in to balance the book value of properties sold. Money accruing to British Railways came to round about £19 million, with an excess over book value of £3–4 million.

The surplus on letting these properties came to £2–2 million. Here, like the freightliners, is real potential, real growth and the prospect of profit and money accruing to British Railways. What have the Government done to help this new potential? First of all, we have had the restrictions on commercial development. Secondly, we have had the freeze, which in some cases prevented additional charges being allowed for in commercial agreements. Thirdly, we have had the most wonderful example of integration and co-ordination, which I understand are the twin inspirations of Socialist planning. This has been an appalling example of blunder.

In October last year a Circular was published by the Minister of Housing, which said that British Railways should offer surplus property to local authorities first of all. This undoubtedly brought in the delay and restriction of what was increased profit potential. At the same time the Government put very considerable curbs on local authority spending. The result was that British Railways were forced, perhaps against their commercial judgment, to offer properties and land to local authorities, and yet another Government Department was preventing these local authorities from obtaining sanctions. At the end of 1966 there were £8 million worth of sales uncompleted to local authorities, many of whom were unable to obtain loan sanction. [Interruption.] If the hon. Gentleman the Member for Ealing, North (Mr. Molloy) questions this, it is in the Annual Report of British Railways for him to read if he cares to do so.

Reference has been made to British Railways workshops. We on this side of the House have always believed that the workshops can add their skill and strength to the operation of the railways, for the obvious reason that they have shown this under my right hon. Friend. There has been a great deal of money spent on rationalisation and reorganisation, but the Government have now come forward with the proposal that the workshops should be able to compete openly with outside industry in any area.

There might be something to be said for this argument if we had any assurance that there would be genuine costing and competition, even in the sphere of railways supply, in which at present the workshops have a virtual monopoly. I know that the only remaining firm building carriages on new work outside of British Railway workshops, has tendered for about £24 million worth of work in the last few years but has obtained not one order. It is quite clear that within the sphere of building carriages and wagons there is not fair and free competition. There is not costing which we would accept as reasonable and fair.

Mr. J. T. Price (Westhoughton)

This argument does not stand up, because the railway workshops in the part of Lancashire which I have the honour to represent are losing contracts for points and crossings and other railway equipment, for which they have to compete on commercial lines with outside industry.

Mr. Taylor

I was referring to the building of carriages and wagons. If the hon. Gentleman doubts what I am saying he can look up in HANSARD an Answer given to me by the Minister of Transport after I had asked whether it would be the case that British Railways workshops would quote a fixed price for new work tendering, in the same way as the private sector of industry. The answer was "No" and if the hon. Gentleman wants to know why, let him ask his right hon. Friend on the Front Bench.

There were other matters that I had hoped to cover, but I hope I will be excused, as time does not allow. To summarise briefly, what is the outlook for British Railways? Speaking at the Conference of the National Union of Railwaymen and Branch Secretaries at the beginning of this month the Minister said: The railways have been the Cinderellas of transport for a long time now. I cannot wave a magic wand and produce a glass coach and a golden crown for railwaymen. This at least is one pledge which has been kept. The right hon. Lady unquestionably inherited the framework of the glass coach, but with the help of her Cabinet colleagues, by blunder, weakness and obsession with ideology, she has succeeded where Prince Charming failed, in transforming the embryo glass coach into a pumpkin.

Where there was hope now there is gloom and disillusionment; where there was flexibility, now there is rigidity; where labour relations were tolerable, now they appear to be at an all-time low. A deficit which was being reduced is now rising, and appears to be getting out of control.

What about investment? An essential stimulus to demand and profitability has been cut back by the Government which claims to have faith in the railways. The 1966 investment allocation of £120 million was £15 million below the actual sum given in the National Plan as the figure to be spent in the next few years. Even this figure of £120 million, because of financial curbs, was reduced by £14 million. The 1967 amount which will be spent on capital is down again, to £104 million.

I would point out to hon. Gentlemen opposite that in the National Plan's estimate of the work needed to be done to eliminate the railway deficit by 1970 it was made clear that capital spending at the rate of £135 million a year over the next few years was required. We have never reached anything like that in 1966, and in 1967 we are down to £104 million. The highly profitable development activities in surplus property have been hamstrung by the freeze and office building restrictions, and the administrative red tape to which I have referred.

The real hope and inspiration for the future, liner trains, are under the threat of a Ministerial take-over, through a National Freight Authority which no one —the N.U.R., British Railways Transport Holding Company or anyone else—wants. This will further divert the scarce management skills of the railways away from their essential tasks. The railway workshops which could, through continuing reorganisation and the stimulus of competition, contribute real strength to the railways, are being transformed into a self-supplying monopoly empowered to tender outside a protected monopoly market on the strength of an incoherent and suspect basis of competition.

In the quasi-commercial spheres of hotel management and catering a ludicrously low rate of return—a 1 per cent. increase in the case of catering—continues without any demand being made to realise the rich harvest of profit which is there for all to see. The closing of unprofitable lines, even those agreed months ago, are delayed at enormous costs because the awarding of alternative bus route contracts awaits essential road improvements, no doubt deferred by the Minister's own cuts.

So the bright promises contained in the National Plan, inserted in our Motion as an act of political charity and torn out by the Government's own Amendment, give way to the grim reality of the mounting deficit—£.135 million last year, probably £145 million this year. The social cost of this enormous drain on our natural resources can be seen from our industrial stagnation, and the rocketing emigration, which stems directly from the inquitous tax burden imposed in this country.

It is foolish for the Minister or anyone else to laugh at this, because the fact is that rising taxation is at the root of industrial stagnation, whether on the railways, private industry or elsewhere. The Minister should realise that the railway deficit is part of this, and it is a vast and growing problem. The Minister offers us only one answer—a new method of doing the sums, more from the taxpayer, more from the conurbation authorities, and more from the already overburdened ratepayers. This is a response which is unacceptable to the people of this nation.

We on this side have a firm conviction that the sensible, sane and constructive policies proposed by my right hon. Friend and developed by my hon. Friends in this debate could bring about the efficient, flexible and go-ahead railway system which our economy requires. It is because the Minister's policies and the Government's policies are working against this objective that we shall divide the House tonight.

6.40 p.m.

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

In the light of the speech of the hon. Member for Worcester (Mr. Peter Walker), I wonder how he can seriously contemplate taking his hon. Friends into the Lobby. I was fascinated by his "do-it-yourself", poor man's railway kit and all his policies, which he numbered one after another.

The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) accused my right hon. Friend of being appallingly complacent. He castigated her for not being constructive. I can only assume that he is a good student and that he had prepared his speech well before coming into the Chamber. The hon. Gentleman suggested that we were preventing British Railways from disposing speedily of surplus property. Let me reassure him. In 1965, sales amounted to £12–7 million. In 1966, they were £24–3 million.

The Opposition's Motion is in three parts. First, it regrets the mounting deficit. Secondly, it regrets the Government's failure to take steps about the working deficit and productivity. Thirdly, it goes on to point out that had we done so there would have been a contribution to national economic growth.

I have no great quarrel with the third part—apart from its lack of balance. But lower costs and lower manpower—and, as we have heard in the debate, manpower is over 60 per cent. of the railways' costs—are only one side of the balance sheet. There is the other side, receipts. On this, like most other industries, British Railways are not entirely masters in their own house. They are the carriers of people and people's goods. They do not operate in a vacuum. The prosperity and rate of growth and changes in the industries of its customers have a profound effect on the Board's own prosperity. I should have thought that the Opposition, as self-acknowledged business experts, would have drafted their Motion to take account of the whole finances of the industry.

As regards the first part of the Motion —the total deficit—my right hon. Friend has dealt with the last four years and the likely situation in 1967. But since the Opposition are particularly concerned with the working deficit, it is worth noting that over the whole period 1963 to 1966 this has been contained, despite substantial increases in costs. The figures are £81 million odd in 1963, they varied in 1964. and 1965, and £71 million 1966. This is hardly the picture of a deficit getting out of control. After absorbing increased wages and other costs of about £95 million, in that period, it is a commendable achievement that working expenses are down. This is the direct result of productivity and increased efficiency, which the Opposition complain about in their Motion.

In no way am I minimising the anxiety which we all share, but at the same time the relevance of the detailed figures must be judged against the vast turnover of the industry. Both gross receipts and expenditure are of the order of £500 million, and it is against these figures that comparatively small changes in the deficit should be judged.

The fall in freight traffics is the key to British Railways' failure to achieve the results hoped for in 1965 and 1966, and it will be the same in 1967. My right hon. Friend has mentioned the rise in passenger receipts. The totality of all freight traffics has gone down in that period.

The Board is being particularly badly hit by the fall in coal traffics and iron and steel. These form 80 per cent. of its total freight tonnage, and over a third of its freight receipts comes from coal. Because of this dependence on coal traffics and the vast railway investment in this field, it is obvious that we have had to be in close touch with the Minister of Power in the formulation of fuel policies. It is important that, whenever there are any changes in trends, British Railways should be able to take action to mitigate the effect on its own finances. This cannot be done overnight, but what can be done is to ensure that early information is available and to watch very closely the scope and area of any new investment in this field.

I think that I have dealt with the first and third parts of the Opposition's Motion. The nub of it is, of course, in the second part. They complain of our failure to eliminate the working deficit—as if this were something of our own invention. What I have said about freight, I think, has dealt with the "mounting" element of the deficit. Like the majority of industries, and more than many, the railways are affected by the general economic situation and the Government's essential measures to right the balance of payments. This has been accentuated by the particular changes in the coal and iron and steel cartage side of their business.

But the House will not forget that British Railways are still operating under the restrictions of the 1962 Act. Even that Act, despite the political euphoria on the benches opposite at the time, gave a number of years during which the deficit had to be carried. It imposed the dual and contradictory objectives on the industry of paying its way—operating on commercial criteria—and, at the same time, of paying for lines which any Minister of Transport decided to keep open for social reasons. This is now both unworkable and unacceptable to the country and to the House.

I sympathise with the Opposition in their predicament. They do not know whether they want closures or not. The odd exceptional one far away from the constituency of any hon. Gentleman opposite is obviously welcomed. They would then feel in accord with the philosophy of the right hon. Member for Wallasey (Mr. Marples). Only the other day the hon. Member for Worcester was in full cry because allegedly Her Majesty's Government had closed more railway lines over a period than his party. Not only was he wrong, but he soon dropped this like a hot potato when I told the House that in one month alone—September, 1964—just before the election, decisions to close some 460 miles of line had been taken by the right hon. Member for Wallasey. This is about a third of the whole mileage of line closed by the present Government in 2½ years—and it was done in one month. The closest parallel to the feverish activity in the Ministry of Transport in those heady summer months is that of a diplomatic mission in an unfriendly foreign country burning its files when it is about to be sacked.

We have accepted that there is a need to look closely at the statutory obligations of British Railways, and that there is a need to look closely at its finances and give it realistic objectives. There is nothing worse for the morale of management and men than to be saddled on the one hand with a never ending closure programme—taking up an enormous proportion of management time—and on the other, a sizeable deficit. The hon. Member for Worcester talked rightly about the danger of enormous figures becoming meaningless. The greater the deficit is, the greater the danger of its becoming a disincentive to financial and managerial efficiency.

There are two tasks. The first is that of accountancy. This is the placing of financial responsibility on the shoulders of those to whom it belongs. The whole philosophy of targeting and financial discipline is that one has a workable yardstick to measure achievement. Profit and loss in itself does not do this. The second task is to examine the underlying causes of the deficit and to seek to remedy it.

My right hon. Friend and the Board have recognised the urgency of this priority and she and the Chairman have set up the Joint Inquiry which is taking place under my chairmanship. We have had the assistance of eminent independent members, and of the Board, as regards both management and men. Consultants have been engaged to probe deeply into the very matters which have caused anxiety to all of us.

The principles that we have announced of separating the social from the commercial in terms of accountancy and the paying of specific subsidies are being formulated. Yardsticks have to be decided upon and the extent of the problem mapped out. This has been a most searching and painstaking examination of the major factors involved and I pay tribute to the time and energy—generous beyond description—that has been given to this investigation by its members. In the autumn, my right hon. Friend the Minister will set out how she proposes to act in the light of any proposals we make.

The root cause of the deficit has had to be analysed. Trends and forecasts for the future have had to be assessed. Capital, receipts and costs have had the cold light of objective analysis thrown upon them. The wagon load traffic, sundries and parcels and commuter traffic —this is where a great deal of the losses take place. This is the kind of problem that has had to be tackled.

On the deficit, I think that I have shown that a sustained and determined effort is being made jointly, by the Board and the Ministry through my Group, to get at the facts and to present proposals.

Nor are we sitting back in the meantime. Already a great deal of work is being done, in the interest of economy, on the extension of inter-working arrangements in the parcels and sundries field and the planning of the unification of British Railways' and British Road Services in that direction. It was a bit of a shock to me to discover that British Railways had not been accorded permissive powers under the 1962 Act to send goods throughout by road where necessary. What an idiotic restriction this was to impose upon them. My right hon. Friend was pleased to give the British Railways Board the necessary consent. Those are the kind of restrictions that this great industry has been saddled with under the terms of the 1962 Act.

The only aspect remaining of the Motion is the complaint about our failure to take steps to increase productivity. I have already mentioned how working expenses have been contained in the face of increased costs. This is the acid test of the effort to increase productivity. Steam locomotives in the last four years have gone down from 7,000 to 1,600, while diesel and electric have gone up from 4,250 to 5,300. Coaching vehicles are down by one-third and there has been a reduction of getting on for 200,000 in freight vehicles. These are the steps for which we should commend the British Railways Board in its efforts to increase productivity.

My right hon. Friend played a very significant part in getting agreement on liner train open terminals. This was a longstanding dispute dating from early 1964. The Conservative Government, while recognising their value, were unable to persuade the unions to allow free access. It was a Labour Government that took the decision to go ahead and it was my right hon. Friend, after long and patient negotiation, who secured the agreement.

I totally reject the interpretation by the hon. Member for Weston-super-Mare (Mr. Webster) of the Tartan Arrow issue. My right hon. Friend's intervention was done with the full support of British Railways management. I presume that the hon. Member's carping remarks were not calculated to be helpful. Neither were the Opposition's taunts before my right hon. Friend succeeded in the liner train agreement. Month after month, the Opposition taunted and ridiculed her. I am sure that it was to their great surprise that my right hon. Friend eventually succeeded in winning through on this great and important issue.

The use of liner trains has continued to rise, from 1,300 containers a week last February to nearly 1,900 a week recently. The network is growing. New traffic is coming on to rail and, at the same time, the Board has been able to reorganise its own existing traffics more efficiently and more economically. If this is not productivity, what is? I agree entirely with the Opposition that this kind of measure can, in the words of their Motion, make a significant contribution to the nation's economic growth". This the Board is doing, and this is what my right hon. Friend is trying to achieve. She should not be faulted by the Opposition for all this. Rather should she be congratulated.

But the chief field for increased productivity must be manpower, the biggest item in the industry's costs; and we know how very sensitive this is. The industry has seen a massive contraction in its labour force, from 503,000 to 361,000 in four years, and further reductions are inevitable. Any industry which has seen both this loss of jobs and, at the same time, the complete lack of any meaning or sense in the Act and statute

governing it must be very wary of any change.

In the last 18 months, I have travelled more than 5,000 miles from railway centre to railway centre, from district council to district council, from weekend school to local departmental committee to explain what we are seeking to do with the industry and to carry back the views of the men to my right hon. Friend. Sometimes I have had the opportunity of a full night to talk to the industry's elected representatives, or it may well be a few minutes at a goods yard or station. But I yield to no one in my awareness of the real anxieties of these very worthy men. Those men know more than anyone the real problems of contraction.

Anyone who has had occasion to lift the veil from over the out-of-date pay and jobs structure of this industry will realise that the barnacles of the years frequently conceal whatever merit there was in any particular differentiation. This is one of the main reasons for the history of unrest for so many years. My right hon. Friend the Minister of Labour has been presiding over the wide-ranging discussions between the Railways Board and the unions on the pay structure, productivity and efficiency of the industry and its machinery for negotiations and consultation. My hon. Friend the Member for Leicester, North-East (Mr. Bradley) has mentioned all these things. The search for increased productivity is a major function of the discussions and the right structure must increase modernisation and ensure that workers receive a fair share of the benefits.

I trust that for all these reasons, the industry will accept that a determined effort is being made on all fronts to give this industry the right weapons and the right tasks in the nation's economy, and that for all these reasons the House will reject the Opposition's motion.

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

The House divided: Ayes 218, Noes 308.

Division No. 391.]	AYES	[7.0 p.m.
Alison, Michael (Barkston Ash)	Balniel, Lord	Bennett, Dr. Reginald (Gos. & Fhm)
Allason, James (Hemel Hempstead)	Barber, Rt. Hn. Anthony	Berry, Hn. Anthony
Astor, John	Batsford, Brian	Bitten, John
Atkins, Humphrey (M't'n & M'd'n)	Beamish, Col. Sir Tufton	Biggs-Davison, John
Baker, W. H. K.	Bell, Ronald	Birch, Rt. Hn. Nigel
Black, Sir Cyril	Harris, Reader (Heston)	Orr-Ewing, Sir Ian
Body, Richard	Harrison, Brian (Maldon)	Osborn, John (Hallam)
Bossom, Sir Clive	Harrison, Cot. Sir Harwood (Eye)	Osborne, Sir Cyril (Louth)
Boyd-Carpenter, Rt. Hn. John	Harvey, Sir Arthur Vere	Page, Graham (Crosby)
Boyle, Rt. Hn. Sir Edward	Hastings, Stephen	Page, John (Harrow, W.)
Braine, Bernard	Hawkins, Paul	Pearson, Sir Frank (Clitheroe)
Brewis, John	Hay, John	Peel, John
Brinton, Sir Tatton	Heald, Rt. Hn. Sir Lionel	Percival, Ian
Brown, Sir Edward (Bath)	Heath, Rt. Hn. Edward	Peyton, John
Bruce-Cardyne, J.	Heseltine, Michael	Pink, R. Bonner
Bryan, Paul	Higgins, Terence L.	pounder, Rafton
Buchanan-Smith, Alick(Angus, N&M)	Hirst, Geoffrey	Powell, Rt. Hn. J. Enoch
Buck, Antony (Colchester)	Hobson, Rt. Hn. Sir John	Price, David (Eastleigh)
Bullus, Sir Eric	Hogg, Rt. Hn. Quintin	Prior, J. M. L.
Burden, F. A.	Holland, Philip	Pym, Francis
Campbell, Gordon	Hornby, Richard	Quennell, Miss J. M.
Carlisle, Mark	Howell, David (Guildford)	Ramsden, Rt. Hn. James
Cary, Sir Robert	Hunt, John	Rawlinson, Rt. Hn. Sir Peter
Channon, H. P. G.	Hutchison, Michael Clark	Rees-Davies, W. R.
Chichester-Clark, R.	Iremonger, T. L.	Renton, Rt. Hn. Sir David
Clark, Henry	Irvine, Bryant Godman (Rye)	Ridley, Hn. Nicholas
Clegg, Walter	Jenkin, Patrick (Woodford)	Ridsdale, Julian
Cooke, Robert	Jennings, J. C. (Burton)	Rippon, Rt. Hn. Geoffrey
Cooper-Key, Sir Neill	Johnson Smith, G. (E. Grinstead)	Robson Brown, Sir William
Cordie, John	Jones, Arthur (Northants, S.)	Rodgers, Sir John (Sevenoaks)
Cotfield, F. V.	Jopling, Michael	Rossi, Hugh (Hornsey)
Costain, A. P.	Joseph, Rt. Hn. Sir Keith	Royle, Anthony
Craddock, Sir Beresford (Spelthorne)	Kaberry, Sir Donald	Russell, Sir Ronald
Crawley, Aidan	Kerby, Capt. Henry	St. John-Stevas, Norman
Crosthwaite-Eyre, Sir Oliver	Kershaw, Anthony	Sandys, Rt. Hn. D.
Crouch, David	Kimball, Marcus	Scott, Nicholas
Crowder, F. P.	Kirk, Peter	Sharpies, Richard
Cunningham, Sir Knox	Kitson, Timothy	Shaw, Michael (Sc'b'gh & Whitby)
Currie, G. B. H.	Knight, Mrs. Jill	Sinclair, Sir George
Dalkeith, Earl of	Lambton, Viscount	Smith, John
Dance, James	Langford-Holt, Sir John	Stainton, Keith
d'Avigdor-Goldsmid, Sir Henry	Legge-Bourke, Sir Harry	Stoddart-Scott, Col. Sir M. (Ripon)
Deedes, Rt. Hn. W. F. (Ashford)	Lewis, Kenneth (Rutland)	Summers, Sir Spencer
Digby, Simon Wingfield	Lloyd, Ian (P'tsm'th, Langstone)	Tapse I, Peter
Dodds-Parker, Douglas	Lloyd, Rt. Hn. Selwyn (Wirral)	Taylor, Sir Charles (Eastbourne)
Doughty, Charles	Longden, Gilbert	Taylor, Edward M.(G'gow,Cathcart)
Douglas-Home, Rt. Hn. Sir Alec	Loveys, W. H.	Teeling, Sir William
Drayson, G. B.	MacArthur, Ian	Temple, John M.
du Cann, Rt. Hn. Edward	Maclean, Sir Fitzroy	Thatcher, Mrs. Margaret
Eden, Sir John	Macleod, Rt. Hn. Iain	Tilney, John
Emery, peter	McMaster, Stanley	Turton, Rt. Hn. R. H.
Eyre, Reginald	Macmillan, Maurice (Farnham)	van Straubenzee, W. R.
Farr, John	Maddan, Martin	Vaughan-Morgan, Rt. Hn. Sir John
Fisher, Nigel	Maginnis, John E.	Vickers, Dame Joan
Fortescue, Tim	Marten, Neil	Walker, Peter (Worcester)
Foster, Sir John	Maude, Angus	Walker-Smith, Rt. Hn. Sir Derek
Galbraith, Hon. T. G.	Maudling, Rt. Hn. Reginald	Wall, Patrick
Gibson, Watt, David		Walters, Dennis
	Mawby, Ray	Ward, Dame Irene
Gilmour, Ian (Norfolk, C.)	Maxwell-Hyslop, R. J.	Weatherill, Bernard
Gilmour, Sir John (Fife, E.)	Maydon, Lt.-Cmdr. S. L. C.	Webster, David
Glover, Sir Douglas	Mills, Stratton (Belfast, N.)	Wells, John (Maidstone)
Godber, Rt. Hn. J. B.	Miscampbell, Norman	Whitelaw, Rt. Hn. William
Goodhart, Philip	Mitchell, David (Basingstoke)	Wills, Sir Gerald (Bridgwater)
Goodhew, Victor	Monro, Hector	Wilson, Geoffrey (Truro)
Gower, Raymond	Montgomery, Fergus	Wolrige-Gordon, Patrick
Grant, Anthony	Morgan, Geraint (Denbigh)	Wood, Rt. Hon. Richard
Grant-Ferris, R.	Mott-Radclyffe, Sir Charles	Woodnutt, Mark
Grieve, Percy	Munro-Lucas-Tooth, Sir Hugh	Wylie, N. R.
Griffiths, Eldon (Bury St. Edmunds)	Murton, Oscar	Younger, Hn. George
Gurden, Harold	Nabarro, Sir Gerald
Hall, John (Wycombe)	Noble, Rt. Hn. Michael	TELLERS FOR THE AYES:
Hamilton, Marquess of (Fermanagh)	Nott, John	Mr. R. W. Elliott and
Hamilton, Michael (Salisbury)	Onslow, Cranley	Mr. Jasper More.
Harris, Frederic (Croydon, N.W.)	Orr, Capt. L. P. S.
NOES
Abse, Leo	Barnett, Joel	Boardman, H.
Albu, Austen	Beaney, Alan	Booth, Albert
Allaun, Frank (Salford, E.)	Bellenger, Rt. Hn. F. J.	Boston, Terence
Allen, Scholefield	Bence, Cyril	Bottomley, Rt. Hn. Arthur
Archer, Peter	Benn, Rt. Hn. Anthony Wedgwood	Bowden, Rt. Hn. Herbert
Armstrong, Ernest	Bennett, James (G'gow, Bridgeton)	Braddock, Mrs. E. M.
Ashley, Jack	Bessell, Peter	Bradley, Tom
Atkins, Ronald (Preston, N.)	Bidwell, Sydney	Bray, Dr. Jeremy
Atkinson, Norman (Tottenham)	Binns, John	Brooks, Edwin
Bacon, Rt. Hn. Alice	Bishop, E. S.	Brown, Rt. Hn. George (Belper)
Bagier, Gordon A. T.	Blackburn, F.	Brown, Hugh D. (G'gow, Provan)
Barnes, Michael	Blenkinsop, Arthur	Brown, R. W. (Shoreditch & F'bury)

Buchan, Norman	Heffer, Eric S.	Morris, Charles R. (Openshaw)
Buchanan, Richard (G'gow, Sp'burn)	Henig, Stanley	Morris, John (Aberavon)
Butler, Herbert (Hackney, C.)	Herbison, Rt. Hn. Margaret	Moyle, Roland
Butler, Mrs. Joyce (Wood Green)	Hobden, Dennis (Brighton, K'town)	Mulley, Rt. Hn. Frederick
Callagnan, Rt. Hn. James	Hooley, Frank	Newens, Stan
Cant, R. B.	Hooson, Emlyn	Noel-Baker, Francis (Swindon)
Carmichael, Neil	Horner, John	Noel-Baker,Rt.Hn.Philip(Derby,S.)
Carter-Jones, Lewis	Houghton, Rt. Hn. Douglas	Oakes, Gordon
Castle, Rt. Hn. Barbara	Howarth, Harry (Wellingborough)	Ogden, Eric
Chapman, Donald	Howarth, Robert (Bolton, E.)	O'Malley, Brian
Coe, Denis	Howell, Denis (Small Heath)	Oram, Albert E.
Coleman, Donald	Howie, W.	Orbach, Maurice
Concannon, J. D.	Hoy, James	Orme, Stanley
Conlan, Bernard	Huckfield, L.	Oswald, Thomas
Corbet, Mrs. Fresa	Hughes, Rt. Hn. Cledwyn (Anglesey)	Owen, Dr. David (Plymouth, S'tn)
Crawshaw, Richard	Hughes, Emrys (Ayrshire, S.)	Owen, Will (Morpeth)
Cronin, John	Hughes, Hector (Aberdeen, N.)	Padley, Walter
Crosland, Rt. Hn. Anthony	Hunter, Adam	Paget, R. T.
Crossman, Rt. Hn. Richard	Hynd, John	Palmer, Arthur
Cullen, Mrs. Alice	Irvine, A. J. (Edge Hill)	panned, Rt. Hn. Charles
Dalyell, Tam	Jackson, Colin (B'h'se & Spenb'gh)	Parker, John (Dagenham)
Darling, Rt. Hn. George	Jackson, Peter M. (High Peak)	Parkyn, Brian (Bedford)
Davidson, Arthur (Accrington)	Janner, Sir Barnett	Pavitt, Laurence
Davidson, James(Aberdeenshire,W.)	Jay, Rt. Hn. Douglas	Pearson, Arthur (Pontypridd)
Davies, Dr. Ernest (Stratford)	Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)	Peart, Rt. Hn. Fred
Davies, G. Elfed (Rhondda, E.)	Jenkins, Hugh (Putney)	Pentland, Norman
Davies, Ednyfed Hudson (Conway)	Johnson, Carol (Lewisham, S.)	Perry, Ernest G. (Battersea, S.)
Davies, Harold (Leek)	Johnson, James (H'ston-on-Hull, W.)	Prentice, Rt. Hn. R. E.
Davies, Ifor (Gower)	Johnston, Russell (Inverness)	price, Christopher (Perry Barr)
Davies, S. O. (Merthyr)	Jones, Dan (Burnley)	Price, Thomas (Westhoughton)
de Freitas, Rt. Hn. Sir Geoffrey	Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)	Pursey, Cmdr. Harry
Delargy, Hugh	Jones, J. Idwal (Wrexham)	Rankin, John
Dell, Edmund	Jones, T. Alec (Rhondda, West)	Rees, Merlyn
Dewar, Donald	Judd, Frank	Reynolds, G. W.
Diamond, Rt. Hn. John	Kelley, Richard	Richard, Ivor
Dickens, James	Kerr, Mrs. Anne (R'ter & Chatham)	Roberts, Albert (Normanton)
Dobson, Ray	Kerr, Dr. David (W'worth, Central)	Roberts, Goronwy (Caernarvon)
Doig, peter	Kerr, Russell (Feltham)	Roberts, Gwilym (Bedfordshire, S.)
Donnelly, Dosmond	Lawson, George	Robertson, John (Paisley)
Dunn, James A.	Leadbitter, Ted	Robinson,Rt.Hn.Kenneth(St.P'c'as)
Dunnett, Jack	Lee, Rt. Hn. Frederick (Newton)	Robinson, W. 0. J. (Walth'stow, E.)
Dunwoody, Mrs. Gwyneth (Exeter)	Lee, Rt. Hn. Jennie (Cannock)	Roebuck, Roy
Dunwoody, Dr. John (F'th & C'b'e)	Lee, John (Reading)	Rogers, George (Kensington, N.)
Eadie, Alex	Lestor, Miss Joan	Rose, Paul
Edelman, Maurice	Lever, Harold (Cheetham)	Ross, Rt. Hn. William
Edwards, Robert (Bilston)	Lever, L. M. (Ardwick)	Rowland, Christopher (Meriden)
Ellis, John	Lewis, Arthur (W. Ham, N.)	Rowlands, E. (Cardiff, N.)
English, Michael	Lewis, Ron (Carlisle)	Ryan, John
Ennals, David	Lipton, Marcus	Shaw, Arnold (Ilford, S.)
Evans, Albert (Islington, S.W.)	Lomas, Kenneth	Sheldon, Robert
Evans, loan L. (Birm'h'm, Yardley)	Loughlin, Charles	Shinwel, Rt. Hn. E.
Faulds, Andrew	Luard, Evan	Shore, Peter (Stepney)
Fernyhough, E.	Lubbock, Eric	Short,Rt.Hn.Edward(N'c'tle-u-Tyne)
Finch, Harold	Mabon, Dr. J. Dickson	Silkin, Rt. Hn. John (Deptford)
Fitt, Gerard (Belfast, W.)	McBrids, Neil	Silkin, Hn. S. C. (Dulwich)
Fletcher, Raymond (Ilkeston)	McCann, John	Silverman, Julius (Aston)
Fletcher, Ted (Darlington)	MacColl, James	Silverman, Sydney (Nelson)
Foot, Michael (Ebbw Vale)	MacDermot, Niall	Skeffington, Arthur
Ford, Ben	Macdonald, A. H.	Slater, Joseph
Forrester, John	McGuire, Michael	Small, William
Fowler, Gerry	Mackenzie, Gregor (Rutherglen)	Snow, Julian
Fraser, John (Norwood)	Mackie, John	Spriggs, Leslie
Freeson, Reginald	Mackintosh, John P.	Steel, David (Roxburgh)
Calpern, Sir Myer	Maclennan, Robert	Steele, Thomas (Dunbartonshire, W.)
Gardner, Tony	McMillan, Tom (Glasgow, C.)	Stonenouse, John
Carrett, W. E.	MacPherson, Malcolm	Strauss, Rt. Hn. G. R.
Ginsburg, David	Mallalieu, E. L. (Brig?)	Summerskill, Hn. Dr. Shirley
Gordon Walker, Rt. Hn. P. C.	Mallalieu,J.P.W.(Huddersfield,E.)	Swain, Thomas
Greenwood, Rt. Hn. Anthony	Manuel, Archie	Swingler, Stephen
Gregory, Arnold	Marquand, David	Thomas, George (Cardiff, W.)
Grey, Charles (Durham)	Marsh, Rt. Hn. Richard	Thomson, Rt. Hn, George
Griffiths, David (Rother Valley)	Mason, Roy	Thornton, Ernest
Griffiths, Rt. Hn. James (Llanelly)	Maxwell, Robert	Thorpe, Rt. Hn. Jeremy
Griffiths, Will (Exchange)	Mayhew, Christopher	Tinn, James
Hale, Leslie (Oldham, W.)	Mellish, Robert	Tommy, Frank
Hamilton, James (Bothwell)	Mendelson, J. J,	Tuck, Raphael
Hamilton, William (Fife, W.)	Mikardo, Ian	Urwin, T. W.
Hamling, William	Millan, Bruce	Varley, Eric G.
Hannan, William	Miller, Dr. M. S.	Wainwright, Edwin (Dearne Valley)
Harper, Joseph	Milne, Edward (Blyth)	Wainwright, Richard (Colne Valley)
Harrison, Walter (Wakefield)	Mitchell, R. C. (S'th'pton, Test)	Walker, Harold (Doncaster)
Hart, Mrs. Judith	Molloy, William	Wallace, George
Haseldine, Norman	Moonman, Eric	Watkins, David (Consett)
Hattersley, Roy	Morgan, Elystan (Cardiganshire)	Watkins, Tudor (Brecon & Radnor)
Hazell, Bert	Morris, Alfred (Wythenshawe)	Weitzman, David

Wellbeloved, James	Williams, Clifford (Abertillery)	Woof, Robert
Whitaker, Ben	Williams, Mrs. Shirley (Hitchin)	Wyatt, Woodrow
White, Mrs. Eirene	Williams, W. T. (Warrington)	Yates, Victor
Whitlock, William	Willis, George (Edinburgh, E.)
Wigg, Rt. Hn. George	Wilson, Rt. Hn. Harold (Huyton)	TELLERS FOR THE NOES:
Wiley, Rt. Hn. Frederick	Wilson, William (Coventry, S.)	Mr. Alan Fitch and
Williams, Alan Lee (Hornchurch)	Winterbottom, R. E.	Mr. Harry Gourlay.

Question put, That the proposed words be there added:—

The House divided: Ayes 304, Noes 219.

Division No. 392.]	AYES	[7.11 p.m.
Abse, Leo	Dobson, Ray	Jackson, Colin (B'h'se & Spenb'gh)
Albu, Austen	Doig, Peter	Jackson, Peter M. (High Peak)
Allaun, Frank (Salford, E.)	Donnelly, Desmond	Janner, Sir Barnett
Alien, Scholefield	Dunn, James A.	Jay, Rt. Hn. Douglas
Archer, Peter	Dunnett, Jack	Jeger,Mrs.Lcna(H'b'n&St.P'cras,S.)
Armstrong, Ernest	Dunwoody, Mrs. Cwyneth (Exeter)	Jenkins, Hugh (Putney)
Ashley, Jack	Dunwoody, Dr. John (F'th & C'b'e)	Johnson, Carol (Lewisham, S.)
Atkins, Ronald (Preston, N.)	Eadie, Alex	Johnston, Russell (Inverness)
Atkinson, Norman (Tottenham)	Edelman, Maurice	Jones, Dan (Burnley)
Bacon, Rt. Hn. Alice	Edwards, Robert (Bilston)	Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)
Bagier, Gordon A. T.	Ellis, John	Jones, J. Idwal (Wrexham)
Barnes, Michael	English, Michael	Jones, T. Alec (Rhondda, West)
Barnett, Joel	Ennals, David	Judd, Frank
Beaney, Alan	Evans, Albert (Islington, S.W.)	Kelley, Richard
Bence, Cyril	Evans, loan L. (Birm'h'm, Yardley)	Kerr, Mrs. Anne (R'ter & Chatham)
Benn, Rt. Hn. Anthony Wedgwood	Faulds, Andrew	Kerr, Dr. David (W'worth, Central)
Bennett, James (G'gow, Bridgeton)	Fernyhough, E.	Kerr, Russell (Feltham)
Bessell, Peter	Finch, Harold	Lawson, George
Bidwell, Sydney	Fitt, Gerard (Belfast, W.)	Leadbitter, Ted
Binns, John	Fletcher, Raymond (Ilkeston)	Lee, Rt. Hn. Frederick (Newton)
Bishop, E. S.	Fletcher, Ted (Darlington)	Lee, Rt. Hn. Jennie (Cannock)
Blackburn, F.	Foot, Michael (Ebbw Vale)	Lee, John (Reading)
Blenkinsop, Arthur	Ford, Ben	Lestor, Miss Joan
Boardman, H.	Forrester, John	Lever, Harold (Cheetham)
Booth, Albert	Fowler, Gerry	Lever, L. M. (Ardwick)
Boston, Terence	Fraser, John (Norwood)	Lewis, Arthur (W. Ham, N.)
Bowden, Rt. Hn. Herbert	Freeson, Reginald	Lewis, Ron (Carlisle)
Braddock, Mrs. E. M.	Galpern, Sir Myer	Lipton, Marcus
Bradley, Tom	Gardner, Tony	Lomas, Kenneth
Bray, Dr. Jeremy	Carrett, W. E.	Loughlin, Charles
Brooks, Edwin	Ginsburg, David	Lubbock, Eric
Brown, Rt. Hn. George (Belper)	Gordon Walker, Rt. Hn. P. C.	Mabon, Dr. J. Dickson
Brown, Hugh D. (G'gow, Provan)	Greenwood, Rt. Hn. Anthony	McBride, Neil
Brown, R. W. (Shoreditch & F'bury)	Gregory, Arnold	McCann, John
Buchan, Norman	Grey, Charles (Durham)	MacColl, James
Buchanan, Richard (G'gow, Sp'burn)
Butler, Herbert (Hackney, C.)	Griffiths, David (Rother Valley)	MacDermot, Niall
Butler, Mrs. Joyce (Wood Green)	Griffiths, Rt. Hn. James (Llanelly)	Macdonald, A. H.
Callaghan, Rt. Hn. James	Griffiths, Will (Exchange)	McGuire, Michael
Cant, R. B.	Hale, Leslie (Oldham, W.)	Mackenzie, Gregor (Rutherglen)
Carmichael, Neil	Hamilton, James (Bothwell)	Mackie, John
Carter-Jones, Lewis	Hamilton, William (Fife, W.)	Mackintosh, John P.
Castle, Rt. Hn. Barbara	Hamling, William	Maclennan, Robert
Chapman, Donald	Hannan, William	McMillan, Tom (Glasgow, C.)
Coe, Denis	Harper, Joseph	MacPherson, Malcolm
Coleman, Donald	Harrison, Walter (Wakefield)	Mallalieu, E. L. (Brigg)
Concannon, J. D.	Hart, Mrs. Judith	Mallalitu,J.P.W.(Huddersfield,E.)
Conlan, Bernard	Haseldine, Norman	Manuel, Archie
Corbet, Mrs. Freda	Hattersley, Roy	Marquand, David
Crawshaw, Richard	Hazell, Bert	Marsh, Rt. Hn. Richard
Cronin, John	Heffer, Eric S.	Mason, Roy
Crosland, Rt. Hn. Anthony	Henig, Stanley	Maxwell, Robert
Crossman, Rt. Hn. Richard	Herbison, Rt. Hn. Margaret	Mayhew, Christopher
Cullen, Mrs. Alice	Hobden, Dennis (Brighton, K'town)	Mellish, Robert
Dalyell, Tam	Hooley, Frank	Mendelson, J. J.
Daring, Rt. Hn. George	Hooson, Emlyn	Mikardo, Ian
Davidson, Arthur (Accrington)	Horner, John	Millan, Bruce
Davidson,James(Aberdcenshire,W.)	Houghton, Rt. Hn. Douglas	Miller, Dr. M. S.
Davies, Dr. Ernest (Stretford)	Howarth, Harry (Wellingborough)	Milne, Edward (Blyth)
Davies, G. Elfed (Rhondda, E.)	Howarth, Robert (Bolton, E.)	Mitchell, R. C. (S'th'pton, Test)
Davies, Ednyfed Hudson (Conway)	Howell, Denis (Small Heath)	Molloy, William
Davies, Harold (Leek)	Howie, W.	Moonman, Eric
Davies, Ifor (Gower)	Hoy, James	Morgan, Elystan (Cardiganshire)
Davies, S. O. (Merthyr)	Huckfield, L.	Morris, Alfred (Wythenshawe)
de Freitas, Rt. Hn. Sir Geoffrey	Hughes, Rt. Hn. Cledwyn (Anglesey)	Morris, Charles R. (Openshaw)
Delargy, Hugh	Hughes, Emrys (Ayrshire, S.)	Morris, John (Aberavon)
Dell, Edmund	Hughes, Hector (Aberdeen, N.)	Moyle, Roland
Dewar, Donald	Hunter, Adam	Mulley, Rt. Hn. Frederick
Diamond, Rt. Hn. John	Hynd, John	Newens, Stan
Dickens, James	Irvine, A. J. (Edge Hill)	Noel-Baker, Francis (Swindon)
Noel-Baker,Rt.Hn.Philip(Derby,S.)	Robinson,Rt.Hn.Kermeth(St.P'c'as)	Tomney, Frank
Oakes, Gordon	Robinson, W. O. J. (Walth'stow, E.)	Tuck, Raphael
Ogden, Eric	Roebuck, Roy	Urwin, T. W.
O'Malley, Brian	Rogers, George (Kensington, N.)	Varley, Eric C.
Oram, Albert E.	Rose, Paul	Wainwright, Edwin (Dearne Valley)
Orbach, Maurice	Ross, Rt. Hn. William	Wainwright, Richard (Colne Valley)
Orme, Stanley	Rowland, Christopher (Meriden)	Walker, Harold (Doncaster)
Oswald, Thomas	Rowlands, E. (Cardiff, N.)	Wallace, George
Owen, Dr. David (Plymouth, S'tn)	Ryan, John	Watkins, David (Consett)
Owen, Will (Morpeth)	Shaw, Arnold (Ilford, S.)	Watkine, Tudor (Brecon & Radnor)
Padley, Walter	Sheldon, Robert	Weitzman, David
Paget, R. T.	Shinwell, Rt. Hn. E.	Wellbeloved, James
Palmer, Arthur	Shore, Peter (8tepney)	Whitaker, Ben
pannell, Rt. Hn. Charles	Short,Rt.Hn.EdwardCN'c'tle-u-Tyne)	White, Mrs. Eirene
Parker, John (Dagenham)	Silkin, Rt. Hn. John (Deptford)	Whitlock, William
Parkyn, Brian (Bedford)	Silkin, Hn. S. C. (Dulwich)	Wigg, Rt. Hn. George
Pavitt, Laurence	Silverman, Julius (Aston)	Willey, Rt. Hn. Frederick
Pearson, Arthur (Pontypridd)	Silverman, Sydney (Nelson)	Williams, Alan Lee (Hornchurch)
peart, Rt. Hn. Fred	Slater, Joseph	Williams, Clifford (Abertillery)
pentland, Norman	Small, William	Williams, Mrs. Shirley (Hitchin)
Perry, Ernest C. (Battersea, S.)	Snow, Julian	Williams, W. T. (Warrington)
Prentice, Rt. Hn. R. E.	Spriggs, Leslie	Willis, George (Edinburgh, E.)
Price, Christopher (Perry Barr)	Steel, David (Roxburgh)	Wilson, Rt. Hn. Harold (Huyton)
Price, Thomas (Westhoughton)	Storehouse, John	Wilson, William (Coventry, S.)
Pursey, Cmdr. Harry	Strauss, Rt. Hn. G. R.	Winstanley, Dr. M. P.
Rankin, John	Summerskill, Hn. Dr. Shirley	Winterbottom, R. E.
Rees, Merlyn	Swain, Thomas	Woof, Robert
Reynolds, G. W.	Swingler, Stephen	Wyatt, Woodrow
Richard, Ivor	Thomas, George (Cardiff, W.)	Yates, Victor
Roberts, Albert (Normanton)	Thomson, Rt. Hn. George
Roberts, Goronwy (Caernarvon)	Thornton, Ernest	TELLERS FOR THE AYES:
Roberts, Gwilym (Bedfordshire, S.)	Thorpe, Rt. Hn. Jeremy	Mr. Alan Fitch and
Robertson, John (Paisley)	Tinn, James	Mr. Harry Gourlay.
NOES
Alison, Michael (Barkston Ash)	Dalkeith, Earl of	Hogg, Rt. Hn. Quintin
Allason, James (Heme) Hempstead)	Dance, James	Holland, Philip
Astor, John	d'Avigdor-Goldsmid, Sir Henry	Hornby, Richard
Atkins, Humphrey (M't'n & M'd'n)	Deedes, Rt. Hn. W. F. (Ashford)	Howell, David (Guildford)
Baker, W. H. K.	Digby, Simon Wingfield	Hunt, John
Balniel, Lord	Dodds-Parker, Douglas	Hutchison, Michael Clark
Barber, Rt. Hn. Anthony	Doughty, Charles	Iremonger, T. L.
Batsford, Brian	Douglas-Home, Rt. Hn. Sir Alec	Irvine, Bryant Godman (Rye)
Beamish, Col. Sir Tufton	Drayson, G. B.	Jenkin, Patrick (Woodford)
Bell, Ronald	du Cann, Rt. Hn. Edward	Jennings, J. C. (Burton)
Bennett, Dr. Reginald (Cos. & Fhm)	Eden, Sir John	Johnson Smith, G. (E. Grinstead)
Berry, Hn. Anthony	Emery, Peter	Jones, Arthur (Northants, S.)
Biffen, John	Eyre, Reginald	Jopling, Michael
Biggs-Davison, John	Farr, John	Joseph, Rt. Hn. Sir Keith
Birch, Rt. Hn. Nigel	Fisher, Nigel	Kaberry, Sir Donald
Black, Sir Cyril	Fortescue, Tim	Kerby, Capt. Henry
Body, Richard	Foster, Sir John	Kershaw, Anthony
Bossom, Sir Clive	Calbraith, Hon. T. G.	Kimball, Marcus
Boyd-Carpenter, Rt. Hn. John	Gibson-Watt, David	King, Evelyn (Dorset, S.)
Boyle, Rt. Hn. Sir Edward	Gilmour, Ian (Norfolk, C.)	Kirk, Peter
Braine, Bernard	Gilmour, Sir John (Fife, E.)	Kitson, Timothy
Brewis, John	Glover, Sir Douglas	Knight, Mrs. Jill
Brinton, Sir Tatton	Godber, Rt. Hn. J. B.	Lambton, Viscount
Brown, Sir Edward (Bath)	Goodhart, Philip	Langford-Holt, Sir John
Bruce-Gardyne, J.
Bryan, Paul	Goodhew, Victor	Legge-Bourko, Sir Harry
Buchanan-Smith,Alick(Angus,N&M)	Cower, Raymond	Lewis, Kenneth (Rutland)
Buck, Antony (Colchester)	Grant, Anthony	Lloyd, Ian (P'tsm'th, Langstone)
Bullus, Sir Eric	Grant-Ferris, R.	Lloyd, Rt. Hn. Selwyn (Wirral)
Burden, F. A	Grieve, Percy	Longden, Gilbert
Campbell, Gordon	Griffiths, Eldon (Bury St. Edmunds)	Loveys, W. H.
Carlisle, Mark	Gurden, Harold	MacArthur, Ian
Cary, Sir Robert	Hall, John (Wycombe)	Maclean, Sir Fitzroy
Channon, H. P. G.	Hamilton, Marquess of (Fermanagh)	Macleod, Rt. Hn. Iain
Chichester-Clark, R.	Hamilton, Michael (Salisbury)	McMaster, Stanley
Clark, Henry	Harris, Frederic (Croydon, N.W.)	Macmillan, Maurice (Farnham)
Clegg, Walter	Harris, Reader (Heston)	Maddan, Martin
Cooke, Robert	Harrison, Brian (Maldon)	Maginnis, John E.
Cooper-Key, Sir Nei;l	Harrison, Col. Sir Harwood (Eye)	Marten, Neil
Cordle, John	Harvey, Sir Arthur vere	Maude, Angus
Corfield, F. V.	Hastings, Stephen	Maudling, Rt. Hn. Reginald
Costain, A. P.	Hawkins, Paul	Mawby, Ray
Craddock, Sir Beresford (Spelthorne)	Hay, John	Maxwell-Hyslop, R. J.
Crawley, Aldan	Heald, Rt. Hn. Sir Lionel	Maydon, Lt.-Cmdr. S. L. C.
Crosthwaite-Eyre, Sir Oliver	Heath, Rt. Hn. Edward	Mills, Stratton (Belfast, N.)
Crouch, David	Heseltine, Michael	Miscampbell, Norman
Crowder, F. P.	Higgins, Terence L.	Mitchell, David (Basingstoke)
Cunningham, Sir Knox	Hirst, Geoffrey	Monro, Hector
Currle, G. B. H.	Hobson, Rt. Hn. Sir John	Montgomery, Fergus

Morgan, Geraint (Denbigh)	Rawlinson, Rt. Hn. Sir Peter	Thatcher, Mrs. Margaret
Mott-Radclyffe, Sir Charles	Rees-Davies, W. R.	Tilney, John
Munro-Lucas-Tooth, Sir Hugh	Ronton, Rt. Hn. Sir David	Turton, Rt. Hn. R. H.
Murton, Oscar	Ridley, Hn. Nicholas	van Straubenzee, W. R.
Nabarro, Sir Gerald	Ridsdale, Julian	Vaughan-Morgan, Rt. Hn. Sir John
Noble, Rt. Hn. Michael	Rippon, Rt. Hn. Geoffrey	Vickers, Dame Joan
Nott, John	Robson Brown, Sir William	Walker, Peter (Worcester)
Onslow, Cranley	Rodgers, Sir John (Sevenoaks)	Walker-Smith, Rt. Hn. Sir Derek
Orr, Capt. L. P. S.	Rossi, Hugh (Hornsey)	Wall, Patrick
Orr-Ewing, Sir Ian	Royle, Anthony	Walters, Dennis
Osborn, John (Hallam)	Russell, Sir Ronald	Ward, Dame Irene
Osborne, Sir Cyril (Louth)	St. John-Stevas, Norman	Weatherill, Bernard
Page, Graham (Crosby)	Sandys, Rt. Hn. D.	Webster, David
Page, John (Harrow, W.)	Scott, Nicholas	Wells, John (Maidstone)
Pearson, sir Frank (Clitheroe)	Sharpies, Richard	Whitelaw, Rt. Hn. William
Peel, John	Shaw, Michael (Sc'b'gh & Whitby)	Wills, Sir Gerald (Bridgwater)
Percival, Ian	Sinclair, Sir George	Wilson, Geoffrey (Truro)
Peyton, John	Smith, John	Wolrige-Gordon, Patrick
Pink, R. Bonner	Stainton, Keith	Wood, Rt. Hon. Richard
Pounder, Rafton	Stoddart-Scott, Col. Sir M. (Ripon)	Woodnutt, Mark
Powell, Rt. Hn. J. Enoch	Summers, Sir Spencer	Wylie, N. R.
Price, David (Eastleigh)	Tapsell, Peter	Younger, Hn. George
Prior, J. M. L.	Taylor, Sir Charles (Eastbourne)
Pym, Francis	Taylor, Edward M.(G'gow,Cathcart)	TELLERS FOR THE NOES:
Quennell, Miss J. M.	Teeling, Sir William	Mr. R. W. Elliott and
Ramsden, Rt. Hn. James	Temple, John M.	Mr. Jasper More.

Main Question, as amended, put and agreed to.

Resolved, That the House regrets the financial situation of British Railways and congratulates Her Majesty's Government on the steps being taken, together with the British Railways Board, and with the help of the Joint Steering Group, to identify and provide for the socially necessary lines; to give to British Railways a realistic efficiency target; to modernise freight handling; and to enable the railways to respond to changing traffic demands.