LONDON TRANSPORT BOARD (BORROWING POWERS)

HC Deb 02 April 1968 vol 762 cc299-326

10.3 p.m.

The Minister of State, Ministry of Transport (Mr. Stephen Swingler)

I beg to move, That the London Transport Board (Borrowing Powers) Order 1968, a draft of which was laid before this House on 21st March, be approved. This Order is required to provide the London Transport Board with the necessary powers to obtain the money needed to carry forward its substantial programme of investment, which is designed to provide London with a more comprehensive and efficient public transport system. Before referring to some of the more important projects now being undertaken, it may be helpful to the House if I explain the need to approve the Order at the present time.

Under the Transport Act, 1962, the limit on the London Transport Board's borrowing was set initially at £200 million, a figure which included the Board's commencing capital debt of £162 million. However, the Act provided that the limit could be raised by Order up to a maximum of £270 million, and at the end of 1965 the House approved an Order which increased the effective limit on the Board's borrowing to £250 million. It is now approaching this limit. At the present time the Board's borrowings stand at about £241 million and it estimates that the remaining £9 million will be used up by the middle of this year, 1968.

The Order now before us provides for the limit to be raised to a maximum of £270 million, providing the London Transport Board with further borrowing powers of £20 million. This will be sufficient to meet the Board's requirements during the remainder of 1968 and part of 1969. It is, therefore, a short-term measure related to the Board's substantially firm plans for investment this year and next year.

The total expenditure of the Board on fixed investment in 1968 is estimated at £27 million, about £17 million of which arises on major projects for new tubes—the Victoria Line from Walthamstow to Victoria and the recently authorised extension to Brixton.

In 1969, reflecting the substantial completion of the Victoria Line, investment expenditure is expected to fall to a level of about £19 million.

The main Victoria Line is due to open in stages starting in September, 1968, only five months from now. The total cost of the line will be about £68 million. It will have 12 stations at all of which there will be interchange facilities with other underground lines and/or with British Rail. The line, which will greatly improve the usefulness of the London tube railway system as a whole, will be in the forefront of the world's most technically advanced and labour-saving railways. Special features of this line will include automatic train operation, reducing the crew required on each train to one man; automatic fare collection; and closed circuit television on all platforms, associated with public address systems for passenger flow control.

The opening of the line will result in substantial time savings to travellers from north-eastern suburbs and, by reducing interchange in the central area, to existing Underground passengers. What is equally important is that it will afford valuable benefits in the reduction of road congestion. London Transport is to be congratulated on the impending completion of this imaginative project, which will be of great benefit to the travelling public in the capital city. The construction of an extension of the line to Brixton was approved last August. It is expected to cost about £16 million. Construction is already well under way and is expected to be completed by about 1971 or early 1972. Again this will produce valuable social benefits. It should also substantially relieve overcrowding on the central sections of the Northern Line and to some extent also on the Bakerloo line.

Services on existing lines are not being neglected. The Board will soon be starting a £6 million programme for the replacement of old rolling stock on the District, Metropolitan and City, and Circle lines. This will provide more comfort and ensure greater reliability for the passengers on these lines.

Important developments are taking place also in relation to the Board's bus services. The Board's bus reshaping plan, announced in 1966, is a radical attempt to overcome the problem of the dislocation of bus services by traffic congestion; by remodelling services to meet the changing pattern of demand, and by saving manpower. The bus re-shaping plan involves a substantial move to one-man operation, a reduction in the number of long routes, and the introduction of satellite routes serving points of traffic demand such as special shopping centres and railway stations. Investment in new one-man operated buses and associated interchange facilities is running at the rate of £4–£5 million per annum, which is a measure of the progress being made with the implementation of this imaginative new scheme.

I have mentioned only a few of the major projects now being undertaken. Many other important developments are taking place—for example, station reconstructions, modernisation of escalators, and improvement of power supply for the underground—but I hope that I have given a sufficient explanation to justify this modest increase in the Board's borrowing powers, and to demonstrate the substantial benefits that it will bring in the improvement of a public transport system which, despite the criticisms which are made from time to time, is one which many other capital cities have cause to envy.

I have mentioned that these new powers will be sufficient to meet the Board's requirements until some way into 1969. As members will be aware my right hon. Friend and the Leader of the Greater London Council have jointly announced that they have reached agreement that there should be a major reorganisation of transport in London. This is not the right occasion to debate this important development. Discussions are now taking palace between the Ministry, the G.L.C., the London Transport Board and British Railways with a view to drawing up detailed proposals for the reorganisation. Other interested bodies will be consulted soon. A White Paper will be published when the consultations are complete, and necessary legislation will follow. In the meantime, I cannot elaborate on the broad statement of intentions already announced, except to say that the new borrowing powers being provided will all be required before the G.L.C. could assume the responsibility envisaged for them under the new arrangements.

But while, as I have indicated, this major change will be implemented beyond the period of time to which these new borrowing powers are related, it is relevant to draw attention to the important connection which exists between them London Transport have made valiant efforts to maintain its traditional high standard of service in conditions in which this is made increasingly difficult by the effect of traffic congestion.

While the Board's own plans go a long way towards adapting its services to the environment in which they operate, the success of these plans will depend in large degree on the implementation of traffic policies which allow buses more reasonable freedom of movement. In the Government's view, this means that there must be a centralised control of policy in relation to highways, public transport and traffic, and I am glad to say that this is a view shared by the Leader of the G.L.C. This further application of the principle of integrated planning of transportation means that we can confidently look forward to the realisation of the maximum benefit obtainable from the Board's investment programme. These developments therefore enable me to commend the Order to the House with the greatest confidence that the powers sought will be used in the most beneficial way to the London travelling public.

10.14 p.m.

Mr. David Webster (Weston-super-Mare)

Like the Minister of State, I am glad to come down to the spacious green pastures of this Chamber after Committee Room 10. As we are a little further apart, perhaps our exchanges will be a little less acrimonious.

While agreeing with him on that, I do not exactly share his pride in the great achievements of London Transport. The conclusion in paragraph 590 of the Report of the Select Committee on Nationalised Industries on London Transport indicates that the Board is both failing to provide an adequate service and failing to pay its way. That is an indictment going back to 1965. This body, which in 1963 was running at a profit of £2.1 million and in 1964 at a profit of £1.3 million, ever since 1964, at the end of the 13 wasted years, has got itself deeper and deeper into economic loss.

The figure was £1 million in 1965—only £1 million; in 1966 it was £5.9 million; in 1967 the provisional figure is £11.3 million; and in 1968, this year, the estimated figure is £12.6 million. And the Prices and Incomes Board, in its very thorough examination, is very chary indeed about the likelihood of this being such a small figure. This is the body in which the Minister of State has so much pride. There are a lot of considerations the House will wish to take into account before granting these borrowing powers to make sure that the money is to be used properly.

There was in the Transport Finances Act inadequate provision for this rapid increase in losses, which have increased, in fact, by £5 million per year until the estimate for this year, and we have not seen that and the Prices and Incomes Board cannot see it either. This is the body which—after 13 years of Tory management, when it was profitable, then these years of Socialist management, when it has been most unprofitable—is to be taken over by the G.L.C. and run much more properly.

I congratulate the G.L.C. on acquiring the buses. This is different from any other big city, where there is to be a unified public transport authority which will lose these buses and which will be dominated and centrally controlled by elected members and the Minister, with the power of veto over the chairmanship of the Board. In this case the G.L.C. will appoint the executive and be responsible for them.

One cannot but point out that in the years in which there have been these rapidly increasing deficits, which have been subsidised by grants from the taxpayer, it has been the taxpayer in the development areas and in many other places who has been subsidising the commuters of London. This seems to be a very extraordinary situation of which many people outside the City of London will take note.

Whereas in London the railways are remaining outside this arrangement and their deficit is not to be carried by the London Transport Board, in the four major conurbations—Manchester, Birmingham, Liverpool and Newcastle—the P.T.A.s will take over the losses. There for one notices a very considerable difference and there will be this tax because of the London deficit. London will, under the new agreement, I am very glad to say, benefit from free enterprise operators. This is a splendid thing and I congratulate the G.L.C. Whereas in the provinces they will lose their free enterprise buses to the public transport authorities and also they will no doubt be trading at a loss in petrol and ancillary services, in London this will not occur. So London has a much better deal on the point the Minister of State was discussing.

It is also good to know that the G.L.C. will control the route and fare structure, because this will have a great deal of effect on the future financial results of the London Transport Board. One only wishes that the rest of the country was going to be as fortunate, but with other public transport authorities this is not going to happen.

One has to look at the deficit since 1964. The last increase was on 16th January, 1966. It was an increase of 9½ per cent. and, as a result, the revenue went up by £5.5 million and by the assimilation arrangement with British Railways their revenue went up by £1.4 million. In the autumn of that same year London Transport asked for £7.3 million. In February of 1967, because of the period of what is euphemistically called severe restraint, there was to be a delay in granting this, so the taxpayer footed the bill. And on 30th June, 1967, the London Transport Board sought an increase to cover a deficit of £8.6 million—this is something that was profitable in 1964—a 14 per cent. increase, and they were smartly referred to the Prices and Incomes Board.

After what many of us consider to have been a justifiable delay of three months, the Prices and Incomes Board produced an excellent Report which is well worth considering in the light of the moneys being granted tonight. It said that it saw a £5 million increase in the deficit each year being made over the rest of the country and that during the delay the position had been aggravated, as is often the case with delays, with the result that the money given under the Transport Finances Act had run out. This therefore is an extension of overdraft to tide it over until the time when it is taken over and is run profitably by the G.L.C.

There are two statutory obligations on the Board. The first is to provide an adequate service and the second is to carry out its financial obligations. As I said, the Select Committee decided that it had succeeded in neither. That was stated in 1965 and I should have thought that very few of the members of that Committee would have thought that the situation had changed since that time. Pre-1961 the duty of the Board was to break even but then, under Cmnd. 1337, which was approved by the Transport Tribunal, it had an obligation to produce a profit of £4 million. That has proved to be excessive and beyond the powers of the Board.

One sympathises with these deficits and it is obvious that when there is central congestion the buses are held back. People get frustrated and turn to their own motor cars. There follows even greater losses on the buses, with the result that fares are increased and more people use their own motor cars. We appreciate this difficulty, but there are many things in the Board's Report which should have been considered. From what we gather, these matters have not had the thorough consideration which they should have received.

The last time that we debated this matter it was pointed out that the Phelps Brown Report's recommendations had not been implemented fast enough and, in any case, that the Report should have been ordered a great deal earlier than it was. There has, therefore, been a great deal of delay in dealing with one of the central problems, which is labour relations, for while 80 per cent. of the costs of the roads goes in labour, in the case of the railways it is 70 per cent. Operating expenses in the years 1963–67 have gone up by between 4 per cent. and 7 per cent. per year. It is estimated that in 1968 the cost increases will be £1.9 million, of which £1 million will be wage increases, £0.6 million will be increases in materials and services and £0.3 million will be accounted for by the Victoria line. As I said, Londoners are still being subsidised by the rest of the country.

Under the Transport Finances Act deficits for the period 1966–68 were estimated to be £25 million, and of this £16 million was to be dealt with by grants under the Act and £9 million by extra fares. Now Government grants, according to the Prices and Incomes Board, will amount to between £25 million and £30 million. Thus, a hop on the bus under these proposals will be a 6d. hop and the revenue will be increased by £4.7 million. There will be a considerable increase for the two-mile run, bringing an extra increased revenue of £2.1 million, making £6.8 million out of the required total of £8 million.

The average rise in fares throughout will be 14 per cent., while the rise on the shortest journeys, which are the most profitable, will be 50 per cent. Increases in season tickets are expected to bring in £300,000 and the abolition of concessionary fares for juvenile workers is expected to bring in another £300,000. Then there is what is technically called the "coarsening" of fares, which has been welcomed by the Prices and Incomes Board, along with the change in the bus-tube fare structure in an effort to encourage Londoners to go by Underground. These are reasonable propositions which we welcome and I join with the Prices and Incomes Board in paying tribute to the London Transport Board for its accurate forecasting; it nearly always forecasts correctly what fares increases will produce.

However, the Prices and Incomes Board in paragraph 50 onwards of its Report examines a number of suggestions which it would appear the London Transport Board has not sufficiently and imaginatively examined. We did not hear much of this from the Minister of State and I regret that, because there is a need for new thinking to deal with the terrible problems of London Transport. There is, for example, the fact that we are being exhorted to stagger travel and peak-hour traffic, and it appears the suggestion has been made that there should be a peak-hour differential of 3d. on each fare, but there is no evidence that there has been adequate testing of this idea by London Transport.

I appreciate that on tubes in certain areas there is an off-peak concession rate, but it is thought that the administrative objection is excessive; and the figures of the Prices and Incomes Board are that if there is a fall-out of travellers this 3d. surcharge for peak-hour traffic would bring in about £4.5 million, and if there was no fall-out, £6.75 million. This is a considerable amount in shortfall and I should have thought it worth examining this further but the London Transport Board is unwilling to consider this. Why should it? It is at present a monopoly. I hope that when there is a bit of competition it will do so.

I concede that there are difficulties here. Why charge an extra fare for somebody who is going against the tidal flow of traffic? But, on the other hand, surely it is right that people who cause the peak hour capacity should pay for that peak hour capacity. This is always the problem in transport. We have peak hour capacity which is expensive stuff left lying around for the rest of the day, and therefore it is appropriate that those who use peak capacity should pay for it. Also, the peak surcharge would encourage staggering which has been exhorted as long as I have travelled on London Transport. It is also suggested that where people travel without paying fares—"bilking" as it is called—there should be a heavy excess fare. I should have thought that was something on which the Minister of State could have commented.

More important than these points, however, are proper marketing and consumer research to determine price policy because I do not believe there has been nearly enough. That could determine the elasticity of demand. I see the hon. Gentleman the Member for Nuneaton (Mr. Leslie Huckfield) well outside his own public transport area tonight. His constituency has been subsidising London Transport for some time.

Mr. Leslie Huckfield (Nuneaton)

I know that the hon. Gentleman is very enthusiastic about taxpayers subsidising public transport in Birmingham, Merseyside, Manchester and Tyneside, but he does not seem very keen on taxpayers subsidising transport in London.

Mr. Webster

That is one of the things that goes against development area policy. If we are subsidising a development area, which is something the Government have always recommended, why subsidise the essential area of London? To continue the point of consumer research, surely the information that would be available would be a basis for long-term traffic forecasts and would surely help in working out the pattern of capital expenditure on rolling stock and the scheduling of the loading layout for the future. It is time this was done, and I regret that it has not yet been done adequately.

It would also be useful for the equipment replacement and design of the capital investment for which much of this borrowed money is to be given. Then there is the need for further origin and destination surveys to examine these things and to find out where public transport is competing against the motor car, and to use the information to educate the people who are travelling by car as to the actual cost of their motor journey. On this point it is very interesting that much of the publicity is on the tube line and inside the buses to the people who are already travelling by London Transport, when surely it should go on the outside organs, such as the television, the newspapers and magazines, in order to encourage the public to use the benefits of London Transport and to take congestion off the road.

Then, on the subject of costs, I made suggestions regarding revenue. I know that one of the problems throughout the whole of this undertaking has been to get agreement with the unions, and I hope that one of the great points of the Phelps Brown break-through is not going to be exacerbated by wage freezes. In the case of rescheduling and rerouting over and above the reshaping plan, which tends to concentrate solely on the one-man buses, I should have thought there was a great deal of scope for further designs of route. This is surely borne out by the fact that only 27 per cent. of the bus routes at present cover their full cost. Then, although there is the statutory obligation to carry the public, there is nothing to prevent London Transport changing the regularity of buses and carrying out research for that purpose. Where this has been done by private enterprise bus operators there has been a 10 per cent. cost reduction. I appreciate that this might take two years, but I should have thought a bit more imagination could have gone towards this.

Mr. Huckfield

Would the hon. Gentleman like to substantiate with some examples the last point which he has just made, because this seems a rather fantastic claim to make?

Mr. Webster

No. Possibly the hon. Gentleman could take time off and read the Prices and Incomes Report, which will tell him that and will tell him that it is private enterprise buses which have done this in other cities in the country, and which are now to be taken over by P.T.As., so that they will probably not be doing this any more. So that is something which can surely be done.

The period of transition to the one-man buses is suggested to be 15 years, whereas with a bit of effort and a bit of imagination and co-operation, which I appreciate is not easy to get, it is suggested that this could be done in 8 years. I think we probably need another Phelps Brown to help us do it. I should have thought, also, that if there are to be redundancies in depôts there should be transfer grants from certain depôts to assist in what is agreed to be a difficult problem, and union agreements and overtime and working conditions should be revised. I wonder whether it is possible that in London we should have some of the peak-time workers being part-time workers. I know that the unions at present hate this, but they do it in America and it seems to work efficiently. I should have thought that this should be explored, as also should the work management in workshops. Those are a number of suggestions.

I must remind the Minister of State that while there was a Conservative Government the London Transport Board made a profit and paid its way, but it ceased to do so from the moment that Labour took office. Maybe some of it is a coincidence, but not all, and that loss has been subsidised by the general taxpayer. But this, I know, is an intermediate activity before the G.L.C. take this over, and I know that everyone on either side of the House would wish the G.L.C. and the London Transport Board great success and hope they will get to the bottom of these problems, which are admittedly most difficult.

10.33 p.m.

Mr. Norman Atkinson (Tottenham)

The hon. Member for Weston-super-Mare (Mr. Webster) made a number of provocative points which I know he will not expect me to follow, for it is, in fact, the trade union movement, which represents many of the workers to whom he was referring, which will possibly give him much more adequate answers than myself. But I would remind the Minister that many of the proposals which he has in mind for London Transport can be carried out only on the basis of maximum co-operation with the trade union movement. So I hope that the Government will make sure that they pursue their proposals with that co-operation in mind, and will not attempt to initiate any new moves unless they have that maximum co-operation.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

How long does the hon. Gentleman think it ought to take to introduce one-man buses—15 years or less? Would he put a number of years on the period he suggests it should take to introduce one-man buses?

Mr. Atkinson

That is essentially a question for the trade unions to answer. They themselves must negotiate many of these proposals. All that I am asking at the moment in regard to this aspect of transport is that the Minister, the Ministry of Transport, the G.L.C. and all those others involved co-operate fully, in order to achieve the maximum support from the trade unions involved. I think we should ask for that.

As for the Minister's statement, I am certain that many thousands of Londoners, in North London particularly, will get a great deal of pleasure from it, and will join me in congratulating the Government on the proposals which have been made. There are also, however, many weaknesses in the statement, and some very serious omissions, and I want to direct the attention of the House and of the Minister to two of the omissions.

I mention the first very briefly indeed. While we recognise the great steps forward achieved in the design of the new Victoria Line and in the automated or semi-automated services which will be run there, I am very sorry indeed that maximum confidence was not established in some of the original concepts promoted by our engineers. Unfortunately, the Government have listened to accountants rather than engineers, and so they have missed a number of very good opportunities by which we could have established a new underground service far in advance of anything known in the world. A number of engineers have been frustrated because of the shortage of money, and I am sorry about this. I am sorry we have not taken the opportunities which were presented to us.

The other omission I am sorry about is the whole question of car parking facilities on the perimeter of London. If we are to use these new tubes to the maximum extent we should indeed have heard in the Minister's statement something about the provisions being made for car parking facilities, and I regret that we have not heard this evening of any proposals for that.

I refer particularly to stage two of the Victoria Line. I am particularly interested in Tottenham because I believe it is at Tottenham where we can provide some of these facilities which motorists now coming into the centre of London could use, and so they could make maximum use of the new underground railway. They could come by car to Tottenham and park their cars and then use the tube into the centre of London. This would obviously be in keeping with the ideas the Government have for inner London transport problems and would alleviate the enormous difficulty of accommodating the thousands of motor cars there are today. The Government have failed to accept many suggestions which have been made to them about providing modern ideas for car parking facilities, particularly, as I say, in the Tottenham area.

There we have the opportunity to build a mechanical car park, with the use of computers, whereby motorists could come to Tottenham and put their cars into an automated car park. The motorist would place the car on a palette, the palette to be automatically directed into a storage position within the mechanical car park, and retrieve it by computer, on production of a card by the motorist when he wishes to retrieve his car. This could be done entirely by automatic means. An important point about this is that engineers who have worked on these sorts of schemes have proved that car parking facilities of this sort can be provided for less than £1,000 per motor car.

This is something of a revelation for we now hear of mechanical car parks being constructed in the country and one in Westminster where it is suggested that the cost per car will be about £4,500. There are other methods. I hope that the Minister will investigate them and not turn a deaf ear to them as was done in the past. Twelve months ago the Ministry failed to take up progressive ideas and an opportunity was lost.

While congratulating the Government on the statement that has been made, knowing that this is yet another step towards ultimate solution of transport problems in London, I hope that the Minister will have another look at the question of providing adequate car parks facilities on the perimeter, which would go some way towards solving difficulties of car parking in the centre.

10.41 p.m.

Mr. W. F. Deedes (Ashford)

I do not want to delay the House on the subject of London Transport's debt, although I share the doubts of my hon. Friend the Member for Weston-super-Mare (Mr. Webster) whether it is run in a businesslike way. Nor do I want to follow the very interesting remarks of the hon. Member for Tottenham (Mr. Atkinson) about car parks.

I want to refer to the services which London Transport is providing and in particular to the services to which the amount of money we are voting tonight will go. This Order provides a welcome opportunity to look into the future of London Transport's capital operations, especially those on the lines about which the Minister of State spoke. I want to refer to the application of this Order to the region south of the Thames where the Victoria Line is shortly to be completed and where the Brixton extension is to come into operation. This is where London Transport is embarking on its most extensive and expensive work. In my view, it will embark on a great deal more.

This is potentially the most expensive area which London Transport has to consider. The moment is approaching when, in conjunction with these works to which this money is going, we shall have to think about a big switch from the Southern Region railway to London Transport. The importance of the works which are to be funded by this additional money lies in what we may be able to do there. I do not believe that we shall be able to go on much longer with the present arrangements between London Transport and Southern Region bringing on to the Southern system about 900,000 travellers to London every day. I do not think we are entitled to expect Southern Region to do that on its present resources.

Therefore, in considering this Order, we are entitled to ask the Minister of State to take us a little further on the strategy which is in mind here. One might reflect that the money to be provided is ludicrously small. When one considers what is going on in some capitals such as Montreal, where I saw the new railway last year, or even San Paulo which can raise much less than London Transport, one sees that for the London network the additional capital even for two years is a great deal lower than is required. I believe the Minister of State told us that the Victoria Line and the Brixton extension would account for £28 m Ilion of the money we are voting. That will not offer much relief to the Southern Region.

On the other hand, the extension of the Fleet line would be a major contribution. Whether that comes into this block of capital, I am not clear. Perhaps the Minister of State could tell us. I am particularly interested in the Fleet line. It would be a major contribution to the Southern Region if London Transport could be made responsible—a combination of the Victoria, Brixton and Fleet line—for some of the dead-end Southern Region system south of London, such as the links to Addiscombe and Hayes. I understand that if a proper transaction went through the Southern Region could be saved about 15 trains a day at peak hours. This would transform the situation for travellers who use the Southern main line.

I know that the Government are taking a great interest in this, and I approve of what I know, which is that there is a joint committee looking into all this and considering the future. I suspect that finance is the stumbling block. How far these further transactions between London Transport and the Southern Region are to be allowed to go depends a great deal on the money. That is why I raise the matter now.

What will be the strategy? I am interested in what the Greater London Council will do with London Transport, but I am much more interested from the point of view of the area south of the river and what will be the relationship between the Southern Region and London Transport.

The Government have some responsibility, because they are increasing the hope. I shall probably be out of order if I raise the subject of Thamesmead, but this £200 million project will put considerable weight not only on the London Transport system south of the river, but on the Southern Region. My understanding is that London Transport is prepared, on certain terms, to take a bigger share of the load south of the river. We are about to give it more money. Therefore, I should like to know what obstacles, if any, there are to a transition of functions between London Transport and the Southern Region. The reason for taking this seriously is that we are considerably under stock with underground railway south of the River Thames. North of the River Thames—and this is often not appreciated—practically all the suburban service is on the underground. South of the river the Southern Region has to carry out the functions which the London Transport underground service does north of the river. This means that the main line railway shares its bottlenecks with the suburban railway and also shares its resources.

I will not dwell on this, because it will probably be out of order, but those who use the Southern Region system to travel far into the reaches of Kent and down to the coast have had a rough time during the last year or two. It would be a major contribution if London Transport were able to take a bigger share of the suburban traffic at the critical point.

It is a question of money—whether it will be the resources of London Transport or of the Southern Region. I want to see a major switch here and I should like to know how far the arrangements for which we are voting this capital will make it possible. I should like to think that it is accepted that London Transport has a rôle to play on surface rail as well as subway south of the river. I should like to know how much of the money that we are voting on these two new underground lines may eventually go towards this need. Before we grant this large, but by no means excessive sum of money, a word from the Minister of State on the strategy involved would be welcome.

10.50 p.m.

Mr. John Hunt (Bromley)

Unlike the hon. Member for Tottenham (Mr. Atkinson), I believe that this Order will be greeted with despair and despondency by taxpayers and by the travelling public in Greater London who have come to regard the coffers of London Transport as a bottomless pit into which increasingly large sums of their money are being relentlessly poured.

As my hon. Friend reminded us, it is less than two years since the House voted £16 million to London Transport. We were told then that this sum would see it through until the end of, 1968. The right hon. Lady the Minister of Transport told us during the Second Reading debate on the Transport Finances Bill that this money—that is the £16 million—would provide a breathing space…to carry out fundamental changes of policy and she went on to speak with pride of the Transport Co-ordination Council for London which was sitting under her chairmanship. The Council, she said, would get operational co-ordination and generally make public transport more effective."—[OFFICIAL REPORT, 18th May, 1966; Vol. 728, c. 1360] No doubt that was part of the new Britain which was to be forged in the white heat of the technological revolution. What a pity the right hon. Lady is not present tonight to tell us of the progress which has been made by this Council.

In the same debate nearly two years ago, the hon. Gentleman who is now the Minister of State said that the time between then, that is 1966, and the end of 1968, would be used for a drastic reappraisal of the problems of London Transport. He now has only nine months to go, and I hope that at least we shall have some sort of interim report tonight on the reappraisal which he has been making during this period.

Mr. Swingler

I take it that the hon. Gentleman is expressing his opposition to the agreement which my right hon. Friend has come to with the Leader of the Greater London Council to give the G.L.C. responsibility for public transport?

Mr. Hunt

No. I shall come to that in a 'moment. I do not think it was specifically said in 1966 that the drastic reappraisal to which the hon. Gentleman was referring then related to the takeover of London Transport by the G.L.C.

Mr. Swingler

In that case the hon. Gentleman cannot have been following what we have been talking about. We have been discussing the necessity of trying to get some integration between highway planning, traffic management, and responsibility for public transport, and if the hon. Gentleman had been following our discussions he would have realised that my right hon. Friend's agreement with the Leader of the G.L.C. was part of the attempt to get the organisation which is necessary for the Metropolitan area, part of which I take it he represents.

Mr. Hunt

Perhaps when the hon. Gentleman replies to the debate he will tell us the function of the Transport Coordination Council for London in these negotiations, and what work it has been doing. I am still waiting to hear the results of the work which has been going on under the chairmanship of his right hon. Friend. There are ugly rumours that this Council has been merged with the Winter Emergency Committee. If this is so, we ought to be told something about it.

All that appears to be happening at the moment is that London's fares are going up, subsidies are increasing, and the efficiency and punctuality of London Transport services are going down. The 14 per cent. increase in fares which is now envisaged will mean that since 1966 average fares have increased by nearly 25 per cent. This is some contribution to the Government's prices and incomes policy! Ever since 1965 the London Transport Board has been operating at a deficit, and now the taxpayers and passengers of London are being called on to foot the bill, for continuing inefficiency under this authority. As my hon. Friend said, the recent Report of the Prices and Incomes Board was a scathing indictment of the management of London Transport, which has proved by its results to be timid and tepid.

As has been said already tonight, labour costs represent between 70 per cent. and 80 per cent. of the total outgoings; yet what is being done? We are still waiting to hear. What is being done to make significant economies in this sphere? What is being done, as has been asked already, to speed up the conversion of London's buses to one-man operation? The hon. Gentleman said that substantial moves were being made in this direction. We want to know tonight how substantial they are. It was originally proposed that this should be carried out over the absurdly extended period of 15 years. What is now the time scale? Is it five years, ten years, or eight years as the Prices and Incomes Board suggests?

I spoke during the debate on the Transport Finances Bill nearly two years ago, and said that I could never understand why there have to be ticket collectors at the entrance as well as at the exit to underground stations, and yet the ticket collectors are still there, knitting and nattering, usually entirely oblivious to the passengers who are passing by. This is an inexcusable waste of manpower and womanpower in London Transport.

In the same debate in 1966 I asked why the no-standing rule on London's buses between 10 a.m. and 4 p.m. could not be scrapped, and yet this antiquated, absurd, restrictive practice still survives, and the passengers and the taxpayers of Greater London have to pay for it.

Why are the unions still able to insist that no part-time labour should be employed by London Transport during peak periods? Surely it is time for a firmer line to be taken with them. Is it not time that the Minister laid down some rigid conditions before distributing even more largesse in the Way that is proposed tonight?

Two further interesting suggestions for economies have been made by the Prices and Incomes Board in its very authoritative Report.

Mr. Robert Maxwell (Buckingham)

Since part-time-drivers are an issue which ha: been raised by many hon. Members on this side, may I ask whether the hon. Gentleman is aware that public transport in the United States where part-time drivers are employed is a complete, utter and abysmal failure? Were it to be introduced in London, the public services, which are, by and large, the best in the world, would come to a halt.

Mr. Hunt

I have no personal experience of the United States; I can only quote as my authority the Prices and Incomes Board's Report, which I commend to the hon. Gentleman. There is a clear implication there that this system should be tried in this country. At least we can experiment in that respect. Let us have some moves in that direction.

Mr. Atkinson

In talking about part-time bus drivers, presumably the hon. Member is talking about drivers who are already professionally occupied as drivers. To have part-time drivers means that a driver who is working during the day will take an additional job during the evening as a bus driver. This is a fantastic proposition. Or is he suggesting that men who work as barmen in the morning become bus drivers at night, and the men who work as bus drivers in the morning become barmen at night? What kind of logic is there in this argument?

Mr. Hunt

Surely the situation at the moment is that there is a great deal of idle manpower for many hours of the day, which is utterly uneconomic and expensive. We should try every possible method to reduce the operating costs of London Transport in this respect. I am not saying it should be done overnight, or on a widespread scale, but let us have a pilot system, modelled perhaps on the United States experience.

The Report of the Prices and Incomes Board makes a number of other suggestions for economies which we should hear something about from the Minister of State. It refers, as has been mentioned in the debate, to the substantial loss from fraud, from the fare-dodgers on London Transport. The automatic fare collector is the only long-term solution to the problem. Therefore, can we be told what specific progress has been made in this direction, and what other steps are being taken now to deter the widespread cheating and evasion which goes on?

Reference has been made to the other suggestion of the National Board for Prices and Incomes for a campaign to woo the car driver hack on to public transport by reminding him of the cost of travelling by car, sharply increased again by the Budget. The National Board for Prices and Incomes suggested that it should be done not by advertisements on station sites, which are not seen by car drivers, but on television and in national and local newspapers. Surely it is a plan worth pursuing. Has the Minister of State asked London Transport what it thinks about it? Similarly, has he asked it for some sort of progress report on the provision of car parking facilities, about which I am in complete agreement with the hon. Member for Tottenham (Mr. Atkinson)?

I have no doubt that, when control of this vast transport authority is vested in the Conservative-controlled Greater London Council, all these matters will be tackled with the vigour, imagination and determination which have been so conspicuously lacking under its present management. In the meantime, the people of London are being called upon to pay more and more for a steadily deteriorating service—

Mr. A. H. Macdonald (Chislehurst)

Do I take it that the hon. Gentleman does not agree with the suggestion made by his hon. Friend the Member for Weston-super-Mare (Mr. Webster) that there should be a further increase in commuter fares?

Mr. Hunt

The agreement is that any increase in commuter fares will take place before the G.L.C. assume responsibility. I understand that that is the basis of the agreement and, to that extent, the hon. Gentleman's intervention was totally irrelevant.

I repeat that passengers within the London Transport area are being called upon to pay more and more for a steadily deteriorating service. This is a sad indictment both of the management of London Transport and of the much vaunted planning and co-ordination of the party opposite. Once again the Government have failed to keep their promises and fulfil their expectations. This Order is further proof of their failure and incompetence.

11.4 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

I rise briefly to ask why my constituents, who live 90 miles away from London, should be asked to fork out again for London Transport.

It must be faced that this £20 million of extra capital will not be borrowed. We have been taxed in the Budget to provide it. In addition, we are asked to pay large sums of money to cover the ever-mounting deficit of London Transport. On behalf of my constituents, I am entitled to ask why they should pay these taxes to benefit people who live in London.

Mr. Swingler

On a point of order, Mr. Deputy Speaker. I must point out that we are discussing a Borrowing Powers Order. It does not deal with deficit grants.

Mr. Deputy Speaker (Sir Eric Fletcher)

The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) must keep to the Order, which is concerned with borrowing.

Mr. Ridley

As I said, the Order requires another £20 million to be lent to London Transport, and that sum will be found out of the Budget surplus of £1,300 million which was raised by the Chancellor last week. I object most strongly to this additional taxation being raised to meet extra capital required for London Transport. I do not see why my constituents should pay more tax to provide for the ever-mounting profligate expenditure on capital account by London Transport.

Government policy is that investment in nationalised industries should be controlled by an 8 per cent. discounted cash flow rate, and that any project which does not meet this test for investment purposes should not be proceeded with. Here we have had £68 million for the Victoria Line—which is past history—a further £16 million for the Brixton extension and a further £6 million for the District, City and Metropolitan Line remodelling. Has all that expenditure met the 8 per cent. discounted cash flow test?

Mr. Swingler

Did the hon. Member oppose the approval given by the House in respect of the Victoria Line at the time when the right hon. Member for Wallasey (Mr. Marples) was Minister?

Mr. Ridley

I am asking the hon. Gentleman whether the money that he is asking for from the House has met the 8 per cent. discounted cash flow test, which is the Government's own test of whether investments should be made. I would remind the Minister that at the time when the Victoria Line was first authorised the 8 per cent. discounted cash flow test was not in existence—rightly or wrongly. I am asking him whether his own test has been applied in this case.

I have a suspicion that something is wrong. I would not be averse to putting the hon. Member for Buckingham (Mr. Maxwell) in charge of London Transport. He has made this honourable House pay its way in respect of its own catering. He might be able to make London Transport pay its way. I agree that there would then be an increase in London Transport fares, but this might not be a bad thing if it let my constituents off the hook of having to bail out London Transport. I should be prepared for the sacrifice of losing the hon. Member from the House if he could turn London Transport's deficit into a profit.

There is a serious point here. If the prices for a commodity are too low there is an excessive demand for it. That results in excessive investment, and in the end the taxpayer has to pay in two ways. He has to pay to meet that deficit and he has to pay to meet that extra capital required by that excessive demand. I therefore hope that the Minister of State will announce plans for bringing London Transport back into surplus. I see no reason why constituents of hon. Members who do not represent areas in London, and who get no benefit from London Transport, should be forced to pay these sums in order to find this capital.

Mr. Leslie Huckfield

Did the hon. Member's constituents also object to subsidising surburban rail losses in Birmingham, and other development areas, as mentioned by his hon. Friend the Member for Weston-super-Mare (Mr. Webster)?

Mr. Ridley

I should not be able to say this if the taxpayers were prepared to subsidise rural bus services in my constituency. They are in a parlous financial state, and there is something to be said for funds being made available to help them and other rural bus services. Since this traffic is one way, however, and the money is paid by the rural communities to help the urban centres—Birmingham, London and the rest of the large cities are all subsidised—I suggest that it would be better to slop subsidising transport and to make it all pay its own way.

I hope that the Minister of State will uphold the principle of people paying their own way, and will agree that constituents living outside London should not be asked to subscribe to the fare structure of an under-priced Metropolis system.

11.15 p.m.

Mr. Swingler

With your leave, Mr. Speaker, and that of the House, I will speak again. I will resist the temptation, in spite of the incitement offered, to make a partisan speech. I am inspired by the speech of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley)—a very interesting speech, conveniently combined with points that are to come later. To be sure, all hon. Members when they examine their consciences in relation to transport in their constituencies must admit to a certain amount of confusion. A large number of them know perfectly well that they demand from the Ministry of Transport transport services subsidised by someone outside their constituencies. Sometimes I am tempted to produce a list of hon. Members who, in one way or another, have sought from the Ministry maintenance of some form of transport services, or levels of fares, or structures, or the like that would have to be subsidised by someone else.

I do not make much point of that—it occurs on both sides—and it relates to the long-term problem that, whether we are dealing with railway closures, or levels of bus fares, or underground developments, or the organisations of road tunnels, and so one, one part of the country, through our system of taxation helps other parts. Some parts receive very substantial investment in transport facilities which are paid for by the taxation of people in other parts who do not receive such substantial investment in transport facilities—

Mr. Ridley

The Minister has coupled his remarks with my own speech. I should like him to admit that I have never, either personally or on behalf of my constituents, asked him or the Ministry for any subsidy whatsoever. I should be grateful if he would acknowledge that fact.

Mr. Swingler

Without the book, I will rely on the crystal ball and exonerate the hon. Gentleman. He must be in the minority of hon. Members, many of whom accept that this is the state of affairs. It is one of the problems we have to face. We all want the best facilities—underground services, railway services, and so on—and many of these simply cannot be made to pay. But people want them, and hon. Members quite rightly representing their constituents ask for them, sometimes demand them. Those facilities can only be provided on the basis of being subsidised through the national taxation.

We know that in London we need a London transportation authority, and that is the answer to the hon. Member for Bromley (Mr. Hunt). My right hon. Friend wants to see the establishment of a London transportation authority to organise road planning, the provision of public transport, traffic management, and such things. That is the only thing that makes sense right across the country. We have said that we cannot wait for the reorganisation of local government to get these things, but must proceed to establish the necessary powers. That is why in Standing Committee F, with the help of my hon. Friend the Member for Nuneaton (Mr. Leslie Huckfield), we are getting powers to establish passenger transport authorities whose work will later have to be harmonised with that of local government. The whole exercise is about the integration of powers for highway planning, public transport planning and traffic management. That is what it is all about. In London, my right hon. Friend is very glad to have arrived, with her consistent exposition of these principles, at an agreement with the Greater London Council to see that we proceed to get that and put it on the most viable basis. I will make no further comment about the measures which we must take to implement the agreement which my right hon. Friend has reached in principle with the leaders of the Greater London Council in order to get it.

A number of points have been raised by hon. Members in detail about how we should do these things. I say straight away how much I agree with my hon. Friend the Member for Tottenham (Mr. Atkinson) about car parking arrangements. There is no doubt that great mistakes have been made and great opportunities have been missed in the organisation of car parking facilities at public transport terminals, especially in the peripheral areas, on the most economic scale. Any proposal which my hon. Friend cares to put forward will be carefully considered.

I do not have the figures with me, but more facilities are steadily being provided all the time in that respect, because they are extremely important. If people can come forward with better propositions about how, in this capital city, we can promote "park and ride" and get a better organisation of car parking at public transport terminals, those are the people who should be welcomed with open arms. We will examine in the most serious way any suggestions or proposals which they make.

I address myself to the right hon. Member for Ashford (Mr. Deedes). We know what a serious problem exists south of the river, and has existed for some time. Serious discussions are going on between the Government, London Transport and British Railways about future development in this sphere, and especially the relationship between the facilities provided by British Railways and those provided by London Transport. We must scrutinise with the utmost care the inter-changeability of these facilities and the way in which they should be co-ordinated.

Developments underground are extremely expensive. I gave figures tonight. The point which hon. Members must face, and which the right hon. Member for Wallasey (Mr. Marples) had to face, is that, when considering these facilities and the development of underground railways, one is rarely faced with a proposition which is reckoned to be profitable. Nevertheless, we are faced with a proposition which, in terms of social benefit, especially when taking into account the relief of congestion on the roads, is justifiable. That is a quite recent development in thinking, but it is an important development. If we tie ourselves to the profitability criterion, very few developments of facilities might take place.

We must consider more and more the balance between social cost and social benefits, the provision of facilities and the making of investments. This was done in the case of the approval which was given for the Victoria line. This will apply very strongly in the South-East to our future consideration of the provision of new transport facilities.

Mr. Deedes

In connection of the cost of underground railways, which, we accept, is enormous,: did not the right hon. Gentleman intend to have a cost-effectiveness test of whether underground, overhead or other means would ultimately provide the best result? What happened to that test?

Mr. Swingler

We are constantly considering these things, scrutinising them and refining the techniques. It is no good the hon. Member for Cirencester and Tewkesbury laughing. I very much doubt whether he has read the Manchester study. Probably he has not. We are today employing a considerable number of private, profit-making consultants—I expected that to please hon. Members opposite—to examine how these issues should be determined.

Perhaps hon. Gentlemen might care to read the Manchester Study. Perhaps they might care to read some Other studies which have come out. They might care to read the results of. the London Transport Survey—all done by private profit-making or fee-earning consultants, and I hope they will not be distrusted—and se. what results are tending to emerge from those studies. We are relying on the best professional advice from this country, from the United States and from others to tell us what are the projects that should be promoted.

One thing that is generally agreed among them all is that only on the basis of integrated planning and the highest state of co-ordination between different modes of transport and the acts of local government will we be able to get these facilities. Therefore, that is what we are trying to do.

I hope you will forgive me, Mr. Deputy Speaker, if I have strayed slightly beyond the borrowing powers of the London Transport Board, but this Order to increase the borrowing powers of London Transport is for the purpose of enabling them to provide facilities justified on social benefit grounds, to extend the underground, to improve the bus service and other matters of that kind. In pursuance of that, and in pursuance of our discussions with the trade unions for one-man operation and other matters of that kind, we will raise the state of productivity to bring into being steadily in the coming months a transportation authority in London which can really tackle, on an integrated and co-ordinated basis, the fundamental problems which have been accumulating over so many decades.

Question put and agreed to.

Resolved, That the London Transport Board (Borrowing Powers) Order 1968, a draft of which was laid before this House on 21st March, be approved.