TRANSPORT BOARDS

HC Deb 22 January 1968 vol 757 cc36-109

Motion made, and Question proposed, That a Revised Supplementary sum, not exceeding £30,000,000, be granted to Her Majesty out of the Consolidated Fund, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1968, for the expenditure of the Ministry of Transport in grant to the British Railways Board, the London Transport Board and the British Waterways Board in respect of deficits on their revenue accounts.—[Mr. John Morris.]

3.40 p.m.

Mr. Edward M. Taylor (Glasgow, Cathcart)

During the short time that I have been in the House, Supply days have been used, by and large, to discuss other items. We have taken that opportunity to discuss matters of very real and relevant significance for the country's future. On this occasion, however, we have decided to use the time, as it was originally intended, to discuss Supply. I believe that there is no more important or vital aspect of our present position than the economic crisis, and a Supplementary Estimate of the order of £30 million is quite clearly a matter of great significance.

The total amount referred to in the Vote is £168 million, which is an increase of £30 million. When in June, 1967, we discussed the British Railways deficit of £153 million which makes up almost all this amount, several hon. Members on this side expressed alarm at what was taking place; at the sheer size of a deficit of £153 million; and, more important, at the fact that the Government appeared to be making no significant changes of policy which could reduce the amount. Sadly, our worst fears have been realised and, once again, we find ourselves with an enormous deficit. The plain fact is that the British Railways deficit is now assuming the dimensions of a national disaster.

We have to consider that recently we hive been discussing a policy to reintroduce prescription charges which involved a great deal of controversy and trouble, and was related to a sum of £25 million. We have to consider the very real alarm and misery which will stem from the Government's decision to reduce expenditure on Scottish housing by £7 million over a period of two years, which is only one-fourteenth of the amount of this year's railway deficit. We have to consider the dangers to our national security and to our substantial assets east of Suez because of a recent Government decision in that regard; and that all our defence capability there could have been continued in the 'eighties, and not the 'seventies, if we were able to take the amount represented by just one year of the deficit.

Consideration of all those aspects gives some idea of the amount of money of which we are now speaking. The fact is that this year's deficit is equivalent to 5s. per week every week for the average family. In effect, what we are doing is paying an extra insurance stamp of 5s. every week just because of the deficit.

We on this side are not in any way trying to suggest that the elimination of the deficit is easy: on the other hand, when hon. Members opposite and people outside talk about the social consequences of action on the railways we should also remember the importance in social priority of a sum of over £150 million. It is a very substantial amount. We therefore believe that at a time of economic stringency, at a time when the Government are very carefully scrutinising all items of expenditure, when nothing is sacrosanct and sacred cows no longer exist, we should look very carefully at the deficit relating to this Supplementary Estimate and at all aspects of our policy.

The importance of the amount is not just a question of money. In our debate on 26th June last, I was very impressed by the speech of the hon. Member for Central Ayrshire (Mr. Manuel), who often speaks in our railway debates. On that occasion he made a very sensible and important statement. The hon. Gentleman then said: 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."—[OFFICIAL REPORT, 26th June, 1967; Vol. 749, c. 135.] That is absolutely true. The existence of a substantial deficit has a very devastating effect on the morale of railwaymen. The one real asset the railways have are the men who work on them. There could be no greater body of people so committed heart and soul to the future of this great industry.

We shall have to ask many questions about this Supplementary Estimate, and I hope that the Minister will answer them fully. The first and obvious one must be why there has been such a very substantial error in calculations, and what steps are being taken to prevent this happening in the future. We often have under-estimates—our debates in recent years have seen several examples in which the overspending of money has caused major controversy—but we now have a major overspending of £30 million in one year, and when we have such a major difference without any significant changes of policy taking place in between questions must be asked.

These are not just my own fears. The Estimates Committee, when considering a memorandum submitted by British Railways only a few weeks ago, pointed out in a Report published in December that it was very alarmed. In page 7 of its Report we read: Your Committee feel bound to point out that Supplementary Estimates for the British Railways Board are becoming a regular occurrence. Apart from the disturbing picture this presents of the failure of the railways to pay their way"— that is obvious— there appears to be a continuing inability on the part of those concerned to make accurate estimates. For example, in their Eighth Report for Session 1966–67 the Estimates Committee reported to the House an increased deficit for the British Railways Board, due largely to a loss of freight receipts caused by the economic climate. This is virtually an identical account to that which Your Committee are now reporting. While accepting that the present economic situation was difficult to forecast, Your Committee consider that the British Railways Board should have been able, as a result of their experience last year, to make their estimates for the current year more realistic. That is a very carefully worded and very sensible comment. We might not think such a major mistake so disastrous if it had not happened before, but, as the Committee points out, we now have exactly the same question arising and exactly the same explanation given, though the same sort of disaster has happened in a previous year.

Our first question, therefore, is: what steps are the Government taking to make sure that this will not happen again? When the Government are thinking in terms of very tight budgeting and of trying to work out amounts to the nearest £1 million in so many social spheres, we must know what steps they intend to take to make sure that a mistake of £30 million will not occur again. The Government's answer to that question is one in which every hon. Member and every taxpayer will have a very real interest.

The second question that we on this side are entitled to ask is whether the Government consider that this is a matter that will not arise again, but that there will be an improvement in the financial position of British Railways. When we recall that my hon. Friend the Member for Worcester (Mr. Peter Walker) pointed out in our June debate that we have made a capital investment of £1,200 million in British Railways over the last 10 years, it seems incomprehensible that we should have a deficit which has been growing under this Government and which, looking to the immediate future, appears likely to continue to grow.

It is worrying if we take into account the reasons given by the British Railways Board in statements to the Estimates Committee. All the reasons given for this Supplementary Estimate and the size of the deficit would appear to be factors which are not improving, but are getting worse. We look at the four essential reasons which British Railways gave in the statement, contained in Appendix 2 of the Report on pages 44 and 45. The first reason was an absence of upturn in the level of economic activity.

Do hon. Members on either side of the House, having heard the Chancellor of the Exchequer and other Ministers including the Prime Minister speaking in recent debates, consider that this factor will disappear as a result of the Government's economic policies? The slashing of Government expenditure and the further dampening measures on the economy which we all know are to come, but we do not know exactly when they will come, will unquestionably have a serious effect on the level of economic activity.

I well remember listening to speeches by hon. Members opposite in which they said that it was possible to have a growth rate not of 5 per cent. such as we had in the last two years of Conservative Government, but of 6 per cent. by investment programmes. Then we had the National Plan, which suggested 4 per cent., and later the former Chancellor spoke of 3 per cent. Under the present Government the economy has hardly grown at all. On average, it has been a growth of 1 per cent. and the prospect for the future is that things will get worse. Do the Government estimate an improvement in this factor in the immediate future? I cannot see a remarkable upturn in economic activity. We must discount this factor when we are looking for an improvement.

The second reason given to the Estimates Committee was that coal traffic has been hit. Hon. Members opposite are constantly reminding us that the future of the coal industry is not so bright as it once was. This is a vital factor for British Railways. As the Minister pointed out on 26th June, one-third of the freight receipts come from coal and about 90 per cent. of the freight total comes from coal and steel. Can we look for an improvement here? In all previous debates on the railways we have had the unknown factor of a White Paper on Fuel Policy, but this is now available. Despite devaluation, it seems that it will be the basis of fuel estimates at least over the next five years.

The White Paper tells us that the amount of coal required between now and 1970 will fall by about 20 million tons per year. Here is another factor in which the coal industry is heading for a rapid contraction and this unquestionably will have a very considerable effect on British Railways. This was given as a reason for decline. The Supplementary Estimate this year and looking to the immediate future makes it a factor which can only deteriorate. Every estimate made by this Government about the amount of coal which would be required and consumed has, unfortunately, proved over-pessimistic. If we have the suggestion of a 20 million ton reduction over the next few years, it might be more serious. We can see no sign of improvement here. The third reason was that iron and steel has been seriously affected by the recession. I suggest that the recession will not disappear. From the meagre reports by the British Steel Corporation now that the industry is under public ownership, there seems no immediate prospect of a considerable improvement in the iron and steel industry. To that extent the Government cannot look for much progress.

The fourth factor, a smaller one in total, is the question of industrial stoppages and disputes. It was pointed out to the Committee that £2 million had been taken up by disputes over freight terminals and also the dock strike and the A.S.L.E.F. strike. Although we have been given an assurance that industrial relations would flourish under the present Government, I think that it was right of my hon. Friend the Member for Worcester to point out in a recent speech that industrial relations on British Railways are not flourishing and morale is perhaps at an all-time low.

In all this tale of gloom presented to the Estimates Committee, there was one hopeful factor. It was the statement that freightliner business had been improving and the amount received from it in one particular case had been an underestimate. We on this side of the House have consistently pointed out that the whole freightliner network, planned and financed by the previous Government, offers an enormous potential for British Railways. Is it not a tragedy that tomorrow in Standing Committee we shall be starting proceedings on the Transport Bill which will take away from British Railways total control of the freightliner system, which is the one real growth factor? We can see on the basis of present Government policy no wonderful improvement in the situation; in fact, we see it getting worse.

When we have a deficit of £150 million, when we see the situation getting worse at a time of economic stringency this is a matter of very real concern for every Minister, for the Cabinet, for every hon. Member and for every taxpayer. When he was speaking of the problem in the debate on 26th June, the Parliamen- tary Secretary to the Ministry of Transport pointed out that there were two essential tasks. He said that the first was a question of accountancy and how to look at the figures. The second was a question of remedying the underlying causes. There is no question that on looking at the accountancy the Minister has kept his promise, because in the Committee tomorrow we shall be starting on a remarkable Bill which will change round the accounts of British Railways very considerably.

The best summary of this new situation was given in the magazine Modern Railways, in the January issue, by Mr. Fiennes, who is known to the Minister. The heading was: They have shuffled the deficit under the rug. This is the whole basis of the policy which the Government are bringing forward under the Bill. They are changing the figures round. Instead of a deficit it will be called a loan or a grant.

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

On a point of order, Mr. Deputy Speaker. I wonder how far we can pursue the matter of legislation in this debate. There will be an opportunity in Committee in the next few weeks. I am concerned about, whether it can be discussed now.

Mr. Deputy Speaker (Sir Eric Fletcher)

In this debate hon. Members are entitled to discuss the Supplementary Estimates and anything which reasonably arises from the Estimates.

Mr. Taylor

I am well aware that these are facts which the Parliamentary Secretary does not want to hear and matters which he does not want to have ventilated in the House. If he cannot see the relevance to the estimates of what I have been saying, the future of British Railways is much more gloomy than we thought.

This matter is uniquely relevant to the question of the Supplementary Estimates and what the Government intend to do about the problem. Not only do we consider it directly relevant to this debate, but I hope that the Minister will reply to it. If he is to shelter behind a question of order to avoid answering questions, we shall take the strongest exception.

The hon. Gentleman said that, first, we had to get accounting right; he is doing that by shuffling the deficit under the rug. What about the second thing he would do to remedy underlying causes of the British Railways' deficit? This is something we have not seen happening. All that has happened has been talk about new grants, loans and subsidies. There has been nothing about the fundamental weaknesses and causes of this trouble. Instead of taking no action, which would have been preferable in present circumstances, the Government have been taking actions which we believe to be entirely wrong.

How are we to get rid of Supplementary Estimates such as this and of the British Railways' deficit? One way which the Minister suggested was by getting at underlying causes. There is another way; that is, to ruin those in competition and to try to make life so difficult for them to compete with British Railways that the deficit may be reduced by forcing traffic on to the railways. I look at the history of previous Budgets tax pressures, the £350 million annual extra tax put on road users and present plans for further taxes of £40 million on road users. It might seem to those looking at the Supplementary Estimates that this is what the Government have in mind—that they are trying to solve the problems of the railways by making life impossible and uneconomic for those who compete with them. This is the wrong course of action and one that we shall bitterly oppose.

The National Plan, the most unique contribution by the Government to the wastepaper drive, surprisingly enough had some useful things to say about British Railways, the deficit and the Supplementary Estimates that we are considering. It suggested that the railways working investment might be eliminated by 1970 if certain things were done—if there was substantial progress in implementing the closure proposals, if a start was made on the process of concentrating on selected trunk routes and if there was co-operation with the unions in increasing productivity and on the question of train manning. We believed that it was a sensible policy and could have been achieved.

But there was a fourth factor at the foot of the page, one which the people who drew up the National Plan con sidered uniquely relevant, the question of investment. They said that they believed that investment should be £135 million annually looking over the next few years, and that this would not be an enormous increase against the vast sums which were spent on investment in the railways by a previous Government.

I put a third question to the Minister on the question of these Supplementary Estimates. Does he see any hope of Estimates like these not being brought before the House without a substantial programme of real investment in British Railways? The fact is that although the Government apparently have millions of pounds to spend on all kinds of nationalisation in the field of transport, when it comes to investment I believe that they have been starving the railways of much-needed investment which could lead to the kind of policies and service which could eliminate deficits and prevent this kind of Supplementary Estimate coming before us.

I remember the Minister of Transport speaking about this crucial factor of modernisation which is vital for providing morale. At the conference of N.U.R. branch secretaries in June last year she 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 or a golden crown for railwaymen. In the Second Reading debate I pointed out that the Minister had selected the framework of a glass coach, but, unfortunately, through weakness and obsession with ideology, had succeeded, where Prince Charming failed, in transforming the embryo glass coach into a pumpkin. We can see this happening no more relevantly than in the field of investment.

The National Plan said on page 129 that £135 million of investment was considered in real terms to be the basis of the future. What has happened?

Mr. Deputy Speaker

Order. I think that the hon. Gentleman was right in saying that he is entitled, in considering the Supplementary Estimates, to deal, if he thinks it proper, with any matters that may involve legislation, but it does not seem to me that in dealing with the Supplementary Estimates one can deal with the question of investment.

Mr. Taylor

I can appreciate, Mr. Deputy Speaker, that at this point it might appear that I was going away from the subject.

I was trying to point out that one of the reasons, I believe, for our having this Supplementary Estimate is a reduction which the Government made in the investment programme, and I am anxious that they should take steps to stop future Supplementary Estimates of this kind. We have recently had word of a further reduction in investment. It was that sole point that I was hoping to make, and also to give figures.

Mr. Deputy Speaker

We cannot deal with hypothetical questions about possible future Supplementary Estimates. We can deal only with the Supplementary Estimate before us.

Mr. John Peyton (Yeovil)

On a point of order, Mr. Deputy Speaker. I ask for your guidance. The House of Commons is faced with a disaster, that it should be asked to provide another £30 million on top of the already very large estimated deficit. The House would surely, I submit, be grossly negligent in its duty if it did not ask for assurances from Ministers that this will not happen again. We are not here just to put a rubber stamp on a disgraceful state of affairs. We are here also to ask for remedies.

Mr. Deputy Speaker

There are obviously some limits to what the House can discuss in debating the Winter Supplementary Estimates. As I understand the position, the House is entitled to discuss whether this Supplementary Estimate for £30 million is justified or not and whether the House should approve it or not. In considering that, it is possible to discuss whether any legislation is desirable or not. However, I do not think that we can discuss hypothetical questions as to whether future Supplementary Estimates may or may not be put forward as a result of the Government's present policy. We must confine this debate to whether the House should approve or disapprove the recommendation by the Government for a Supplementary Estimate of £30 million.

Mr. Peyton

Further to the point of order, Mr. Deputy Speaker. I am very sorry to have to pursue the matter. [Interruption.] Perhaps it would be better if the Joint Parliamentary Secretary were in the Chair. My point—it comes very much out of what you have just said, Mr. Deputy Speaker—is that we are dealing with this present Supplementary Estimate and the House has to decide whether to support it or vote against it.

For my part—I do not know about my right hon. and hon. Friends on the Opposition Front Bench—I would willingly vote against the Supplementary Estimate unless the Government are able to adduce arguments to show that this disgraceful state of affairs will not be repeated. It is very much upon that that I seek your guidance.

Mr. Deputy Speaker

Obviously, the Chair has to be reasonable in allowing limits of debate on Supplementary Estimates, and I will do my best in that regard. I think that we have to be careful not to go very much wider than the question whether this particular Supplementary Estimate is desirable or not. Within certain limits it is permissible, in my view, for the hon. Member to ask what the consequences of this Supplementary Estimate might be, but not to any great length.

Mr. Taylor

I am extremely grateful, Mr. Deputy Speaker. This has been due to my inexperience in the House and on the Opposition Front Bench. It is such a wide subject, on which we feel so strongly, that we are inclined to go outside the limit. However, I will keep strictly to what you have suggested.

I believe that one of the reasons for the Supplementary Estimate was the cutting of the British Railways' capital investment during the year that we are considering, which I believe has reduced the competitiveness of the railways. When we consider that the 1967 Estimate was £104 million and that in July, 1966, the capital expenditure was reduced by £14 million, I suggest that this was directly relevant.

What attitude should we take? We might be prepared to say that a mistake was made, but we would forget about it and approve the Vote were it not for the feeling that we have that exactly the same thing is being done again. Written Answers were given on 20th December last, particularly in column 414, showing that the electrification of the Crewe to Glasgow line is being indefinitely postponed by the Minister. We on this side believe that one of the basic factors accounting for the Supplementary Estimate was the postponement of modernisation schemes. Looking to the future, we are given no confidence when we see exactly the same thing being done again.

Mr. Archie Manuel (Central Ayrshire)

The hon. Gentleman talks about "the Estimate", but these Estimates are from three Boards. He talked scathingly about the Railways Board. Has he studied the position of the Waterways Board?

Mr. Taylor

I have studied the position of the Waterways Board in some detail. Having taken half an hour to deal with one aspect of this matter, I am inclined not to go greatly into the details of the position of the Waterways Board. We have, however, looked into the matter in some detail, and I hope that some of my hon. Friends with special, interests in British Waterways will put forward our arguments.

I understand that, as a result of actions which have been taken, investment in the current year will be about £100 million, which, unfortunately, is a substantial decline on what we have had recently. This is not the kind of policy which we should be adopting. It is not the kind of plan we need to modernise British Railways and give them a real future. I am afraid that many of the amounts contained in the Supplementary Estimates are due to the varied activities of British Railways, some of which are not really relevant to the running of a railway, and have diverted necessary management technique and interest away from the basic and essential job of running trains.

We see in the Report to the Estimates Committee that the surplus on British Railways' hotels was only £700,000, compared with a budgeted £1 million. This is very unfortunate when we consider that the amount of profit made on the British Railways' catering services shows a return of less than 1 per cent. on capital investment invested. This was given as one of the side reasons for these Supplementary Estimates. This raises the question: is it sensible or reasonable in a major industry like this for the Government to divert so much of the activities of management into so many areas which could probably be more effectively operated by people outwith the railway industry?

There is scope for diversification of management and ownership in this direction. If the Government were to come forward with sensible policies which would create capital by disposing of certain of these assets, or allowing private participation of capital in these ventures, we might have far more hope for the future, and the kind of difficulties we have had might not reappear. Can the Government tell us if they have any plans for the disposal of property by British Railways and what relationship such policies have to the production of these Supplementary Estimates? We see from the Report to the Estimates Committee a considerable excess on the sales of surplus property. There is far more scope in this direction and we hope that there is a great future here.

There is no question but that morale has a very real influence on the profitability of any industry. I would be interested to hear from the Joint Parliamentary Secretary the extent to which he felt that morale, particularly among management, was connected with the production of such substantial Supplementary Estimates. My hon. Friend and right hon. Friends have consistently pointed out the great importance of management morale to the whole success of British Railways.

When we look back over the last year the tragedy is that the Government's policy on management, particularly top management, is shown to be almost scandalous. We now have a Chairman of British Railways in whom all hon. Members have very real confidence, a man who has made an enormous contribution to the industry. What is disastrous is that his whole authority within the railways should have been adversely affected by the scandalous series of events leading up to his appointment. It was a situation in which the job appears to have been hawked round the City of London and we finally ended up by refusing to pay this man the rate for the job.

We certainly cannot hope to overcome management problems and attract forward-looking and progressive people into the industry so long as this is the Government's policy. No one cares more about management in British Railways than the former Chairman, Sir Stanley Raymond, who made a major contribution to British Railways. I was interested to read one of his recent speeches, made on 6th December, 1967, when he was talking on leadership in a changing world. He referred to the fact that if he had made any lasting contribution to the transport industry it was the British Transport Staff College at Woking, which has already had about 600 potential managers through its 13-week intensive course.

Those of us who know of this college have the highest confidence in it. It would be interesting to know what the Government's future policy on management will be and, what is more important, what has happened to the 600 men who have been going through this intensive course? The morale of top management in British Railways has been seriously affected by the sad story of the appointment the Chairman and I hope that the Government will ensure that such a situation never happens again.

Another factor which may be directly relevant to the Supplementary Estimates is the fall in railway receipts, particularly freight rates. I wonder whether the Government would be prepared to institute a real investigation into the relationship of this fall to the service provided by British Railways. Those of us on this side of the House who have the interests of the railways at heart, who believe that this great industry has a dynamic future, are extremely reluctant to make specific references to cases of bad service, cases in which we feel British Railways has failed the other industries of the country. We are very reluctant to do so, but some of these failures are so bad that they should be referred to.

When we are considering the question of the speed, reliability and efficiency of competing transport services, then the speed, reliability and efficiency of British Railways is very relevant. I have many examples, but one which I want to refer to was brought to my attention by my hon. Friend the Member for Dorking (Sir G. Sinclair). He told me of a letter that he received on 11th January from one of the firms in his constituency, Kine Engineering Ltd., of Redhill, Surrey, concerned with making wood-cutting machinery. This is a firm with a wonderful export record which had gone to considerable lengths to try to expand its exports. My hon. Friend had been asked by the Board of Trade to congratulate the firm on its wonderful efforts. After six years of endeavouring to build up an export market in Holland it pulled out every possible stop to dispatch some machines to an exhibition in Holland.

Normally, its overseas delivery was five to six weeks, but it did this within a matter of days. It then put the matter into the hands of British Railways. Sad to say, the machines were smashed before they arrived in Holland, and the result is that the firm believes that the export orders which they might have had have now disappeared. The firm also points to another example in which it suffered from British Railways. It said that to meet a special delivery in September the firm, with its own transport, made delivery to Reading so as to save time. The goods arrived by passenger train at the customer's destination four weeks later.

There is not one hon. Member who does not have on his files a similar case, when British Railways have let someone down. There are many examples like this, directly affecting the amount of freight tonnage given to the railways, and these may result in further deficits. It is only fair to say that we also have many examples of splendid service on the part of British Railways, when they have gone to almost absurd lengths to ensure fair and good treatment to passengers. However, there are far too many cases such as those I have mentioned. I wonder whether any estimate has been made of the extent to which this kind of situation affected the production of these Supplementary Estimates.

One important factor is the connection of safety with revenue. There has been a substantial reduction in revenue. We have been told that one of the main factors encouraging traffic and passengers is the railways' unique safety record. There is no other organisation which has such a good safety record as the railways. However, there have been certain distributing developments of late, which make us want to review the whole situation. There was a Parliamentary Answer to one of my hon. Friends on 17th January, column 576, in which the Minister pointed out that the number of derailments in 1966 was over 300.

Mr. Manuel rose—

Mr. Taylor

I assure the hon. Gentleman that this is directly relevant, and that he ought to listen.

The total was over 300, and, in fact, it was the highest figure for 10 years. When we are considering a Supplementary Estimate which relates to a considerable reduction in revenue and in freight tonnage, these are just the kind of factors at which we should look most carefully.

I have given one example. There have already been some disastrous major accidents. In the Railway Review for 29th December, we read that the engineering staff of the Western Region is becoming more and more concerned about what it believes to be a deterioration in maintenance standards and practice. Taking all these matters together, with some of the alarming statements made at the recent Hither Green inquiry, there is a case for the Government instituting an inquiry into all aspects of safety in this great industry. It has had such a wonderful record that it would be a tragedy if an Estimate of the kind now before us were to be followed by others relating to the whole question of safety.

I have referred to various factors arising on this Supplementary Estimate. The factor of morale is of great importance. The Government must look carefully at the state of morale on British Railways and its relation to this Supplementary Estimate. I apologise again for having spoken for a long time, and I realise that the hon. Member for Central Ayrshire thinks that I should spend more time talking about London Transport and British Waterways, but the deficit on British Railways makes up such a considerable part of the whole deficit that I feel entitled to spend further time on British Railways.

One of the principal factors affecting morale is the way that reorganisation schemes have been introduced and conducted. How many times have the hon. Member for Central Ayrshire and others concerned with the railways heard from railway men that the one thing they are fed up about is that, every two years, there is a reorganisation or a change round, with the result that management and men have to spend a great deal of time acclimatising themselves to a reorganisation or rearrangement which they may not regard as directly relevant to the future prosperity of British Railways? I have enormous sympathy with that feeling. There may be times when reorganisation must take place, but it is tragic that we have had so many.

In these circumstances, when considering the figure of £30 million with which we are here concerned, how can we have any confidence in the Government's explanation? The most significant reorganisation is the establishment of a National Freight Authority, a factor of far greater relevance in reorganisation than any of the other internal changes we have had in the past. The Government ought to make an assessment of the effect on morale of what is covered by this sum of £30 million and the relationship of morale to the reorganisations which we have had. If they would allow the scarce management resources of British Railways to be concentrated on running the railways, without going in for some of the other strange, ideological exercises in nationalisation or the extension of public ownership, it would be far better for the future of our railways, and Supplementary Estimates of this kind would be far less likely to come before us.

Mr. Manuel

I wish that the hon. Gentleman would not go on so when he talks about morale, making sweeping assertions and charges and references to the new legislation which is coming forward. Does he not realise that morale will be improved if drivers of road vehicles do not have to drive for such long hours? Does not he realise that this will make for more road safety? I am sure that he and everyone will agree with the part of the new legislation which deals with that matter. There must be a logical day's work for a man to perform in the conditions which we have on our roads today.

Mr. Taylor

I was referring to the National Freight Authority. Does the Railways Board want the Authority? Does the National Union of Railwaymen want the Authority? Does the hon. Gentleman know anyone who wants the Authority? The whole world does not want it. I am sure that the hon. Gentleman's friends on the railways do not want it.

However, what disturbed me in the hon. Gentleman's intervention just then was his suggestion that I was making assertions and charges. If he feels that I have been doing that, he has misunderstood my speech or I have failed to make the matter clear. The one point I am trying to get across is that this is not the time for assertions and charges. This is the time for the Government to look into these figures, realise their appalling size, and try to find a way to reduce them and ensure that Supplementary Estimates of this kind are not brought forward. It was on that basis that we initiated this debate, not to try to extract some mean party advantage but to find real solutions to the problems which confront transport and to elicit adequate answers to our questions.

One of the directly relevant reasons for this Supplementary Estimate is the inflexibility of the Government's transport policy and their obsession with ideology. At about the beginning of the year covered by this Estimate, the Government decided that there would be a route mileage for British Railways of 11,000 miles. When we take that in conjunction with the various exercises in nationalisation undertaken by the Government since then, it is clear that Ministerial inflexibility is a directly relevant factor in this discussion.

I am sorry to go on for a long time, but I have been repeatedly interrupted from the other side, though, admittedly, in a helpful way. One question which must be answered by the Government was raised with them last June. They have had notice of it ever since. In June last, my hon. Friend the Member for Worcester made a most constructive speech in the railways debate and he put forward five points which he regarded as of direct relevance to the reduction of the deficit and the prevention of further Supplementary Estimates. I shall not mention all, five, but the one I raise with particular force now is the question of manpower policy.

Many of us on this side have from time to time paid tribute to the way in which the number of men employed on the railways has been consistently reduced in a fairly short time with, generally speaking, the co-operation of the trade unions. The fact that manpower has been reduced from 500,000 to about 360,000 in three years, with very little industrial unrest, is something of which the railways can be proud and, more important, something of which the unions involved can be proud. Nevertheless, bearing in mind the various estimates which have been made and the studies conducted by people outside the railways, I wonder whether, even at the present figure, there is a great deal of waste of manpower on British Railways.

A good part of the £30 million we are here considering relates to surplus capacity and surplus manpower on British Railways. On the question of surplus manpower, I appeal to the Minister not to think just of the vehicle repair shops and of the men who drive the trains. I want him to consider the administration as well. In London, we have the headquarters of British Railways and three regional headquarters. This part of British Railways does not seem to contract with the same intensity as does the footplate part. The time has come to review the whole manpower situation within British Railways, the administrative offices as well as the man on the footplate.

When the time comes for my right hon. and hon. Friends to take responsibility for this great industry, one of the matters to which we shall give careful attention will be the whole question of manpower in administration as well as on the operational side of the railways.

There is a great deal more which I should like to say, but, having already taken too much time, I make my final point. There is a great danger of it being said that this is just another Supplementary Estimate, the money has been spent, and there is nothing we can do about it. In fact, we can do a great deal about it. We can ask why. Why has it come about? Let us identify the various parts of it and see how we can prevent this sort of thing happening again.

On many occasions, we on this side of the House are, quite wrongly, accused of being against the railways. We are sometimes said to have a prejudice which leads us to be regarded as enemies or opponents of British Railways. Nothing could be further from the truth. We do not approach these questions from the standpoint of being against the railways. We are very much for our railways. We are on the side of the railways, wishing all the time to offer them a really dynamic future.

We saw the beginning of that policy when we had Lord Beeching and former Conservative Transport Ministers who recognised that years of decline and despondency could be removed only if the modern railways were to face the reality of living with the car age. The task set by previous Ministers and Lord Beeching was not to destroy the railways, but to create a new system which was modern, efficient and dynamic.

Enormous progress was made under our previous Governments which led to a substantial reduction of the railways' deficit and made a major change in the morale of those who worked on the railways. That was done by a policy of substantial investment in new equipment, in electric trains and in freight liners. Now, however, we see the situation being reversed. The deficits are growing, items of capital expenditure are being slashed and the Government are obsessed ideologically in introducing a Bill entailing £71 million to nationalise the bus companies and to take over Glasgow's transport.

The policies put forward by the Conservative Government offered the railways a dynamic future with real progress and growth. It is because, we believe, those policies are being ignored and because the Government arc going in the wrong direction that we have this figure before us today and we can look forward only to mounting deficits. The time has indeed come for a change, and I fear that what we are about to hear from the Government will confirm that that time has come.

4.31 p.m.

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

We have had a long and interesting speech from the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor). He was at times passionate, and I thought that he might explode, but I seemed to sense that some of his passion was slightly phoney in parts. We have had a long almost Cook's tour of the railways dealing with safety, legislation, investment, morale, as well as the things which caused plate cracks, and the ancient hobbyhorse of the need to examine manpower in administration.

On one occasion, the hon. Member suggested that I might be sheltering under the rules of order in trying to evade a debate on legislation. I have no objection to having a full debate on legislation. Indeed, over the next few weeks—possibly, the next few months—we shall be discussing transport legislation at length. I imagined, however, that the hon. Member was straying somewhat in that he wanted to have a rehash of the Transport Bill Second Reading debate of a few weeks ago. It was only on 26th June last year that we had a full and wide-ranging debate over the whole of the railway deficit.

The hon. Member suggested that the Government were not looking carefully into the problem of the deficit. On 26th June, I spelt out—obviously, this information has not sunk in—some of the things which we were then doing. The Minister and the then Chairman set up a Joint Steering Group under my chairmanship, comprising distinguished independent members, members of the Railways Board, a representative of the Treasury and other independent members, to look into these very matters and conduct a thorough inquiry into the whole of the finances of British Railways.

Perhaps the hon. Member has forgotten the terms of reference of that inquiry. All I would say is that since the wide and full-ranging debate of 26th June, the Report of the group was published in a Cmnd. White Paper and his hon. Friend the Member for Worcester (Mr. Peter Walker) was kind enough to congratulate the members of the group on the work which had been done.

The matters which were looked at included a suggestion that there was need for differentiation between the social services and the commercial services and the suggestion that there should be a specific grant tied to the working of the individual socially necessary lines. We have never heard from hon. Members opposite whether they are for or against that kind of proposal. There was an incentive for the reduction of the tracks of British Railways by a track rationalisation grant. Then we dealt with the need to ensure that the railways carried only the right kind of financial responsibilities for bridges, roads, museums, police and all the other things which historically they now carry; lastly, the inherited capital structure of the 1962 Act.

When the hon. Member for Cathcart talks about the need for sensible and forward-looking policies, he must realise that whatever the difficulties and problems—and there are many—Brtish Railways are still operating under an Act of Parliament introduced by his right hon. Friends. I know that the hon. Member was not here in those days and, therefore, does not carry responsibility for it, but the deficit, large as it is, was £159 million even in 1962.

What is obviously needed above all else is to ensure that the industry has the right amount of capital which it can properly carry and, at the same time, in respect of Ministerial responsibility, the right kind of board structure to ensure that it has the necessary financial control over this great industry and that those things which the industry has to carry and for which it should not be responsible should be laid at the door of the community as a whole.

Those are the sensible proposals that we have put forward as against: first, the social services; secondly, the anoma1 lies of the past; thirdly, the capital structure; and, fourthly, the right kind of board with its emphasis on corporate planning and financial control. All these matters are gone into at some length in the Report which has been published. This, perhaps, is the attack on the under-lying problem to which I referred in the debate of 26th June and which is so necessary. Indeed, when one looks at the analysis made in the Report by a large number of independent commentators, the general view is that we have not been entirely wrong in our approach to this important matter.

An interesting point made by the hon. Member was that the Government were starving the industry of investment. Looking at the situation objectively, over the years since 1962 there has been a very large amount of investment in this great industry. In looking at the national order of priorities, whether on this side of the House or on the other, perhaps one of the problems is to ensure that investment is channelled to the right purposes. Whatever be the actual amounts of investment, it is a new one on me that the industry has been starved of investment.

Mr. Edward M. Taylor

The point which I was making—I hope that the hon. Gentleman will accept it—is that the amount of investment in 1968 will be below the average for the last 12 years. Bearing in mind that we spent £1,200 million over the last 10 years, will he confirm that the figure for 1968 will be only £100 million?

Mr. Morris

Perhaps my hon. Friend the Joint Parliamentary Secretary will be able to deal with the actual amount when he replies to the debate. If my memory serves me aright, however, the figure is £100 million. Looking at the whole of the investment of this great industry and its financial position today, however, no one could at any time say that the industry has been starved of investment. What is important is that investment should be channelled to the right purposes and that there should be the right kind of control over that investment. That is the point which we have made in our Report.

Mr. Deputy Speaker

Order. I have already ruled that on this Supplementary Estimate we cannot engage in a prolonged debate on investment policy.

Mr. Morris

I agree entirely, Mr. Deputy Speaker. I was merely replying to a point which had been made by the hon. Member for Cathcart, who was given some latitude in regard to both legislation and investment.

Mr. Deputy Speaker

The rules of order should be clearly understood. It is perfectly in order on a Supplementary Estimate to discuss, so far as may be relevant, what legislation may be involved. It is not in order, as I have already ruled, to discuss the question of investment policy.

Mr. Morris

I am grateful, Mr. Deputy Speaker. I will not pursue the point. I think that I have dealt by way of my reply with the point which the hon. Member was allowed to make. There is one other point I should like to make since the hon. Member asked me a specific question about it, and that is sale of property and other assets. I am not sure how far the hon. Member was suggesting it, but there seemed to be a suggestion that this was not being carried out as expeditiously as it might be. I am not sure that the hon. Member was making that point, but in fairness I will give the figures, which are that, in 1963, there were £12 million worth of sales of property and other assets; in 1964, £14½ million; in 1965, £22½ million; in 1966, £33½ million: and we have only an estimate so far for 1967, and that is over £20 million. Perhaps that information will be of some help to the hon. Member.

Perhaps it would be for the convenience of the House if I were to go very quickly into the background of the method of these Estimates. As is made clear in the covering memorandum dated 16th January 1968, the additional provision being sought in respect of the Transport Boards' revenue deficits is related to the outturn for the whole of the Exchequer financial year.

In the past, it has been the practice to submit a Supplementary Estimate during the winter for only 75 per cent. of any additional provision necessary to cover the year as a whole, but on this occasion it has been necessary, for technical reasons which are nothing to do with the financial results of the Boards, to seek 100 per cent. provision during the winter, instead of leaving a further amount to be sought by way of spring Supplementary Estimates.

This has come about because of the urgent additional requirements for funds, largely as a result of acceleration of the payment of investment grants and compensation for foot and mouth disease, which are pressing hard on the Civil Contingencies Fund, which is statutorily limited to a maximum of £75 million. The total supplementary provision required for the year is in excess of that figure, and it is, therefore, necessary to accelerate the customary Parliamentary timetable in respect of some of the Estimates so as to secure provision earlier than would have been possible if the customary procedure had been followed, leaving the balance of the provision to be granted through a March Consolidated Fund Bill.

I want to emphasise this point since it is the sole reason for the increase of £6.8 million in the provision sought for payments of revenue deficit grant to the British Railways Board in the Revised Supplementary Estimate compared to the original Supplementary Estimate which was examined by the Estimates Committee and on which the Committee submitted a Report on 19th December last year. The additional money required is, therefore, not on account of any deterioration in the finances of British Railways compared to what was expected when the original Estimate was submitted. It is entirely due to the need for the Treasury to secure approval to additional provision in respect of the whole of the expected shortfall at this point of time instead of merely 75 per cent. of the shortfall.

The House will have noted that the Revised Estimate also includes provision for payments of revenue deficit grant to the London Transport Board which were not provided for in the original Estimate which was examined by the Estimates Committee. Again, this does not mean that the provision now being sought relates to a sudden deterioration of the finances of the London Transport Board which was not foreseen at the time when the original Supplementary Estimate was submitted.

The original Estimate concentrated on the provision necessary in respect of the deficit grant to the British Railways Board because this was by far the bigger sum and because, in accordance with normal practice, it was sufficient to seek 75 per cent. of this larger sum only and not to attempt to seek 75 per cent. of the additional provision necessary in respect of the much smaller deficit of the London Board. But now that the Revised Estimate seeks to secure 100 per cent. of the additional provision necessary in respect of the year as a whole, it is appropriate to include the additional money which is necessary to meet the shortfall incurred by the London Transport Board.

The remaining item in the Revised Supplementary Estimate, relating to the deficit of the British Waterways Board, is, in fact, a saving on the original provisions obtained for the year 1967–68. It amounts to £100,000, and is a useful little offset to the additional provision now being sought for British Railways and London Transport deficits. The House might like to know that the saving is attributable both to increased revenues accruing to British Waterways and to cost reductions. I am sure that the House will wish me to congratulate the British Waterways Board on its achievement, in a particularly difficult field, in a particularly difficult year.

I thought I would set out the background to all those complicated matters.

I now turn to the main constituent element in the Revised Estimate; that is the Supplementary provision of £28.8 million being sought for increased grants to the British Railways Board in respect of its revenue deficit for 1967–68. The House will be aware that the existing provision for these grants was £127 million, which it is now proposed should be increased to no less than £155.8 million. By far the greatest part of this prospective overspending arises in relation to the Board's deficit for 1967, which the Revised Estimate assumes will be £153 million as compared with the original estimate of £128 million, an increase of £25 million in the deficit estimated for the calendar year. The Board's accounts for 1967 have not yet, of course, been finalised, and the actual result will not be known for some time. However, I am informed that any variation from the present estimate will almost certainly be downwards rather than upwards, and this is good news on a front which worries us all.

The main element in the Board's deficit crises on account of railway working, and the Estimate assumed that this will amount to £91 million in 1967, an increase of £24 million on the provision made in the original Estimate. I can tell the House that the deterioration can be attributed almost entirely to a shortfall in gross receipts. Working expenses are almost exactly on target, being only £0.2 million out of a budgeted £535 million; that is a variation of only 0.04 per cent. And within the figure of gross receipts, passenger earnings are only £0.4 million cut of a budgeted £180 million; that is a variation of only 0.2 per cent.

The House might be interested to keep these remarkably close estimates in mind when considering the discrepancy in freight receipts compared to freight estimates. Moreover, the House should know that the Board has not only absorbed increased costs of £17 million in 1967, but expects that its total working expenses will come out at a figure £6 million below that for 1966, implying a saving in constant price terms of £23 million. Thus, although the overall financial result is very disappointing, it is at least satisfactory that the Board has continued to release productive resources, particularly manpower, on a substantial scale. I dealt with this matter in the debate on 26th June.

I now turn to the shortfall in total gross receipts, which the Revised Estimate assumes will be about £24½ million less in 1967 than was forecast in the original Estimate. This shortfall consists largely of the following main items.

In the first place, there is the difference in passenger receipts to which I have already referred of almost £½ million. This is a particularly good result in a difficult year. Incidentally, hon. Members will, no doubt, have seen the Railways Board's statement that passenger journeys rose by 68 per cent. and receipts by 43 per cent. in the first year of operation on the London-Midland electric main line. This shows the remarkably buoyant future of main line inter-city services given the right sort of development.

Next, there is a shortfall on coal and coke revenue of about £6 million. This category of freight traffic is particularly susceptible to the general level of industrial production, and the Board attributes the shortfall to the continued low level of industrial production compared to what it had estimated in its forward Estimates, which were, of course, made some considerable time ago when it seemed likely that there could be some upturn in the level of economic activity before the end of 1967. The House is well aware of the reasons why this has not come about—[Interruption.] I am dealing with each point in turn as objectively as the House would wish in considering the Estimates.

Other factors influencing the level of coal receipts include the comparative severity of our winters, which cannot, of course, be forecast and where the Board suffered through a blessing to the rest of the economy of mild weather last year. Iron and steel is another sector which has been seriously affected by the continuation of the industrial recession, both as regards finished products and iron ore. British Railways' carryings of the latter have also been affected by a trend during 1967 towards the use of imported ores. One bright feature in steel carryings, however, has been the success of some of the freightliner services, particular on the Wales to London route. All in all, the Board attributes £2½ million of the shortfall to iron and steel traffic.

On the issue of freightliners, perhaps the House would like to know some of the details of the development of this important system. There are now 15 terminals in service, which is the whole of the first stage. London has three, and Glasgow, Manchester, Liverpool, Aberdeen, Cardiff, Birmingham, Sheffield, Leeds, Stockton, Newcastle, Hull and Edinburgh have one each. The Minister has also approved a freightliner terminal at Southampton, which is the first in the second stage, and proposals on the rest of the second stage have not yet been put to the Minister by the Board.

There is a whole variety of traffic carried on the system. It includes meat, porridge oats, machinery, paper, books, gas cookers and sperm whale-oil. The first one from Edinburgh to London, on 8th January, 1968, included containers of whisky bound for Paris. Steel is carried from Cardiff to Willesden at the rate of 600 tons per week, and now dirty collars are sent to Scotland for laundering on a regular overnight service. The 100,000th container from London to Manchester on 8th October, 1967, was a load of Guinness.

Perhaps the whole variety of freight being carried is a very great encouragement to the attractiveness of this important system to consumers as a whole.

Mr. Peter Walker (Worcester)

This information about the alcoholic content of the freightliner traffic is very interesting. However, could the hon. Gentleman give us some figures about the revenue and the expenditure of the freightliner train service?

Mr. Morris

It is not possible to give such figures. The system is still in its early stages and, of course, the gross receipts, when looked at in totality, are comparatively small. I think that one should keep a sense of proportion about the importance of this growing trade.

I think that I have dealt sufficiently with that important facet, and perhaps I might now move on to deal with the most serious—

Mr. James Scott-Hopkins (Derbyshire, West)

Does the hon. Gentleman mean that he cannot give any figures of capital expenditure for the setting up of the freightliner service?

Mr. Morris

The hon. Member for Worcester was on a different point. He wanted to know about the profitability of the service. I have not the figures of the capital expenditure involved, but I am sure that I can get them for the hon. Member for Derbyshire, West (Mr. Scott-Hopkins), because the Minister's consent would have been involved. However, I do not carry the figures in my head. I will look into the matter.

The most serious shortfall of all has been incurred in the category of traffic known as "other wagon load", which broadly represents miscellaneous traffics which often require much marshalling and sorting. The shortfall here was £6½ million while on the somewhat similar type of traffic known as sundries, there was a shortfall of £2 million. In both cases, the Board says that the economic situation was the principal reason for its estimates being so badly out, though exceptional factors were the direct interruption of services as a result of the guards' strikes in September and October and the London Rail Freight Depot strike earlier in the year, together with the loss of confidence in rail services which such strikes created.

This also had something to do with the shortfall on revenue expected from parcels carried by passenger train, amounting to £3m. For the future, the reorganisation which the Board now has well in hand of its sundries traffic is expected to be of great value, beginning with 1968 and showing further reductions of the losses in the early years of the National Freight Corporation, who will take over responsibility for this particular traffic under the provisions of a Measure now before the House. The shortfalls that I have just mentioned amount, in all, to about £20½ million. On top of this, the original Vote Estimate estimated that further gross receipts would be received of almost £4 million. This sum was not broken down into the various categories that I have just mentioned and should, therefore, be added to the aggregate of £20½ million to give a total shortfall of £24½ million.

Turning to the other activities of the Board—that is, other than railway working—the position is that it achieved a net working surplus of about £8 million as compared with a budgeted figure of £8½ million. This, of course, is a considerable improvement on last year's result—£.6.4 million—when the shipping activities were badly affected by the seamen's strike. Hotels results have been rather disappointing, merely maintaining their net surplus at about last year's level and falling somewhat short on Forward Estimates. On the other hand, the letting of non-operational property produced almost £1 million more than the Board had forecast.

If I can summarise, the overall position is that, while railway working expenses were held to budgeted levels, despite increased costs, railway gross revenue was about £24 million down on the figure underlying the Vote Estimate. There was a shortfall of £½ million on other activities which was offset by a corresponding saving in interest. The overall deterioration was increased to £25 million by the expenditure of almost £1 million on redundancy payments to staff who took advantage of resettlement arrangements, compared to the estimate made in the Board's budget.

Although this expenditure increases the deficit in the short term, the Board, of course, gains in the long term and it is to be congratulated on its success in decreasing its long term costs by running its business with less staff than it had thought would be needed at the beginning of the year. It had forecast a total reduction of about 15,000, and, in the event, it was able to manage a reduction of 20,000, which, I am sure the House will agree, was a notable achievement for a labour intensive business.

So far, I have dealt with the deficit on a calendar year basis, but, of course, the overall provision necessarily has to be related to the Exchequer financial year, and this brings in the first eight weeks of 1968, when grant payments have to be made in respect of the deficit which the Board incurs during those weeks. The original Estimate made a provision of £14 million to meet such payments, but it now seems prudent, in the light of the shortfall in 1967, to assume that the first two months of 1968 will show a comparable worsening over the forecast made a year ago, and provision is accordingly sought for about £3½ million on this account.

I have already taken up a good deal of time in dealing with the main element in the Supplementary Estimate, and perhaps the House would be content if my hon. Friend the Joint Parliamentary Secretary were to explain the make-up of the supplementary provision which is necessary on account of grants to the London Board in the reply to the debate which he will be making later.

5.0 p.m.

Mr. John Peyton (Yeovil)

I think that the House would wish to congratulate the Parliamentary Secretary on the skill with which he kept his head down and avoided trouble in answering the very able speech of my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor).

The hon. Gentleman's modesty is a good example to some of his more arrogant colleageaues who habitually disregard their failures and never apologise. It is nice to have a Minister getting up and saying that the general view has been that they have not been entirely wrong. This is the sort of modest claim which, while I would not endorse it, as least I do not feel obliged to rebut with the vigour I would normally contribute to Ministerial assertions.

The hon. Gentleman should be thanked for one of his contributions to the House—a charming piece of phraseology—when he referred to the useful little offset of the British Waterways Board. I would be highly ungenerous if I did not, with enthusiasm, endorse the little message of congratulation which he sent to the British Waterways Board. It is a wonderful thing to have this useful little offset of £100,000. If only other bigger creatures could follow that noble example!

We were then given the assurance that any revision of these present lamentable Estimates would be downwards, not upwards. It is very nice, but I am not sure how one reconciles it with the last part of the Parliamentary Secretary's remarks when he told us that the first two months of this year had shown the trend of losses continuing, if not getting worse. I hope, therefore, that the Parliamentary Secretary will not have to eat even those limited words which he uttered just now.

A horrid suspicion came into my mind at one stage in his speech. It was that he had not composed every word of that speech himself. I would not ask him to confirm or deny this, but the words which particularly called this suspicion into my mind were when he referred to the upturn in the level of economic activity which has not taken place for reasons of which the House will be aware. I do not believe that any Member of Parliament could possibly have composed that sentence, because it was bound to be greeted in a fairly ribald way, as indeed it was. We are all abysmally aware of the reasons why the level of economic activity has now risen.

It seems to me that the House of Commons is at its weakest and does itself the least service when we come to discuss Estimates such as these. We do not seem willing to see such matters in the general context of our economic affairs, even after the background of last week. My hon. Friend was absolutely right to call attention to this £30 million Supplementary Estimate we are now called upon to pass in contrast to what happened last week. If the House of Commons was doing its job properly, if it was really making a bid to earn public respect, it would be paying a great deal more attention to matters of that kind.

It seems a very odd thing that when we come to discuss these issues—which are, by the way, Motions in the name of the Financial Secretary to the Treasury—that the Treasury, which is not really the most modest of beings, should be so shy as not to put a Minister forward to explain the details in such circumstances. The Treasury is responsible for the control of the finances of the country and it seems a very odd custom that no Treasury Minister ever appears even to hold a watching brief on behalf of his Department. Anyone who has been a member of the Public Accounts Committee has listened to the Treasury constantly saying that often a particular Department or particular nationalised industry is very closely examined on its figures. I never have much regard for that sort of argument—in fact none at all—but it would be nice if the Treasury were to show a little more interest in the affairs of these industries and Departments by having a Minister on the Government Bench in case Members of Parliament should be so impetuous as to wish to ask questions of the bankers.

An alternative course of action which the House of Commons would do well to adopt from time to time would be, when we get an Estimate like this, to throw it back at the Government and say, "We will not pass it. We have not been told enough. We have not been given nearly enough evidence about the causes for this mistake in forecasting". The Government say that they trusted the National Plan, but that is a grossly overworked alibi. They should not be allowed to get away with constantly saying that they rely upon such monumental pieces of nonsense.

This is a tremendously powerful argument against nationalisation. Had the railways never been nationalised, I have no doubt that by this time they would have slimmed down into an efficient and useful service. Once an industry is nationalised, one of the great tenets of Treasury policy since the war—or even before that, but more visibly so since the war—has been to reinforce failure and penalise success. It is one of the things for which this country owes the Treasury a debt of no gratitude.

I find that these repeated requests, which everybody knows from start to finish will be rubber-stamped and proved, are excellent examples of the pitfalls and the thorns and the wretched miseries of the road of public ownership

I endorse what my hon. Friend said about the management of the railways, particularly the appalling way in which the onerous and responsible post of the chairman was disposed of and handled. I should like to offer a word of good wishes—one would hardly say congratulations, but I do mean good wishes—to Mr. Johnson on assuming that post. My goodness, he is getting a job! As my hon.. Friend also said, one of his jobs will be to fight his so-called friends in the Government that set up the nationalised railways in the first place, because there is constant interference from the Government in nationalised industries, and particularly the railways. I am not here making a party point. Since the railways were first established in this country—I do not know why; perhaps the overwhelming desire of successive Governments to get down and play trains—no Government in the past, except one which was overburdened with the affairs of running a large war or something of that kind, has been able to resist the temptation to approach the railways like an amateur gardener approaches a garden bed, digs the whole blooming lot up, has a look at the roots, and then puts some of the weeds back and takes none of the proper action. It is this constant tampering and lack of modesty which one finds as the major characteristic in the Establishment in approaching the complex affairs of an industry about which individually they know practically nothing.

I have not got a note of the exact words used by Mr. Gerard Fiennes, the ate General Manager of the Western Region, when he wrote that article for which he was guillotined, but it was something to the effect that only in the days of the great and good doctor had anybody got down to the business of how to make this industry into a national asset instead of letting it be a national millstone.

That is the real point. One of the first things the Government did when they took office was to sack Beeching. I am not suggesting that they sacked Lord Beeching because they did not like his face, or he did not agree with them politically, or anything like that. They sacked him because the consequences of his policy were too embarrassing. The Government do not like facts. It was very difficult for the Tory Government during the period running up to the 1964 General Election, but at least they stuck to the plans. Exceptions were made here and there, but, generally, they pressed on with the policy laid down by Beeching, and I pay tribute to my right hon. Friend the Member for Wallasey (Mr. Marples) who had the guts and courage to go on with what he said he was going to do. He found a first-class man, and gave him a chance to get on with his job, and in that sentence one sets out how a Government should behave. This Government has behaved in precisely the opposite way, and the consequences were, are, and will be, disastrous. They fired Dr. Beeching because they could not face reality.

I do not think that I need deal with the level of economic activity, because it has been referred to by my hon. Friend, but I would like to say something about coal traffic. I see no chance of reversing the trends. The largest market for coal is by a long way the electricity industry, and save where power stations are situated at the coalfields, the prospects of the coal industry supplying large quantities of its product are meagre indeed.

The iron and steel industry has already been referred to as one reason for the disappointing freight record. I do not want to say much about a particular case, but I have written to the general manager concerned and received a courteous and helpful reply, and no doubt he will deal with the matter. This case illustrates a real sickness in the industry. A constituent of mine, a steel stockist at Andover, is building a works. Some months ago—I think that it was in September or October—he started discussing the matter with the railways. The traffic going through, both in and out, was between 75,000 and 100,000 tons a year of coil steel and plates, the sort of cargo which one would expect a steel stockist to handle. Not until now, when I have written to the general manager, was there any assurance that the railways were going to jump at this traffic, which is made for them. It is repetitive traffic. It is easy to handle. It is tailor-made for them, and yet they are dragging their feet, rather than saying, "Here is a customer whom we will pursue and encourage for all we are worth, because this is just the kind of traffic that we must get on to the railways if they are to be made to pay".

My hon. Friend referred to morale in the industry. I do not want to speak for those who have not given me the authority to do so, but railwaymen in my constituency have expressed great concern about the sort of hazy plans now being indulged in, and I have the impression, though I would not, for a moment, like anyone to think that general managers are anything but loyal, or allow themselves to be tempted to say things which are hostile to the Government, that they have been driven to their wits' ends by this constant intervention by the Government, and in particular by the sudden production of this colossal great "heffalump", the National Freight Authority. I cannot see the justification for this.

The liner trains are a splendid project. They show signs of success. I accept that the pay packet is the most important thing for those engaged in industry, but everyone likes a sniff of success now and again, and Ministers ought to be aware of this. The railways have produced a service which can compete with, and offer better services than, those available by road, and at a reasonable price. This is a first-class piece of successful planning, but it is being whisked away from them, and they are being left with their own operations. It must be terribly disappointing for anybody who looks at this problem from the point of view of a railwayman.

I conclude by reverting to some of the remarks that I made at the beginning. I find it a crushing disappointment that more concern is not expressed about the expenditure of such vast sums of money as this. Having been worked into a state of frenzy last week by the charade in early January, both inside and outside Downing Street, the House should now be more willing to follow its proper path of duty, which is to supervise, examine, and stimulate into some sort of action, the Treasury, which is meant to be the banker. These are demands upon limited and over-pressed national resources. I cannot help thinking that if this is the best that this House of Commons can do in the present context of our affairs, in the performance of its duty of supervising national finances, the best thing that can happen is for it to be dissolved without delay.

5.18 p.m.

Mr. Charles Mapp (Oldham, East)

I regret that I have come into the Chamber rather late in the debate—this is due to sudden enforced circumstances—but I think that I have picked up the drift of the argument so far. I confess that in following the hon. Member for Yeovil (Mr. Peyton) I do not propose to go into his mixture of narrow political argument, with some impishness about it.

I regret that year after year since 1953 there has been a deficit in railway receipts. This year's deficit of about £138 million is to be increased to nearly £170 million, by just over £30 million. I think that we must analyse this figure without too much party spirit, because I believe that on many occasions both sides of the House have not been helpful to the railway industry. This may be partly because of the narrow approach that is sometimes made and partly the question of cost deficits. I was a railwayman. I came here with the help of a railway union, but I am now completely free in that respect, although my associations on both sides are very friendly and intimate.

I want to be frank and analytical. In my view, this is not a political issue; we ought to assess the changes that the internal combustion engine, with its great mobility, has thrust upon the railways, with their considerable rigidity. I have always felt that since the Act of 1947 one of the greatest disasters was that in the first few years we had eminent civil servants or ex-civil servants at the head of the British Transport Commission. Eminent though these people were, they had not been used to the railway environment and to taking decisive action. They had not been used to the environment of business—of making their minds up. Nor had they been used to the need to animate legislation. They were always more used to being influenced by one or other Government Department.

It has always been my view that if the House sets out conditions under which a nationalised industry should operate, those in charge of the industry should regard as their bible the relevant legislation, and should retain vigorous and independent minds, running their undertaking without politics but setting out the hard economic facts and proclaiming them to whoever will listen.

For the first few years—indeed, until the mid-1950s—there was a marked lack of interest in the public mind and in the minds of hon. Members on both sides of the House about the economic problems besetting the railways—not least the economic problems of built-in costs in competing forms of transport. During the first few days of 1968, after many years of Tory Government and about three years of Labour Government, we are still awaiting the essential prerequisite to any study of internal transport, namely, the basic costings. I am not happy about being asked to consider a major Bill, the principles of which are long overdue in their application, without any knowledge of what I call the major costings.

Throughout my life—and the process is continuing now, in air transport—we have constantly paid subsidies in one way or another to various forms of transport. Then, in a few hectic moments, we have tried to compare the tariffs of the different forms of transport, or their respective performance, and then we have drawn narrow and limited conclusions, from false premises.

The future of the railways is totally different from what it was in the past. I recognise that the rigidity of the track, except in respect of peak traffic, is bound to limit the degree to which railways can compete with the internal combustion engine. It is also my view that in the struggle of the railways to find their right Place in the future transport pattern they have been unfairly treated in terms of costings. Only in 1962 did we relieve railways of their common carrier liabilities. Only in the last few years have we begun to consider their real problem.

I want to make a passing reference to the tragedy that occurred a few days ago in Staffordshire, and the inquiry that has been instituted concerning certain types of crossing. At Question Time the other day I had hoped to express the view that there should be a wider inquiry. From the supplementary questions and answers it would appear that the inquiry will be concerned only with examining existing forms of safety on both road and rail, where they run across each other. In my view, such an inquiry should be wide enough to consider the new forms of loading that both the roads and railways have to deal with, in the new circumstances, and to see whether existing arrangements should be modified to the new set of conditions.

A few years ago we would not have expected. to see on the roads transformers of the weight which we see now, one of which was involved in the recent accident. There is also the question of greater weight and speed, as in the case of the train on which I travelled from Manchester this afternoon. These are all new elements, and I hope that the inquiry will be wide enough to examine them in order that recommendations may be made about them.

The Minister should drop altogether what I regard as being a sheer waste of time in trying to identify the social costs of the railways. Before I came here I had some administrative responsibility on the railways. I know many middle-level management officers who are generally unconcerned with politics. If I dismiss from my mind any political view, as I want to do in this matter, and ask any of those officers, who have serious responsibilities to the public, if he is able to identify, in his day-to-day operations, that part of the costs he is incurring in providing a service which is attributable to social costings, he will throw up his hands in despair.

I remember having discussions round a table in Manchester with regional railway officers. I was their guest and they asked if I would talk to them. Because of old personal relationships we were not talking about politics, but when I asked whether any of my colleagues—engineers, signal engineers, operating men and estate engineers—could, in his heart of hearts, begin to draw out from his costings those items which he could, with his hand on his heart, say were his social costings, nobody was able to do so.

Excluding the present general manager of the new railways and a few others who are practical railwaymen, the people in charge, with their academic and economic knowledge, are less likely to be able to identify the social costings than are those who are on the job day by day. I have read with the greatest care the ministerial reports of the many meetings of committees and sub-committees involving railway officers, and I am totally unconvinced that the figures that will ultimately evolve will persuade me or anyone else who knows anything about the subject that the figures could form criteria that will last.

Let us look at the costings between any two major cities—between Plymouth or Exeter and London, or between Manchester and London, or between Glasgow and London. The services have been costed on the basis of a certain volume of passenger transport and of freight transport. This is the acceptable method. If I were in charge of operations, I would be concerned not with costings but with moving trains from Manchester to London, or from Exeter to London, on their way North. I would not be concerned with the route, but with my manpower and the use or over-use of the tracks. I should use for freight the most serviceable route, which can and, occasionally, does change every three or four months. It changes between summer and winter and if there is a rugby football match at Twickenham.

Bearing in mind that 60 per cent. of track costs go to freight traffic, where do costings get us? I would summarise to the Minister the arguments which I used in Committee in 1962. They are very simple. It is patently true that every railway officer can present a factual yearly statement of his track and policing costs. They are not estimates but pragmatic figures and the work can be set against the cost. By design or otherwise, year by year, the track and such ancillary costs of railways generally—the case of London Transport is different—equate the kind of subsidies which we have had to face.

Let us be realistic. In many continental countries this problem is not the subject of exercises by a Minister and his staff. Until two or three years ago—I do not know the present position—the Minister had on his staff fewer than 20 people who knew the railways from having worked on them. In comparison, there are over 1,000 backroom boys dealing with road transport. If I were Minister and had such a paucity of firsthand knowledge of the railways, I wonder whether I would be satisfied with internal advice like that. I would constantly look askance at the railways information; this is what the Ministry has to do.

The Ministry has always been satisfied to have only this slender advice—I would have grave reservations about that position of responsibility. I would be in the hands of either a set of railway officers who might consider matters in two different ways or of a very slender advice staff which, although academically and economically well informed was unable to set one set of operating conditions against another—

Miss J. M. Quennell (Petersfield)

The hon. Member's point is very important. Is he suggesting that the Minister should have a railway equivalent of the Road Research Laboratory, so that she could test and cost innovations and experiments?

Mr. Mapp

I am glad that I gave way.

This is the fertile consequence of what I am saying. The basic study of new passenger trains now going on at Derby, of trains of 100 tons moving at speeds of 150 m.p.h., which some of us saw a few months ago, will come to the House and the Minister with all the boffin work done by railway headquarters. And the Ministry will have only this limited personnel. Apart from the safety officer, I doubt whether any of them has the day-to-day knowledge of balancing the claims of passenger and freight traffic and of how to get the most use out of a given set of men, locomotives and track.

I am not asking for an increase in the number of civil servants, but an intake of 20 or 30 knowledgeable operating officers might be a first-class investment for the Ministry, bearing in mind that it has the right to approve or disapprove of major capital investments.

When I worked on the railways I might have asked for a few thousand pounds when I was trying to fill wagons and trains and, in those days, make £1 million at my station into something more. Those of us who were near these problems did not see them in the same way as they are seen in the Minister's long minutes and social costings. Instead of wasting time on these academic exercises, the Minister might say frankly—I would hope with the approval of both sides of the House—that Parliament would be prepared to authorise the track, signalling and policing costs of railways each year and then say, "We are now putting you on a parity with the highways".

What might follow? With some knowledge of operating, I would say that if, with track costings and policing being paid by an outside body, I were unable to get adequate passenger and freight traffic to ensure a continuing surplus after two or three years, I would have to decide, as a practical person, "This line is not being patronised by the public. They do not want it and there is a case for closing it." That would be a far better criterion than that written into the old Act, which will be extended in the new one, with its curious consultative committees and those inquiries which I have always attended in the knowledge that I and perhaps two or three others in the room were the only ones who could ask the real. awkward questions, because we had the experience to enable us to look behind the figures.

Is it right, these days, that only one of our major industries should have to try to prove such things as the worth of a fine? This does not happen in coal, electricity or other industries. I am all for consultation within reason, but if we are to try to keep lines open, we must be practical. It is very popular to argue for one's constituents that a particular "tiddly wink" station should stay open for the benefit of a few people two or three times a day. This is a good constituency point, but it is not our whole responsibility as Members of Parliament. If we paid the railway people for their track and policing and put them on a parity with the roads, and if the people of the area do not patronise that form of transport then, in terms of national investment, we ought to withdraw it.

Let us consider the consequences of doing so. First, we should avoid all the silly controversy which heats up in villages and towns which are struggling to maintain a service from the Victorian age which economically cannot be maintained. secondly, we should have automatic criteria. If we paid for the track, then it would become the property of the State and the Minister could use the vacant track, through the local authorities, for development, in many cases as additional roads. He could make use of the property through local government or in any other way that was suitable. That would be a considerable gain.

In the Bill which is shortly entering Standing Committee, the Minister is pursuing a course which will show us, in a few years' time, that all the present exercises have been completely unavailing. It will be found to have been a waste of time to reach an equation of x when no one will know the meaning of x. I ask the Minister to reconsider the whole matter. She may take as much advice as she likes, but I have summarised today the argument which I used upstairs, and it is still valid. The system I suggest operates in a modified form in France and in another form in Holland—I have seen them both—as well as in other parts of the world. If we adopted it, it would save a lot of time.

I do not mind being political on some issues. The hon. Member for Yeovil said in the latter part of his speech that nationalisation is always a disease and never brings success. From 1951 onwards the Conservative Government interfered with some parts of nationalised transport, but if they shared his views, why did they not examine the possibility of handing the railways system back to private enterprise?

Mr. Deputy Speaker (Mr. Sydney Irving)

Order. The hon. Member is going a little beyond the Supplementary Estimate in speaking of what happened and what did not happen in 1951.

Mr. Mapp

I hope to keep in order, Mr. Irving. I was trying to make the point that we have had these deficits since 1953, 1954–55. If the hon. Member took the view that those deficits might have been avoided by some other course of action, then I remind him that his Government had all the opportunities to avoid them. In fact, they caused the deficits, which rose higher and higher.

Mr. Peyton

I entirely agree with much that the hon. Member said. I have never tried to whitewash either the actions or inactions of successive Tory Governments. What I said at the end of my speech was that my right hon. Friend the Member for Wallasey (Mr. Marples) very wisely appointed Lord Beeching and had the courage and wisdom to let Lord Beeching run the railways. In so doing he set a magnificent example for his successor in the Ministry of Transport, which unfortunately the right hon. Lady has not followed. She ran away from the consequences of Beeching.

Mr. Mapp

I accept some part of the hon. Member's comment and I will give him a little succour in his analysis by telling him that I always looked upon Lord Beeching's contribution as very valuable and hoped that his services would continue. But I regarded him mainly as a catalyst. There were many problems which many railway officers had tried to hide under the carpet. He was a catalyst, and in a sense his service in bringing to light ugly, awkward facts was remarkable.

I should have liked Lord Beeching to continue and possibly to have with him two colleagues who might perhaps have been able to marry with that catalyst mind a dynamic forward-looking policy and a belief that corporate collective action can work as well as, if not better than, the individual, private profit motive. We did not have the opportunity.

I have said that other leaders were of the civil servant type—men too careful and too cautious. We needed an individual with the courage to face the Government, of whichever party, and to say, "My remit is laid down in the Act of Parliament." It has been done in the electricity industry. Apart from Lord Beeching, I believe that practically all railways Chairmen since 1947, while they were men of great character, were without the drive and the energy to tell those in Government what their responsibility was and what they would accept.

May I turn to two services in which the railways have initiated developments which are worth while. Hon. Members opposite may feel that I am not as warm-blooded about liner trains as they are. That is probably because I know a little more about them than they do, because I worked with them long before it was popular to talk about them. The railways have had a working knowledge of liner trains for many years. For years a major power station in Liverpool has been so served by coal from the Yorkshire coalfields. There are, or were, four trains a day—liner trains is the modern term for them: 18-ton vehicles carrying 64-ton loads from outside Buxton to Northwich, carrying the basic elements for I.C.I. factories in Northwich.

These are sound operating trains. The principle is not new. It is not necessary to tell railwaymen about them, for they can see these trains running from point to point and earning revenue. But, sooner or later, hon. Members of both sides of the House will understand that the volume of traffic passing between smaller towns is not necessarily large enough for liner trains. The amount of traffic between the smaller towns is such that it cannot possibly be suitable for the liner train system. In this conception of liner trains we are talking about the major centres of industry.

I regret that the proposal for the liner train is not quite as I wished to see it. It has been encouraged by the Ministry in terms of investment and, with some reservations about terminal costings, by me. I agree that these trains have made an impact and are very profitable. But I regret that we are to have the clumsy and wholly impracticable arrangement by which the railway cartage fleet—and I do not know whether it applies to the containers, to—will be handed over, in a sense, to some other authority. At any rate, they will do all the terminal work. They will sell these container loads and will collect and deliver them. They will have the key voice in telling those railway people who are trying to operate trains night and day how much the fare will be.

As one who is interested and who at one time had a railway fleet under my charge, I should like to know how people operating a fleet in the conditions in which they will operate liner fleets will be able to tell me and others who are railway operating officers what my freight costings must be. This is implied in the whole arrangement and I regret what is happening to this service—for reasons which I suspect but will not detail now. Suffice to say that I believe the reasons to be based on expediency rather than on practical working. I therefore regret that the Minister has felt it necessary to take this step.

The same could be said of hovercraft, although I am not as well informed on this issue as I might be. What I know about the subject leads me to believe that the same arguments apply. A great deal of "know-how" and money have been invested. Railwaymen want to know that they are working in an industry which has a future. It is not encouraging for railway officers and others who have been in the industry for many years always to be told that they are in a bankrupt service. They want to provide a service which will be viable in the future and they do not want these opportunities to be taken from them. I do not see how railway charges of this kind can be determined by people who will be more concerned with collection and delivery than actually with haulage and freight.

When one considers the loss aspect of the railways, one must admit that commuters are primarily responsible for a large share and that the same applies on the buses. However diligent one might be, I cannot see how, when operating a fleet of., say, 1,000 buses, one can carry every available commuter at the peak hours in the mornings and evenings and not lose money when most of those buses are otherwise virtually idle, eating into one's costs, for the rest of the day. Unless commuter fares are very heavily increased. money will continue to be lost.

A greater realisation of the commuter problem should exist and this whole problem should be looked at more realistically. I agree that the problem bears more heavily on London than some parts of the provinces, but I regret the precedent which has been established of Looking at the problem in London without considering it in as much detail elsewhere. Regardless of whether I represent Oldham or London, this precedent should not be continued. While the problem of commuter fares in London may be greater in volume, it is similar to that in Birmingham, Newcastle and other major cities. These various problems should be looked at on their merits.

I am not averse to an equiation or cross-subsidiation to solve this problem, although I accept that hon. Gentlemen opposite consider this with a good deal of reservation. I believe that cross subsidisation is inevitable. It exists in the postal services and in many other spheres. Indeed, if it did not exist in the Post Office, we in Oldham would pay about one-third of the present postal charges which we must meet. This happens to be the case because of the terrific volume of outward mail-order traffic. It is the cream of the business, but I accept that cross-subsidisation must exist.

The principle that some other authorities should have an effective voice in deciding commuter fares in and out of London and should have some precept on their local authorities about the loss that exists in the fares structure for buses causes me to have great doubts in my mind. This is because there will be considerable doubt generally that local democracy will not be effective and—I say this having been a councillor—because I do not believe that the average councillor, whichever party he represents, is able to work out the sort of sums involved in this exercise. There will, of course, also be the claims of pressure groups.

If my right hon. Friend wishes to avoid the kind of supplementary figures which are at present presented, she should be straightforward to John Bull and say, "I am putting the railways on precisely the same financial footing as the roads. I will pay their maintenance costs and the costs policing, either through taxes or rates". If, then, the railways powers that be cannot contrive a method of movement, wagons and trains, that works, and if they cannot encourage people to fill them, the British public might then have to face the closure sort of solution.

Mr. T. G. D. Galbraith (Glasgow, Hillhead)

The hon. Gentleman is saying that the country should take over the railways and that the railways should be free in the way that the roads are free. Is he aware that the roads are not free, that people use the roads in cars and lorries but must pay a tax for doing so? Will he explain how a similar state of affairs could exist on the railways?

Mr. Mapp

I am not sure to what extent that is relevant in terms of taxes. Being a driver, I accept that I pay a fee which permits me to be a driver. Purchase Tax must be paid when a car is purchased initially, and that is part of the national taxation system. I would agree with the hon. Gentleman to the extent that an argument could be adduced about the duty on petrol. I would also agree that, if parity existed between rail and road, the other taxation, which has been imposed over the years by Governments of both parties, should be given further consideration.

My main argument is that the principle involved should be given first priority, and then our problems might be more easily solved. Railway officers and men would then be able to look forward without having constantly to face the charge that the railways are milking the nation, are a losing proposition and are never doing anything profitably. We must be realistic and accept that, faced with the commuter problems that exist, it is unlikely that the railways can become viable unless we tackle the problem realistically. If people engaged in industry believe intrinsically that there is a fair chance to sell their articles, utilities or services—and in this case a service—then that belief is half-way to achieving our objective.

5.59 p.m.

Mr. T. G. D. Galbraith (Glasgow, Hillhead)

I listened with interest to the thoughtful and helpful speech of the hon. Member for Oldham, East (Mr. Mapp), although I did not entirely agree with his remarks about the taxation of the roads compared with the railways.

This Supplementary Estimate represents an increase of £30 million in one year, the money to be produced by the taxpayer. This is where the roads and the railways differ. The roads produce money, while the railways use it up. This money must be produced by the taxpayer at a time when, according to the Prime Minister, Government expenditure should be cut.

If Government expenditure has to be cut, why is it not cut in this Supplementary Estimate? We are told that the extra payment to the railways is necessary because of a reduction in freight receipts. If freight receipts have been reduced, why not reduce the service until it meets the requirement of the freight, instead of imposing on the public this fantastic increase of 33 per cent. for a service that the public clearly does not want to use? What is the purpose of doing this?

How long do the Government intend continuing to maintain at public expense a system that is far too big for the requirements of today's transport clientele? The Government ought to accept the fact that the needs of transport users change—they are not the same from one generation to another—and instead of pouring this money into a system that has been proved not to be wanted, the Government ought to trim the size of the railways so that it approximates to the demand for the service.

There is nothing sacrosanct about the figure of 11,000 track miles selected by the Minister as being the right size for the railways. The Minister just pulled that figure out of the air, as it were. The hon. Gentleman must know that that is what happened in the Ministry. Those concerned did not even use matchsticks for their calculations, far less slide rules —they just pulled the figure out of the air without having any scientific basis.

If, instead of sticking to 11,000 track miles, the Government were to make economies, the money could be used where it is needed most—in the improvement of our road system. But it is expenditure on the roads, which are wanted, that is to be cut as a result of the Prime Minister's statement last Tuesday, while public money is lavished on the railways where there is no public demand. It is impossible to imagine a more topsy-turvy set of priorities.

The commonsense, businesslike way of doing things would be to allow the railways to reduce in size as, in the past, the canals were allowed to reduce in size because there was no more demand for them at their former size. Unfortunately, that is not the way in which the Government have proceeded.

The Minister hopes, without conceding anything to the changed requirements of transport, to get these figures—which must be a great embarrassment to the Government—to look a little better next year by two very dubious financial expedients which will merely conceal the burden on the public without removing or lightening it in any way. First of all, the Government intend to step up the cost of road traffics to such an extent that some of them may come back on to the rail, and this switch, let it be marked, will be achieved by penalising the roads, not by making rail more efficient. This switch will mean an extra cost to industry, not just of a financial nature but administratively and in reliability.

The extra cost shown in this Supplementary Estimate makes utter nonsense of the Government's call for an export drive in the Dunkirk, back-to-the-wall spirit. It is quite impossible to respond to that kind of call from the Government when one sees the Government wasting money like this.

The second way in which the Government hope to make the figures look a little better next year is to conceal them; and sweep them under the carpet by getting local authorities to pay some of the costs, but the bill will in any case be just as big—

Mr. Deputy Speaker (Mr. Sydney Irving)

Order. The hon. Gentleman is getting beyond the Supplementary Estimate. He is now talking of next year's Estimates and, indeed, of matters in regard to legislation now before the House. Neither is permissible in a debate on Supplementary Estimates.

Mr. Galbraith

With the very greatest respect, Mr. Deputy Speaker, your predecessor in the Chair allowed a few remarks on these subjects. I am not really going very wide, and my speech is quite short. I was only indicating why I am opposed to this Supplementary Estimate.

Mr. Deputy Speaker

I have read my predecessor's remarks to the House on these matters. Incidental references I would allow, but certainly nothing beyond that.

Mr. Galbraith

Naturally, Mr. Deputy Speaker, I will follow your Ruling, but we on this side want to know why there should be this great subsidy of £136 million, which is what the Supplementary Estimates amount to, for the users of transport. That is what the Government have to justify, and it will be very, difficult for them to do so.

Just last week we were told that in Scotland only 7 per cent. of the population were using rail and that 59 per cent. were using buses, and I take it that the figures for England are very much the same. I do not know the exact cost to the country of maintaining this service for 7 per cent. of the population—perhaps the Minister can tell us—but it must be a very large percentage of the £166 million. Perhaps £50 million or £60 million is used to maintain railways that are not wanted—

Mr. John Morris

I should like to be perfectly aware of where the hon. Gentleman stands. I seem to sense a difference in emphasis between himself and his hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor). Is he for or against investment in British Railways? Does he want to close a large number of railway lines in Scotland?

Mr. Galbraith

What I want—and if the Minister will wait a moment I shall come to my point—is to get rid of this waste of money. I consider a Supplementary Estimate of £166 million a gross waste of money, and the Minister, in- stead of looking so pleased with himself, should be hanging his head in shame.

Mr. John Morris

The hon. Gentleman complained about the very large amount of railway lines in Scotland for the number of passengers using them. Does he want to get rid of a large number of railway lines in Scotland?

Mr. Galbraith

If the Parliamentary Secretary will just keep himself in control for one minute he will get an answer to that question when I come to that portion of my speech. This is an utterly ridiculous and unjustifiable extravagance. This indiscriminate subsidy policy of the Government is at the root of a good deal of the country's present economic troubles.

There has been a lot of talk recently, and to a certain extent in this debate, on social benefits, but as the hon. Member for Oldham, East will be aware—and the Minister, too—the Geddes Committee, which went into the matter carefully, reported that methods of calculating social costs are in their infancy. It seems to me that, like most of the concepts of economists, the concept of social benefit can be used to prove almost anything one likes, and I am not any more convinced than the hon. Member for Oldham, East is that this is a good reason for keeping lines open.

Even more alarming than the rail figures are the figures for London Transport because they indicate the sort of burden which the Minister is preparing for other regions. A subsidy amounting to the colossal figure of £11 million is required to run in London what is very little different from one of the Minister's new P.T.A.s. With this costly example before us, why should the Minister think that the P.T.A.s will be a success? All experience in the past indicates that these will be an expensive failure, and that the public ownership which now exists in London is quite irrelevant to the solution of problems of transport. With these startling figures before us, Parliament should take a stand against the pretensions of the Executive and say that we will just not go on paying these indiscriminate subsidies. Travellers as a class are not particularly needy people any more than people who buy clothes, or kitchen utensils. Here I am quoting— On what ground should they, as a class, be subsidised? The fundamental principle must be accepted that transport is itself not a social service; it is a consumer good. To ensure that the produce is available in the right quantities with no shortages and no waste, it is essential to charge a price which, as nearly as possible, represents the true cost of production. That piece of advice, curiously enough—and the Minister will be interested to know this—comes from Socialist Commentary. I wish that the Government would study it and take it very much to heart. If people want services they must be prepared to pay for them. This applies particularly to London Transport. To succour London Transport to the extent of £11 million per annum makes nonsense of any distribution of population policy, which I always understood some sections of the Government believe in.

It is not so much transport that needs co-ordinating and integrating as the Government, because one arm of the Government does something entirely contrary to what another arm is trying to do. It is this sort of sentimental unbusinesslike approach to London which causes the growth of nationalistic feelings in other parts of the United Kingdom which is causing the party opposite so much trouble and harm. It is in their own party interest that they should look at this. The Minister will be well aware of it, because he comes from Wales, as I am and I come from Scotland.

The country cannot go on paying a subsidy for railways amounting to over 6d. on the Income Tax, particularly when neither freight nor passengers require this colossal infrastructure any longer. This extravagance in transport represented by this £166 million extra has gone on for far too long. Until we get a great deal closer to a position where we can get what we pay for, I am very much afraid that this country will continue its unsuccessful struggle to get out of the financial quagmire which excessive Government expenditure such as this has landed it in. If I could get my hon. Friend the Member for Yeovil (Mr. Peyton) and other hon. Friends to stand by me, I would feel inclined to divide the House against the Government.

6.12 p.m.

Mr. Julian Ridsdale (Harwich)

When listening to the speech of the Parliamentary Secretary I found it very difficult to see the wood for the trees. He emitted so much smoke that I almost thought the railways were back in the steam age.

I would be far happier if I knew that the admirable Dr. Beeching was still at the head of British Railways, because then I would be certain that we could be sure of getting value for money for this deficit of £153 million, I agree with my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) who so excellently opened the debate, is a national disaster. Coming so shortly after the cuts in Government expenditure, and not being able to find further cuts, it is the bounden duty of each of us to inquire in great detail into the Supplementary Estimates and to get a far better explanation than we have heard from the Parliamentary Secretary.

One of the things which worries me, representing as I do Harwich which has a considerable railway population, is the low morale in British Railways. It goes right through from the top to the lowest-paid worker. How much more confidence would the lowest-paid worker have if he knew that there was at the head of British Railways someone like Dr. Beeching who had a knowledge of how a large business could operate. Much as I appreciate and know the present Chairman of British Railways with all the experience he has, I wonder if it is the kind of experience we need to administer a great industry, such as this man has to do, excellent man though he be in many respects.

I am sure that the reason we have not the right man at the head of British Railways today is that the Government have not had the courage to pay the economic price for him. In the same way we see that there have been vast reductions in manpower on the railways and yet the wage bill is approximately the same. I ask the Parliamentary Secretary if this Supplementary Estimate of £30 million is in any way connected with across the industry wage rises? I hope that it is not. We have had another explanation which I shall deal with in detail later.

I agree very much with my hon. Friend the Member for Yeovil (Mr. Peyton) that it is vital to support success and not failure. In my constituency there is one of the best railway ports. I welcome the investment which has been made in the port of Parkstone by British Railways, but what disturbs me is that we have not been ever able to get a detailed account of how the operating costs of that port works. I should like the men at Parkstone to be paid more because they are making a profit and not to be subsidising some other part of the country in making a loss. This is the way to success, pay for skill and hard work and for the men to see the result of that work in their own port.

No wonder the private enterprise port at Harwich navy yard and Felixstowe port go ahead while the British Railways port at Parkstone goes down and as a consequence we have to face a deficit of £22 million in the Supplementary Estimate and £153 million on the railways as a whole. This is because, alas, we are too subsidy-minded and we are frightened to look at economic costs. We are frightened by the real price in the market place. We have to face competition in the world in order to pay our way and we have to look at the facts of reality in the face. Until we do so we shall have deficits such as the one we are discussing. Looking at the hard facts of reality I have considered the long-term trend of prices to see what was happening in the long term to British Railways. I see that the receipts from freight in 1957 were £353 million. Receipts from freight in 1966 amounted to £275 million. I should like to know from the Parliamentary Secretary what they were in 1967 or for the latest available date. The amount of tonnage taken by British Railways in 1957 was 275 million tons and in 1966 it was 213 million tons.

British Railways has increased fares for commuters. These receipts are double what they were in 1957. Dare the railways charge a higher price for some of the traffic coming to them? If not, does this not show that the railways are not using the best economic way of carrying the load? I am rather in favour of what w as said by my hon. Friend the Member for Glasgow, Hillhead (Mr. Galbraith) about looking at facts in the market place. We cannot any longer be a country which subsidises this and that.

Mr. A. H. Macdonald (Chislehurst)

As the hon. Member is concerned with facing these realities, would he care to face the reality of the situation of the costs of the commuter services in London? If, as he suggested, fares were to be put up further what would be the effect on wages and salaries'?

Mr. Ridsdale

I am saying that we have to improve the efficiency of the service. I am sure that if we could do that we should get things right. This is a small part of the revenue. The revenue from the commuter service increased from £16 million in 1957 to £32 million in 1966, but the revenue with which we are involved here was £353 million in 1957 and £275 million in 1966. The Joint Parliamentary Secretary is right; it is the freight problem that is important and the crux is how we deal with it. It is because of failure to face the economic realities that we have to discuss this huge deficit.

I am conscious that other hon. Gentlemen wish to speak and that we shall be discussing other very important Supplementary Estimates, for the Army and the Navy, and I am sure that in those cases also more reality is needed than we hear from Ministers at the moment. I am convinced that the Government must support success and not failure. As I did at the beginning, I stress the importance of morale in the railways and the importance of ensuring that correct leadership is there and that proper reward is given to management and lower-paid workers. When that is done we shall get an efficient industry, but not until it is done.

6.21 p.m.

Miss J. M. Quennell (Petersfield)

I am almost heartbroken that the hon. Member for Oldham, East (Mr. Mapp) has at last left the Chamber. It appears that hon. Members opposite are not keen to take part in the debate. Indeed, there do not seem to be many of them present. One can perhaps assume that they are all in the Library writing letters to their Chief Whip, and that will probably explain his absence, too.

The hon. Member for Oldham, East produced some very interesting ideas which I thought were of some importance and worthy of consideration. His remark that the heads of the B.T.Cs. after the 1947 Act were over-influenced by the Governments of the day was, I thought, true, and I think that that over-influence tends still to have its sway today.

The Minister referred to the difference between the passenger receipts and the Estimate as being only marginal. This may be true; but a marginal difference on Estimates amounting to hundreds of millions of £s is nevertheless a large sum of money. I suggest that in this aspect of the railway service there are certain losses that could be made good. Passengers do not now travel by train as readily or willingly or as eagerly as they should do. The reasons are very clear. Certainly in the South of England passengers very often find that conditions on passenger trains are, to say the least, unattractive. The facilities are very often unpleasant. The sanitary arrangements on the trains are nauseous. The accommodation for refreshment is inadequate. One has to stand in a swaying coach trying to eat a potted meat pie of some description, holding it in one hand while clutching a gin and tonic in the other, and that at 60 m.p.h. is not good for one's digestion and cannot be described as comfortable.

The British Railways Board spends a considerable amount of money on advertising. I believe that it would get better results if it cut the advertising and concentrated on making the passenger comfortable once he is in the train. I also believe that it would get far better results if it could get its trains to run to the advertised timetables. In recent months a new timetable has been introduced in the Southern Region, and it has produced some chaotic results.

It is not to be marvelled at that the passengers have no confidence in the ability of the management to run its trains to time and that the staff have, very unfairly I think, had to take the brunt of the passengers' legitimate grievances, taking the kicks and not getting many halfpence out of it. There appears to be no real prospect of the passenger trains running to time. I think that the Minister will find that if the Board makes the trains reasonably clean and comfortable internally the receipts will begin to rise. One of the first steps in improving the deficit position should be to increase receipts where it can be done, and I suggest that the Minister should try this as a beginning.

Mr. John Morris

I am very interested in what the hon. Lady is saying and very conscious of its importance. None of us on either side would differ from her in what she is saying. But, after all, at the end of the day there is certain responsibility on the Minister and certain responsibility on the Board. I am sure that due weight will be given to what she has said, but I must point out that it is not the Minister's responsibility to interfere with management on this scale.

Miss Quennell

That is an interesting point. I will give the hon. Gentleman an example. Between the end of July and the beginning of December 177 trains that were scheduled to arrive in Alton Town from Waterloo got lost on the way and did not get there. The hon. Gentleman says that this is nothing to do with him. Is it not? Is not dislocation of service of this magnitude anything to do with him? I wonder.

Mr. John Morris

I will tell the hon. Lady where the Minister's responsibility lies. The railways operate under the doctrine of the 1962 Act which charges the railway management with certain responsibilities and the Minister with certain responsibilities. I would be the first to concede, as we discussed at Question Time the other day, that there is an avenue through which passengers can make complaints, to the T.U.C.C., from which recommendations can be made to the Minister. Apart from these very narrow limits laid down in the Act passed by hon. Members opposite, all these matters are the responsibility of the Railways Board.

Miss Quennell

The hon. Gentleman rightly says that the T.U.C.Cs are an avenue for passenger complaints. But the T.U.C.Cs., I am sure he will agree, are inclined to examine the arguments for the closing of lines and the quality of service. I also think that he will agree that the T.U.C.C. in my area has a part-time unremunerated chairman who is an insurance broker by profession, and that he has 22 colleagues who are all unremunerated, and that they have all been swamped by the complaints that have been poured in upon them in the last six months, and that the problem has suddenly overwhelmed them.

When the Minister says that the actual management of trains is a matter for the railway management, what he is really saying is that if 177 trains do not reach their destination he is still not involved with the actual management of the railways. But he also said that under the 1962 Act certain responsibility was laid upon the railway management and certain responsibility upon the Minister. Does he not agree that there comes a time when the Minister must look at her responsibilities under the 1962 Act?

Mr. John Morris

I should have though that that is exactly what we are to do in the Transport Bill which begins Its pas: age through Standing Committee tomorrow.

Miss Quennell

I have a nasty feeling that if we were to pursue this debate for much longer you would rule us out of order, Mr. Deputy Speaker. The Joint Parliamentary Secretary is now guilty of a real red herring, not a false trail. The point is that we have, as a nation, got a railway service in which it would appear that no one can influence either Board or Minister should the quality of the service fall below that which the passengers expect and have a right to look for. This is what the hon. Gentleman has implied. It is a constitutional matter of great importance, but I think that you would be leaping to your feet if we were to pursue it.

I will not take up more time except to comment on the phrase used by my hon. Friend the Member for Harwich (Mr. Ridsdale), who called it the hard face of reality. The hard face is simply this. If the Minister will make the service attractive to the passenger she will find that the marginal deficit which she has on passenger receipts over estimates will evaporate very quickly. Give the people what they want and they will repay handsomely.

6.30 p.m.

Mr. Philip Goodhart (Beckenham)

I am indebted to the hon. Member for Harwich (Mr. Ridsdale) for at least bringing one success story into this debate. Hitherto the debate has been unrelieved by any story of success by British Railways, apart from the charm- ing intervention of the Joint Parliamentary Secretary, when he revealed that, thanks to the freightliners, the Government were now able to send their dirty laundry to Scotland to be washed.

I am reminded of the charming intervention made by the hon. and learned Member for Warrington (Mr. W. T. Williams) in last week's debate on the Government cuts, when he said that the Government had had so much bad luck that he was almost inclined to believe that God must be a Conservative. If we pursue this line of reasoning it must follow that God does not travel very often on the Southern Region of British Railways. Certainly by any standard Southern Region has had appalling luck in the last 12 months.

As the management has said, the commuting public has had to put up with unprecedented burdens. In the last 12 months there has been a guards strike, there have been go-slows, there has been a new timetable which does not work, and there has been a work-to-rule. As the Joint Parliamentary Secretary told us this afternoon, we were fortunate enough to have a mild winter last year, while this winter we have been unfortunate enough to have snow. So, one can see that British Railways' cup is filled to overflowing.

Is it really all due to bad luck'? I have had the pleasure of meeting a number of the senior executives of Southern Region. They are men of charm and no doubt of great ability, but after one looks at the size of the deficit, and at the quality of the service provided, one wonders whether there is any reason at all why they should do better in the future than they have done in the immediate past.

If private enterprise had been concerned with a fiasco of this proportion there would have been a major shake-up and heads would have rolled. But has anyone been dismissed because of the recent failures in Southern Region? Has anyone been demoted, or have their salaries been reduced in any way? The answer is most certainly, "No". The only way in which senior management in the Railway Boards can now be removed is by disagreement with the Minister, over questions of individual initiative and competence.

It would appear that there is in this region, as regrettably there is throughout so much of nationalised industry, a lack of personal responsibility. This is reflected in the size of the deficits and the quality of the service.

Mr. Mapp

In a sense of fairness—the hon. Member has said that he had seen, presumably with others, officials of Southern Region. In dismissing what they might have said, he is now, broadly speaking, censuring them. I wonder whether he would do a service to the House and be good enough to let us know what explanation the officials have given for this bad service to which he has referred?

Mr. Goodhart

The principal reason that is put forward, in public and in private, by the Southern Region officials, is that they are trying to carry more commuters in a more restricted region than in any other area in the world. They have tried to squeeze more trains into the proverbial pint pot.

If this had worked it would have been a great feather in the caps of those officials responsible and all credit to them. But it has not worked; it has been a failure. In private enterprise one can reward those who succeed, and at the same time one can deal with failure. In the Southern Region there would not have been very much reward if this timetable reorganisation had worked. No doubt there would have been a good mark on the report sheets of these officials but there would not have been any substantial reward. At the same time one sees no penalty. It would seem that everyone goes on in exactly the same way as before.

After the events of the last 12 months I do not believe that the Southern Region can give to the harried commuters of London a better service under the present system, under the present chiefs. What is needed is a new lead, new management at the top and, after all this, we desperately need more investment to try to unclog the crowded trains that for years to come will make daily travelling into London an obstacle race rather than a smooth passage.

6.40 p.m.

Mr. Geoffrey Wilson (Truro)

I sympathise with hon. Members who have been discussing the problems of Southern Region, but I assure them that the Southern Region is now, like the Southern Railway before it, rather different from the other railway regions. The problems are quite different, Southern Region being the only region which depends on passenger fares for its revenue. The deficit which we are discussing now, however, arises not on passenger fares but on goods traffic. In my region, the Western Region, we have no complaints either as to unpunctuality of trains or as to their being dirty. Western Region's trains are clean and punctual, and they are running at greater speed than they did before the war.

It is most regrettable that we have to debate these Estimates at all this week, after our debates of last week. We are asked to provide another£30 million in respect of British Railways and London Transport, a very large sum, and the Parliamentary Secretary has told us that a good part of it is due to a deficit on British Railways. These deficits are partly responsible for our need to have the debates last week, of course, because it has been excess Government expenditure which has largely contributed to the country's financial trouble.

It could be said that any debates on Supplementary Estimates are debates about water which has already gone under the bridge. But the point we make from this side is that it should not have gone under the bridge. It should have been diverted into a more profitable irrigation channel. We object to these Estimates and criticise them on that ground. There is very little excuse for the railway deficit being as large as it is. The Parliamentary Secretary suggested several reasons why the deficit had arisen. Others were referred to by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), who reminded the House of five different reasons which had been stated in the First Report of the Estimates Committee. But there is another reason which has hardly been touched on and not explicitly mentioned at all, namely, that the Beeching Plan was abandoned before it was fully implemented.

I was interested to note that the Parliamentary Secretary chose the year 1962 and observed that the railway deficit then was£159 million. That was the year before the Conservative Act of 1962 came into force and before the Beeching Plan had come into operation. The Beeching Plan resulted in the deficit being reduced to£133 million in 1963 and to£120 million in 1964. Had it gone on, the deficit would, no doubt, have been reduced further. In other words, the Beeching Plan was working in reducing the deficit, and it is only since a change of Government and since Beeching went that the deficit has started to rise again, now reaching£155,800,000.

Today, and in previous debates recently—the Parliamentary Secretary did it today—the Opposition have been challenged about subsidising uneconomic railway lines for social reasons. In fact, contrary to popular belief, when my right hon. Friend the Member for Wallasey (Mr. Marples) appointed Dr. Beeching and asked him to produce a plan, he did not ask him for a plan to make the railways pay. The remit set out at the beginning of the Beeching Report shows that what Dr. Beeching was asked to do was to review the needs of the country's transport as it then was and to recommend what pattern of railway lines would be viable.

Dr. Beeching did that in his Report, but he also made clear—this appears more than once in the Report—that he admitted that there would be cases where an uneconomic line might have to be preserved for social reasons, for instance, that it would be less expensive to maintain an uneconomic commuter service than to build a new urban motorway, or, in a rural area where there were very few roads, it might be cheaper to keep a rural line going than build the necessary roads, or, as a matter of strategic requirement, it might be advisable from a military point of view to keep certain lines open to supply certain depots, and so on. All these matters were mentioned in the Beeching Report, and my right hon. Friend the Member for Wallasey never dissented from them. It was always recognised that certain uneconomic lines might have to be kept open. But neither my right hon. Friend nor Dr. Beeching ever envisaged that any large number of lines or any substantial part of the railways would have to be kept as a subsidised service.

We on this side have never accepted that the railways should be a social service. One accepts old-age pensions as a social service because everybody becomes old. We accept that the National Health Service may be a social service and be applied universally in the country because everyone may need it and it is necessary even in remote areas. But we do not accept that railways are a social service. There never was a time, and it is not such a time now, when everyone could have a railway service, and it is unfair to provide one for some people at the general expense of many people who have not got a railway service, never had one and do not want it. Yet this Supplementary Estimate does just that. It is to provide a subsidy for some people to have a service which is not otherwise paying.

Transport is never an end in itself. It is always a means to an end. One cannot say that there is a need for a railway from London to Manchester or between any other two points. It may be a convenience. It may cost less to go by rail than by some other means, but there are many other means by which one can travel from one point to another. In that sense, one cannot say that it is a necessity. By and large, those who find it cheaper or more convenient to go by rail should be expected to pay for it. However, because this principle is not accepted, Supplementary Estimates such as these arise, and, under existing Government policy, they will continue to arise.

Several hon. Members have observed that the Transport Bill which is to begin its Committee stage tomorrow conceals a lot of the costs which will arise out of railway services. But the costs will still be there, and, unless the railways pay their way or come nearer to doing so, it will be the taxpayer in the long run who has to find the money.

Last Tuesday, the right hon. Member for Leeds, West (Mr. C. Pannell) chided me for making a speech which, he said, he had heard before in 1950. He passed that comment because I was referring to certain historical events and experiences regarding the Great Western Railway. Of course he had heard it before. The trouble with right hon. and hon. Members opposite is that, although they know the facts and have heard them all before, they take no notice of them. Their trouble is not that they are stupid or ignorant but that they are inveterate deductive thinkers, judging what to do next not by their experience of what has gone before but deducing their policy from some slogan or other and trying to make the slogan fit the facts.

In the case of transport, the slogan is usually either integration or nationalisation. Instead of seeing that the Beeching Plan was working and reducing the deficit, they abandoned it and then the deficits began to rise. They did not learn from that either. If they had appreciated the true state of affairs, they would have gone back to the Beeching Plan, and we would not have had these Estimates before us. We ought not to be called upon to find money to meet a deficit which has arisen out of a mistaken policy.

The new Bill which is to go to Committee tomorrow contains all sorts of provisions which, as I say, will conceal the costs of running the railways. It is possible that we may not be faced with a deficit of this sort again and be asked to vote a Supplementary Estimate. But the deficit will still be there. Unless we get a better explanation than we have had so far, it is questionable whether we should support the Supplementary Estimate. At least, we have reason to criticise it thoroughly.

6.50 p.m.

Mr. Frederick Silvester (Walthamstow, West)

If I may speak briefly about an impression which has struck me from the debate, which is the first time that I have heard a debate on Supplementary Estimates on the railways, it has become clear as various hon. Members have spoken that the basic factor behind this new Supplementary Estimate has been the intervention of the Government in the management of British Railways. One of the dangers of intervention is not merely the deficit of£30 million, but the effect of the deficit on the operation of the railways.

The deficit is bad as a deficit because of two effects which it has on management. It debilitates the management, and in part it arises from Government interference with management. The 1962 Act placed upon the Railways Board the objective of trying to be financially viable by 1970. It may well be that there are occasions on which a Government may decide, for one reason or another, to subsidise lines in certain parts of the country. They may describe it in their new Bill as being a subsidy for socal reasons. Even in their existing reports, however, British Railways make it clear that they are being forced to bear these costs for social reasons. The Bill, therefore, does not really make much change in that direction.

What is happening now, however, is that we are taking away from the railways the objective of financial stringency and asking them to co-operate in devising a scheme whereby they may from the very beginning be loaded with social costs. The Supplementary Estimates fall into that pattern.

Secondly, the deficit arises from Government interference with management. At some point in the debate, we heard about the 11,000 route miles. In my constituency, there is a line which the original plan threatened, would be a freight-only line and would cease to carry passengers. If that proposal goes through, I and hon. Members opposite who share the same line will make a fuss, kick up a lot of noise and hope to save the passenger side of the line. It is our job to do that. We will deploy the arguments with all the strength we can. It is not the job of British Railways to do that. It is their job to look at it as a commercial proposition and try to make sure that they are not called upon to bear costs which it is no longer possible for them to bear.

The danger of the present approach is that British Railways are being asked to co-operate in a system which from the outset includes in their thinking the permanent carrying of lines which will no longer be commercially viable.

One last example of the way in which the deficit and Government interference go together in British Railways, and the bad effect which there is likely to be on management, is the example, which has been quoted several times this afternoon, of the freightliner. It is clear that there are certain aspects of British Railways management which are the fruits of their imagination and are likely to be the growth points of the industry for the future. In the debate in June, also on the deficit, the Minister said that the freightliner formed a major part of the plan to divert resources from the traditional traffics which were declining to the new and expanding traffics which represented the future of the railways. Those are to be taken away.

It seems to me, therefore, that not only are the Government imposing on management in British Railways burdens which it is not fair for them to bear, but they are also taking away from the railways the opportunities in which their future lies. Both of these arise because of the continuing deficit which Parliament is asked continuously to support and because Governments and Parliament still continuously interfere.

One thing which has emerged today, perhaps most forcibly from the hon. Member for Oldham, East (Mr. Mapp), is that this debate goes on in generalities, whereas the future of British Railways depends upon detail and the detailed application or imaginative policies which are practicable to attract traffic, both passenger and freight, to the railways. Debates of this kind will not solve that.

The solution lies in choosing the right men in the railways and allowing them to do the job with the minimum of Government interference. We are talking not simply about the£30 million of the Supplementary Estimate, but the effect of continuing to come to the House of Commons for authority to finance the deficit and the effect which this has on interference by the Government in the management of British Railways.

6.56 p.m.

Mr. Peter Walker (Worcester)

The few hours that the House has spent on this Supplementary Estimate have been of considerable importance. It was impressive to witness speech after speech from the benches opposite, crowded and seething with indignation that all this money had been spent and that if it had been saved it would have obviated the introduction of prescription charges. It has been impressive to hear the hon. Member for Ebbw Vale (Mr. Michael Foot) and all his colleagues, one after another, pointing out that the railway deficit this year is equivalent to about six years of prescription charges.

Likewise, it has been impressive to w to the deep interest of Treasury Ministers as the Chancellor of the Exchequer and several other Treasury Min- isters have been in constant attendance taking note of all the points which have been made and obviously expressing their concern and worry at£155 million of the taxpayers' money being spent on the railway deficit.

Then there was the speech of the Joint Parliamentary Secretary. It was the best attempt to turn defeat into triumph since the Prime Minister's television broadcast on devaluation. As the hon. Gentleman went through his speech, he told us that it was extremely good that only another£30 million was needed and that it could have been very much worse. It is true, he said, that the Government have let the railways down badly but that the degree to which they have let the railways down is of such enormous proportion that it is remarkable that the railways have lost only£30 million more than they had budgeted for.

Mr. John Morris

For the sake of the record, the hon. Member will, I am sure, be the first to concede that his last paragraph is a measure of all the other paragraphs that he has uttered so far in his speech.

Mr. Walker

I must have misunderstood the hon. Gentleman. I thought I heard him say that the reason for this enormous increase in the deficit was that industrial production last year did not rise to the degree that the Government expected. Have the Government by any chance decided that besides having no responsibility for British Railways, they have no responsibility for the economy as well? I only wish that they did not have any responsibility for the economy, but, alas, they do and the nation and the railways have suffered accordingly.

The hon. Gentleman showed his one great skill in the principle of selectivity. I am tired of hearing him and all his Ministerial colleagues mention only the one deficit figure for 1962. It is interesting that they never mention 1963 or 1964. As the Joint Parliamentary Secretary well knows, in 1963 the railway deficit went down by more than£20 million. In 1964 it went down by another£14 million. Then came the Labour Government and the trend was vigorously reversed, and now it is rising steeply.

What is frightening when we have Estimates like this is the appalling lack of reliance that one can ever place on Government estimates. The Report of the Estimates Committee particularly points out the number of occasions the railways have been wrong in their estimates and have come for more money, but the Government first of all in September, 1965, made in their National Plan a forecast for the railways.

We were told off, chastised, by Ministers for not having the faith and belief in the National Plan which they thought we should have had. After all, it was to provide us with extra television sets and refrigerators! As for the railways, we were told that by 1970 we should get rid of their working deficit, and the Government listed the ways in which they would do it. That was September, 1965. In 1966 the railways' deficit rose. Therefore, the trend indicated in the National Plan looked, to say the least, suspect, but we thought, "Well, 1967 will be a better year. We have this rebust Minister at the Ministry of Transport, and all sorts of wonderful things are being said about the railways, and their freightliner trains, and so on, and about a new spirit on the railways."

So we could have anticipated that 1967 would, perhaps, be a better year and that the trend would improve as it had done in the last two years of the Conservative Government. We were disappointed, therefore, when in 1967 the Minister said in the House of Commons that the railways' deficit was not going to improve during 1967 and that things were going to be about the same. I remember how disappointed we were when she told us there would be no improvement in 1967. If we had been told not only that there was to be no improvement but a considerable deterioration in the railways' deficit, that would indeed have made nonsense of all the boasts being made about improvements taking place in British Railways.

What we are concerned about is that the Joint Parliamentary Secretary's speech and the speeches of the Minister herself show no indication that the problem of this increasing deficit and of this enormous Supplementary Estimate is going to be tackled. Therefore I ask the Joint Parliamentary Secretary for his comments on a few major points.

Firstly, on the labour force, which has been reduced over a period of years. There was recently the Government inquiry that took place and Cooper Brothers, the firm of City accountants, have reported on the financing of the railways and have made comments, I gather, in their report as to the labour force. Moreover, Mr. Fiennes has written an article and has indicated that the labour force could be reduced by 100,000 men. I want the Joint Parliamentary Secretary to say what he considers will happen to the labour force of British Railways in the future, because this overmanning must be one of the great problems about the deficit.

Secondly, will he take note of the remarks of his hon. Friend the Member for Oldham, East (Mr. Mapp) and of everybody else connected with the railways and consider that, in the morale of the railways a salient point is taking away from them the freightliner trains. and will he consider keeping them with them?

Thirdly, the Joint Parliamentary Secretary gave some figures about the sale of property assets, and, if I remember them rightly, they showed a quite big decline last year compared with the previous year. Will the hon. Gentleman say, when are the railways going to be able fully to exploit their enormous assets? I cite as one example of these the major termini in London, where we have London Bridge, Victoria, Euston, Paddington, St. Pancras and Kings Cross, at all of which there could be developed offices and hotels and arrangements whereby passengers could come straight into the stations without further congesting the streets of London. When will the railways be given much greater freedom to develop these enormous property assets?

Finally—and this very much affects the Estimates for 1967—there is the question of top management. As for that, the Minister announced that she was not going to appoint the person she had as her first choice as Chairman of British Railways, because he wanted a higher salary than that which was available. Mr. Johnson is a very distinguished railwayman, and I want to wish him every possible success. Indeed, he made a very fine job of the work of electrification on the Midland Region. What I want to know is, having decided that Mr. Johnson should be Chairman of British Railways, are the Government going substantially to increase his salary, so that he can recruit underneath him men of high calibre with appropriately high salaries for managing this enormous industrial task? Or is it now the firm policy of the Government for the foreseeable future to peg the salary of the chairmanship of British Railways at this figure?

The tragedy of the last year in which this enormous Supplementary Estimate is being asked for is the effect all this has had on British Railways. My hon. Friend the Member for Harwich (Mr. Ridsdale), my hon. Friend the Member for Yeovil (Mr. Peyton), and my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor)—in his very able, held opening speech today—have all mentioned the adverse effects which have taken place in the last year on British Railways. They are of course deeply depressed at the thought that the British public are again being asked for another£30 million to meet these deficits, and that now for some months the railwaymen hive suffered the humiliation of watching the bickering over their Chairman's salary; and they have been able to read in the newspapers of the appalling manner in which the previous Chairman was treated by the Government, and the way in which he was taken out of a union meeting and told he was no longer to be kept in the job.

Therefore, we have the picture at the end of 1967 and the beginning of 1968 of the railways having a steep rise in their deficit with no sign in the Minister's statement of a turndown of this, with labour relations strained and at their worst ebb, with a great deal of confidence lost. I appeal to the Government really to set about allowing the railways to develop their assets, to retain their freightliner trains, to attract the best in management for this great industry. I appeal to the Government really to tackle these problems—not in a doctrinaire fashion, but by good, sound, practical administration.

7.7 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Neil Carmichael)

I think everyone will agree that we have had a very full discussion of these Supplementary Estimates for transport, and I think that perhaps every- one will also agree that this discussion has taken rather more of the day than had been expected, and that there are some hon. Members who have been waiting very patiently to debate other important Estimates and that, therefore, I ought now to answer as quickly as possible.

I will deal with as many of the points which have been raised as I can. I think it is important to realise that, although debates such as this have a great deal of value, it may be that in the future the House will find another way of looking at Supplementary Estimates, a way which, perhaps, will be more exacting and more streamlined than this. I am not by any means criticising anybody, but I have heard some hon. Members in the Corridor saying, "There must be a better way."

The hon. Member for Petersfield (Miss Quennell) discussed the question of the rights of the Minister regarding the Board. I am not quite sure whether she wished almost to duplicate the Railways Board, a duplication to be created at St. Christopher's House to look after the questions which are raised and to reinforce the Minister in her decisions on railways—but, perhaps, if I continue much longer with the duet which the hon. Member had with my hon. Friend I shall be ruled out of order, Mr. Deputy Speaker.

Miss Quennell

I hope the hon. Member has not got me wrong. What I was trying to persuade his hon. Friend of was that if he improved conditions for passengers he would improve receipts.

Mr. Carmichael

I got the point, but, as I said, it developed into a duet between my hon. Friend and the hon. Lady, and, Mr. Deputy Speaker, I saw you edging towards the edge of your Chair to bring it to a close.

The hon. Member for Glasgow, Hill-head (Mr. Galbraith) spoke about services being reduced and said that, to some extent, there were falls in demands. But falls in services cannot all happen at once. Allowance has to be made for the estimated long-term demands. In the case of coal, for instance, there has been considerable co-operation between the Railways Board and the coal industry. From the point of view of railway receipts, no one can be happy about the fall in the amount of coal sent by rail and the new forecasts. From now on, the Government having established a target for coal, the Railways Board will be closely associated with all the developments to help it to estimate future demand. The Board is planning for a reduction in coal traffic in accordance with the declining forecasts in the coal industry.

As the hon. Member for Harwich (Mr. Ridsdale) said, there is no doubt that the shortfall in freight is the key to the Supplementary Estimate which we are putting forward. Passenger receipts are remarkably accurate, being only 0.2 per cent. out, but it is important to realise that the railways cannot be divorced from the rest of the economy. The carriage of freight is very dependent upon the activities of the rest of the community.

The hon. Member for Truro (Mr. Geoffrey Wilson) and another hon. Member spoke at length about the Beeching closures, as they are now known. Perhaps it would be valuable to give hon. Members the figure. The closures accounted for something like£17 million per annum. If the Beeching closures had still been going on, it is estimated that the shortfall would have been something like£17 million less. That, considering the upheaval which was caused, is not something which we should consider worth while in terms of the deficit which we have.

Mr. Geoffrey Wilson

I understood the Parliamentary Secretary to say that the deficit in 1967 was£27 million. Is he saying, in other words, that, of that£27 million,£17 million was as a result of not carrying out the Beeching proposals?

Mr. Carmichael

The point is that the effect of the Beeching closures was that the saving achieved from them was at the rate of£17 million per annum.

Mr. Galbraith

That figure of£17 million is a very interesting one. I assume that it is£17 million multiplied by three; in other words,£51 million.

Mr. Carmichael

It would be£17 million now. The cumulative effect today would have been£17 million a year.

Turning to the very interesting speech of my hon. Friend the Member for Oldham, East (Mr. Mapp), I will not deal with his question about track costs, which I have heard before and which my right hon. Friend the Minister has answered on a number of occasions. However, I will refer in passing to the very important inquiry which is to be held into the recent accident. Mr. Gibben's terms of reference are not only to investigate the accident, but also to look into the general safety of automatic half-barriers at level crossings. As for my hon. Friend's suggestions about the very big increase in speeds which is likely to affect questions of safety, without presuming to prejudge the reactions of the tribunal, I am sure that such matters will be taken into account in its deliberations.

The other important point raised in the course of the debate concerned the labour force. There have been savings, and they will continue. The estimate for last year was that there would be a reduction of 15,000 in the labour force. In fact, the reduction was 20,000. In the course of the debate on the deficit of British Railways on 26th June, 1967, my hon. Friend gave some figures and said: 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."—[OFFICIAL REPORT, 26th June, 1967; Vol. 749, c. 161.] As many hon. Members have said, the industry has gone through a very difficult time in the changing circumstances of the modern world, with the introduction of so many other ways of travel. In going through those difficulties, it has been quite remarkable that the morale of railwaymen has been so good. I do not believe that it is quite as appalling as many hon. Members opposite would suggest. For the first time there is a feeling of hope in the industry, and railwaymen to whom I have spoken feel that at least they will be considered as an integrated part of a modern transport industry and not always be the little brothers of the business. They feel that they are able to do a job which will be of benefit to the entire community.

I am sorry that in the course of the debate no hon. Member referred to London Transport, although it forms part of the Supplementary Estimate—

Mr. Galbraith

I did.

Mr. Carmichael

I was out of the Chamber for a few minutes and did not hear the hon. Gentleman. I will make a point of reading what he said and discussing it with him.

It is part of the Supplementary Estimate, and an interesting point about it is that some of the increased deficit has come about due to an improvement in services given to the public. In the first place, there was a considerable easing of the chronic recruitment figures which the Board experienced during the year. That led to the tilling of vacancies at Underground stations and, more significantly, to a higher percentage of bus schedules being operated, particularly in the Central area, than was thought probable at the time that the budget was prepared. The increased services have had the effect of arresting the long-term decline in the number of bus passengers, and the Board estimates that it will finish the year having carried roughly the same volume of traffic as it did in 1966.

I felt that some reference should be made to London Transport. The waterways have been mentioned by a number of hon. Members, and the Railways have been dealt with very fully in the course of the debate. I am sure that everyone has benefited from the discussion.

Finally, I want to stress the importance of keeping the Beeching savings in their proper perspective, important though they are. One of the threads going through speeches on both sides of the House has been that, if we had kept Beeching, all would have been well.

Mr. Geoffrey Wilson rose—

Mr. Carmichael

The closures are only a small proportion of the great problems of the industry, and they should be kept in perspective.

I am confident that the remit under the new Transport Bill will be of benefit to railwaymen and to the rest of the nation as a whole. Sometimes, in these debates, we speak in too partisan a way or both sides of the House and denigrate an industry in an attempt to denigrate the party opposite. In today's debate, we have all learned something. In order to allow others to go forward with the subjects for which they have been waiting so patiently, Mr. Deputy Speaker, I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.