TRANSPORT (LONDON) AMENDMENT BILL

HC Deb 14 November 1969 vol 791 cc755-96

Order for Second Reading read.

11.1 a.m.

The Minister of Transport (Mr. Frederick MuHey)

I beg to move, That the Bill be now read a Second time.

Hon. Members will recall that in reply to a Question from my hon. Friend the Member for Southall (Mr. Bidwell) on 21st October I was able to announce the final terms of the agreement reached with the Leader of the Greater London Council fixing 1st January, 1970, as the date on which the new London Transport Executive will, under the Transport (London) Act, 1969, take over the present board's central red buses and tubes and, under the strategic control of the G.L.C., physically start its job of running London's major transport services.

I need not elaborate on the advantages of this transfer. The principles underlying it, which have been consistently promoted by the Government and supported by the G.L.C., are familiar to the House. Central direction of public transport in London by a single authority and the responsibility of Londoners, including financial responsibility, for the level and pattern of services which they wish to the be operated have been our twin objectives. The transfer of London Transport is undoubtedly our most significant step in pursuing these principles in our capital city.

The Transport (London) Act already provides the framework for what 1 know hon. Members on both sides of the House see as a desirable and far-reaching reorganisation of the whole of London's transport system, for which, of course, my predecessor, my right hon. Friend the Member for Greenwich (Mr. Marsh) did so much work in completing negotiations begun by my right hon. Friend the First Secretary of State. It is to them that the credit belongs.

May I say at this juncture how much I regret that the hon. Lady the Member for Finchley (Mrs. Thatcher), who also took a prominent part in the previous considerations of these matters by the House, has passed from one difficult task to what I suspect is perhaps an even more difficult task—that of educating her colleagues on the subject of education.

I welcome as Opposition transport spokesmen the hon. Members for Worcester (Mr. Peter Walker) and Tavistock (Mr. Michael Heseltine) and I congratulate them on their innovation in that I see from the Press this morning that they have kindly provided those hon. Members who are not able to be here today with a trailer, or summary, of the speeches which they propose to make. 1 shall be most interested to see, when the sweeping attack on the Government's alleged failure to increase fares in preceding years is mounted, how it is squared with the current observation of the leader of the G.L.C. that he thought that even in present circumstances a fares increase might have been avoided.

Her Majesty's Government and the Greater London Council have worked throughout on the basis that the London Transport undertaking would be financially viable at the time of handover. As the House knows, part of the agreement finally concluded with the G.L.C. envisaged that the write-off of the London Transport Board's capital debt should be increased from the 90 per cent. provided for in the Act to 100 per cent. For this legislation is necessary, and the Bill has been presented to cover this point.

The further 10 per cent. of the board's capital liability which the Bill writes off arnounts to approximately £26 million. Under the Transport (London) Act this was the amount of transferred debt to be apportioned between the G.L.C. and the National Bus Company in such a way as to reflect the division of assets of the existing London Transport Board between the new London Transport Executive and the National Bus Company's subsidiary company which will take over country buses and Green Line coaches.

The Act also provided for the new executive to take on a debt to the G.L.C. equal to the G.L.C.'s debt to the Government. So the practical effect of this further "write-off" will be to relieve both the new executive and the National Bus Company of a burden of annual interest payments. These would have amounted to about £1.25 million per annum, almost all applying to the London Transport Executive. Given the unprofitable nature of the services which London Country Bus Services Ltd.—the National Bus Company's subsidiary company—is to take over, there is a good case for taking advantage of this chance of offering it a small measure of financial relief.

But the central intention of the Bill is to afford further assistance to the London Transport Executive. I think it right that I should take this opportunity of explaining the reasons for the Government's decision, and our attitude to the position adopted by the Greater London Council.

The reasons for the Bill are quite straightforward. All who followed the passage of the Transport (London) Act through Parliament will recall that the G.L.C. has at all stages taken every opportunity to maintain that it would accept the transfer of London Transport only on condition that the undertaking should be in a financially viable state. Viability was defined by the Government and the G.L.C. as the ability on the part of the new executive to put £2 million to general reserve in its first year of operation, and thereafter to maintain the reserves at that level at least.

During the time that the Act was under examination both in this House, and in another place, there seemed every prospect that the terms of the viability agreement would be met by the means then being proposed. The L.T.B. at this period had no cause to revise the calculations which it had made in the previous autumn. On the basis of these figures, the Government, after consulting the G.L.C., had decided that viability should be achieved by a combination of the interest relief which would have been afforded by a 90 per cent. write-off of the board's present debts to the Government, and of the board's proposals for a fares increase calculated to yield about £8 million per annum.

These measures were designed to close the viability gap as we then saw it. We knew that estimates are always liable to fluctuation. But the data we were working on were the best that could be produced at the time, and it would, in my opinion, have been wrong to embark on wider measures designed to provide a cushion against what then could only have been a potential worsening of the Board's financial position.

The measures we took—in the Act and by way of a fares increase—were the outcome of careful consideration and were, in the circumstances as we then saw them, right. Certainly, the Government would have been liable to criticism if we had come to the House with proposals for a larger cancellation of debt than we would then justify.

So much for the estimates as they stood. It was not until after Royal Assent that the London board was able to complete further estimates taking into account further factors which altered the basis of its previous calculations. These factors were, in the first place, the pay settlement which the London Transport Board concluded with its busmen on 25th July, the day of Royal Assent, and which, in its final form, was more costly than the Board had allowed for in its estimates.

Another factor was the increased National Insurance contributions to be paid by the board from 3rd November, 1969, and by the executive from the date of its establishment. And, in the third place, a reassessment of cost and traffic trends pointed to a less favourable financial outturn than had been previously assumed. All these factors taken together pointed clearly to a shortfall on the executive's viability target on 1st January next year unless further measures were implemented to improve London Transport's revenue position.

This was an unhappy position. The scope for further financial subsidy from the central Government funds was limited, and it did, indeed, appear inevitable that a proportion of the burden would have to fall on the travelling public by way of fares increases. This was not a prospect that the Government could view with equanimity: fares increases are always unwelcome, and we were indeed aware of the risk that they might cause a further diversion of traffic from public to private transport.

On the other hand, it would have been quite intolerable that the major reorganisation of transport in London, to which all parties attached major importance—and which had the real advantage for the future of placing the financial responsibility for public transport in London with Londoners themselves—could be allowed to be thwarted at this late stage. It was for this reason that the Government entered into negotiations with the G.L.C. designed to reach a fresh set of measures to achieve viability.

The negotiations with the G.L.C. were protracted, and not particularly easy. In all the circumstances, the G.L.C. might have abated its target a little—that is to say, it might have agreed to offset against the need for a fares increase at this stage a proportion at least of the £2 million allocation to reserves provided for in 1970. This the G.L.C. declined to do, and the Government, therefore, with some reluctance, agreed that the gap should be bridged by two main measures—an increase in the capital write-off from 90 per cent. to 100 per cent., and a limited fares increase.

The fares increase does not require legislation, and has been approved under the powers available to me in the Transport (London) Act. Since the increases affect the buses only, and apply only to certain journeys outside Central London, it was not, in the Government's view, appropriate to refer them to the National Board for Prices and Incomes. The write-off, involving a further annual subvention to the new London Transport Executive of about £1¼ million a year, is provided for by the Bill we are now considering.

It has been suggested that this final agreement represents, in some way, a victory for the G.L.C. over the Government. It has also been argued that we could by some means or other have achieved the same result without recourse to a fares increase. I do not think that these arguments really stand up. The Government honoured the terms of the viability agreement with the G.L.C. by the only means properly available to them.

It would not have been right for the Government to take the alternative course of underwriting potential future losses by the London Transport Executive—an organisation not under its control. The write-off of capital gives as much continuing support to London Transport at public expense as the Government can reasonably provide. For the rest, we took the view that a limited fares increase, unwelcome though it must be, was preferable and less damaging to the future of the undertaking than the alternative of slashing service cuts.

But it is only too easy to lose a sense of proportion by dwelling on such disagreements as have arisen. I said at the beginning of my speech that the principles underlying this major reorganisation of public transport in London were common to the Government and the Greater London Council. The Bill, by setting the final seal on the transfer of the London Transport undertaking, will enable the new arrangements in accordance with these principles to be put into effect, and I am sure that the Government and the G.L.C. can and will work together to implement them in the interests of Londoners as a whole.

I hope that on these grounds hon Members on both sides of the House will want to give the Bill their approval, and I commend it to the House.

11.20 a.m.

Mr. Michael Heseltine(Tavistock)

I thank the Minister of Transport for his kind words about me on my first appearance at this Dispatch Box in an appointed capacity. He was most generous, and I appreciate it. May I congratulate him rather belatedly I am afraid, on his appointment? He holds a distinguished position in the Government, one with plenty of excitement ahead, but one which he may not be expected to hold for very long.

I think the right hon. Gentleman has given the fairest possible introduction to the very wide complications which surround the Bill. It is a Bill which writes off the last 10 per cent. of the capital, amounting to £27 million, due from Greater London Council after it has taken over the London Transport operations from the Government. It is, as he says, comprehensible only in the context of the Transport (London) Act, 1969, and that Act, as he rightly indicated in all his arguments, is comprehensible only in the context of the last five years' management of London Transport. I think the House will agree that, while in the context of the national economy London Transport is relatively small, this is a reprehensible example of how the consequences of the financial ineptitude and bureaucratic intervention by a Labour Government lead to good intentions by bad administrators.

This undoubtedly has led to the state of affairs in which the Minister has come here this morning to give away the last of nearly £300 million assets, not even for the price of a misshapen ten bob bit. It seems incredible that only five years ago London Transport was a viable undertaking, not only paying interest on the nation's investments in it but yielding a surplus every year as well. That seems incredible, but it is true. In 1962 the net revenue before interest charges was £8½-million; in 1963 it was £7.8 million; in 1964 it was £7.3 million. Even when we allow the full amount for interest charges, in 1963 there was an overall surplus of £2.1 million, and in 1964 of £31.3 million.

Without doubt there were problems confronting London Transport. I do not want to minimise them. We discussed them at length on the Transport (London) Bill. But the moment the Labour Government were elected two clearly definable and parallel developments came under way. First, there was the unwillingness to back the management of London Transport in managing the undertaking, and, second, there were the long negotiations, of which the Bill is the culmination, with the G.L.C. to take over the undertaking in 1970.

The first accusation underlies all the arguments advanced by the Minister this morning. From the moment this Government were elected they have been guilty of the gravest dereliction of duty in the control exercised over London Transport. In May, 1965, the London Transport Board asked for Government approval for a fares increase to keep track of rising costs. The request was refused. Instead, the Chancellor of the Exchequer raised an additional £3.8 million of tax to finance the inevitably resulting deficit in 1965. In this event not even the £3.8 million was enough and there was a loss of £1 million in 1965.

In 1966 the Government decided to permit a fares increase, which had been requested in May, 1965, but, of course, that fares increase had been calculated on the costs appertaining when the application was made in 1965. It was too little and too late. Within months of that fares increase the board wanted another fares increase to take account of costs which, of course, had risen during the year when nothing had happened. The Government knew that the board wanted this fares increase, but they made it clear that there was a freeze. This was not because they were unprepared to pass on the charge to the public but because there was a statutory freeze applying to all prices and incomes, and, therefore, the board would be ill-advised to submit a formal application.

By this time the Government's intervention had had a most appalling effect on the financial position of the board. By 1966 the net revenue, which before interest charges in 1963 had been £7.8 million, was down to EH million, and by 1967 it was £3.7 million. The board's finances after interest on capital invested by the nation, the taxpayers—which in 1963 had shown a surplus of £2.1 million and in 1964 a surplus of £1.3 million —by 1966 and 1967 showed a deficit of £5.9 million and £10.9 million.

The Government realised that if they were not prepared to accede to the requests of those managing the undertaking they would have to find the money. They found the money by a device called the Transport Finances Act, 1966, which provided that the more the London Transport Board lost the more the taxpayer would pay. This was a very good deal for everyone except the taxpayer. In the event, after two and a half years of refusing to do what they were advised by London Transport Board to do, the Government granted an increase in fares.

It was granted in two parts, in August and September, 1968, but then only granted in part because, although the obligation was accepted, and approved by the Government and by the Prices and Incomes Board, it was refused by the Transport Tribunal, over which the Government had no control. Therefore, the taxpayer once again picked up the bill and the Government amended the Transport Finances Act to increase the amount by which taxpayers' money could be used to subsidise its incompetent control of London Transport.

It occurred to me to ask what was happening in the provinces, where the same trends of rising costs were going on and there were exactly the same problems, although on a smaller scale, affecting the bus services. We are not dealing with Underground services, which maintained their position throughout the period. This was an illuminating investigation. I quote from the public assessment published by the Ministry of Transport in 1969 entitled "Passenger Transport in Great Britain, 1967". It clearly shows that since the Labour Government were elected fares levels in the provinces, both in municipal undertakings which own 100 buses and in the private sector, have caught up very nearly completely with London Transport fares. Ever since the indices were first established, as one would expect, in a major metropolitan area there has been a widening gap in the level of fares between London and the provinces. That is precisely what one would expect. But the moment this Government came to power the trends were reversed and one now finds that by the end of 1967, the time when the latest figures are available, the gap between provincial bus fares in both the public and the private sector and London fares is closer than it has been since 1960.

Mr. Leslie Huckfield(Nuneaton)

Can the hon. Gentleman give one prima facie reason why the gap between muni- cipal and provincial bus company fares and those in the London area should be widened?

Mr. Heseitine

The hon. Member knows as well as I do that the problems for London Transport arise in many ways out of congestion, and the more intense the congestion the more difficult and expensive it is to provide those services.

Mr. Huckfield

No.

Mr. Heseltine

The hon. Member disagrees, but this is a perfectly reasonable explanation. Another factor is that wages in London are higher than they are in the provinces, and, as wages comprise 70 per cent. of the costs, there would be a prima facie case for expecting the costs in London to be higher than in the provinces.

In the four main cities singled out by the Government as most closely approximating to London—Birmingham, Liverpool, Manchester and Newcastle-upon-Tyne—in every year from 1965 to 1968, the latest period for which figures are available, municipally owned and run undertakings showed a gross surplus, although they had similar problems. Therefore, it is obvious that over the period of this Government's control over London Transport their intervention, and their intervention alone, has been responsible for the appalling financial state into which they have run the London Transport Board.

I said that there was a second development. This was the negotiations which were proceeding between the G.L.C. and the Ministry and had been proceeding for many years, I believe since about 1965. The key to this is to be found in the conversations between the Minister of Transport in 1967—then the right hon. Lady—and the Leader of the Conservatives on the G.L.C., Mr. Desmond Plummer. There had always been the clearest possible statement by Mr. Plummer, before he was elected to control the G.L.C., as to exactly what the attitude of the Conservative Party would be if it was elected to the control of the G.L.C. It was elected. It may not be a very nice idea to hon. Members opposite, but that was what the people wanted.

I quote from the Conservative Party manifesto for Greater London at the time. No one would expect the manifesto to do anything other than present the Conservative case, if one likes, in the favourable light in which it was hoped that the electors would see it. It was hardly likely that the Conservative manifesto would state the position against the Conservatives' own interests. This was what Mr. Plummer said before he was elected: … London ratepayers do not want to shoulder a new financial burden and I see no reason why they should. Let us have no doubt about one thing. From the moment that this Government seriously negotiated with the elected representatives of the G.L.C. they knew that in the end the problems that the Government were creating in London Transport would have to be put right not by the G.L.C. but by the Labour Government who had created the problems.

Mr. Plummer warned the Government time and time again that that would be the situation. He told them that the Government should restore the position of London Transport to the position in which they took it over from the Conservatives in 1964—in other words, with a surplus of about £2 million in its first year. What happened after that is entirely the responsibility of the G.L.C. But, having created the problems, it is for the Labour Government alone to find the solutions by which they can be cured.

It is pathetic for the Minister to say: "Things got worse. It was difficult. If only Mr. Plummer was a more decent chap, he might have bailed us out at the last minute." Why should Mr. Plummer bail us out at the last minute? It was entirely the responsibility of the Labour Government. Let the buck stop there.

Mr. Mulley

I am grateful to the hon. Gentleman for explaining Conservative policy in such detail, which I am sure will be noted by Londoners. How does he square his long explanation and argument that fares should have been increased many times in this period with the recent statement by the Leader of the G.L.C. that he would like to avoid even the present fares increase?

Mr. Heseltine

It would be very helpful if the Minister did not try to put words into my mouth. I have made no suggestion as to what should have happened, because we were in no way responsible for running London Transport. The responsibility was that of the Government. I want it clearly understood what they did at each turn of events. The decision were theirs, not those of the Conservative Party. The only decision taken by the Conservative Party is that, a very profitable situation having been taken over in 1964, that situation should be restored by those who destroyed it before they hand it back to the Conservative-controlled G.L.C. in 1970. It was not necessary for me to explain to Londoners what they should understand about Conservative policy. They understood only too clearly in 1967 about Conservative policy, and that is why they elected the Conservatives to control the G.L.C.

Mr. R. W. Brown

(Shoreditch and Finsbury): The hon. Gentleman has chosen two significant figures for 1962, in which he alleges there was a profit of £2½ million, and 1963, in which he alleges that the profit was only £1½ million. So he has already illustrated the point, even by those two selected years, that the profit margin was rapidly decreasing. Can he not address himself to the whole problem? Why not take, for instance, 1955 and 1958, which would show an even larger profit margin? In that way he would show that the general trend in London was for London Transport to be getting more and more in difficulties—because of the situation of London's transport and not because of the advent of a Labour Government.

Mr. Speaker

Interventions should be brief. The hon. Gentleman nearly exhausted his right to speak.

Mr. Heseltine

It is a problem to know exactly how many figures to bring to a debate of this sort. The figures which I have quoted show that over the late 1950s and early 1960s the overall trading pattern in terms of results did not change appreciably one way or the other. It was tip or down slightly from year to year, but overall there was a working surplus of between about £2½ million and just under £1 million. I do not believe that in terms of overall results the hon. Gentleman's contention is correct. I have before me the figures for 1962–64, and those figures bear out what I am saying.

The hon. Gentleman should realise that the London Transport Board came into existence only in 1962. Prior to that the capital within the British Transport Commission must be allocated against national assets employed within London Transport. It is difficult to allocate capital account. I believe that what I am saying is correct, and I do not accept the implications in the hon. Gentleman's question.

To return to the suggestion that it was the responsibility of the G.L.C. to bail out the Labour Government, this is not the view of the G.L.C. and it made this position perfectly clear from the moment that it started to negotiate. There is a degree of hypocrisy in the Minister's argument that, the G.L.C. having failed to abandon its initial posture on the basis of which it negotiated, its initial posture was, anyway, not acceptable in the first place. That is not a convincing argument.

It is not as though the Government decided to pursue the logic of what they had been arguing this morning. By 1968 time was running out. They had to decide what to do. The first thing they did was to increase the fares. The Minister knows this as well as I do. Fares were increased in 1968. The second thing that they decided to do was to write off 90 per cent. of the capital.

In exactly the same way as earlier fare increases have been based on calculations made at an earlier time, so the one that applied in 1968 carried the same problems.

In 1969 we are faced, as the Minister himself said, with yet another fares increase under this Labour Government.

I want to say a few words about the 90 per cent. capital write-off which was carried in the Transport (London) Act, 1969. Unlike the Minister, I listened carefully to what was then said by the right hon. Member for Greenwich (Mr. Marsh), who argued very coherently, and with great conviction, the reasons why it was necessary to use this financial device to find a way of squaring the books. I may not have agreed with everything that the right hon. Gentleman said, but I appreciated the sincerity of the argu- ments he used and his genuine attempt to find a solution acceptable to all parties. It was not an easy thing to do. On 25th July, if I am correctly informed, the Transport (London) Act reached the Statute Book.

This morning the Minister said, "We got the figures wrong." So only just over three months ago, having done the sums, having been advised, having pored over the figures, they got the sums wrong. I listened with stupefaction to the explanations why the sums were wrong.

This morning the Minister did not refer to "getting the sums wrong"; he did not refer to losses which the Government had not expected—simple words which we all understand. He had a phrase for it—"closing the viability gap as we saw it." I know what that means. It means that somebody has made a boob, and the person responsible for the boob is the Minister.

Let us see what the reasons advanced for the boob were. On 25th July there was a pay settlement. As I understand pay settlements—I have never been involved in negotiating one at the Ministry of Transport—there is a fairly long-drawn-out, protracted series of discussions. The unions make representations. The management makes its observations. The two sides come together over a considerable period of time. The day when a pay settlement is granted is not the time to start calculating the costs that arise from that pay settlement. They should have started calculating those, once there was a whisper of what they were likely to be, many months before 25th July. That is a weak argument.

The next argument of which I made note was that National Insurance contributions were put up as from November. Again, I have never been responsible for putting up National Insurance contributions, but in my understanding it is the Government which is responsible for that matter. Did the Government not tell the Minister of Transport that he could anticipate some additional costs when this new deal had gone through? Did not the Minister of Transport know? I realise that he was not Minister then, but the Ministry has a great army of Parliamentary Secretaries, a Minister of State and many civil servants. Were not any of them told that costs were to rise due to the new National Insurance schemes, and that they should take them into account? The Minister of Transport is at least responsible for asking the question.

Then, as was anticipated, there was the general problem of the new forecast about declining traffic in London. I accept that this could be a genuine explanation. All I ask the Minister to do is to publish the new forecasts which were not available on 25th July and which could not have been anticipated at that date.

Mr. Mulley

The hon. Member obviously has done a great deal of homework. But it would have helped him in his researches if he had gone back a little further and discovered, as any other hon. Member knows, that the Minister of Transport does not run the nationalised board. It is the responsibility of the London Transport Board. We do not run London Transport.

Mr. Heseltine

I am at a loss. I heard the Minister of Transport say time and again in his speech that, on advice made available to him by the London Transport Board, certain calculations had been arrived at and that it was entirely on the basis of that advice that the whole deal went through. If he is now saying that the figures were wrong, but that he is hoping the matter will work out all right, then I will tell my friends in the Greater London Council to look out because the Ministry of Transport do not even know that the figures are right. I am sure that the Minister would not want to give the excuse that he does not know whether the figures are right. Certainly, if he does not know there will be many harsh things said in this House the moment we discover what they are. I am not sure what the Minister is saying. If I have misunderstood him, I apologise, but I do not think I have.

We must look at the overall situation. There are £300 million of assets paying a fair return and showing a surplus has gone in just five years. That is £70 million for each of the four Ministers of Transport, allowing nothing for the odd Parliamentary Secretary.

The Government have learnt the odd lesson, tucked away at the end of the Minister's speech. The whole implication was that the logic of fare increases to match cost increases is totally unacceptable to the Government. He wanted me to take a different view. But when I returned from a tour of transport installations throughout the world, I was mesmerised to find in a Ministry of Transport Press release, dated 21st October, 1969, a reference, way down in the communiqué almost in the biographical notes, to fare increases on the buses which are being transferred to the National Bus Company. I thought this a strange thing to do.

If the theory and philosophy of the Labour Government is that fare increases must not match cost increases, here is an example and opportunity for them to transfer that part of London Transport which is to go to the National Bus Company at a deficit. The best advice available—we may not believe it, but assuming it is right—is that part of the London Transport Board will be transferred at a deficit to the National Bus Company. It is to eliminate this deficit that the fares are going up.

One would have expected the Government to have said that it was reasonable to let that great bus undertaking, which has surpluses well able to meet a deficit on the country buses, carry on and that they would continue the subsidies. But the phraseology tucked away in the Minister's speech was "a small measure of central relief." I hope that all those paying extra fares on country buses will know that that is what it is all about—a small measure of central relief to disguise the fact once again that the Government, faced with reality, have put up fares to meet increasing costs.

If one should have any doubt about awareness in the Ministry of Transport as to whether this is their intention, 1 would quote the authority of the Parliamentary Secretary in reply to a Question on 11th November. I asked:

"Are the increases sufficient to eliminate the proposed estimated loss on the buses to be transferred to the National Bus Company as from 1st January, 1970?"

The Parliamentary Secretary was helpful and explained what I imagine to be the case:

"I understand that these increases will make the services viable."—[OFFICIAL REPORT, 11th November, 1969; Vol. 791, c. 170.]

I congratulate the Parliamentary Secretary and the Minister, for I believe they were right to do that. However, I wish to draw attention to the duality of standards applied. The G.L.C. are bailing them out, but the National Bus Company over which they have total control is not expected to do anything of the sort.

In this record of incompetence, in which the need for today's Bill must take its place, there are four principal groups of people who will suffer and who have suffered. The public have suffered because fare increases, which have come as night follows day, have come in big bites as opposed to small bites, and it is far more difficult to absorb big bites. There is a shortage of finance which has held up modernisation in London Transport and which has adversely affected negotiations with the unions in trying to get better productivity deals. Furthermore, there is a shortage of staff in London Transport which amounted to a net loss of 1,000 conductors in 1968.

Wherever one looks, one sees a demoralised management that finds it difficult to get clear decisions so that they may know their responsibilities, and a public increasingly saddled with extra burdens. It is the G.L.C. which will have to sort out the mess. But in the end the responsibility comes back to the Government.

Then one must consider the person whose food bill will be increased because of increased fuel costs. I doubt whether the old-age pensioner, the young, the working man, is likely to know that he will be the sort of case to receive special consideration from hon. Members opposite. He will not be able to distinguish among such items as paying a higher bus fare, increased purchase tax on pet food, the higher cost of the blankets that he needs to keep him warm. It comes to the same thing in the end. But the way in which the Government have gone about this matter means that it is almost impossible to itemise the people who genuinely need subsidies.

It is a depressing account of the management of just one part of the industry. If it was an exception we could pass it by. But it is not. It is too representative of the distortions that follow from indiscriminate subsidy, too costly in the demands placed on the people responsible for operating this organisation, too soft an option for politicians who will not face the right decisions. It is but one chapter in a book, but it is a book that we on this side of the House have read too often.

11.50 a.m.

Mr. Michael O'Halloran (Islington, North)

): As the new Member for Islington, North, I should like to take this opportunity to say a few words in memory of my predecessor, the late Gerry Reynolds. During the 11 years he represented the constituency he was universally respected for his dedication in representing all sections of the community. He was always ready to help. he held regular "surgeries", and was always willing to receive telephone calls at his home. He had an enormous fund of experience and wisdom built up during his many years of service in local government in Acton. In this Chamber, he was known as one of the fastest speakers, but his speed was combined with sound good sense.

As a Minister of the Crown, Gerry Reynolds served loyally in the Ministry of Defence. Officers and men in units of our defence forces in scattered corners of the world recall the individual and personal interest he took in their problems and responsibilities at every level. His achievements during his 41 years were greater than most will achieve in a full span of years. His untimely death is a tragic loss to his wife and family, to Islington and to this House and the future government of this country.

Hon. Members

Hear, hear.

Mr. O'Halloran

I am very glad to have the chance to make my maiden speech on the subject of public transport in London. In my constituency, people need good tube services and, more particularly, good bus services to go to work, to shop, or to visit their friends. Many of them do not have a car, and those who have one often find that they prefer to travel by bus or tube. We are worried that our public transport services seem to be getting worse rather than better. We want to know who is responsible for them, and how they can be improved. We are not satisfied, and we want those in charge to know how we think matters can be made better.

That is why I strongly favour the transfer of London transport to the Greater London Council. It is only sensible that a single body should control transport in London. It is ridiculous that practically every large local authority has been in charge of its own public transport while London has had a different system. This has meant that we have been unable to tie in our ideas on matters such as parking, building roads, or one-way traffic schemes with the way in which the buses and Underground run. It has meant that any ideas which people living and working in London have had on how their public transport should be organised, on what new bus plans we needed and what underground lines should be built have not been duly considered by the people who represented us on our council.

In future, we shall know that the G.L.C. will be supervising the new body which will take over the day-to-day operations. This new body is, in its daily operations, very much the old one under a different name. I suppose that it is too much to expect it to correct its failings overnight, but at least it is some comfort that the overall policy which in the end must set the way the organisation works will be established in County Hall.

In his opening speech, the Minister explained how the hand-over of London Transport had been agreed by the Government and the G.L.C. Certainly, the Government had been most generous in the arrangements they have made. The Bill before us is proof of that. I am only surprised that the Government have not taken more credit for this Measure. I know that announcements have been made, first, that 90 per cent. and then that 100 per cent. of London Transport's capital debt was to be written off, but to many people the phrase "writing off capital debt" does not mean very much. The Minister has now given us some helpful figures, and I hope that it will be realised now that we have been very well treated, and that that is due to the Government.

It has not escaped my notice that the Greater London Council has done its best to try to seize much of the credit for the Government's generosity and to lay on the Government the blame for the fares increases mentioned by the Minister. I understand that it is not traditional for a maiden speech to be controversial, so I shall not add to my argument here, but fare increases will affect my constituents, and they are very sore about it.

It is obvious that, if the G.L.C. had not insisted on the new Executive, its new organisation, making £2 million profit next year but had been content for it to break even, there would have been no need for a fares increase. I do not think that it would have been too much for the G.L.C. to think a little more of the people they represent and a little less of what I might call accounting safety. This is water under the bridge now, but the people who will suffer most, old people and the disabled, would have been catered for if the G.L.C. had been prepared, even in a small way, to match the undoubted generosity of the Government.

I have mentioned the elderly and the disabled, and among them I have particularly in mind the blind. The hardship which they have to bear because of increasing fares has, unfortunately, been permanent. It arises in acute form each time fares are raised, but it is no new problem. It is time that London was brought into line with the rest of the country under the Transport (London) Act, so that the local authorities may arrange for travel concessions.

I understand that the London boroughs, the local authorities responsible for arranging cheaper travel, have gone a long way towards devising a workable scheme for the buses which they can operate with the new London Transport Executive. I sincerely hope that their work will produce speedy results. I want a scheme of travel concessions for elderly and disabled people, who badly need them, to be worked out as soon as possible. Now that there is every facility for instituting them, there is no excuse for delay.

I thank you, Mr. Speaker, and right hon. and hon. Members, for the courtesy and kindness which has been shown to me this morning.

11.57 a.m.

Sir Ronald Russell

(Wembley, South): I have been a Member now for nearly 20 years, but this is the first time that it has fallen to me to follow a maiden speaker. I am particularly pleased, therefore, that I have caught your eye, Mr. Speaker, and that it is my privilege to congratulate the hon. Member for Islington, North (Mr. O'Halloran) on his maiden speech.

The hon. Gentleman spoke of the late Mr. Gerry Reynolds, whom he succeeds, and who, I think, was the fastest speaker in the House. Despite his Irish ancestry, the hon. Gentleman was not quite so fast-flowing as his predecessor, which is probably a relief to the kindly and diligent HANSARD reporters whose duty it is to report our speeches, but he was none the less fluent, cogent, non-controversial in the main, and brief.

I feel that the hon. Gentleman decided wisely to "break the ice" early on, as did his hon. Friend the Member for Paddington, North (Mr. Latham), as I myself did, and as I believe that you yourself did, Mr. Speaker, when we first became Members. It gets it over quickly and puts the ordeal behind one. The hon. Gentleman acquitted himself very well indeed, and the House will look forward with keen interest to his next contribution.

Hon. Members

Hear, hear.

Sir R. Russell

As the hon. Gentleman did, I shall speak in the context of the present Bill about the services which London Transport renders to the people of London. I hope that, in the time ahead, the new management will be able to improve these services, especially the bus services, and particularly in North-West London, which is my special concern.

I raise that point in particular because publicity should be given to the fact that London Transport is having difficulty in maintaining adequate services, not entirely, I think, through its own fault but because it cannot find enough staff. None the less, the services in Wembley and the surrounding areas are sometimes infrequent and often irregular. This is due to a shortage of crews, as has been admitted by the Chairman of London Transport, Sir Maurice Holmes, who is, I am sure, doing his best. I am glad that progress is being made on one new scheme which should help in that connection, namely, the conversion of buses to one man operation.

The harm which is being done is shown by the fact that a lady constituent of mine, aged 64, has written to me saying that she is taking her retirement pension instead of going on working because she cannot face long waits four times a day at bus stops for buses which do not come. It has reached a sorry state when somebody has to take such a decision—possibly reducing the effectiveness of the firm for which she works, because there is also a shortage of labour in other industries in North-West London—simply because one of the services cannot be maintained adequately.

Mr. Speaker

Order. I hope that the hon. Gentleman will link what he is saying to the Bill, which is about the finances of London Transport.

Sir R. Russell

I am sorry, Mr. Speaker. I wondered how wide the debate was.

I hope that the savings to the G.L.C. as a result of the Bill will enable it to improve the services, perhaps including the Underground, which, I gather, is sometimes erratic. Yesterday morning two of my hon. Friends were delayed for a quarter of an hour at Westminster station because something went wrong on the Inner Circle. Perhaps that was due to a lack of necessary expenditure in some quarters.

Unless the G.L.C. can do something, it will for some time to come still be quicker and more reliable for people to travel by private car, rather than by London Transport, or at least by the bus service.

I am puzzled that Clause 2(2) says: This Act extends to England and Wales only. From a geographical point of view what has Wales to do with it, and but from the financial angle why should it extend to England and Wales only? Surely the taxpayers of Scotland and Ireland have to contribute as much pro rata as those from England and Wales? Perhaps the right hon. Gentleman could make the position clear.

I hope that the Bill will result in the money saved being spent to improve the transport services, particularly the bus services, of Greater London.

12.2 p.m.

Mr. R. W. Brown (Shoreditch and Finsbury)

I did not intend to intervene this morning, but the hon. Member for Tavistock (Mr. Michael Heseltine) provoked me. He was rather hard pushed to establish a case, and it was nonsensical to talk in political terms about operating transport systems. If he reads the reports of what his Minister said in 1962, he will see that if any blame is to be laid for the problems of operating transport in London it is to be laid on the absurdity of the transport system his right hon. Friend the Member for Wallasey (Mr. Marples) then brought back from America, which resulted in chaos in our transport systems.

I intervened to give the hon. Gentleman the opportunity to back-pedal a little on the extravagant case he tried to make. The accounts of London Transport show that by 1963 the Government of the day had already had the warning cones hoisted to show that considerable problems were coming. The surplus was halved from over £2 million to just over £1 million, which is surely the biggest cone that could have been flown. If criticism is to be made—and I regret that the hon. Gentleman chose to deal with the matter in this way—the Government should have taken action then.

At that time I argued the case for the Tube being taken from the Elephant and Castle out to Camberwell Green. This argument had gone on since about 1919, and provision had been made by the local authority. But the Conservative Government from 1951 onwards refused to concede the case, even though the previous Government had conceded it in 1948. The Government's main argument before 1964 was that the tube extension could not be afforded because London Transport was already in tremendous financial difficulties. So they were already aware that London Transport was in difficulties. The hon. Gentleman cannot pretend that all was well until 1964 and that overnight, because of the policy of the present Government, everything went wrong.

The hon. Gentleman would find the evidence clear if he looked at the accounts and gave himself time to discuss these matters. Those of us who have been employed in transport undertakings and involved in operating them know something about the problems, quite apart from the political aspect. The accounts illustrate the problem since 1963 in terms of passenger miles lost and the influx of the motor car, about which the hon. Gentleman's right hon. Friend did nothing. Indeed, his right hon. Friend created the problem with which we are now all struggling.

I can understand Mr. Desmond Plummer trying to argue such a case, but he is a political minnow. We do not take much notice of him in London, and I hope that by next April he will have disappeared from the political scene. I beg the hon. Gentleman not to become involved at that level. He must apply himself to a much broader canvas.

I am rather concerned that my right hon. Friend has chosen to write the money off. I support what he is doing, but it would have been wiser to do it earlier. I argued the case for Section 40 of the Transport (London) Act. It was a stupid Section, but was necessary because Mr. Plummer refused, as a local government man, to stand up to his responsibilities. All other municipalities running transport undertakings accepted those responsibilities, but because he is a weak, insensitive man Mr. Plummer persuaded my right hon. Friend to accept that the G.L.C. should not be responsible for providing concessionary fares to the old and the infirm in London, something for which we have pressed for a very long time.

Mr. Michael Hesltine

I am sure that the hon. Gentleman would not want to distrot the position of the Leader of the G.L.C. The power to give discretionary fares lies with the welfare authorities, which are the London boroughs. The London Boroughs Association has complete opportunity to do so.

Mr. Brown

I know that you will be eyeing me very closely, Mr. Speaker, if I expand on this topic. It is rather a humbug argument to say that the welfare authorities should be responsible. I am a member of the London Boroughs Association. I am its honorary treasurer, so I know something about the issues involved.

Mr. Heseltine

Why does it not get on with providing those fares?

Mr. Brown

A separate organisation would be needed to discuss concessionary fares, but there is a problem if any borough does not want to take part in such a scheme. It cannot hedge-hop from Islington to Finchley because Camden does not want it. It cannot hedge-hop from Hackney to Southwark if the City of London will not play ball. One would have to set up a separate organisation—virtually another G.L.C.—to deal with the problem.

Mr. Speaker

Order. We cannot reform local government on this Bill.

Mr. Brown

I was aware that I was running into trouble, Mr. Speaker, and I apologise.

I congratulate my hon. Friend the Member for Islington, North (Mr. O'Halloran) on his excellent maiden speech, in which he made the point about the people who have to suffer the increased fares. In his constituency and mine passengers paid not only the increase that other people paid, but a surcharge. People are virtually only housed in our areas, and they have to leave to go to work, to go shopping, to find entertainment, and so on. There are no shopping facilities or entertainment in the area. Therefore, they are forced to pay the surcharge on top of the fare increase, which is deplorable.

If my right hon. Friend had only decided to write off the whole of this debt in or before last July, it would not have been necessary for the increase and the surcharge upon it to have been imposed upon my constituents, who are suffering particularly badly under the effects.

I urge my right hon. Friend to look for another Amendment. I do not like constantly amending Acts, but, in the London Boroughs Association, we had agreed to have negotiations with London Transport to produce a scheme under Section 40 to provide special concessionary fares. As a result, we got a first-class scheme. It needed negotiating, of course. I thought that the figures put out by London Transport were rather "phoney". Because Mr. Plummer is a "phoney" man anyway, it pressed the fact that any scheme had in itself to be viable and it put up figures which needed negotiating. Nevertheless, there was a good basis.

I was happy about the situation after attending the appropriate meeting because I assumed that the London boroughs would take their responsibilities seriously and immediately have talks on this excellent scheme worked out by officers of both bodies. But the Conservative-controlled authorities ran away. They defeated the whole objective. They will not take part. I am happy to say, however, that there are four Labour-controlled boroughs in London and that they are going ahead in the interests of their ratepayers to provide help for those who need it. But it is a scandal that the Tory boroughs should have chosen to renege on the powers which the Minister had said he had negotiated with the G.L.C. The G.L.C. well knew that its Tory friends in the boroughs would refuse to operate the scheme.

In my constituency, the burden of the increased fares and the surcharge is heavy. If we are to provide this help for the elderly and the infirm, then my right hon. Friend should consider making the provision of help under Section 40 mandatory on the G.L.C. The ld. rate of the City of Westminster yields £410,000. Why should not the City of Westminster and the City of London, for example, support these elderly and infirm people, who have worked there for many years helping to earn them their wealth and 1d. rate product? One would have thought that, in the late years of these people, places like that could grant them special fares.

I have asked the Minister many times to review this situation and I ask him again in the light of what is happening. I welcome the fact that he has seen fit to attempt at least to get London Transport off to a reasonable start. Had this been done when the G.L.C. was a dynamic body and doing great things, I would have been enthusiastic. But it is being done at a time when the G.L.C. is being guided by people for whom I have little or no respect. Their performance in local government is deplorable. Their understanding of the problems faced by London is tragically poor, as is their enthusiasm.

Mr. Speaker

Order. It is only their performance and enthusiasm for the finances affected by the Bill that the hon. Gentleman can talk about.

Mr. Brown

I merely wish to point out, Mr. Speaker, that this financial help which the Government are giving will be of no avail if those controlling the G.L.C. do not know how to function in the interests of the people. I welcome the Bill, but I urge my right hon. Friend to watch the G.L.C. very closely. The London transport system is vitally important. There are enormous problems and I pay tribute to its workers, who are suffering great problems in their day-to-day work.

The hon. Member for Wembley, South (Sir R. Russell) talked about delays in bus timetables. Has the hon. Member ever been on the bus to arrive after the delay? The conductor suffers appalling abuse. For the money he gets, I do not think that I would do his job. Of course, it is distressing and I understand the annoyance of the public at having to wait 20 minutes for a bus. When I have to wait like that, I naturally want to know why. The conductor cannot tell me and I get angry. The burden on the transport workers in London is indeed unenviable.

I wish this transfer well. I wish those operating London transport great success in future. I am aware of the enormity of their task and that it will take a great deal of good will, not only from local government in the whole of Greater London but from this House, to reach the understanding that, if the one criterion is profitability, then there has to be a sacrifice of service to the people of London.

12.16 p.m.

Mr. Anthony Berry (Southgate)

The hon. Member for Shoreditch and Finsbury (Mr. R. W. Brown) made an extraordinary attack on Mr. Desmond Plummer, who is responsible for the great work which is to start on 1st January, 1970, and who has led London so magnificently during the last two and a half years. Mr. Plummer will be soundly vindicated in the elections on 5th April next year.

I thought that the hon. Gentleman was going to attempt to disagree with the figures put by my hon. Friend the Member for Tavistock (Mr. Michael Heseltine), but beyond saying that half £2.1 million was £1.3 million, he appeared to accept everything my hon. Friend said and merely wished that he could have gone back further. The hon. Gentleman did not refute the figures showing that, in 1963 and 1964, a profit was being shown which has not been shown since.

Mr. R. W. Brown

I was trying to establish that the hon. Member for Tavistock (Mr. Michael Heseltine) could have made the point that, between these years of 1963 and 1964, clear warning was given that the surplus had been halved. I was pointing out that this was clear evidence that something needed to be done.

Mr. Berry

As the hon. Gentleman is so interested in the figures, I am sure that he has knowledge of them. They have gone up and down over a long period before now. I will remind him of them. In 1965, the figure was minus £1 million; in 1966, it was minus £5.9 million; in 1967, it was minus £10.9 million; in 1968, it was minus only £10 million. I suppose that to the hon. Gentleman the slight improvement last year means that the figures are getting better indeed.

Mr. George Brown (Belper)

That proves what? The hon Gentleman himself says that something needs to be done, which is what my hon. Friend the Member for Shoreditch and Finsbury (Mr. R. W. Brown) was arguing. Will the hon. Gentleman now proceed to tell us what needs to be done?

Mr. Berry

If the right hon. Member for Belper (Mr. George Brown) had had the privilege of listening to my hon. Friend the Member for Tavistock (Mr. Michael Heseltine) he would have heard in great detail about these figures. My point is that there was a balance in the two years 1963 and 1964 and that since then there has been an ever-growing deficit, except in 1968, when it was a little less than in 1967.

For the third session running, we are faced with a Transport Bill in which a deficit is being abandoned. Two years ago, it was £1,250 million off the railway deficit; last winter it was £240 million off London transport. I suppose that we should be pleased that it is now down to a mere £26 million or £27 million in this Bill. Nevertheless, that is still a big figure to write off.

It is important to concentrate on this aspect today because, whereas these other Acts had long and detailed study in Committee, I suspect that this Bill will not have the same opportunities. I still think it odd that, so soon after the passing of the Transport (London) Act, 1969, the Minister should have to ask the House for this further write-off.

The right hon. Member for Greenwich (Mr. Marsh), the previous Minister of Transport, in the Second Reading debate on the 1969 Act, said: The Bill is the most comprehensive piece of urban transport legislation ever to be produced anywhere in the world."—[OFFICIAL REPORT, 17th December, 1968; Vol. 775, c. 1242.] There is no doubt that this small Bill today comes within the same broad title. The question, therefore, is why, having agreed last year to the G.L.C.'s bold and imaginative ideas for taking over control of London Transport, the Government did not realise the need to write off the total amount. It was only a few months ago that last year's Bill was passed. What has happened since? The Minister said that there were various increases which had not been foreseen, but my hon. Friend the Member for Tavistock clearly dealt with that argument.

In Committee on the Bill last year, I moved an Amendment to reduce the write-off. I had to do it that way because, under the rules of order, I could not move an Amendment to increase it to the 100 per cent. which at that time I certainly thought necessary and which has been proved to be necessary. We had an interesting and serious debate. My hon. Friend the Member for Finchley (Mrs. Thatcher), who was then leading for the Opposition, said that she had no doubt that the write-off should be complete. Now the Government have come to that view. My hon. Friend's last words in that debate were, "Wait and see"; and we have waited and we have seen.

Mr. Plummer saw the danger. One of the essences of his argument was that London Transport must be viable before he took it over. However, he suddenly saw that there was still a danger for the ratepayers of London, in whose interests he has been doing so well for the past two and a half years. Now we have the joint decision by Mr. Plummer and the new Minister to write off the total amount.

Hon. Members have mentioned the London bus services. I hope that some of the bus services in my constituency will be helped as a result of the Bill. A few months ago, I had a difficult case which I raised with London Transport and which concerned a bus service to a local hospital. The bus service was so bad that not only could friends and relations of patients not get there, but nurses and other hospital staff found it difficult to get there to work. That sort of thing is very serious, as we all agree, and we hope that as a result of the Bill that sort of thing will not happen again.

This is a far-sighted scheme and in Mr. Plummer and his team at the G.L.C. we have just the people to implement it. I congratulate them, and I think that he is the one man responsible for it. He had a difficult job persuading the right hon. Lady the First Secretary when she was Minister of Transport and, having obtained her confidence, he found another Minister with whom he had to discuss it, and, more recently, yet a third. But he has persisted in his view that this was the right thing for Londoners, and I congratulate him, and I am sure that the House should, on what is to happen on 1st January, 1970.

We all wish good luck to the new executive and to Sir Richard Way and his colleagues on that body. It is not an easy job that they are taking over, as we all know. We wish all success to them and the staff who, over the years, have served London so well and who will continue to do so. We hope that Londoners will benefit from the scheme and, as a London Member, I welcome it.

12.25 p.m.

Mr. Leslie Huckfield (Nuneaton)

Having listened to the hon. Member for Tavistock (Mr. Michael Heseltine), I wonder what he gained from his recent world tour of major urban transport installations. I hope that when he returns to his constituency he shows more detailed knowledge of the rural transport problems of Tavistock than he has of the transport problems of London.

Every speech we have heard from the Opposition this morning has completely missed the point of the Bill. It is how to succeed in making an urban public transport undertaking pay its way in the second half of the 20th century. This is a problem facing not only the London Transport Board and not only all the large municipal public transport undertakings in the country; it faces every major city in the Western and Eastern world.

I regard the proposals of the Bill as one of the foremost means of solving the problem. The hon. Member for Tavistock has been speaking on transport matters in the House and in Committee for a fair time and he must realise by now that if the problem is not to be solved in this way, some other definite way must be found. So far I have heard no definite alternative from the Opposition.

It may be that the definite alternative which the hon. Member for Tavistock would prefer would be the solution of the motorway box. To me and many of my hon. Friends the motorway box represents the most monstrous and devastating waste of public money inflicted on the country for a long time. I hope that when the inquiry is held next year and goes into the ramifications of the tremendous detriment that the box will mean to the London environment and the foolish waste of money and the gigantic increase in accidents and the overall public expenditure of £2,000 million which will be involved, the hon. Member for Tavistock will realise that the Bill and its way of solving the problem are a much more politically and economically palatable way of dealing with London transport difficulties.

Mr. Berry

Is not the hon. Gentleman over-stretching the language when he refers to gigantic increases in accidents? Surely the motorways have shown a tremendous decrease in accidents over the years.

Mr. Speaker

We may not go into the merits of motorways from an accident point of view. The only question in order is one of finance.

Mr. Huckfield

I shall try to confine myself to the subject in hand. The point I am trying to make is that in terms of social costs and social benefits the Bill is a far cheaper way of dealing with the problem than the proposed waste of money envisaged in the London motorway box. Taking into account the social cost of at least 500 accidents a year on the London motorway box—according to the latest estimates—the social costs involved in the Bill are far less than those which would be inflicted on the London public if the motorway box scheme went through.

Mr. Speaker

I hope the hon. Gentleman will now come to the Bill.

Mr. Huckfield

I shall; I thank you for reminding me, Mr. Speaker.

Most urban public transport undertakings in the Western world now face serious competition from the private motor car. Many cities are now thinking seriously of restricting private motor car access. Another way is deliberately to subsidise public transport. I believe that the Bill is a means of doing that.

If hon. Members opposite are not prepared for London Transport to be subsidised, they must be frank about it. From what the hon. Member for Tavistock has said this morning, it seems that he is not prepared for London Transport to be subsidised by the taxpayer or out of London rates. The only way left for London Transport to pay its way is by an increase in fares. If this is the hon. Gentleman's thinking—and I should be glad if he would leap to his feet and defend himself if it is not—I wish that the Conservative Party, here and in County Hall, would be frank with the public and admit that its way of solving London's transport problems is not by the Bill or by an increase in rates, but by an increase in fares.

Mr. R. W. Brown

This is exactly what Mr. Desmond Plummer has been saying, but it has never been picked up. These other orations of his are picked up instead. This is exactly the situation and on 5th April the people of London will have to decide. Those in power have said that they will refuse in any circumstances to make a subvention from the rates to subsidise the transport system. It means that fares will rise.

Mr. Huckfield

I am grateful to my hon. Friend for that intervention, which has served to underline what I am saying; namely, that the hon. Member does not appear to maintain much contact with his friends across the water. Even when he does he seems to be lamentably disjointed about their thinking. It has been obvious to me for a long time that those in power across the water in County Hall under Mr. Desmond Plummer have as their one objective making London Transport pay its way, which must inevitably involve fare increases.

The kind of financial difficulties we have been discussing and the kind of fare increases referred to by hon. Gentlemen, and to which my hon. Friend the Member for Islington, North (Mr. O'Halloran) referred in his excellent Maiden speech, are the direct result of Conservative policy in County Hall, insisting that the London Transport Board should make a profit of £2 million. If the hon. Member for Tavistock wants to deny that and say that the object of the Greater London Council is not to make a profit of £2 million I will gladly give way. It is being insisted that the London Transport Board should make a profit, and it is the London travelling public which will suffer these increases.

Mr. Michael Heseltine

I would like the right to choose my own interventions. Why does the hon. Gentleman feel that there is a distinction between what he accuses the G.L.C. of doing in 1970 and what the Ministry has done on the London buses, which it is retaining in the National Bus Company; namely, increasing fares?

Mr. Huckfield

The hon. Gentleman knows very well that the position of the National Bus Company and its relationship with passenger transport authorities and local authorities is different from that brought about by the insistence of the Tories in the Greater London Council that from the very beginning London Transport must make a profit of £2 million. The hon. Gentleman has read the White Paper on the financial obligations of the nationalised industries. He knows the obligations placed on the National Bus Company and that they are nothing like the ridiculous obligations placed on London Transport by the Conservative G.L.C.

If we are to have this insistence that London Transport must make a profit, then we shall inevitably get the kind of complaints we have had this morning. When London Transport is forced to make a profit it has to cut out some of its unremunerative services, the very services to which the hon. Members for Southgate (Mr. Berry) and Wembley, South (Sir R. Russell) have referred. It is a logical consequence. When people try to make a profit on this sort of thing they can only do it by putting up fares and cutting out loss-making services. This is anything but a public transport service; it is anything but the kind of public transport service for the people of London that the Bill envisages. Maybe the hon. Member for Tavistock would be more in line with the proposal which emanated yesterday from County Hall, about making Londoners pay for their amenities by something like a sales tax.

Mr. Speaker

Order. The hon. Gentleman may, some time, get on to discussing that, but only when he gets on to the Greater London Council.

Mr. Huckfield

What I was trying to say was that if the hon. Gentleman does not like this Bill, if he does not want London Transport to go on to income tax or on to the rates, maybe he prefers that the cost of it should be borne on the basis of a sales tax. I believe that London Transport ought to be subsidised as a public service for those who live in the area. Apart from that I cannot understand why hon. Gentlemen opposite do not realise the tremendous social costs of the policy they are advocating, which for many of us far outweighs the kind of human costs envisaged in the Bill.

We have a Bill which proposes to write off a further portion of the capital debt of London Transport. Following from his normal transport theories, I suppose that the hon. Member for Tavistock is bound to protest about this. Why does he not do some more research and have a look at the social benefits of a Measure like this? I can assure him that he has to take social costs and benefits into any analysis of the problem. When he does so he will find that it is far cheaper to have a write-off of this nature than incur the fantastic social costs of traffic congestion and increasing accidents which are bound to follow if the party in power across the water insists on making a profit.

This is what the Bill is all about. I would eminently prefer the way in which this Bill tackles the problem, the kind of researches which are being done in the London School of Economics to ascertain whether London Transport services can be provided completely free, to the kind of strict profit and loss approach we have heard from the Front Bench opposite this morning. The world over has shown that in any major city where an attempt is made to make public transport pay it is the people who live in that city who lose in the end. This is why I support the Bill.

12.38 p.m.

Mr. John Page (Harrow, West)

To preserve my reputation with you, Mr. Speaker, I will not follow the hon. Member for Nuneaton (Mr. Leslie Huckfield) too deeply. The expression of policy which he has put forward is fundamentally different from that of his right hon. Friend the Minister. The Government do not believe in a total subsidy for public transport in cities. If they did they would not have gone to the extent of putting up fares, or allowing the fares of the outer London buses to be increased. They have never sought to make a subsidy from public funds to transport. They have only done it for other alternative reasons.

Today, the Minister gives a limping apologia as he empties £27 million out of the sink tidy of the taxpayer's washing-up bowl in his Ministry. His case was absolutely demolished by the excellent speech of my hon. Friend the Member for Tavistock (Mr. Michael Heseltine). The Minister did not really have a case and in a way I have to congratulate him on his good-natured skating on thin ice to try to get over the embarrassment of having to make an excuse for the Bill as quickly as he could. There is no doubt that the Bill is the final result of the inept handling by the Government of their relationship with London Transport ever since 1964.

There is a pathetic belief by people like the hon. Member for Nuneaton that the only alternative to raising prices is a general subsidy. There are such things as increased efficiency. [Interruption]

Mr. Speaker

Order. The hon. Member for Nuneaton (Mr. Leslie Huckfield) has a habit of not being able to contain himself. He must lsten to other hon. Members' speeches after he has spoken himself.

Mr. Page

One of the most important results of the policies which have led to this Bill has been the postponement of modernisation schemes by London Transport, the postponement of operational schemes and the postponement of capital investment in new rolling stock, particularly on the railway and underground services.

The Minister rather cynically said this morning that "slashing service cuts have been avoided". I wonder whether he would like to stand on the railway stations at Harrow and Willesden these days, because not only was it necessary to introduce slashing service cuts from 3rd November but the number of carriages on some of the trains running in the rush hour has had to be reduced from seven to six because of the lack of maintenance facilities or the difficulty of getting older rolling stock repaired. The travelling public in London, particularly from North-West London, are having a very crowded and dangerous time due to overcrowding. The Northern and Bakerloo lines are now a disgrace.

I sincerely hope that as a result of the new management and of enlightened managerial policies, the G.L.C., in which I have the greatest confidence, will get its priorities right and that the London Transport Executive and its excellent officials and employees will be allowed to get on with the job in their own way.

There has been tremendous difficulty in running the bus services in many outer London districts, mainly because it is difficult to get drivers and conductors and maintenance people from the areas in which they live to bus stations in places like Harrow Weald in time to operate the early services. In the Greater London area there is now a 12 per cent. shortage of drivers and conductors.

I am glad that the hon. Member for Nuneaton is still with us, because he will disapprove violently of the policy which I shall suggest the G.L.C. should follow. Many routes in the Greater London area, particularly the outer areas, should be handed over to private enterprise.

Mr. Leslie Huckfield

Shocking.

Mr. Page

I am proud to say that in my constituency we have the only private enterprise regular bus service which goes across a London Transport route. Let London Transport run the main artery services and let private operators have the opportunity of giving the service which I am sure all hon. Members wish to be provided on the feeder services to the main routes. This would make a very appreciable reduction in the capital expenditure on the bus services.

I hope that Mr. Desmond Plummer, who was so absurdly attacked by the hon. Member for Shoreditch and Finsbury (Mr. R. W. Brown) in an electioneering speech which should have been made on 5th November rather than today, will take serious note of what I am saying. We should send from this House a message of good wishes to Mr. Plummer, to the Greater London Council, to London Transport and to all the staff in the hope that now that the parcel has finally been tied up and the job has been put in their lap Londoners will get the service which they deserve.

12.45 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Bob Brown)

I have no intention of taking up in great detail the remarks of the hon. Member for Harrow, West (Mr. John Page), or of putting my hands in the dishwater. But I must take up his accusation that the London Transport Board has been starved of capital by the Government and that this is why the present position exists. Was it not this Government who introduced the infrastructure grants under Section 56 of the Transport Act, 1968, to enable the board to finance the extension of the Victoria Line to Brixton to improve the lot of Londoners? We cannot wear this allegation that the Government have been starving the board of capital.

My hon. Friend the Member for Islington, North (Mr. O'Halloran) made an excellent and telling maiden speech. I am sure that we all enjoyed it immensely and look forward to hearing from him again in the near future. I am sure that his future contributions will be equally down to earth.

My hon. Friends the Members for Islington, North and for Shoreditch and Finsbury (Mr. R. W. Brown) share my personal concern to make cheaper travel facilities available on public transport services for the elderly and the disabled. As part of the reorganisation of London's transport system, the Transport (London) Act provides powers for the London boroughs, as the local welfare authorities, to arrange with the new L.T.E. for cheaper fares to be made available on the Executive's services for the elderly, the blind and the disabled. The Ministry has not had any consultations with the G.L.C. on the issue of concessionary fares because clearly this is a welfare matter and is for the London boroughs to decide. I thought that there was a misunderstanding on that point.

The Transport (London) Act brings London into line with the rest of the country. As a result of successive actions by the Government since they took office in 1964, travel concessions can already be granted. Concessionary fares are essentially a welfare matter and I am sure that the provisions in the Transport (London) Act which make the boroughs responsible for this matter are right.

Nevertheless, it disturbs me, as one who was responsible for introducing two private Members' Bills to extend travel concessions to elderly and disabled people, that many councils are only paying lip service to the needs of disabled and elderly people.

Mr. Speaker

Order. With respect, the Minister is wandering from the Bill.

Mr. Brown

I apologise, Mr. Speaker. I am sure that if it is too long before decisions are taken to provide cheaper travel facilities for the elderly and disabled people in London, my hon. Friends will be asking why, and the ratepayers of London might be asking why.

As my right hon. Friend said in opening the debate, the London Transport Board's financial estimates, which we used to calculate the extent of the viability gap and, hence, the measures necessary to close it, were the best that could be produced at the time. The deterioration in estimates resulted from factors which crystallised only after the Transport (London) Act had completed its passage through Parliament.

The increased National Insurance contributions were announced only on 10th June and the busmen's pay settlement was reached on 25th July, the same date as the Royal Assent. I know well enough, as the hon. Member for Tavistock (Mr. Michael Heseltine) has said, that negotiations do not start the day before an award is made, but negotiations are not scheduled to coincide with the time when Government draftsmen are drafting Bills. The hon. Member must recognise this.

By the time that the London Transport Board had estimated the combined financial effects which those factors would have on the undertaking, it was clearly too late to do anything about them in the original legislation. It was not until the final financial estimates were available that the need for further legislation was established. Up to that point, other measures might have proved sufficient. Had such proved to be the case, the Government would have had to explore them fully in the knowledge that an amending Bill was, at most, an option which they might or might not select.

The decline in the estimates of the number of passengers likely to use London Transport services in subsequent years covered a much later period than the Opposition suggested in Committee, since they were largely occasioned by the disruption in services which came to a head in July and worked themselves through only in the final estimates towards late August.

All that can be said is that it is regrettable in many ways—I will not say more than that—that the further measures, including the additional write-off provided for in the Bill, have had to be brought in. Given the changes in the London Transport Board's financial estimates, however, the Government had no choice if they intended to keep, as they have done throughout, the bargain which they made with Mr. Plummer and his friends.

I want to make it clear that we as a Government have never tried to hide the fact that we held up a fares increase in 1965. We said at the time why we did that and we have had no cause to regret our action. The increases proposed in London Transport fares were not implemented, because we wanted to review not only whether they were necessary, but also whether the whole struc- ture and organisation of London Transport needed a thorough overhaul. The Joint Review which we subsequently instituted made it obvious that a total review had been long overdue, and the structure which we had inherited was far from operating smoothly.

The Opposition seem to be doing their best to deny the Government any kind or rôle. We maintained, and we still do, that we are perfectly entitled in any given situation to look at the wider general effects of any action. We cannot confine ourselves to looking at the mere financial effect of a fares increase, for example. We have wider responsibilities and it is our job not to neglect those responsibilities.

The London Board's present financial position does not stem from alleged Government interference. It is, no doubt, convenient for the hon. Member for Tavistock and his hon. Friends to ignore the basic facts of declining traffic, increasing congestion and the decreasing number of passengers. These are phenomena which, as my hon. Friend the Member for Nuneaton (Mr. Leslie Huckfield) said, are worldwide. They are certainly not confined to this country. On the other hand, we are not closing our eyes and being blinded by the one measure of higher fares alone. The difference between the two sides on this issue is undoubtedly that we have been prepared to test effective remedies. Basically, that was the purpose of the original Act.

The hon. Member for Tavistock referred to a supplementary answer which I gave from this Box on Tuesday. I am sure that the hon. Member cannot have received a letter which I put on the board for him yesterday afternoon, because I would not wish to mislead the hon. Member or the House. Realising that my supplementary answer might be construed as misleading, I wrote to the hon. Member yesterday in the following terms: In my answer to your supplementary question on 11th November (HANSARD, c. 170) I told you that the selective increases (from 9d. to 1s. and from 1s. 3d. to 1s. 6d.) on bus services in the outer area of London for which the London Transport Board have obtained the Minister's approval would make those services to be transferred to the National Bus Company viable. I am afraid that my reply to you overstated the amount of financial relief which those increases will afford to the N.B.C. The effect of the improvement in the finances of London Country Bus Services Limited (the National Bus Company's subsidiary which will run the transferred services) from this fares incease is expected to be of the order of £0.4 million per annum. This has to be set against the estimate that London country buses will have a cash deficit of some £1 million in 1970. While, therefore, those increases will go quite some way to making the services viable, they will be insufficient to do so on their own. I thought it right to make that clear.

Mr. Michael Heseltine

I am grateful to the hon. Gentleman for reading his letter, which I had not received. Therefore, I fully accept that his answer to me on 11th November was likely to give me a false impression, which he has now clarified. Obviously, however, I would like to have time to look at those figures and their implications before commenting on them.

Mr. Brown

It has been suggested in some quarters that the decision to raise the 9d. and 1s. 3d. fares to 1s. and 1s. 6d. on the buses in the outer area of London was the decision of my right hon. Friend alone. I am not prepared to enter into an acrimonious debate about this. Indeed, I cannot see that it would serve any useful purpose. All that I would ask hon. Members to do is to look at the facts.

The Greater London Council has maintained throughout that the new London Transport Executive should be set up in a financially viable state. The Government were faced with the council's total adherence to viability as defined, being a condition of the transfer. Therefore, once the extent of the deterioration in London Transport's estimates of its future financial position had become established, there was no practical or proper alternative but to introduce measures to bridge the viability gap.

The final 10 per cent. of the write-off of the London Transport Board's current debt was not in itself sufficient and without embarking upon damaging and widespread cuts in services—I make no apology for repeating this; my right hon. Friend made the point in his initial statement—we had no choice but to adopt proposals for certain additional fares increases.

I am sorry that I cannot agree with my hon. Friend the Member for Shore-ditch and Finsbury that if we had gone for the 100 per cent. write-off initially, these fares increases could have been avoided. Bearing in mind the attitudes of the Greater London Council and of Mr. Plummer, to which reference has been made, it should be self-evident that these increases would have to come about.

The hon. Member for Wembley, South (Sir R. Russell) asked why the Bill applies only to England and Wales. The reason is that all it does is to repeal parts of Section 19 of the Transport (London) Act, 1969, which itself extended only to England and Wales.

Sir R. Russell

I appreciate that, but why did the original Act apply only to England and Wales?

Mr. Brown

I understand that it is a legal matter and that it was simply because the English legal system applies in Wales. I think that I have fairly well covered the points which have been raised.

Mr. John Page

I am sorry that I did not interrupt the hon. Gentleman earlier, but I thought that he would continue with the discussion on the letter that he sent to my hon. Friend the Member for Tavistock (Mr. Michael Heseltine). Was the intention by raising the fares on outer London services to make the services more viable or merely to reduce a notional subsidy?

Mr. Brown

The basis of the apportionment of the 10 per cent. was to move in the direction of making the services more viable.

The hon. Member for Southgate (Mr. Berry) raised no point on which I would wish to take issue with him, but the House will wish me to join him in wishing Sir Richard Way and the new Executive success in the task that lies before them.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Dobson.]