Clause 36 (Hansard, 28 May 1968)

§ Mr. Keith Stainton (Sudbury and Woodbridge)
I beg to move Amendment No. 149, in page 53, line 16, at end insert— (c) the individual annual amounts paid for such services in respect of which grants have been made for the first time in the course of the year under review. Clause 36 is concerned with grants for unremuneratiye passenger services, and the grants are to be decided at the Minister's discretion in the light of representations from British Railways and of various criteria such as social and economic reasons. The Minister may make a grant for a period of up to three years for each individual line. Ultimately, under subsection (5), an onus devolves upon the Railways Board to report each year in terms of the amount of grant received.
1558 The position at the moment is that, under subsection (5)(a), the Railways Board will report each year the total financial position of the lines for which grants have been received, excluding the grant factor, and, secondly, the aggregated amounts of grant received from the Minister of Transport.
It will be evident from the Amendment that I seek to cause the Railways Board not only to report in the aggregate, but to report the individual annual amounts paid for these grants on the first occasion that the grants are made. My main reason is that the local community interested in keeping a service going should be aware of the cost of it. There are other reasons which I commend to the House.
The total cost of these grants is estimated at about £55 million for the year 1969. According to the Steering Group's White Paper, this may diminish to £50 million by 1974. However, figures of these dimensions are very substantial and, without causing the Railways Board any undue work or administrative inconvenience, we should have a breakdown of the constituent parts as and when individual services qualify for grant.
In Committee, fears were expressed that, because there is no ceiling, the grant could be open-ended. One deduced from the Steering Group that the figure for 1969 would be about £55 million, and that was the kind of figure which the previous Parliamentary Secretary to the Ministry divulged to the Committee. He did that in response to a challenge from our side when we put down an Amendment restricting the grant to £20 million in any one year, the object being to ascertain what the Ministry had in mind.
We also moved a parallel Amendment which, if accepted, would have achieved the object of curtailing grants to two years instead of three. One can see a consistent theme running through our Amendments arising from the disquiet on our side that, while one wants to deal with the matter adequately, it is not one which should be allowed to get out of hand.
A further cause of concern arose from the contents of Appendix D to the Steering Group's White Paper of September of last year. We have had no reply on this point from the Government. In its 1559 closing paragraphs, Appendix D had something to say about the identification of unremunerative services, and simply commended to the Minister and the Railways Board the undertaking of further work and the preparation of a report in the near future. It is implicit in the whole theory of these grants that unless the identification of unremunerative services is placed on a scientific basis, the whole matter can be ill-founded.
Our disquiet on these issues was, I admit, allayed in large degree by the Government proposal to abandon the deficit-financing of the railways and to go over to a grant-aided system. While hon. Members will find enormous satisfaction in this change of procedure, our disquiet remains within the context I have outlined. Even if it be only on the grounds on which I first commended the Amendment—the provision of information for the local community as to what the maintenance of individual services will cost—I hope that the Government will accept this proposal. Its object is reasonable and I submit that it is couched in terms of such simplicity that the Minister will be overjoyed to accept it.

§ Mr. David Steel (Roxburgh, Selkirk and Peebles)
I support the Amendment, which is eminently reasonable and which the hon. Member for Sudbury and Wood-bridge (Mr. Stainton) moved so ably. I welcome the whole of Clause 36 and the idea of getting away from the deficitfinancing of British Railways on to a system which recognises that transport may be part of social and economic planning. It is important, if we are to do this, that communities which are being subsidised and taxpayers as a whole should know where the money is going. That is the object of the Amendment.
This proposal would have a second effect, which would be to require British Railways to be more precise about the figures of loss they make on individual services. I wish particularly to refer to a line in which I have a constituency interest. It is at present under review as the last of the Beeching proposals in Scotland to be decided. It is the Waverley line, which runs through my constituency and goes from Edinburgh to Carlisle.
1560 Many figures of loss have been bandied about from month to month and year to year and the Scottish Office recently commissioned a report from Edinburgh University's social science faculty on the economy of the Borders of Scotland. That report pointed out that great difficulty had been found in coming to grips with the figures of loss about this line because the statistics available to the collaters from British Railways were inadequate, particularly in relation to the cost of running freight trains.
While I welcome this part of the Bill, with its provision for grant-aid to British Railways, it is important that it should carry with it an obligation on British Railways to work out precisely the losses on individual lines so that taxpayers know what they are getting in return for the grants that are given.

§ Mr. Leslie Huckfield (Nuneaton)
Would the hon. Gentleman explain how this could be done, since it is estimated that about 80 per cent. of British Railways' costs are joint costs and cannot be individually allocated to individual services?

§ Mr. Steel
I do not accept that. I have had many discussions with British Railways about the line I mentioned and I assure the hon. Gentleman that attempts are made to allocate revenue from particular services and credit certain sections of the line. It is a difficult exercise and my argument is that an attempt should be made to complete the exercise. If such an attempt is not made I suspect that when decisions are taken to close lines we are merely told that heavy losses are being made and we cannot challenge the figures.

§ Mr. Peter Bessell (Bodmin)
Would not my hon. Friend agree that frequently when closures are proposed British Railways produce a set of figures which cannot be broken down, which means that some decisions are taken on the basis of grossly inaccurate figures?

§ Mr. Steel
I am sorry to have to agree with my hon. Friend. This does happen and when I have tabled Questions about aspects of revenue—for example, about the line through my constituency—I have been unable to get Answers about certain items being credited to the line, such as 1561 freight trains passing through it. Many items of revenue are not added.
The Government must justify to the taxpayer not only their total annual spending on unremunerative lines, but also their decisions about lines—why, say, the line from A to B should be given a grant compared with the line from Y to Z and how much it would cost to give a grant in the latter case. If we are to take this matter seriously and consider the railway system as part of economic and social planning, we must be in a position to make judgments about individual lines.
The Parliamentary Secretary, a Scottish hon. Member, will know that the Economic Consultative Group which advises on economic planning on the Borders has already advised him to retain the railway service to which I have referred. I am sure that he will take the matter seriously. I want to know the basis of the decisions in each case. I therefore hope that the Amendment will be accepted because it will mean that in future we will have the relevant figures in the reports of British Railways.

§ Mr. Leslie Huckfield
I congratulate the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) on at least being honest about these proposals. I say that because on several occasions all that we have had from hon. Gentlemen opposite has been outright opposition to the Bill, and this has fudged the whole issue of the service about which we are now speaking. I am, therefore, pleased that at least one hon. Gentleman opposite has admitted that he is in favour of these provisions.

§ Mr. Bessell
If the hon. Gentleman is suggesting by that that I did not, in Standing Committee, give the same support to this aspect of the Bill, then he is grossly misleading the House.

§ Mr. Huckfield
I am sure that the hon. Member for Bodmin (Mr. Bessell) is capable of looking after himself and is able to make his own speech on this matter. However, if I seemed to represent his view as being different from that of his hon. Friend the Member for Roxburgh, Selkirk and Peebles, I apologise to him. I was more concerned with other hon. Gentlemen opposite, who, while supporting the Transport Act, 1962, to the hilt, have opposed this Bill to the 1562 hilt, but, at the same time, have urged that certain services should be kept open.

§ Mr. Huckfield
I will not give way and I trust that the hon. Gentleman will allow me to make my own speech.
Further to my intervention when the hon. Member for Roxburgh, Selkirk and Peebles was speaking, I still maintain that there will be difficulty in attempting to allocate overheads to particular services. There will be difficulty in ascertaining the precise proportion of direct British Railways' costs or variable costs and the precise proportion of joint or overhead costs. These calculations could be matters of great argument. Many costs cannot directly be attributed to a particular service.

§ Mr. David Steel
Such as?

§ Mr. Huckfield
I will willingly give the hon. Gentleman a list of the costs which it would be difficult to directly attribute. For example, there are signalling, terminal and many other overhead costs. One could consider the freight train element and the difficulty of allocating these overheads. I would willingly give a long list, but I will not delay hon. Members.
There is also the difficulty of deciding exactly when a service does not pay its way. For example, it may pay its way during the peak period but not during the off-peak period, yet because it is considered necessary to maintain a viable presentation of the service it might be considered desirable to keep the off-peak service running. We may have a service which, though it does not directly pay its way by itself, is necessary because it constitutes an important feeder service.
I could quote a whole host of examples where, though a particular service may not pay its way over a particular section of line it is necessary to keep it going either to present an overall impression of service or as a feeder line or in some other capacity in this category. We have a whole range of services which would certainly be excluded if the hon. Gentleman is very strict in his definition but which I would deem should be kept open, not on social but on economic grounds.

§ Mr. David Steel
The hon. Gentleman is quite mistaken. I am not saying that 1563 British Railways should in any way restrict themselves and that the Government should restrict themselves in the giving of the grants. On the other side of the balance sheet, the hon. Gentleman must take into account the social costs of closing a line in terms of increased traffic, say, in the City of Edinburgh, in the case of my own line.

§ Mr. Huckfield
I am trying to make my own speech, and that was the next point I was going to make.
Apart from the difficulty problem of the allocation of overheads—the very difficult definition of what is an unremunerative service, we also have the question of social costs, which are very difficult to quantify. On a certain line there may be a consumer surplus—the consumer may be willing to pay a certain amount more than he is paying at present rather than see the line close down. There is a whole host of social costs— traffic congestion, additional wear and tear, lost time, frustration, accidents, and so on, which should be quantified if we are to do a full cost benefit study in each case.
Therefore, although I appreciate the concern of some hon. Members opposite to see more accurate breakdowns of cost, because of the difficulties of defining these services, because of the very arbitrairy allocations of overhead costs which must be made, and above all because of the very unquantifiable nature of the many social costs with which we must deal, it is not quite as easy as the hon. Gentleman believes. Accordingly, I urge the rejection of the Amendment.

§ The Minister of State, Ministry of Transport (Mr. Stephen Swingler)
I do not think that it would be in order for me now to go into the whole issue of the costing and identification of unremunerative lines. I welcome the intervention of the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) and his support for this part of the Bill. In paragraph 10 of Appendix D of the White Paper, Railway Policy, the report of the Steering Group presided over by my hon. Friend the Member for Aberavon (Mr. John Morris), he and the hon. Member for Sudbury and Woodbridge (Mr. Stainton) 1564 will see that we outlined and emphasised that there was indeed a future programme of work arising from the recommendations of the consultants and their examinations which would include the identification and costing of unremunerative lines.
We appreciate that further work must be done on the refinement of the identification and costings to enable the Minister to be sure about the services which on broad economic and social grounds should be maintained by means of grants. That work is proceeding. I can say nothing further on that at present, except that those who are expert in the matter are proceeding in the endeavour to improve both the estimating and costing in this respect.
The Amendment proposes that we should require the Railways Board to put into its annual report each year the amount of the individual grants being paid in respect of unremunerative services where those grants are made for the first time in the course of the year under review. We have no objection to the Amendment in principle. It is only a question of its mechanics. I am sure that the hon. Member for Sudbury and Woodbridge would not wish to waste time or have requirements about giving information uselessly or in a way that involves duplication.
On 17th March I gave the assurance in the name of my right hon. Friend that when social grants are approved for unremunerative rail services the amount of the grant in each case will be announced at that time. That will be far in advance of the publication of any annual report in which the amount of that grant could appear, where we are talking about grants being made for the first time. Therefore, it appears to me that on that ground we really meet the hon. Gentleman's point. We fully agree that the public should be thoroughly informed as to the amount of the grant after the identification, the costing, and so on, have taken place. The amount of the grant being given in each case should be announced at the time when my right hon. Friend's decision is announced that it is to be a grant-aided service.
1565 On the other hand, it might be said when we consider subsection 5(b) that the amount of grant payable in respect of each service might be given in the annual report, not, I emphasise, where it is given for the first time but on a continuing basis. Rather than make a requirement which we would regard as duplicating, that the Board must put in its annual report the amount of each grant in each case given for the first time, we might ask that in its annual report it should not be just the aggregate amount of the grants paid but should break it down in respect of every service where a grant is payable. That would not be the grant identified for the first time, but would be from year to year on a continuing basis.
We should like a little further time to consider whether that should be inserted into the Bill as a requirement imposed on the Board. We see no objection to it in principle, and we shall consider it during the further stages of the Bill.

§ Mr. Edward M. Taylor (Glasgow, Cathcart)
The Minister has been very helpful in dealing with the points raised by my hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton). He made it clear that the Bill does not exclude the possibility of the information being provided. I hope that in considering this matter further in consultation with the Board he will bear in mind the two arguments put forward by my hon. Friend and the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) that when a substantial amount of money is concerned the maximum information should be given, and the importance to the local communities of knowing exactly how much is being contributed towards their services.
We on this side of the House are most grateful for the Minister's helpfulness.

§ Mr. Deputy Speaker (Mr. Sydney Irving)
May I draw the attention of the House to the revised selection of Amendments which Mr. Speaker has had placed in the Lobbies.