RAILWAYS BILL

HC Deb 24 June 1974 vol 875 cc1004-116

Order for Second Reading read.

Mr. Speaker

I have not selected the amendment declining to give the Bill a Second Reading.

4.9 p.m.

The Minister for Transport (Mr. Frederick Mulley)

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

This is the Bill for which the House has been waiting to put right the financial support for British Railways and introduce a much more satisfactory system of support and control of British Rail's operations, which now need annual support on revenue account from the Government of about £300 million.

Since July 1972 the board's increasing losses have been met through cash shortfall payments without proper statutory authority on the basis of the Vote Estimates and the annual Appropriation Act. It is now urgently necessary to enact legislation which will give express authority for these large payments and at the same time enable the Government and the House to exercise more control over the expenditure than under the present arrangement.

The House is, of course, familiar with the enduring financial problems of railways, not only in this country but abroad, where, in fact, the subventions are often higher than here. For example, the French Government give support of over £600 million a year, while the Germans pay almost twice that. The figures are not, however, strictly comparable since these railways have not had their capital debts written off to the same extent. The fact remains, as far as I have been able to discover, that there is no large railway system in the world which is not in substantial deficit.

The first statutory attempt of recent years to set matters right was the Transport Act 1962, which wrote off or suspended interest payments on the major part of the debt to the Government. The Act also gave powers to pay deficit grants for a period of up to five years, but, in fact, the money ran out well before the period ended, despite the considerable achievements of management and the railway trade unions and workers in increasing productivity through reducing manpower and more efficient use of railway assets.

It is clear from the amendment on the Order Paper that a number of hon. Members opposite are particularly concerned about the current industrial relations problems on the railways. I shall listen with interest to what they have to say, but I ask them to consider the recent problems against the background of a long period of very reasonable industrial relations on the whole during a time of enormous difficulty. I am persuaded that the sort of measure which I hope the House will agree to today will help us to get back to a more harmonious relationship, which is essential if we are to achieve the purpose which I am sure the House wishes us to achieve through the Bill.

The failure of the 1962 Act led to the 1968 Transport Act, which recognised for the first time that the railways were entitled to State support for passenger services operated for social reasons which they were not allowed to close. In all, this Act relieved the board's revenue account by about £150 million a year.

However, it is significant that throughout this period of chronic deficit there was no recognition by the Government of the full extent of the underlying un-profitability of railway operations and the need for much more broadly-based support. Nor was this apparent for a year or two after the 1968 Act, when, owing to the relief given to their accounts by the financial reconstruction, the railways made a small book profit. However, by early 1972 the underlying trend of deteriorating finance was again evident.

The previous Government, therefore, put in hand a further review with a view to establishing whether there could be a viable railway network at all and what railway system should be provided in the public interest, taking account of social and environmental factors.

This Bill is the outcome and it gives statutory recognition for the first time to the fact that the railways are not a normal nationalised industry but a unique type of public corporation which exists to serve social and environmental purposes as well as the economic needs. I should like to acknowledge the contribution of my predecessor the right hon. Member for Yeovil (Mr. Peyton), who asked for the review and who, as I understand it, reached a similar conclusion.

The heart of the Bill lies in Clauses 3 and 4, which provide the basis for a comprehensive new support and control system. They enable the Government to place a general obligation on British Railways to provide passenger services and to compensate them for doing so. The Government will have full powers to define the network of services to be supported and to lay down the conditions under which payments will be made. There is to be a limit on the total amount of grant which may be paid of £900 million initially, which may be increased to £1,500 million if the House agrees by affirmative resolution, following which there would be a need for further legislation.

Mr. J. Bruce-Gardyne (South Angus)

I was dazzled to hear the Minister say in his opening remarks that the Bill would provide for more control over expenditure. Will he explain—because the answer does not leap immediately to mind—how Clause 3 provides more control over expenditure than that which existed under Section 39 of the 1968 Act since the earlier legislation required the subsidised railway services to be specified, whereas this Bill does not?

Mr. Mulley

The hon. Gentleman has made a good point. What he failed to do was to listen to what I said when I indicated that since 1972 the previous Government, without statutory authority, had been making deficit payments. It is that problem to which this matter is mainly addressed. To be fair, my predecessor in the Conservative Government was as concerned about it as I was when I took office. I have never known of a closure proposal where the figures given were not strenuously contested.

Mr. John Peyton (Yeovil)

I hope that the right hon. Gentleman will confirm that he never objected to the Conservative Government's attitude to the mounting deficits.

Mr. Mulley

I confirm that I did not object. The right hon. Gentleman's recollection will tell him that at the time of his statement in July from which the proposal in the Bill stemmed about reimbursing the railways for costs incurred because they could not increase their fares I suggested that he should seek permanent powers over railway finances. The powers sought will give Parliament additional opportunity to review from time to time the operation of the new grant system.

The significant change made by Clause 3 from the 1968 Act régime is that the grant is to be on a comprehensive basis for the whole network of passenger services and will no longer consist of a large number of specific grants for particular services.

Mr. Cranley Onslow (Woking) rose—

Mr. Mulley

I shall be happy to give way, but I hope that no one will complain that in a short debate the Minister took too long.

Mr. Onslow

I was not aware that this was necessarily a short debate, but, leaving that aside, may I put this to the right hon. Gentleman? He said that the Bill would give Parliament the opportunity from time to time to take account of the use of the powers. Will he elaborate on what he means by "from time to time"? Is it not true to say that it is only when the limits need to be raised that Parliament will have an opportunity to take account of the way in which the powers are being used?

Mr. Mulley

The hon. Gentleman has been a Member for quite a time and he knows that hon. Members' power to ask questions of Ministers and Ministers' responsibility to the House depend on areas where the Minister has power. The fact that the Minister now has greater power to ask for information would, I should have thought, have extended the scope of that power. I should not have thought that the hon. Gentleman would have wanted me to tell him that.

Apart from the fact that the 1968 system has proved in the event to be inadequate, it suffers from the disadvantage that there is great difficulty in allocating the joint costs of common track and other facilities to the many services which use them.

The proposal to provide finance through the passenger business is also justified by the fact that the bulk of the costs of the railway in providing and maintaining expensive, high quality track and signalling is attributable to the needs of passenger services. It would be possible to run a much lower cost railway if this were needed for freight operations only, but that, of course, is not our situation. The board now gets the greater part of railway revenue from passenger operations.

I should also mention that we are further assisting the board through a financial reconstruction. This will recognise that the provision of track and signalling is a process of continuous replacement rather than of remunerative capital investment. It is not, therefore, reasonable to continue to saddle the railways system with historic debt charges, nor with new charges arising on track and signalling expenditure in future.

Accordingly, we intend to meet the cost of much of this work through the proposed grant, and the board's debt will be adjusted accordingly. The only major exceptions to this will be in respect of expenditure on new routes and major electrification schemes. As a consequence, the Bill provides in Clause 1 for a reconstruction of the board's balance sheet by reducing its debt to the Secretary of State to £250 million. This results from a net write-off of nearly £200 million, giving an annual interest relief of about £15 million.

But this comprehensive financial assistance does not mean that we are giving the board a blanket subsidy regardless of efficiency and financial considerations. On the contrary, the present open-ended drain of shortfall payments will be replaced by a carefully considered régime of control and review. In the first place, Clause 4 of the Bill will require the Railways Board to act on lines settled from time to time with the approval of the Government in formulating policies and plans for the general conduct of its business. It is not my intention, in seeking this power, to derogate from the responsibilities of the board and its managers.

The Government cannot manage railway services directly, and do not intend to do so. This is the job of the board. But, at the same time, we need to set up a control system which will provide a means by which we can monitor the grant expenditure. We shall need to be satisfied about the estimates of grant which will be needed and the value for money which the community are getting in return for the assistance to the railways, and to have sufficient information to enable the Government to discharge this duty.

There will also be a comprehensive monitoring system under which the Government will review systematically each important part of the board's passenger activities over a period of years.

Mr. Keith Stainton (Sudbury and Woodbridge)

The right hon. Gentleman knows that I have taken part in these debates for several years. He has referred to the write-down in the balance sheet. Can he tell the House what was in last year's accounts of British Rail as the net asset value of the undertaking, and what was the net asset value as a result of the write-down?

Mr. Mulley

I cannot quote those figures offhand. They are available, as the hon. Member has said, in the accounts of British Rail. I see that he has a copy of the accounts before him. I suggest that he looks at them while I get on.

The monitoring system to which I referred will enable us to form a view about the continued justification for supporting services and point to any areas where the community are getting poor value for money for the grant paid. As I told the House on 13th May, there will be no closures of substance in 1974. Moreover, I am now reviewing all the services in the closure machinery.

I understand that certain local authorities have shown interest in making a contribution to keep services going, at least until their longer-term future as part of a co-ordinated local transport system can be examined. I welcome this approach. But, while we have accepted the need for a network of passenger services of roughly the present size, and ruled out any substantial closure programme, it would be unrealistic to expect each and every service to continue unchanged for all time.

Mr. W. Benyon (Buckingham)

Can the right hon. Gentleman be more specific about the time scale? Is he aware that one particular line in my constituency is due for closure at the end of the year, even with the allowance which has been made? Does this mean that the review will take place from the end of this year, or will there be more time?

Mr. Mulley

It means that I am reviewing individual cases now. As soon as I am able I will announce the outcome of the review.

Before I turn to the other important provisions of the Bill, it may be of interest to the House to have a brief indication of how the Government see the future of railway investment and associated policies, for which new legislation is not required. For the present year the level of investment will be that set by the last Government, as modified by the then Chancellor last December. As regards the future, it is too early to say what the outcome will be of the review which the Government are carrying out of all the public expenditure programmes which we have inherited.

I can, however, tell the House that we accept in general the strategies put forward by British Railways last year and will provide an appropriate level of investment to implement them, subject of course to the general economic situation, as with all other expenditure programmes. In practical terms, this means that we accept that the railways network should be of roughly its present size and that commuter and inter-city passenger services should be improved with new rolling stock, including high speed diesels and the advanced passenger train, modernised terminals and better interchanges. Increased expenditure on the maintenance and improvement of track and signalling will give even higher standards of safety and operating efficiency and will also allow for higher running speeds. Freight services will also continue to be improved with computer controlled wagon movements and new wagons.

Mr. Arthur Jones (Daventry)

The right hon. Gentleman is broadening his remarks to take into account other Government expenditure. I assume that he is referring to the road programme. Do the increased resources going to the railways mean that the effect will be to reduce the total road network by 10 pet cent. with a similar reduction in the standards of road building?

Mr. Mulley

No. The point I was making, with which I thought the House was well acquainted, was that the Government are reviewing all public expenditure programmes as from 1st April next. No programme has been given firm figures beyond that date. Railways and roads are in the same situation as every other aspect of Government policy.

The transfer of freight from road to rail, where this offers advantages to the community, will be an important aim of our policy. The railways are particularly well suited to carrying regular flows of bulk and heavy freight. The board has had considerable success recently in maintaining its freight business after the substantial drop of a year or two ago. Great improvements have already been made and a better service will be provided in future as more locomotives and new wagons are produced to meet what is an increasing demand for the rail carriage of the heavier traffics. The brighter future which the Government have in mind for the coal industry will particularly help.

However, it is important to recognise that there are limits to the extent to which freight can be transferred from road to rail. Much road traffic is carried for short distances between places not served by direct rail links, and such traffic could not very well be attracted to rail, except where it is of a special nature, such as pit-head coal moving in bulk. But where goods are carried long distances or in bulk quantities rail is an appropriate and economic mode of transport which has great environmental advantages. I have written to the chairmen or managing directors of almost 100 large companies and had an encouraging response to my request that they should discuss with British Railways in which they could make more use of the railway freight services.

Mr. Peyton

It might be gracious for the Minister to acknowledge that he is following absolutely the lead given by myself and the previous Government.

Mr. Mulley

If the right hon. Gentleman had not been so impatient he would have let me get to that point in my speech. The original proposal was made to the right hon. Gentleman last autumn by the Freight Transport Association, and, although the election did not come until January, that proposal was not im plemented. I know that there were problems in working out exactly how it could be done. I said at the time in my Press notice that I had taken up the proposal put to the right hon. Gentleman by the Freight Transport Association, and I certainly do not wish to take any credit away from him. If he wants to be cantankerous, I would point out that I am making this speech after only three-and-a-half months in office, whereas the right hon. Gentleman had my job for three-and-a-half years.

Mr. Robert Adley (Christchurch and Lymington)

Does the Minister confirm that the hoped-for increase in long-haul traffic going by rail to which he referred would be immeasurably assisted by the Channel Tunnel?

Mr. Mulley

As I said in the Channel Tunnel debate, I personally should not be inclined towards having a Channel Tunnel were it not for the possibilities it might open up for British Railways. If I broaden my speech to take in all these points, the House will properly show its impatience.

The Bill makes two important contributions towards helping railways freight. First, the new support system I have described recognises that the bulk of the joint cost of the railways system is attributable to passenger operations. Most freight traffic is carried over lines which would need to exist in any case to carry passenger traffic, and the standard of maintenance and signalling on those lines is at a much higher standard than would be required for freight operations. I therefore intend that the grant under Clause 3 should be so structured that freight operations would have to bear only a relatively small, though fair, share of the joint costs of track signalling and administration.

Mr. Bruce-Gardyne

The right hon. Gentleman referred——

Mr. Leslie Spriggs (St. Helens)

On a point of order, Mr. Deputy Speaker. Since the Minister rose at the Dispatch Box to move the Second Reading of the Bill there have been a large number of interjections. I understand that this is to be a very short debate. May we have your protection, please?

Mr. Deputy Speaker (Mr. Oscar Murton)

That is not a point of order. If a Minister decides to give way to an interjection, it is entirely within his own competence to do so.

Mr. Mulley

I will give way to the hon. Member for South Angus (Mr. Bruce-Gardyne). It would be helpful if he stayed during the debate. He may want to ask me about something which he missed while he was away.

Mr. Bruce-Gardyne

There is all the the time in the world for the debate—until 10 o'clock. The right hon. Gentleman referred to a fair apportionment of the costs to freight, as between freight and passenger services. Who will adjudicate on what is fair?

Mr. Mulley

That will be done under the arrangements for consultation between the Department and the Railways Board, and will take into account the points I have just mentioned, which perhaps the hon. Gentleman missed.

Secondly, the Bill provides in Clause 8 for a new grant from central Government, not, as has been suggested, from local authorities, to assist the construction of private sidings, including associated depots, access roads and equipment, where this will encourage industry to send suitable traffic by rail. These grants could be made where, given suitable facilities, there would be a scope for transferring freight from road to rail and where this would be desirable from a local environmental point of view but where this would not occur normally since it would require additional investment by industry.

The remaining important purpose of the Bill is to effect a long-needed rationalisation of the arrangement for financing the board's pension obligations, which at present have a serious effect on its current finances, arising from the fact that it has inherited pension obligations from the past which simply cannot be financed by railway operations and which are inescapable. The Bill, therefore, provides in Clauses 5, 6 and 7 for these to be funded over a period by the board with the help of grant from the Government, and also for grant for repayment of money invested in the railways business by the pension funds. These are technical issues which are perhaps best explored in Committee, but they will involve a Government commitment over the years to provide even tually further finance of over £1,000 million.

Before concluding, I should briefly mention the two other clauses of the Bill. Clause 2 increases the board's borrowing powers to £600 million, extendable to £900 million by affirmative resolution. Clause 9 enables salaries to be paid to the chairmen of transport consultative committees, as is already the position in other nationalised industries.

In all, the measures set out in the Bill will give British Railways support as never before. They result from a comprehensive review of the railways business which showed that if the country is to continue to have a railways system of any significant size it will require substantial Government support for the foreseeable future. Governments of all parties have had to make, and will continue to have to make, difficult decisions about the amount of the support which can be provided in the light of other claims on public expenditure, but I hope I have indicated that our acceptance of the broad strategies initiated by the board provide an assurance of continuing support by this Government.

I do not claim that the arrangements will turn out to be perfect or, indeed, provide a lasting solution to the perennial railway problem, but I do justifiably claim that the support being provided gives the railways a better deal than they ever had in the past and an opportunity for management and men to increase productivity through higher investment and give the community a fair return in social and environmental terms for the financial support they must have to remain in existence.

I am convinced that the great majority of our people desire to maintain and improve our railway system and are prepared to will the means to achieve this end. I trust, too, that our constituents. who have so strongly in recent years advocated this course, will give British Railways their practical as well as their political support by using its services, both passenger and freight, to the maximum extent possible.

4.38 p.m.

Mrs. Margaret Thatcher (Finchley)

We are debating the Bill under some difficulty because we are without the 1973 report and accounts, although the 1972 report and accounts were laid over a year ago. We are, therefore, having to make our observations only on the 1972 report and on the known deficit then, which was £26.2 million after subsidy on the old basis. We have no idea what 1973 has produced, except perhaps for a report in The Times of Saturday—and I must point out that reports in The Times are not always true—to the effect that the deficit for last year might be £50 million and that there are in the pipeline substantial increases in salary bills.

We are also without a White Paper on future strategy, as was promised by my right hon. Friend the Member for Yeovil (Mr. Peyton) last November when he made his statement. He said at that time that he would embody his proposals in a Bill and that there would be a transport White Paper underlining the greater emphasis which the Government were giving to the railways and other forms of public transport. We expected that White Paper to accompany the Bill. We are today faced with bigger subsidies, bigger costs and bigger fares without having been given the proper information on which to base a judgment.

It appears that there is some urgency about the Bill, first, because even on the 1972 accounts British Railways were not far from the limit of their borrowing power and, secondly, because the system of special grants in operation from 27th July 1972 to cover financial deterioration amounting to £32 million that year, as the Minister said, has not been put into legislation but it must have been the subject of a supplementary estimate at the time and could, therefore, have been raised and debated in the House in the usual way.

We could perhaps have dispensed with either the 1973 report or the White Paper had the history of dealing with the railways over the last 10 or 15 years been one of steady continuation along the same path, but it has not. The whole philosophy of the Transport Act 1968 is now reversed. That legislation was based on two propositions. The first was that the railways had no hope, from profits on their other passenger services and on freight work, of supporting the many non-paying passenger services which they were expected to retain. The services which required help were to be identified and separately costed so that a conscious decision could be made whether the maintenance of the service was justified in the light of its cost. This was done, and the list is given at the back of the annual report, with the cost against each. I suggest that that is a very valuable list indeed.

We understand that there has been some difficulty in accounting procedures, but at least there was some financial discipline. If the right hon. Gentleman and his staff found difficulty with those accounting procedures, they are certainly going to find difficulty in allocating overheads for signalling and track between passenger services and freight. All accounting problems are difficult and involve certain assumptions, but we should not fail to attempt them and then replace the whole thing by an open-ended subsidy.

Mr. Mulley

The real trouble about the accounting procedures for individual grant-aided lines was not that they could not be worked out according to the Cooper Brothers formula but that in all public discussion about closure proposals the public were never prepared to accept the very large figures which were always involved.

Mrs. Thatcher

I suppose the right hon. Gentleman has used that argument to go to a system of total deficit financing, and I would question the wisdom of that course. It appears that there is no financial incentive involved in the new system.

The second thing that came out of the 1968 legislation was that capital debt was to be written down to a level at which it was reasonable to expect that interest payments could be met out of revenue in the early 1970s. The debt, therefore, was written down from £1,562 million to £300 million. That was a very short time ago, but even that hope and expectation has gone. Within two years the strategy ran into difficulty, and has now been abandoned. That policy itself was wholly different from the one devised five years earlier under the Beeching plan. Within a decade there have been two policies and both have been abandoned. This is difficult enough for politicians, but it is even more difficult for those who run the railways. They must plan ahead if the service is to continue, and must have a clear basis and a financial programme on which to do it.

Looking at it from the consumer's viewpoint, we all know that yesterday there were fare and freight increases of 12½ per cent. and 15 per cent. respectively. The commuter well remembers the almost total dislocation of services last winter during the ASLEF work-to-rule when the passenger was expected to suffer, and did suffer, intolerable conditions. Yet he still has to put his hands in both pockets to pay—first for the season ticket, and then for the subsidy—and he was not getting anything that could remotely be called a service.

Before we give this Bill a Second Reading we shall want to be assured, on behalf of the travelling public, by the Minister of Transport or the Secretary of State for Employment that there will be no repetition of those events. Against the unusual background of there having been two U-turns in strategy in 10 years in a nationalised industry which is supposed to be a panacea for everything, we are now trying to plan for the future.

The heart of the Bill is in Clause 3, which alters the basis of support from specific grants to general deficit financing. I should like to say a word or two about general deficit financing. First, I believe that it is bad for the morale of those who work on the railways. During the first two years after the Transport Act 1968, when the railways made a profit, I had the impression that this was very good indeed for the morale of all those who worked in the service. They could hold up their heads and say that they were part of a flourishing and profitable concern, and the whole spirit and atmosphere of the industry seemed to change. Then they got back into difficulties again. I am wondering whether it is now right to go to a wholly open-ended subsidy system.

Clause 3 also refers to two EEC regulations and somehow conveys the impression that the doctrine of support for the whole system rather than specific support for separate parts is inherent in the two regulations. That just is not so. I have been all the way through both regulations, and the language is just as consistent, if not more so, with separate subsidies for a part, as it is for subsidies for the whole passenger system. Indeed, the regulation commences by condemning that which it goes on to permit. It begins: Member States shall terminate all obligations inherent in the concept of a public service as defined in this Regulation imposed on transport by rail, road and inland water way. Nevertheless, such obligations may be maintained in so far as they are essential in order to ensure the provision of adequate transport services. The whole philosophy appears to be that if one subsidises a part one must look at the effect on the whole. This is much more akin to the philosophy of the 1968 Transport Act than to a general subsidy.

Mr. Mulley

I do not know where the right hon. Lady gets the idea that we have changed the situation because of the EEC regulations. That is not so. The change comes about because of the nature of the system. I was extremely moved, incidentally, to hear the right hon. Lady speak so movingly about the troubles of the railways and the travelling public. I was trying to search my mind as to who was responsible for the railways at that time when they turned from a small profit to a deficit. It was the then Government and their actions from which the travelling public suffered.

Mrs. Thatcher

I know the right hon. Gentleman knows this Bill very well, but it appears he does not know quite as well the wording of the Explanatory and Financial Memorandum, which in relation to Clause 3 uses the curious language: Clause 3 repeals section 39 of the 1968 Transport Act under which the Secretary of State makes grants to the British Railways Board for individual unremunerative passenger services, and which has become otiose in view of the new methods of financial support for the whole rail passenger system established by the EEC transport regulations mentioned below. I think that conveys the impression which I indicated in my speech. I am trying to say that the EEC regulations are just as consistent with the 1968 system of support as they are with the one proposed in the Bill, and there should be no question of using the EEC regulations to justify the change of system. The choice of general deficit financing is that adopted by the present Government. I believe that the statement made by my right hon. Friend the Member for Yeovil on 28th November 1973 was rather different. He then said: Unremunerative passenger services should be kept in being as long as they are justified on social and environmental grounds."—[OFFICIAL REPORT, 28th November 1973; Vol. 865, c. 398.] My third point on Clause 3 is that grants appear to be limited, if that is the right word, to a maximum of £1,500 million over five years—an average of £300 million per year. It is difficult to justify this massive amount on the 1972 accounts, which are the only ones we have. I have been through those accounts, and, so far as I can see, in grants and loans the Government in that year gave between £150 million and £160 million to the railways. We are now asked for double that sum. In that year the grants for unremunerative services were £68 million. Those for maintenance of certain track and signalling equipment were £8 million. The grants under the 1972 (Grants) Act to compensate for price restraint were £27 million, the special grant consequent upon the July 1972 statement was £32 million, the infrastructure grant of a capital nature was £5.6 million, and the loan was £14 million. Now we face a Bill for about double that amount, or powers to subsidise up to double that amount, without any figures upon which to base our judgment.

Mr. Ronald Atkins (Preston, North)

Confirming what the right hon. Lady says, that we are trying to step up our contributions to the railways in line with what is happening on the Continent—I think that she has a point there—the fact is that help to the French railways and the German railways is respectively £500 million and £600 million. In fact, even in the Bill we are still paying very much less than Continental countries do to their State railways.

Mrs. Thatcher

I understood from the Minister that that did not take into account the massive capital write-offs which seem to occur with ever-increasing regularity. I gave the figure for the 1968 Transport Act. There is another write-off here, and that is another way of giving away very large sums of money. We would like to have some more detailed figures upon which to make a judgment.

My fourth point is that the clause provides for the Secretary of State to impose on the Railways Board obligations of a general nature as regards all or part of the railway passenger system. I wonder what general directions the right hon. Gentleman will give in the interests of passengers. He can also attach conditions to the payment. Can he say whether he has any specific ones in mind?

This clause and the next one give the Secretary of State considerable powers and will subject him to endless parliamentary Questions. I am not sure that Governments are altogether equipped to exercise these powers. It is often better to exercise powers by some financial discipline. Is the right hon. Gentleman satisfied that the administrative system in the Department can formulate and proffer the requisite advice? That is no criticism of those in the Department. It is more a query about the system itself, which sometimes seems to dominate us all. We lay a duty on the Minister to give directions to those who run the railways. Those who advise the Minister what directions to give do not run railways, probably have never run railways and may well profoundly hope that they never will. Can they do anything more than check their arithmetic and tell the board that the requisite sums amount to too much? If so, would not it be better if the board had a capital and revenue budget at the outset with a sum for contingencies within which it has to keep? Is not that position different from an open-ended subsidy? The danger with the right hon. Gentleman's chosen system is that it will be a green light for maximum wage and salary demands on the ground that the taxpayers will pay, however large the bill.

According to the Economist of 15th June 1974, British Railway's contribution to the transport system is 8 per cent. of passenger miles and 19 per cent. of freight-ton miles. The rest goes via road—

Mr. Leslie Huckfield (Nuneaton)

Nonsense.

Mrs. Thatcher

—or air. We are voting enormous annual sums which are demanded from the many people who never use the service.

The Minister may reply that he has extensive capital plans to enable the railways to be used more intensively, although he did not say that today. I understand that he is carrying on the old plans with the reductions made in the December announcement.

Hitherto, we have always assumed that the railways had some kind of environmental advantage over roads. That was the position until recently. Recently we have faced the prospect of having a new railway line built. I believe that it is the first for a century. Who should be the first to object but those who live near the proposed new railway line to the Channel tunnel? Upon what grounds should they object but environmental grounds? It may be that if we use our railways more intensively, like the Japanese run theirs—I gather that their system is equal to the size of ours, moving three times as much freight and six times as many passengers—the noise, vibration and air currents become so great that the environmental advantages may go altogether, especially when we remember that we are going in for high-speed trains and advanced passenger trains and on a new line with very short time intervals between trains.

It may be that we are too ready to assume that the environmental advantages lie with the railways. As we have not put in new railways people may have got used to living beside the old system at its old timetable frequency.

Mr. Peter Snape (West Bromwich, East)

The procedures given to members of the public to object against the high-speed railway link in connection with the Channel Tunnel are different from and more generous to the public than the opportunities given to them to object to motorway development. Will the right hon. Lady say what, in her opinion, is the number of objections received from members of the public who live alongside existing railway lines compared with the number received from people who live adjacent to motorways and heavily used urban trunk roads?

Mrs. Thatcher

I find that there is maximum objection to proposals for a new motorway. Hitherto, we have had nothing to compare it with, since there has been no proposal for a new railway until now, and I do not think that those living alongside the proposed new rail link will agree that they have had more generous time or opportunity for making their protest. Part of their protest is that both the time and the methods for objecting have been far too limited.

Having made those comments about Clause 3, I come to Clause 1, which is said to reflect the new accounting system whereby infrastructure assets previously on capital account will henceforth be charged to revenue account.

As the right hon. Gentleman said, hitherto track and signalling renewal has been accounted as capital. Now it will be accounted as revenue. There is a clearly understood commercial difference. If we maintain, it is revenue. If we replace with a brand new greatly improved system—large sections of track or putting in a new signalling system with computers—clearly it is capital. There can be no argument about that.

The change is occurring for a different reason. Even if it is accounted as capital, it will have to be written off in a few years anyway, so why not write it off as we go along by accounting it as revenue? Looking at it cynically, it might not be a bad idea. But it is not necessarily good accountancy practice.

Clause 2 deals with the capital programme. I have one small technical question on it. I expect that the Minister will say that it has been the practice for years and that I did not know about it, but there is no reference in the Long Title to the increase in the borrowing powers of the Railways Board. The Long Title does not deal with it. It says: A Bill to amend the law relating to the British Railways Board… Then it jumps straight to Clause 3 and the other clauses. Is that customary?

Mr. Mulley

I cannot claim to be an expert parliamentary draftsman, and the right hon. Lady has a distinguished legal past. Since the borrowing powers are part of the law relating to the British Railways Board, I think that those words enable us to amend the borrowing powers.

Mrs. Thatcher

It may be that words in italics never get into the Long Title, and some Bills consist almost entirely of words in italics. However, normally I should expect an increase in the borrowing powers to the extent contained in this Bill, up to £900 million, to be worthy of mention in the Long Title. I am sure that there is a good reason. We would like to know what it is because we never think about these matters until we have to do the work involved and then we discover all kinds of small points like this.

I understand that this increase is for the same interim rail strategy as that announced by my right hon. Friend the Member for Yeovil when he had responsibility. I assume that these borrowing powers are sufficient to take into account the rail link for the Channel Tunnel. However, we would like to know whether that is so.

I turn now to other activities of British Railways. One very profitable activity appears to have escaped attention. British Railways are major property owners. I understand from the 1972 report that they are one of the country's six largest landowners. The net rental income is about the same as that obtained from property owned by the Crown Estates and the Church Commissioners combined. The net receipts amount to £13.9 million. This income is obtained from a wide range of items on the rent roll.

I mention this matter to point out that there is a great deal of property in the hands of a wide range of people, because it is owned by nationalised industries as well as by pension and insurance funds.

The Bill provides further proof, if such proof is needed, that the nationalisation of an industry does not solve any of its problems. The railways have been nationalised for over 25 years, and successive Governments, both Conservative and Labour, have failed either to solve the railways' financial problems or to find a satisfactory way of reconciling reasonable freedom of management in the running of the industry with proper accountability to Parliament for the enormous public funds involved.

The Bill raises many questions and problems. It is accepted that there must be a substantial railway system. But must we always pour money in at this rate? There is no guarantee that the assets created will be used to the optimum extent. A significant phrase in the 1972 report, in the section on freight, states: The biggest loss resulted from industrial disputes… That was referring to disputes in other industries as well as on the railways.

We would like a flourishing railway service from the viewpoint not only of those who work in and have retired from it, but of those who use it as passengers or for transporting freight.

The Government have demonstrated their willingness to take all reasonable steps to this end and to commit the taxpayer to expending large sums of money. We now have to rely on those who run and work in the industry to ensure that those who use it will receive value for money.

5.3 p.m.

Mr. Tom Bradley (Leicester, East)

I warmly welcome the Bill.

Perhaps I should begin by declaring a personal interest. I am the President of the Transport Salaried Staffs' Association, which is the second largest trade union operating in railway negotiations. Prior to coming into this House I worked on the railways. If disaster overtakes me at the next General Election I presume that I shall have to work for the railways again. Therefore, I have a very deep interest in the future development and security of the railways' business. I believe that the Bill will help towards achieving those twin objectives.

I regretted the appearance on the Order Paper of the amendment in the names of several hon. Gentlemen opposite. Frankly, I think that it suggested a situation in the railways trades unions which does not exist. Many of those who are working and bargaining within the railway industry are moving towards a constructive approach to secure prosperity for the industry. We believe that we have an identity of interest with management. It is better to negotiate within an industry that is in the black than one that is always in the red. Therefore, those of us who are working for a constructive approach within the industry and for greater cooperation between the railway unions where differences exist are not helped in our work by the mischievous amendment which appears in the name of the hon. Member for Woking (Mr. Onslow), who obviously wishes to intervene.

Mr. Cranley Onslow (Woking)

I am grateful to the hon. Gentleman for allowing me to intervene straight away. I do not think that the House will necessarily judge my amendment as being mischievous. At least, it has served one useful purpose so far without my having to speak to it; that is, to extract from the hon. Gentleman the sentiments that he has just expressed. The more that he and his colleagues on the railways can live up to those high sentiments, the more likely the public will believe that they will get value for money. Perhaps the hon. Gentleman will take it from me that commuters, of whom I am one, have not so far had the assurances to which they are entitled on this matter.

Mr. Bradley

With respect, if the hon. Gentleman knew more about the railway industry and the trades unions that bargain within it he would have known not only my views but the views of Sir Sidney Greene and others who are doing their best to get the kind of approach that will produce the results that we all have in mind. However, the amendment has not been called, so there is little point in discussing it. I just wanted to make that observation.

The Bill represents, after many years of argument, a recognition finally that Britain needs its railways as much as its roads. The implications are that we should no longer delude ourselves that the railways can or should produce a profit in conventional accountancy terms. From now on we have official recognition that the railways' value in environmental, energy and social aspects is to be fully appreciated by annual payments tied to no rigid formula.

The post-war history of railways finance is well known. Some of it has been rehearsed by my right hon. Friend the Minister for Transport and by the right hon. Member for Finchley (Mrs. Thatcher). It is worth recalling, since the right hon. Lady referred to the patchwork of solutions that successive Governments have brought in in recent years to financial problems that have repeated themselves far too often, that much of this trouble started after the Conservative Government were elected in 1951 and began the process of breaking up the British Transport Commission and its subsidiary, British Road Services.

Prior to 1953 we had an integrated system of public transport, or at least the shell of an integrated system of public transport, which was beginning to produce results. It is no accident that in 1952 we saw the last surplus achieved after payment of interest by the then British Railways Board.

After 1952, following the break-up of the British Transport Commission, deficits appeared. They reached between £120 million and £150 million between 1963 and 1968. I agree with the right hon. Member for Finchley that those deficits are a dead weight on the industry and very bad for the morale of the staff. Even the massive financial reconstruction of the 1968 Act did not prevent the reappearance of deficits in 1971.

Since then—this is part of the answer to the right hon. Member for Yeovil (Mr. Peyton) who intervened during my right hon. Friend's opening speech—piecemeal and ad hoc solutions have been applied. The right hon. Gentleman even brought in the Civil Contingencies Fund to help on one occasion. This is not good. There was no philosophy and no financial strategy. The board, with its cash flow problems, was living almost from day to day. It was clear that we needed a thorough reappraisal of what had taken place not only in 1968 but in 1962.

It is no use the right hon. Lady complaining about the writing off of capital debt. Much of that capital debt was historic in origin and in no way reflected the true obsolescence of the assets it represented in the balance sheet. Much more certainly was needed for the financial strategy of British Railways. I believe that the Bill goes some way towards providing it.

I hope, too, that no one in this House imagines that there has been no attempt by the railway management itself to improve matters. There have been substantial staff reductions, countless internal reorganisations, the selling off of assets and tax manipulations, not to mention line closures and the curtailment of services. On the question of staff reductions, it may come as a surprise to the right hon. Lady and to others to learn that between 1962 and 1972 the number of British Railways' staff fell by 209,000; that is to say, from 439,000 personnel to, just under 230,000. With a staff displacement of that order over a decade, the wonder is that we have not had more industrial friction on the railways than we have experienced.

At the end of the day, after years of argument and barren discussion about road versus rail and the difficulties of trying to run the railways, as the Chairman of the Railways Board said the other day, like a grocery shop, the "make-it-pay" school of thought has been shown the hopelessness of its approach. There is now widespread acceptance that, along with most other railway systems throughout the world, and certainly any system operating passenger services, British Railways cannot be expected to act commercially, on the one hand, and, on the other, provide many social services. The present chairman once said that it is like trying to hit two targets with the same bullet. It cannot be done.

It is fair to say—and I am glad that my right hon. Friend acknowledged it today—that the previous Government were coming round to this view. The right hon. Member for Yeovil underwent a considerable conversion during his period of office as Minister for Transport Industries, and in his statement last November he accepted that the existing network should remain virtually unscathed, and he held out a new investment prospect of £891 million over the next four firm investment years. British Railways, on the other hand, had asked for £1,800 million over nine investment years. We then had the Chancellor of the Exchequer within weeks saying that there would be a 20 per cent. reduction in the programme announced by the right hon. Member for Yeovil.

I wanted to hear from my right hon. Friend today what was our Government's view of that situation. I thought that my right hon. Friend was a little vague on this. It is worrying to hear the Chairman of the Railways Board and some of his colleagues say, as they did only last week, that they are still awaiting a statement about the level of investment for British Railways next year. They do not even know their investment limit for next year. We understand that this year the figure is to remain the same as that fore shadowed by the right hon. Member for Yeovil, but that is not good enough.

The real basic key to railway success is proper, large-scale—indeed, substantial—investment; otherwise the railway system will rot and decay whatever kind of current financial assistance may be brought in by this or any other Government.

Mr. Mulley

It is true that we have not given the railways an investment figure from 1975 onwards, but nor has any other part of the public sector been given its figure. The Government came into office in March and inherited a serious economic situation and problems in the public sector. We are still working out our programme from 1st April. If we had picked out the railways it would have been the only public sector industry that had been selected, and that was not possible.

Mr. Bradley

I am obliged to my right hon. Friend for his intervention. I am not decrying his efforts or heaping scorn upon him. He has done well to get the Bill past the Treasury, and I think that he has done extremely well to convince his more senior colleagues in the Government, who preside over Departments competing for scarce economic resources, that the railways should be put in this privileged position. I hope that my right hon. Friend will not think that I am rebuking him, but I remain of the opinion that the situation for future investment is vague. I hope that we shall receive early clarification of the position, because the British Railways Board must know not just next year's level of investment limit but that for the following years throughout the decade. The board produced a carefully reasoned policy review in June last year setting out the aims and describing the targets and the financial resources needed to obtain them.

It is generally assumed in the Bill that the new grant support system which the Minister is introducing will involve payment of up to £1,500 million over the next five years. It is assumed that this refers exclusively to pasesenger services. Is that correct? I have no quarrel with the repeal of the grant arrangements previously made under section 39 of the 1968 Act, which focused on individual unremunerative services and their replacement by Common Market regulations. I welcome this not only as a good railwayman but an unrepentant European, and I am rather sorry that the right hon. Lady disturbed my confidence on that matter by going into some complex details to suggest that the Common Market was not involved in the way in which the Minister was operating. At any rate, as I understand it, this system obtains in France and Germany. The regulations are designed to compensate railways for public obligations on a much wider basis and are an advance on previous thinking about specific grants for individual unremunerative lines. Anyway, the money is there, and whether it is to do with the Common Market or anybody else does not concern me now.

What will be the impact of this on passenger services under notice for withdrawal? Will they be reprieved? The Minister said this afternoon that they are under review. I hope very much that they are under sympathetic review. To take it a little further, will some marginal services already closed be reinstated? Many areas in my constituency locality of Leicestershire have had more than their fair share of closures, and local people will have every right to feel angry if new investment and support is concentrated exclusively on the advanced passenger train inter-city concept which affects only a small section of the community, principally business men travelling on expenses.

I assume, however, that some part of the new money, together with the increased borrowing powers, will be devoted to freight services. The new accountancy procedure foreshadowed for track and signalling expenditure, charging to revenue and not to capital account, leads one to believe that there is to be some subsidy somewhere for freight operations, and again I have no objection to that. Just as it is right to convey people more cheaply than the real cost into urban centres by public transport to relieve road congestion, so it is right to divert some freight traffic from road to rail of a merchandise character where clearly environmental and congestion factors are involved.

The Minister must beware of the negative approach of railway management to freight traffic. It is deliberately working itself out of the conveyance of freight except for the company train and merry go-round type of traffic. The wagon load concept was first denounced by Dr. Beeching as long ago as 1963, and the decline then set in accompanied by the closing of many marshalling yards. The railway policy review issued last June forecast the disappearance of another 45 million tons of this type of wagon load traffic by 1981. There are many within as well as without the industry who question this judgment. They do so on energy, economic and road congestion grounds.

Under Clause 4 the Secretary of State can take powers over certain aspects of railway policy. I hope that he will exercise those powers in extracting from the railways their firm intentions relating to conveyance of freight traffic. I believe that my right hon. Friend the Secretary of State will realise that there are many people who want to see more traffic diverted from road to rail, even though it may be only a small amount—2 per cent. to 4 per cent. of the present total conveyed by road traffic is suggested to be within the category of being suitable for transference to rail. Transference of some unsuitable loads now conveyed by road and causing congestion not only would be a useful contribution to relief of that congestion and a help to the environment but would also assist railway finances in a positive way.

On the general question of ministerial supervision of plans, is my right hon. Friend aware that difficulties in the past have arisen because of the chronic delay by his Department in reaching conclusions? There is an urgent need to get to grips with the long-term planning and investment requirements.

I do not in any way question Government commitments to moving traffic from road to rail, and I understand that my right hon. Friend the Minister is already talking—he has today confirmed that this is so—to the famous 100 firms first promulgated by his predecessor last November. He has in mind to try to persuade or convince them of the need to convey more of their traffic by rail. But the first firm he should talk to is the National Freight Corporation. The remit of that firm was quite clear under the Transport Act 1968, yet those of us working in the industry know that one of the corporation's subsidiaries, National Carriers Limited, goes it alone and is now a fierce competitor of British Railways, as well as being a customer and supplier of traffic movements to British Railways.

This is not good enough. That position was not envisaged in the 1968 Act. The National Freight Corporation and British Railways were to work hand in glove, but that has not happened. I had serious reservations about the 1968 Act when it was before the House, and I invoked the support of even the right hon. Member for Yeovil (Mr. Peyton) when I deplored the transference of Freightliners Ltd. to another company under the aegis of the National Freight Corporation, and I believe that my reservations have been borne out by the practice that has developed in recent years.

I hope that my right hon. Friend will look carefully at the amount of traffic now being trunked by National Carriers Limited by lorries throughout the length and breadth of the land. It was originally intended that this traffic should be given to the railways for them to convey.

The National Freight Corporation should be the number one firm on the list of 100 firms, but I suspect that it is not on the list at all.

There is also the question of Freightliners Limited. It was always a mistake to take that firm away from railways management. Sir Stanley Raymond said that it was the brightest jewel in the railways' crown. It was a shocking error of judgment, in my view, to separate the selling and operation side of the same business and put them under different managements. It has not worked. I greatly hope that my right hon. Friend will one day bring it back entirely to British Railways, where it properly belongs. I realise that I cannot go into that matter now in great detail because to do so would be to attempt to go wide of the terms of the Bill. However, Freightliners Ltd. is a 49 per cent. owned subsidiary of British Railways, and it made a profit of £1 million in 1973, after a deficit of £500,000 in 1972. What provision is being made to assist Freightliners Ltd. with future investment? What replacement capital is to be provided for new wagons? We could reach a situation where trains run by Freightliners Ltd. may have to be taken out of service in the interests of safety of operation.

If we are trying to increase utilisation of the railways, as I believe my right hon. Friend is seeking to do, it would be tragic if Freightliners Ltd. were now to be starved simply because it is a 49 per cent. owned subsidiary of British Railways. Where does Freightliners Ltd. figure in all this? What are the future investment intentions in this connection? I got no help from the right hon. Member for Yeovil regarding this when I asked him a Question on 21st December last. Apparently, Freightliners Ltd. has to get all its investment support from the National Freight Corporation, the 51 per cent. holder of its stock.

Freightliners Ltd. has less than half the number of nation-wide depots that it was originally promised years ago. It is little wonder, therefore, that it is not yet able to provide a nation-wide system of large-scale movement of freight, as originally intended. I greatly hope that my right hon. Friend will bear these points in mind in his considerations.

Another National Freight Corporation company, Hanson Haulage (London) Ltd., formerly a large user of Freightliners Ltd., is now transferring traffic to heavy road trunk haulage lorries. This could be avoided if more capital were given to Freightliners Ltd.

The Bill is most welcome. It is a step in the right direction, but I remind my right hon. Friend that it deals with only one part of the nation's transport problems. The railways' activities ought to be integrated with other transport operators under national scrutiny, covering planning, investment and operations. A White Paper setting out the prospect of coordination in this respect would be as welcome as the Bill itself. A White Paper was promised by the right hon. Member for Yeovil last November, but long before that, in July 1972, I asked in the House for a White Paper. That promised White Paper did not materialise under the last administration.

I hope that we can look forward to a statement from my right hon. Friend in the near future as to how he proposes to achieve greater co-operation within a bigger sector of public transport. In the meantime, I welcome the Bill as a useful provision to assist British Railways with their recurring financial problems.

5.28 p.m.

Mr. John Peyton (Yeovil)

I have no quarrel with most of what the hon. Member for Leicester, East (Mr. Bradley) has said. I was interested to hear him comment on the need for a White Paper on transport. Innocent as I am in these matters, I had been led to believe, by a constant barrage of often silly Questions that I was asked about producing a White Paper on transport policy, that as soon as the right hon. Gentleman the Minister got into office he would have done some work on this subject over the years—when he had little to do in opposition—and might now have been able to produce a learned document which would shed new light on our transport problems.

I congratulate the right hon. Gentleman on the fact that he has rediscovered during his period in office some of the facts of transport life which had become hidden from him while in opposition.

I wish I could congratulate the right hon. Gentleman wholeheartedly on his speech, which no doubt out of consideration for the convenience of the House was short and meagre. He obviously thought that he did not want to cause the House great labour in thinking about the weighty information he had given us, so he spared us any such heavy diet. The hon. Member for Leicester, East, in a characteristically polite way, said that the right hon. Gentleman was a little vague.

I constantly regret and lament the fact that after the war the Labour Party launched itself into a campaign for spreading public ownership as wide as possible for purely doctrinaire reasons and without any thought of the wider considerations of the public interest.

I remember on one occasion when I was answering a Question at the Government Dispatch Box I said that I had never concealed what was my view—namely, that to impose public ownership upon great industries like the railways was a fiasco. There was a splendid reaction from none other than the right hon. Gentleman the present Secretary of State for Industry, under whose hand most of British industry languishes as the unwilling recipient of some of the silliest advice that has ever fountained out of a single human being. I recall on that occasion the right hon. Gentleman getting to his feet, his countenance blazing with a mixture of indignation and asininity as he defended this wanton assault by me upon what he regarded as the Ark of the Covenant.

The really serious matter concerning the nationalised industries in general is that though there have been a lot of waffle and many high-sounding phrases about objectives—that these industries should pay their way, taking one year with another, and so on; that they should serve this, that and the other objective—nevertheless, the means of securing those objectives and the means of controlling the investment put into the nationalised industries have been only of the most gossamer-like kind. We still have never got near to answering the question, once we had saddled ourselves with ownership: how does one control them effectively without at the same time inhibiting management? What on earth claim—I am not being personal here—has the right hon. Gentleman the Minister, or I myself, to substitute our judgment at any time for that of the management of the railways? Furthermore, what possible ground has the Treasury for its judgments upon railway investment matters?

I hope that it does not matter if I mention the name of a firm. Not very long ago representatives of British Insulated Callender's Cables came to see me with a view to asking that railway orders he more evenly spread over the years. I asked them to let me have a rough graph of the orders that they had received from British Rail over the past 10 or 15 years. The resulting picture was ghastly. It showed no continuity—even in the matter of cable, which the railways and everyone else could have foreseen as a continuous requirement. Although I put no blame whatever upon the right hon. Gentleman for it, the fact that it has been disclosed again this afternoon that the railways' investment for next year has still not been settled—and this at a time when long leads are common—is simply fatuous.

I have sat in the right hon. Gentleman's seat. I know how very much easier it is to talk than to do. But I really believe that there is room for a very sustained effort on the part of Ministers to stop this stupid, short-sighted attitude towards investment in the nationalised industries.

Mr. Mulley

I am glad to have the right hon. Gentleman's endorsement of the problem. In the short time that I have held my office, I have discussed this matter with the board. What we cannot give the railways now is the total figure for the next five years. But we can agree—we are working on this basis—on some of the long lead problems and long-term orders for rolling stock, and so on, which will be well below the absolute final figures. That can be done, and we intend to do it.

Mr. Peyton

I am glad about that, and I wish the right hon. Gentleman every success in his sorties to the Treasury.

Mr. Bruce-Gardyne

Is there not a very fundamental difference? So long as we have a vast public sector and vast nationalised industries, it is absolutely inevitable that the Treasury will use those nationalised industries for purposes of fine tuning, so long as the Treasury indulges in fine tuning. It is crying to the moon to expect otherwise.

Mr. Peyton

"Fine tuning" is a lovely phrase.

Mr. Bruce-Gardyne

That is what the Treasury calls it.

Mr. Peyton

The Treasury may call it "fine tuning", but it deserves some other rather clumsier and cruder term.

The one basic factor that must be faced by all of us who have been concerned with railways over the years since the war is that no one has got it right yet. We tend to go on using rather optimistic phrases, suggesting that it will all be better next time. From the national point of view, my major fear is that we might be left in the 1980s with a derelict system which is still labour-intensive, with the overwhelming and depressing feature of constant, recurring and increasing operating deficits.

We do not have a great mass of alternatives. We did not have a great mass of them when I was in office, and I do not think that the right hon. Gentleman has many, either. It is certainly a choice between evils. We could go for a smaller system. If we were to do that and to achieve at the same time any worthwhile economies, it would involve a wholesale lopping of the system and not merely a paring of the so-called unremunerative services. If it is rejected—I have never heard this policy seriously advocated—I believe that to go for the alternative of simply paring off, if one can recognise them, those services which are said to be unremunerative, or, having identified them, supporting them in some special way, leaves a lot to be desired. First, it spreads a great deal of uncertainty throughout the industry. Secondly, decisions are probably made for the wrong reasons and at the wrong times. Thirdly, the effect upon the services themselves is thoroughly bad.

Railway management would naturally be reluctant to invest either money or management resources in a line or a service which was under sentence of closure or likely to suffer from such a sentence. Therefore, even if the Government were to decide, or had decided, to resort to a programme of closing a proportion of the present unremunerative services and of supporting the rest individually, this would not be a wise policy. It would not be a wise policy partly for the reasons that I have given—that it is prejudicial to the services—and partly because it is so very difficult to identify and to distinguish between a service which is said to be unremunerative and a service which is said to be profitable. In considering the railways, it is very difficult to get away from the fact that they are a network, and to separate out individual services is often a very fallacious and time-wasting exercise.

The only sensible alternative is a reasonable investment policy over a period of years which will allow the railways to plan ahead. If such a policy is not adopted, the alternative will be a continuous tide of increasing operating deficits.

I believe that the Government are, broadly speaking, right to choose that course. It had already received the endorsement of the previous Government. The Government are also right to follow the line we took in attempting to persuade major users of road transport to see whether they cannot get some of their freights back on to rail.

I do not know what advice the right hon. Gentleman received from his right hon. Friend the Secretary of State for Social Services, but if he received advice from her to the effect that he should look after that child of hers called quantity licensing he was very wise to reject her advice. It would have had involved him and his Department in such an exercise of bureaucratic cobwebs as would have made no sense and benefited no one.

I am glad, too, that the right hon. Gentleman has continued along the course we were ourselves to take of regularising the pensions position, which had become totally disgraceful. There, I am afraid, my congratulations must cease.

I am very sorry that the right hon. Gentleman had nothing to say about fast trains. What about the Advanced Passenger Train? What is the Govern-men's view about this train? If money is to be invested in a modern railway system, it is as well that one should have in prospect at least some new fast trains. The advanced passenger train—at least at one time—had very good prospects. It has since run into all kinds of troubles, particularly where industrial relations are concerned. I urge the Government to make their views clear as soon as possible about the future of the advanced passenger train.

My right hon. Friend the Member for Finchley (Mrs. Thatcher) referred to the question of railway property. I confess that during the three and a half or four years that I was responsible for transport one thing I was determined to do, if I could, was to get a sensible development of property over what is now a slum—Liverpool Street, right in the middle of the City of London. We must remember—and without pride—that one of the few league tables in the world which Britain heads is the table of office rents in the City of London. We have done it all ourselves. How stupid… How absolutely absurd…

A combination of the Department of the Environment, the Government, and the Greater London Council, was sufficient to inhibit any progress here. Yet one would have thought that it would be a very desirable project to develop sensibly the airspace over Liverpool Street to produce decent office accommodation to save thousands of people, every day, the tiresome necessity of having to take a second journey once they have got to Liverpool Street. We talk about commuters. Why do we not try to do something sensible?

Yet so great is my patience, so unlimited my tolerance, that I was quite unable to make any substantial progress over such a substantial matter. I wish the right hon. Gentleman better success than I had, but he will meet opposition of the stupidest and most tiresome kind.

I come to the question of trade union attitudes. I know very well just how difficult it is, in a declining industry, to make change not too painful for men who have a great sense of the industry they work in and the importance of their rôle in it; because the rôles of these men have nevertheless altered.

One of the things that we in Britain are inclined to suppose in a rather sloppy way is that wherever there is a grievance, no matter how artificially fanned that grievance is, there must always be an immediate and expensive redress for which the public will have to pay. I do not believe that that premise holds water. I recognise the sensitivities of the drivers, but in many cases in their attitude to the public there has been a woeful disregard of the damage that they have inflicted on the national interest.

Mr. Leslie Huckfield

Does the right hon. Gentleman also conclude that the drivers' attitude has been helped by the complete unwillingness from time to time of the Chairman of the British Railways Board to talk to them?

Mr. Peyton

Every now and again one's own folly is totally proved to one. When I gave way to the hon. Member for Nuneaton (Mr. Huckfield) I had an awful feeling that I was wrong to do so. The hon. Gentleman proved it in one sentence.

I want now to say a few words about railway management. Let us remember that we in Britain believe—I know not why—that we can pay men in high positions less than the market rate and still get the very best of service. We are very lucky in what we get. I wish to take this opportunity of saying how much I enjoyed working with Mr. Richard Marsh. It is not easy to go from this House and become a chairman of a nationalised industry and find oneself working with someone whose political views one does not share. I salute the work that Mr. Marsh has done since he has been Chairman of the Railways Board, and I wish him well for the future.

I believe that we must be very careful about the way we treat the management of nationalised industries. I have never made any secret of what my opinion of this abominable system is, but I do not in any way allow that to influence my views of those who have the really difficult task of management. Not only do they have the normal problems of industry, though they have some of the more obvious and useful disciplines removed from them. At the same time they have to respond to the pressures of politicians and Government Departments to an intolerable extent. They have my greatest sympathy. They have my greatest sympathy, and when the Minister referred to a comprehensive monitoring system, I do not doubt that those words will send a chill through the spines of management. That will almost inevitably add up to a time-wasting exercise from which no one will benefit, but which will generate a great deal of irritation.

It would be as well if I made one mention of the Bill. I am always agreeably surprised by the way in which certain phrases crop up. Clause 3(1) says: The Secretary of State shall be the competent authority". I profoundly hope that he will so prove, but have the gravest doubts, and I hope that those words will not encourage either the Secretary of State or one of the other Ministers to meddle and interfere too much.

May I conclude by referring to the public? Last year and the year before the commuting public were treated intolerably. They were bullied and pushed around and they had no kind of service. They were not the "bowler-hatted brigade", as they were sometimes described. They were poorer people who could not afford their own transport. They came from a large area around London and day in day out, if they could get a train at all, they had to endure agonies of discomfort. There was hardly a word of apology or consciousness of that. If we are to survive in this country we need certain new attitudes and one of them has to be an absolute determination on the part of the railway staff to serve the customer instead of everyone grabbing what they can for themselves.

Mr. Deputy Speaker

Before I call upon the next hon. Member may I remind the House that there are a considerable number of hon. Members who wish to be called in the debate? Short speeches would be helpful.

5.53 p.m.

Mr. Peter Snape (West Bromwich, East)

In accordance with the traditions of the House, I wish to declare that until my election recently, and since leaving school, I was a railwayman, and I am still a member of the National Union of Railwaymen.

It was sad to hear the right hon. Member for Yeovil (Mr. Peyton)—a man who is held in great respect by Britain's railwaymen because of the work he did as Minister for Transport Industries—propound a speech, this afternoon, which can only be described as what will come to be known in the next election campaign as "Wedgery-Bennery". It was sad to hear what has become so typical these days—an attack on railwaymen in general and drivers in particular.

We are sometimes apt to forget the growth in passenger and freight transport. It increased between 1950 and 1960 by about 55 per cent., and in the decade from 1960 to 1970 by a further 62 per cent. The increase in freight and passenger traffic masks a big decline in bus and rail travel, because it is virtually all accounted for by an increase in car mileage. The growth in freight traffic in that period has not been quite so rapid. Between 1962 and 1970 it increased by about 30 per cent., all that increase being carried by road, while the railways recorded a significant fall in their carryings—down by about 50 million tons a year since the end of the 1950s. The situation is therefore that road freight traffic has increased by about 52 per cent. while rail traffic has declined by about 20 per cent.

During that time successive Governments, both Conservative and Labour, decided to concentrate on the motorway building programme and about 1,100 miles were built. We are still being urged from various quarters to construct even more. Surely it is becoming increasingly clear, no matter how many more miles of motorway we build, no matter how much public money—and the Conservatives should remember that it is public money—we pour into the road building programme we shall never satisfy the insatiable demands of the British Road Federation, the motoring organisations and the vast panoply of public relations that people like that can drum up to advance their ideas.

My right hon. Friend the Minister and right hon. Members opposite referred to the past remit of the railways and its consequences. The right hon. Member for Finchley (Mrs. Thatcher) dealt in some detail with the effects of the Transport Act 1968. She will not be surprised when I say that the railway trade unions were very much against some aspects of that Act. They warned of its likely consequences. For the sake of the short-term removal of British Railways' debt the Act sought to introduce an integrated transport system within the railways. Freightliners and National Carriers Ltd. were competing in a nonsensical way for the same traffic. Perhaps the lack of road-rail integration in this period was best summarised by Mr. Bosworth, the BRB's Deputy Chairman, who told the Select Committee on Nationalised Industries in its 1973–1974 Session that the 1968 Act provided for something called the Freight Integration Council, but that that body had failed to reach any satisfactory results. Its failure to reach any satisfactory results can be seen on any main road in any big city today.

We shall all have some difficulty in speaking on the Bill, because it came without warning. It was not preceded by the usual White Paper. I give it a qualified welcome, but I have some questions for my right hon. Friend. Earlier, he mentioned that investment in the railways would be as agreed by the previous administration, which I presume means the £891 million announced in November and reduced by 20 per cent. in December. Does the Bill include that £891 million, less 20 per cent., or are we talking of something else? Is my right hon. Friend satisfied that the railway policy review last year represents the best value for money, in terms of improved services to the public, and will it achieve its declared aim of switching freight from road to rail?

The Bill refers to £5 million being used to encourage firms to build private sid ings. I am tempted to ask how many minor roads, let alone major roads, £5 million would buy. That sum is totally inadequate for the purpose and should be drastically increased.

There is little mention in the Bill of capital expenditure for new rolling stock. In the decade 1962–72, expenditure on rolling stock declined, in real terms, from £68 million to £17 million. In carriage sidings and motive power depots throughout the country tonight, the inevitable process of cannibalisation will be taking place so that maintenance staff can turn out enough rolling stock to take to their place of work the commuters to whom the right hon. Member for Yeovil referred. The success of the fitters and maintenance staff will need the cooperation of the train crews—that much-maligned body of men. It will be necessary for both drivers and guards to flout many of the rules laid down by the British Railways Board to get commuters from A to B.

One of my hon. Friends said that the number of staff employed by British Rail declined from 439,000 in 1962 to 256,000 in 1972. He could have gone back even further, and pointed out that in 1952 the then British Railways employed 601,381 staff, according to Stationery Office statistics. It is estimated that in 1981 there will be 190,000 people employed by British Rail. Can the right hon. Member for Yeovil think of any other industry that could have suffered such a drastic cutback in staff with so little industrial trouble?

We have heard from both sides of the House about future investment proposals. The Government have rightly announced investment proposals for the National Coal Board—a welcome indication of long-term planning. Readers of the quality Sunday newspapers will be aware that things are somewhat different for the British Railways Board. The 2,000-odd freightliner vehicles in service on British Rail have been the subject of no fewer than 17 different contracts. What sort of financial insanity is it that we continually inflict on the management of nationalised industries?

There has been little mention this afternoon of the energy crisis and the need to conserve oil supplies. There is little mention in the Bill of the need for further electrification, particularly of the East Coast main line and the many very important cross-country routes. What is the Government's policy on future electrification?

I turn to the question of pay. The right hon. Member for Yeovil will be aware that the morale of railwaymen is extremely low, and has been for many years. We cannot expect men to go to work at 1 o'clock, 2 o'clock, 3 o'clock and 4 o'clock every morning for the sort of money a junior shorthand typist can earn in any of our large cities. The right hon. Gentleman spoke of the need to pay management its full whack. He and other right hon. and hon Members seem to forget the need to pay the rank and file railwaymen their full whack. All grades on British Rail have an important part to play in maintaining its services.

When some Conservative Members talk about drivers or other railwaymen holding the country to ransom, do they never consider the advertisements in the London Evening Standard? There was an interesting one only last week, offering the fairly princely rate of £55 a week for Bunny Girls. That is more than twice the salary of a guard on British Rail, nearly twice the salary of an engine driver, and more than the average earnings of both drivers and guards, despite their arduous, long and unsocial hours. I ask Conservative Members to reflect on the values of the society we have created, when they criticise drivers on the Southern Region and elsewhere who are heartily sick of doing an arduous job for virtually peanuts and who withdraw the only commodity they have to withdraw, which is their labour.

I commend a number of points to the Government for their consideration in framing policy. There are cogent energy resources, land, pollution and safety arguments for developing the railways. Not only the spirit but most of the 1968 Transport Act must be reversed if the railways are to serve the country effectively.

The railway freight services are in grave need of being revamped in response to public concern about the harmful effects of road freight traffic. The railways will have to be regarded as the principal form of fast land passenger transport for the 1980s. New high-speed routes may well be required.

The Department of the Environment needs an overall strategy for planning national transport investment. The Government should lay down specific objectives for British Rail's standard of service and performance. We must have an end to the constant change of political attitude, the constant interference in what the right hon. Member for Yeovil rightly called management's prerogative in the day-to-day operation of railway services.

What we need is a declaration of faith in a great British industry, and far more investment in not only an essential part of our future economic strategy but what must be the transport system of the immediate future.

6.8 p.m.

Mr. Paul Tyler (Bodmin)

Like the hon. Member for West Bromwich, East (Mr. Snape), I wish to refer to my own interest in the rail system. It is a rather different interest from the hon. Gentleman's, in that I am a very small shareholder in the Dart Valley Light Railway Company. In the past few days I have heard, to my great pleasure, that the company made a profit last year and that I shall receive a dividend of about 60p.

My other special interest in transport at present is evidenced by the state of my feet. I spent some time over the weekend marching round my constituency on a 35-mile sponsored walk along the coast. That has taken its toll. An additional interest is that I come to the House on a bicycle.

I hope that the House will appreciate, from this, that my interest in the rail industry is not only as an industry but as an important environmental and social service. It is on that part of the implications of the Bill that I wish to concentrate.

It would be wrong to concentrate too much on the figures presented to us, and those which have been interpreted from the Bill, without appreciating that the Bill also represents a shift in emphasis on the purpose of, and the relationship between, policy and implementation in our rail system. Indeed, hon. Members who have spoken so far have avoided the temptation to do so.

I was pleased to hear the Minister say that the rail industry was not a normal nationalised industry, that it had wider social and environmental objectives than most nationalised industries. I am sure that hon. Members on both sides of the House would endorse that view. Having said that, I must add that it is important that we do not interpret the word "environmental" too narrowly. I was slightly disturbed to hear the right hon. Member for Finchley (Mrs. Thatcher) refer to the dismay caused to local residents by the introduction of a new railway, interpreting that as an environmental objection.

The reason that many of us feel that the rail service is environmentally more desirable, per se, than the road system involves much wider considerations. For example, I believe that it takes 40 acres of farmland to construct a motorway, but to electrify an existing rail track takes up no extra land. When every part of the total acreage of British agricultural land is potentially of enormous importance, especially for import saving, and when our balance of trade must be a major economic consideration, the saving of land is crucial.

The hon. Member for West Bromwich, East has mentioned that the rail system is more economic than the road system in that it transports more goods and more people, in terms of the use of resources, such as fuel and energy. That must be a consideration that is uppermost in our minds.

Nevertheless, we cannot escape the fact that the figures that are being presented to us and to the public are considerable. The Guardian on 14th June, in commenting on the introduction of the Bill, did a slightly complicated calculation and came up with the answer that the annual levy on the population of this country—including children—in supporting the rail system was approximately £10.40p a year. The Guardian's leader then said: Does this seem too much to pay to keep a means of transport which almost everyone uses in one way or another or at one time or another? I think that most hon. Members will agree that it is not. Nevertheless, the money must be seen in relation to the way in which the Government and Parliament control the use of it. It is right that most hon. Members who have spoken have concentrated on that point.

Are we developing a sufficiently efficient system of control and monitoring to ensure that these considerable sums of public money are being used to the maximum possible public good? I think that the Financial Times of 14th June hit the nail very effectively on the head. In its leader, whilst referring to the Minister, it said: He is now faced with the task of devising an entirely new working relationship between the Government and British Rail, which hitherto has been a free-standing public corporation with, in theory at least, a clear set of objectives. Now that the Rail Board is charged with running of what is openly acknowledged to be a 'social service', arrangements will have to be worked out whereby the Treasury and Parliament can be assured of the maintenance of financial discipline and internal morale but which also allow the railways to operate with a reasonable measure of managerial freedom. I believe that that will become increasingly important as the years go by. What may seem to be a day-to-day managerial decision may have implications which go right through the transport system and have wider considerations in terms of energy conservation, the allocation of land use policies and our whole social and environmental future.

Therefore, it is right that we should look back a little on previous attempts to grapple with the difficult problem of the relationship between Government and Parliament and an industry of this sort. It has already been pointed out that the Minister's proposals are a retreat from the policy which was set out in the 1960s. In 1960 the Select Committee, which was chaired by Sir Toby Low, recommended a new policy. That policy eventually came to fruition in the White Paper of 1967 and the Transport Act 1968. That policy was to identify, as we all know, those services which were viable and those services which had to be retained but which were not viable and had to be subsidised.

A different system has been proposed this afternoon and it is for the Minister to convince us however sympathetic we may be to his objective, that the system has been thought out, including the way in which the public interest will be preserved as the money is spent. There have been examples where what may have seemed at the time to be day-to-day managerial decisions on the part of railwaymen have turned out to be wasted investment—for example, the Carlisle marshalling yard, the Bletchley flyover and, possibly, the Manchester-London electrification. There have been examples where not a penny has been returned. Further, there are on the horizon major decisions that must be taken.

What will be the form of the Channel Tunnel? Is it to be an extension, of the rail system or an ancillary to the motorway system'? This is not just a rail matter but a matter for the Government, for Parliament and for the country, Similarly, we must consider the new market at Nine Elms. I understand that at present there is no provision for a railhead, despite the fact that the growers of the most beautiful flowers and the best horticultural products which come from my constituency, from the Tamar Valley in Cornwall, would find it most convenient to have their produce travel by rail. It is important, when a decision of that sort is taken, that not just British Rail should be involved in the eventual outcome but also the wider public sector.

Reference has been made to the item in the Bill which refers to private sidings and the money that is being made available for that purpose. I believe that it is important that the money and its use should be discussed in the open. I understand that European experience of this type of subsidy has not been entirely helpful and does not necessarily prove that it is the right way to proceed.

I was interested to hear the right hon. Member for Finchley refer to the development of property which is owned by British Rail, as indeed did the former Minister, the right hon. Member for Yeovil (Mr. Peyton). The property owned by British Rail is already enormously valuable and potentially of greater value from a financial point of view, but it is in the centre of most of our major cities and it could be a potential disaster from a social and environmental point of view if it were sold off to the highest bidder. It would be scandalous if an industry such as the rail industry were to have its property put up for sale for private development. Some of the prime sites in the centres of our cities might be appropriate for office use—perhaps but not necessarily some of the Central London stations—but some of the property further out in London, such as large marshalling yards, could be used for housing. Some of the land could be used for housing railway workers and transport workers generally.

The Chairman of London Transport took an important initiative last year when he drew attention to the land that was held in stock by London Transport. I hope that British Rail will also think about the property that it holds and that it will not be only the financial considerations of British Rail that will come top of the priority list. The wider interests of the public must also be considered.

In Clause 9 there is a suggestion that the chairmen of consultative committees should be paid more money. I believe that more money should be paid to those who do more work. I find it disappointing that there is not a proposal in the Bill to extend the rôle of such committees so that they could consider the fare structure of the railway system. There is a considerable public interest to be considered and we should ensure that that interest is helped through the Bill.

It will be apparent from my comments that, while I accept, as I am sure my right hon. and hon. Friends do, the overall objectives of the Bill, I have some misgivings about the readiness of Government and Parliament to undertake a new monitoring and controlling rôle. I believe that there may be a case for a Select Committee on Transport to look at these wider interests. If that is not practical, perhaps there could be a special standing and continuing sub-committee of the Select Committee on Expenditure to consider the subject.

Mr. Onslow

Would the hon. Gentleman consider the possibility of the Select Committee on Nationalised Industries filling the bill?

Mr. Tyler

I have considered it. With my limited experience, I have not had the pleasure of being a member of that Committee. However, I think that if we accept that the railways are a peculiar nationalised industry needing special treatment, as the Minister said, the best way to deal with the wider considerations which the railways may have for the whole of environmental and social policy may not be in tandem with the other nationalised industries. I would prefer the matter to be the subject of a special Select Committee, if possible, dealing with the relationships and comparisons of the railways to all other forms of transport. This would be preferable to treating the railways as just another nationalised industry, for they have little kinship with the other nationalised industries.

I welcome the Bill, and I hope that in Committee we shall have further evidence of new thinking by the Government about the way in which control of these vast sums of money is to be monitored by the Government and the House. I believe that we have a great opportunity to set the rail system in a new direction, with a new sense of purpose. I believe that it would be totally wrong if we simply told the engine driver to drive like hell in whatever direction he chose to go.

6.22 p.m.

Mr. Leslie Huckfield (Nuneaton)

I am a member of the Transport and General Workers' Union, but I speak today in my capacity of undertaking parliamentary liaison for the Associated Society of Locomotive Engineers and Firemen.

I welcome the Bill. I think that my right hon. Friend is to be congratulated, in particular, in fending off the pruning knives of the Treasury. He has preserved an expenditure which had to be projected forward over the years. Bearing in mind that we are living in an atmosphere of severe public expenditure cuts elsewhere, for him to have preserved this amount of the public spending programme in his part of the Department of the Environment over the next five years is quite an achievement.

I welcomed the Transport Act 1968. I was a member of the Standing Committee which considered it upstairs. I welcomed it because I thought that the procedure whereby there were to be specific grants for certain social services meant that we were taking decisions on the size of the railway system out of the hands of railway management and putting them into the hands—I hoped—of this House. I hope that in getting rid of the specific grants now we are not going to transfer back to railway management decisions on the size of the railway system. Decisions on the future size of the railway network should be a matter at least for the Minister and, more appropriately, for this House.

The Bill is particularly necessary because it makes provision for the deficit financing which is necessary. But I think we have to go further still. As other hon. Members have pointed out, there is urgent necessity to hear something from my right hon. Friend, not only about deficit financing and subsidies for loss-making services, but also about the capital investment programme. A Bill like this does not mean much unless we are able to compare it with a statement on capital investment at the same time.

Reference has also been made to Clause I and the fact that the capital debt of the board has been once more written down. Perhaps this capital debt and the need to pay such high amounts of interest on it, followed by the need to write down the debt, might not have recurred so early had it not been that, so often, when the board wished to engage in more profitable activities, such as hotels, the development of railway land, the shipping services and the many other ancillary activities which it would have been legal for it to have engaged in under the 1968 Act, it was refused permission, especially by the Conservative Government. No wonder the board found difficulty in meeting interest payments when every time it came to the Conservative Government asking to be allowed to extend its activities in order to help pay the interest charges it was turned down.

The main emphasis of the comments, particularly of hon. Members opposite, centres on the proposal to transfer subsidies from a specific social service basis to a general deficit basis. Some hon. Members seem to think that it is all to do with the Common Market. I should be a bit worried if a significant improvement in railway financing like this were all to do with the EEC. It goes a little wider than that.

My right hon. Friend made a statement about public and parliamentary accountability. We are to go from something like £81 million-a-year specific services grants to a general deficit grant of about £300 million a year, which means £1,500 million over the next five years. If we are to do this, what incentive is there to the board to maintain specific services? In many cases, Cooper Brothers' formulae, particularly the one which formed the basis of an agreement between the board and passenger transport executives, were not only keeping tabs on how much was being spent on a particular service but were also an incentive to the board to maintain particular services. In going over to a more general deficit financing principle, are we losing some of the specific checks and controls we had on specific services?

I think that my right hon. Friend is doing something much more important than going from a specific grant procedure to a general deficit procedure. He is adopting a procedure whereby the bulk of the track and signalling costs of the system will be paid for by the Government. I think that my right hon. Friend is hiding his light under a bushel on the matter. He need not be afraid of it. For a very long time, railwaymen have argued that if the road user has his track and signalling costs paid, so should the railway user have his paid. The combination of Clauses 1 and 3, transferring track and signalling costs from capital account to revenue account, means that the bulk of rail track and signalling costs will in future be paid for by the Government.

My right hon. Friend has nothing to hide in taking that decision. Railwaymen should be grateful to him. I do not think that my right hon. Friend can tell us that every single detail of all that comes under EEC Regulations 1191 and 1192, but whether the switch does or does not come under those two regulations the House should be grateful to him for what he has done. In accepting that my right hon. Friend is transferring the bulk of the track and signalling costs from the Board to the Government—I hope that my right hon. Friend will say so openly—we should accept that what we are doing is giving a general subsidy to the majority of railway operations. The British Road Federation has calculated that every single journey will be subsidised to the tune of £1.75. I do not necessarily accept this figure, but the general nature of the grant which the Minister is giving the railways is open to such interpretation.

There is another point that the Minister must have noticed. It is that if the majority of track and signalling costs are to be met out of this general passenger service grant of £300 million, freight charging ought now to be on the basis of marginal cost pricing. If this means that the railways ought now to be able to charge some lower price for their freight I think that they will need more encouragement from the Minister than simply his writing to 100 firms. One of the most regrettable things about the last investment submission made by the Chairman of the British Railways Board to the last Government was the fact that out of the £1,800 million in the submission only £44 million, or 2 per cent. of the total submission, was for freight investment.

We have already heard about the cannibalisation that takes place every night to keep the railway services going. Any railwayman knows that if we had any significant increase in freight at the moment the railways could not carry it because the freight-carrying capacity is not there. There is a shortage of wagons in certain areas, and a shortage of marshalling facilities in other places. If the Minister intends there to be any kind of observable shift of freight from road to rail there will have to be a lot more freight investment than was envisaged in the last investment submission by British Railways.

I would have liked to hear—I hope we shall hear it in the next investment submission—something more about new railway wagons. Only about a half of the 250,000 wagons operating at the moment are vacuum-braked. The rest of them certainly do not even look as if they could be. I hope that in the statement we are to get from the Minister we shall hear something more about electrification. We ought to know something about this in future, particularly in view of the favourable cost-escalation comparisons taking the Crewe-Glasgow electrification project as an example.

There certainly are not many major transport investment projects which, over a period of five years, can record and brag about a cost escalation of only 35 per cent. That cannot apply to Concorde. I hope it will not apply to Maplin. That is the record, so far, of the British Railways Board on electrification.

I welcome the provision which my right hon. Friend has made for granting £5 million towards the construction of private sidings. I only hope he will do a little more than write to 100 firms. I hope he will do a little more than has been promised so far to bring about that shift from road to rail.

Mr. Mulley

Perhaps I may clarify this point. The purpose of the letter—it has been well received—was to put the firms in close touch with British Railways so that together they could go through the firms' operations with a view to getting the firms to give a greater proportion of its traffic to rail. It was not just a case of my writing a letter. It is being followed up by the board and the National Freight Corporation.

Mr. Huckfield

I do not doubt my right hon. Friend's sincerity, but we have to keep a watchful eye on the whole process, so that it does not become just another public relations exercise.

Mr. Ronald Atkins

My hon. Friend ought to acknowledge the fact that it was my right hon. Friend who, when he was last in Government, authorised—in the teeth of opposition—the electrification of the line to Scotland which has been so justly praised.

Mr. Huckfield

I have spoken of my right hon. Friend's hiding his light under a bushel in respect of what he has done with track and signalling costs. He is also to be congratulated upon taking the original electrification decision. I hope that he will follow through what he has begun in writing to these 100 firms.

It is the investment in railway freight capacity which is the determining factor. In the submission which the Chairman of the British Railways Board made to the previous Government he said that he did not envisage that the railways would be carrying any more freight in 1981 than they are carrying now. When I asked the former Minister for Transport Industries how much he envisaged the railways carrying in 1981, as against what they are carrying today, the right hon. Gentleman said that he thought they would be carrying about the same as now. Since I hope that there will be some growth in the economy between now and 1981, that seems a pretty dismal forecast both by the chairman of the board and the right hon. Gentleman.

I have said that I act in a parliamentary liaison capacity for ASLEF. I bear in mind what my right hon. Friend has said about the need to keep in touch with the unions. I cannot help feeling—if I may deliver this mild rebuke—that my right hon. Friend has not got off to a very good start with this Bill. It does not do the Minister much good, and it does not get the best response to the Bill, when my right hon. Friend writes to the unions concerned, as he certainly wrote to ASLEF, on the same day as the Bill came out.

I would have thought it would have been better for the Minister to have got together with the unions concerned, to have discussed the proposals in the Bill before its publication and before my right hon. Friend held his Press conference. It is not the best way for the General Secretary of ASLEF to be told about this by his wife, who happened to have heard it on the car radio. This is not the best way of announcing to General Secretaries the details of any Bill.

I, too, support the claim of the railwaymen. It is not just a case of railwaymen working shifts; it is usually a case of their working a different shift every day. The average railwayman would be happy if he knew what shift he would be working in three weeks' time. Often it is a matter of starting at I am one day and 1 pm the following day—and it might be 6 am the day after that. With the conditions that prevail on Southern Region in particular, a railwayman may be responsible for hundreds of lives. Such hours are not conducive to good bodily functions like sleeping and eating regular meals. They play havoc with family and social life and cause all kinds of unsocial pressures. Such is the job of the railwayman. Such is the job which railwaymen have always borne with a great deal of pride, because they, above all, believe in the railway system.

I know that the Minister recognises that he must consult everyone involved, including the railway unions. He does not inspire much confidence among the general public, however, if he does not appoint for example, to transport users' consultative committees, the kind of people who understand railway problems. I speak as one who frequently attended meetings of such committees. I have often thought that one of the best things that could happen, particularly under a Labour Government, would be for there to be a complete review of the method of appointment and a condition laid down about the necessity of appointing chairman of such committees who actually used the railways occasionally. This has net been the case in the past.

I welcome the Bill. The Minister has made some fundamental innovations, such as the decision relating to track and signalling costs. I recognise that this represents a significant declaration of faith in the railway system. What the House, the country and the railwaymen are waiting for above all is information showing how much money the Government are prepared to invest in the railways' capital programme.

6.40 pm

Mr. Cranley Onslow (Woking)

When the Minister introduced the Bill he held out the hope that it would provide either the Government or the House—I am not absolutely clear which he meant—with more control over expenditure. He went on to say, when pressed by me, that he foresaw that the new procedure would give hon. Members more opportunity for questions. He added—and this slightly took away my rapture—that the Government did not intend to derogate the powers of management. I do not wish the Government to derogate the powers of management, but I should like to know whether the right hon. Gentleman agrees with my right hon. Friend the Member for Finchley (Mrs. Thatcher) that in future there will be endless scope for parliamentary Questions on matters to do with the railways. My right hon. Friend is perhaps being optimistic if she thinks that that will be the position—or perhaps pessimistic, as it seems to be what she does not want.

In any case, it is a matter of some reproach to the House that it is 13 years since the Select Committee on Nationalised Industries last examined British Railways. The hon. Member for Bodmin (Mr. Tyler) reminded us of this, although I think he must himself have had to be reminded of it. There is now a strong case for a direction to the Select Committee, in the light of this Bill, to look into the way in which the House should in future keep itself informed about what goes on on the railways. We cannot tolerate the present vacuum indefinitely.

The House will be aware that several hon. Members, amongst whom I number myself, represent commuter constituencies, in which the smooth running of the trains is essential to the daily work of many, if not all, of those who live there. Because I represent a commuter constituency—not so much because I am myself a commuter—I put on the Order Paper an amendment, to which some of my hon. Friends who represent commuter constituencies and a stray Scottish Nationalist have seen fit to add their names. For that I was roundly condemned as mischievous by the hon. Member for Leicester, East (Mr. Bradley).

I do not want to labour the sentiments which have been so powerfully expressed by my right hon. Friend the Member for Finchley and my right hon. Friend the Member for Yeovil (Mr. Peyton), but before the hon. Member for Leicester. East starts asking me what I know about the railways, may I remind him that if he spent a little more time on commuter trains he would know how my constituents feel. In particular, if he had to take the trouble to find a way to get to work in the City without going through that infernal "drain" every morning—[Interruption.] If the hon. Gentleman says that he commutes to the House every day, he is either extraordinarily fortunate or extremely good-tempered.

Mr. Bradley

I must correct the hon. Gentleman. I firmly believe that the best thing in London is the next train to Kettering, where I live. I commute every day and I understand the anguish that is felt by passengers. All I want the hon. Gentleman to do is to appreciate that some of us are doing our best within the industry to get the solution which he requires, and to give us the credit for it.

Mr. Onslow

I am not denying credit, though I have a suspicion that the hon. Gentleman commutes to and from Kettering without paying, which makes a bit of difference between his position and the love-hate attitude of the average commuter towards the railways.

We need to appreciate that those who do commute to work in the City or elsewhere are not all bowler-hatted stockbrokers. A great many young school leavers taking their first jobs have to commute to London. They can ill afford the fares at the best of times, and their lives were made insufferably bloody by the action which occurred last winter. The hon. Member for Nuneaton (Mr. Huck-field) informed us that he was the parliamentary liaison officer for ASLEF. I do not know whether that is an honorary post. He might have had the grace on this occasion to express some tiny word of regret for the sufferings which the action of ASLEF inflicted upon a vast number of rail users.

Mr. Leslie Huckfield

Will the hon. Gentleman recognise that it does no good in this cynical and bitter way to rake over the embers time and again? He does not gain himself many friends on the back half of the train—he said that he did not use trains—and he will not win himself many friends on the front end of the train. Will he accept that not many unions would have tolerated ever since 1972 an unresolved promise by management? Will he also bear in mind that from 1955 until 1972 ASLEF took no official action?

Mr. Onslow

I do not think that the hon. Gentleman will win himself any new friends anywhere on the platform. It is on the platform that opinions are formed, not so much on the trains, which, if they come, tend to be rather too crowded to enable people to form considered opinions. But if he dislikes raking the embers, I must remind him that in the Sunday Telegraph of 16th June Mr. Ray Buckton is once again reported as saying: I am having the utmost difficulty in holding my members back. They feel aggrieved at the long wait they are having for what they regard as a just demand. That is the point which the hon. Member for Nuneaton is putting and, again, he does not express a single work of contrition—

Mr. Leslie Huckfield

I would not apologise to you, would I?

Mr. Onslow

—for the sufferings which were inflicted by ASLEF on a very large number of people in and around Greater London. I am sure that those people will take appropriate note of his attitude and will be interested to note how he discharges his function as parliamentary liaison officer to that union.

To get on to a much more important point than the episodes which caused a great deal of concern last winter, I believe there is an urgent need in the debates which the nation is now conducting about matters of great importance to get away from the trail of the red herring of State participation in private industry which the right hon. Member for Bristol, South-East (Mr. Benn) keeps so assiduously dragging across our paths. The great problem of today is public control over nationalised industry, and very large sums of money are involved, of which the Bill is an example.

I do not necessarily complain about that, except that I do not believe that it is to the House that British Railways should be looking for the finance they need for all their fringe activities.

But it is essential that the public should get value for public money. In this case that depends on the smooth working of the railways, and that in turn depends on good industrial relations.

The Minister said that he hoped that there would be a more harmonious relationship in future. The Chairman of the British Railways Board in an interview which is reported in British Travel News in Spring 1974 expressed a similar sentiment in these words: I think now they have been given a long term future, and when we get wage rates up to a reasonable level, there will obviously be a good impact on employee relations. The hon. Member for Leicester, East said much the same. But, in the light of the experience which we have not yet had time to forget, hopes are not enough. So I should like to press the Minister further on how he sees this desirable state of affairs coming about.

In a nationalised industry the employee cannot participate in share ownership—I hope that the right hon. Gentleman agrees with me on that—especially in a non-profit-making activity such as British Railways. I agree that it is a good thing finally to face the situation that it is unrealistic to expect British Railways to make a profit, and I agree with what Mr. Marsh said in the same interview: it is appreciated that the railway is not, and cannot be, a commercially viable business in conventional terms". When considering the deficits which have been chalked up in the past, I am minded to suggest that we should treat the money that goes into running the nationalised railway rather as the Chinese treat the money they take in their packets when they go gambling. If they have anything at all in their packets at the end of the day, they regard that as a most unexpected profit. They are prepared to see the rest of it go. If we adopt a similar approach and combine with it the cutting out of the so-called commercial fringe activities of which the hon. Member for Nuneaton seems to think so highly—although if he looks more closely at the accounts I think he will take a different view—we are getting closer to the real problem. There are plenty of activities which could well be carried out on a subcontracting basis with minimum capital or management involvement on the part of British Railways, which have plenty of calls on their capital and management resources which are infinitely more important in the public context. I would rather see every possible effort devoted by British Rail to bringing in the advanced passenger train as soon as possible rather than frittering away scarce money and management on such activities as hotels, hovercraft and things of that nature.

It is impossible in a nationalised industry for the work force to participate in management in the sense which we are led to believe may be possible in the private sector. I do not think the Minister holds the view—and if he does perhaps he will say so now—that it would be desirable to have 50 per cent. trade union participation on the Railways Board. It is only conceivable that there should be participation between management and staff in areas such as manpower planning, career structure and similar activities. These matters are not crucial and do not determine the financial or investment decisions which are fundamental to the enterprise as a whole. The railways have the purpose of serving the public, and on that there is no room for compromise. It may be difficult to find the ideal answer, though I have great sympathy with the comments of my right hon. Friend the Member for Yeovil about past practice. I like to believe that we could evolve some system of management of the nationalised industries which involved the Government saying to each of the industries, for example, "Tell us what you could do if we allowed you to have £500 million in the coming year and in the following two years, and what you could do if we offered you £750 million." They could get the nationalised industries to present a number of options which were carefully costed, one of which the Government could accept unconditionally as far as any Government can, and then leave matters to the management of the industry concerned to get on with its remit within its financial bounds without any of the systematic monitoring, or nitpicking, or day-to-day control, or interference of the kind which drives managements of nationalised industries into a state of unconcealed frenzy.

It is also essential—and the users want this most of all—that there should be between the management of the railways and the men and women who work on them some agreement or bargain which will stick. For a start, I hope some responsible person—and perhaps it could be Mr. Marsh—will consider what should be done about the extraordinarily antiquated set of rules which appear to govern the activities of train drivers. They sometimes seem to have been drawn up by Will Hay himself, and, indeed, I am surprised that we have not yet heard of a case of a driver refusing to take out a train because he had not been given a nightshirt and a candle in case he had to sleep in the cab. Some of the stipulations in those rules are totally unrealistic. They belong to bygone days and by now should have been removed from the rule book. Rules which are sensible should be clearly observed the whole time and should not be the cause of the kind of industrial action with which we have grown so boringly familiar.

I wish to emphasise the point that we must have an agreement in the industry that will last. That is the real test of the situation, and it is an assurance for which we are entitled to ask. Part of the answer, in this industry as in others, must come from the creation of some kind of premium for good service to the public. Very often in the nationalised industries long service is badly rewarded for reasons which are historical but not creditable.

In the case of the Post Office I rejoice to see that we have at last got away from the situation where the Imperial Service Medal used to he the standard reward for 25 years' faithful service. I do not know whether a colour television set is an adequate alternative, but I believe that at the end of a man's service he should have something to look forward to as a result of his dedicated efforts. At the end of the day I am certain the public will not mind paying a reasonable price. On this occasion perhaps we shall reluctantly see the price paid once more in the absence of any kind of firm assurance of a real bargain. It is in the long run essential that the nationalised industries, which exist to serve the public, should do just that. It is not enough for the Government or for union leaders, and certainly not for this House, to rely on nothing more than hope.

6.56 p.m.

Mr. Leslie Spriggs (St. Helens)

I agree with the right hon. Member for Yeovil (Mr. Peyton) that it is easier to talk than to do. He has had the experience on being on both sides of the fence. He knows what it is like to be a Minister of Transport Industries and also a back bencher, from which position we heard him today.

I welcome the Bill with certain reservations, and I hope that when I have expressed them in the form of one or two questions I shall be given a ministerial reply at the end of the debate.

The Minister said that the main purpose of the Bill was to supplant the inadequate system of support under the 1968 Transport Act by a comprehensive new grant in respect of the whole network of railway passenger services. He said that this would be an on-going policy, although in order to give Parliament opportunities to review its operation a limit of £900 million, extendable to £1,500 million, is to be placed on the amount which may be paid. Much of the cost of the track as well as of passenger services will be eligible for grant. Freight will also be assisted by the new powers to pay up to £5 million annually for the construction of private sidings and associated facilities. Some of my hon. Friends have already referred to private sidings and the £5 million subsidy which the Minister is providing to encourage private industry to install such sidings and also to persuade them to transfer their traffic from road to rail. However, I can hardly see £5 million being enough to encourage many firms to build private sidings. It is an inadequate sum. I shall refer to this matter again when I put my questions to the Minister.

We are told that the Bill also makes provision for removing from the British Railways Board the financial burden of its inherited obligations on pensions. I welcome this. It is understood that the board cannot finance all its pension obligations from revenue. The Minister suggested that a meeting might be called to explain to the unions the technical and complex nature of these pension provisions. He said that, although the Bill provided for a substantial increase in borrowing powers of the board and wrote down its capital debt from £439 million to £250 million by the end of the year, it did not deal with investment levels since these are a matter not for legislation but for settlement in the annual reviews made of public expenditure.

When the Bill appeared it gave little warning of what the Minister or the Government proposed. I regret this because many of us expected a White Paper prior to the publication of the Bill. I assure my right hon. Friend that when I heard about this Bill I was taken completely by surprise.

Mr. Mulley

I am sure that my hon. Friend appreciates the stage that we have reached in the parliamentary timetable before the Summer Recess. I could well have produced a White Paper, and we could have debated it, but, because of the enormous figures involved and the need to rectify the omission whereby the railways had not got proper support, I wanted this Bill to become law. We could not have had both the White Paper and the completion of all the Bill's stages this side of the Summer Recess.

Mr. Spriggs

I am obliged to my right hon. Friend for that explanation, which, of course, I accept fully.

The situation on pensions is not clear. Estimates of the cost range from £660 million to £1,080 million. But my right hon. Friend has promised to explain this matter separately, and it is probably in our interests that the Bill seems to have been left deliberately vague on this aspect.

I am sure all my colleagues welcome the special grants for the construction of private sidings and associated facilities. We recognise these as a worthwhile inducement to the hundred or so large firms which my right hon. Friend is approaching in order to get them to send more goods by rail.

It is felt that the Bill does little more than keep the rail system ticking over on its present basis. Of very real importance is the investment of British Railways, so what of the £891 million promised for modernisation by the last administration? Where is the capital investment needed for new electrification, for instance? Much of this Bill is to bring in uniformity of treatment of railways by countries in the Common Market. Various estimates in the Press suggest huge sums of new money for the railways, but, when the situation is examined, this is found not to be so.

Many of the estimates include the pension liabilities, and there does not appear to be a great deal of additional money for investment or any acceptance of a wider rôle for the railways.

What of the energy, material resources, land, pollution, environmental and safety aspects of the matter? I wish to put several questions to my right hon. Friend. I hope that he will take note of them, because they require answering.

First, does the Bill include the £891 million of investment announced by the previous administration?

Second, are the Government satisfied that the railway policy review of last year represents the best value for money in terms of improved service to the public and of switching freight from road to rail.

Third, the Bill makes provision for £500 million to encourage firms to build private sidings. Is that enough to bring about a significant change? There is a desperate need for new wagons, locomotives and staff. The job has to be made more attractive and the future secure. The pay has to be right, or services cannot be maintained.

Fourth, the investment proposals of the National Coal Board are a welcome indication of long-term planning, namely, on a 10-year basis. This Bill plans for five years. What happens after that? A long-term investment plan is essential.

Fifth, as part of the nation's need to preserve oil supplies, coal output is to be increased. We see electrified railways which are more efficient and more attractive to passengers as being the means by which railways can contribute towards saving oil. What is the Government's policy on a massive electrification programme?

Sixth, under the previous Government's proposals there was the possibility that one or two lines would be closed. Is it the intention that the network should now be maintained in its entirety?

Seventh, my union, the National Union of Railwaymen, supports and welcomes the decision to build the Channel Tunnel and the new rail link with London. It sees the project as providing a tremendous boost to the railways by means of greatly increased passenger carryings and freight handling. My union has called upon the Government to provide incentives to industry to feed through-traffic into the Continental system by placing freight on the railways at regional centres. There is a real need for the Government to make it clear through legislation that, from this country's point of view, the primary function of the tunnel will be to provide a through rail service. On that basis, the facilities at Cheriton should be restricted.

I want finally to refer to the problems confronting the Railways Board. I do not speak for the board directly, of course. These are my own opinions. After reading the Bill carefully it seems to me that the Railways Board possibly will find that the five-year programme envisaged in the Bill is much too restrictive for the successful administration and future planning of our railway industry. I ask my right hon. Friend to study the difficulties and problems which a five-year programme creates for the board and to look at the 10-year investment programme of the coal industry with a view to providing a 10-year investment policy for British Railways. Given this kind of financial investment, I feel sure that the Railways Board, the trade unions and the public as a whole will benefit from all aspects, including those of the environment and the quality of life.

7.8 p.m.

Sir Bernard Braine (Essex, South-East)

I am sure that the hon. Member for St. Helens (Mr. Spriggs) will not mind if I do not take up his argument, other than to say that I am sure that the House will listen with great interest to the answers which the Government give to the very pertinent questions that he has just put.

In normal circumstances, I should welcome the Bill in principle. Manifestly, it is in the national interest for us to have a railway system which not only is run efficiently and with a proper sense of obligation to its customers but is used to the maximum. Motoring has long ceased to be the pleasure that it used to be, certainly in the South-East. We are slowly choking ourselves to death on the roads, and it should now be clear to the simplest intelligence that it is a wasteful, if not a criminal, misuse of resources to go on encouraging more motor traffic and the pollution, congestion and delays that this causes when we have at hand an under-used railway system which, given the right conditions, would ensure swift, comfortable and relatively pollution-free transport.

It is difficult to understand why thousands of people in my part of the country daily take to the roads and, by so doing, add half an hour or more to what used to be the time of the rail journey. Why do they do it? It can only be because they have lost faith in the railways—I am not saying whether this is justified—and prefer the certainty of getting from A to B in a vehicle which they can command. Surely that is bad. The question is, therefore, whether the Bill will do anything to bring about the radical shift back to rail that is needed.

I entirely agree with my hon. Friend the Member for Woking (Mr. Onslow) that there is a need for much closer scrutiny of railways and transport policy in general in the future than in the past. In return for this new financial support that we are being asked to give to the railways, surely we are entitled to ask that we are provided with a vastly improved service and that a great deal more regard is given to the travelling public than has been manifest in recent years. Are we to get an assurance from the Minister that there will be a new deal not only for the railways but for the people that they exist to serve?

Frankly, I am not impressed by the way that the railways are being managed. I refer particularly to the lines serving my area. Yesterday fares were increased by an average of 12½ per cent. without any differentials to take account of local conditions. Such increases are not marginal in character. For many of my constituents, who use the two commuter lines to London and have absolutely no alternative means of getting to work, the increase is about £20 a year from Benfleet or £22 from one of the two Southend stations. Since there is little local employment, the effect on school leavers and young workers may be catastrophic. I calculate that for all who pay no income tax, about half of the recent threshold increase is swallowed up immediately by the higher fares authorised yesterday and about 65 per cent. for those who pay tax.

What adds insult to injury is that we are being asked to pay more for a manifestly deteriorating service. I make no mention of the distress and hardship that was caused to thousands of my constituents last year by selfish industrial action which did grave damage to the interests of the railway industry. I concede at once to hon. Gentlemen who have some connection with the railways that the vast majority of railwaymen condemned that action. I think that they deeply regret any action which must drive people away from the railways or which damages their image. For that reason I do not wish to indulge in any criticism of what happened. Let us hope that that is a thing of the past and that the new deal envisaged in the Bill will help to create a new atmosphere in which—

Mr. Leslie Huckfield

Will the hon Gentleman give way?

Sir Bernard Braine

The hon. Gentleman might permit me to finish. We all know that he represents a sectional interest in this House. We should draw a veil over what happened. My hope is that the Bill will represent a new deal for those who work on the railways as well as for those who use them.

Mr. Mulley

The hon. Gentleman should not get too excited about a new deal. The major part of the money, the investment that is coming along, should and will improve the service over a period. The large sums in Clause 3 are to keep the existing railway service going. The Bill does not envisage the wave of a magic wand to put all these problems right.

Sir Bernard Braine

I did not say that. I hope that there will be some attempt by the management of the railways to improve the existing service. I have in mind particularly the unreliable timekeeping, the sudden cancellations, and the introduction of short trains—I am speaking of the commuter lines to Southend—forcing hundreds of passengers who have spent a day working hard in London to stand for the time of their journey home. I understand that nine complete trains were immobilised last week at Ilford waiting for relatively minor repairs. Promises to provide fast off-peak services have been made in the past but have been broken. My constituents may be forgiven for thinking that they are regarded by British Railways as there for the milking but otherwise of no account.

Why is this? I suggest that it is partly because huge nationalised concerns are too remote from the people they serve. For example, we find when we make complaints at Liverpool Street that the local management understands the problem and wants to do something about it, but is powerless to do anything because it is answerable to remote figures in York.

There is too a complete lack of flexibility in the charges structure. The aim surely should be to retain existing passenger traffic and to attract traffic back from the roads. This should be the major aim of any fares structure.

Why cannot we have a restoration of the old workman's ticket, which was very popular in its day? It led to large numbers of people journeying before a certain hour in the morning, making better use of rolling stock.

Why cannot we have differentials designed to encourage people to travel regularly at off-peak periods? I refer not only to shoppers but to workers. It would be of positive advantage if we could persuade employers to stagger working hours. I am advised that the local management in my area would like to experiment along these lines, but that it is prevented from doing so by the present rigid fares structure laid down by Eastern Region headquarters at York. I suggest that freedom to experiment with fares designed to maximise traffic is needed.

Conditions in the South-East are totally different from conditions elsewhere. Conditions in South-East Essex in particular are different from conditions on any other commuter line. We have the highest concentration of commuter traffic and some of the most heavily used commuter stations in the country. People are completely dependent on those lines. Of course, those lines make a profit. I am not advancing that argument. It is in the nature of public transport that some lines make a profit and others make a loss. But British Railways management know that they have our commuters where they want them. Because of that they do not seem willing or capable of meeting our particular conditions. I suggest that there should be more flexibility for local management to meet that kind of situation.

Clause 3 gives the Secretary of State power to make certain general directions, and Clause 4 gives him power to approve capital expenditure of a substantial amount. However, I see no provision under which he can require British Railways management to adopt a more flexible charging policy and a more commercial approach to the vital task of keeping and attracting passenger traffic to the railways.

Why is that? I hope the Minister will explain why this rigidity still obtains. Is it impossible to give each area served by British Railways a fares structure related to its special circumstances, designed to get back the traffic that it has lost to the roads, and to attract new traffic? Is it impossible to provide special rates for the young traveller up to the age of, say, 25, or for pensioners who are continuing to work? As an additional means of helping the railways, have the Government considered giving income tax relief for those in between those two categories who have been using their cars to get to work?

Mr. Spriggs

The hon. Gentleman is making some very good suggestions. Is he aware that on Merseyside, for example, there is a scheme which enables two housewives to travel to London for shopping for the price of one ticket?

Sir Bernard Braine

The hon. Gentleman's area is fortunate. There are differential schemes operating as between regions, but what I am arguing for is flexibility within a region. I am arguing that some regard should be pa id to the peculiar circumstances of an area such as that which I represent.

I promised to be brief, and I come to my conclusion. I hesitate to support a further heavy injection of taxpayers' money into a nationalised industry which up to now has shown such little imagination and commercial judgment. My vote on the Bill will be determined by the answers which the Minister gives to the practical suggestions that have been made tonight. My attitude to this measure will depend upon the extent to which the Minister uses his considerable influence commercially minded and, for the first time, to have regard for the customer, to persuade British Railways to become I hope he responds.

7.21 p.m.

Mr. Ronald Atkins (Preston, North)

I do not want to follow at length the arguments advanced by the hon. Member for Essex, South-East (Sir Bernard Braine) but I wish to refer briefly to commuter lines. This subject has been referred to by a number of hon. Members, but they ignore one reason for the bad service, and that is low wages. Very often when there is a shortage of trains it is due to a shortage of staff. The suggestion put forward by the hon. Member for Woking (Mr. Onslow), that there should be service awards after a number of years' employment—I think he said 25—is a good one, but on their present wages railwaymen will not last that long and something must be done, especially in the London area, to improve wages so that services can be run properly.

Hon. Members may have heard of the problem over freight carriage in the Dagenham district. Because of a lack of staff, the railways cannot carry the freight which they would otherwise be able to do. If the railways do employ staff, or transfer them into the area from other regions, sooner or later those men become employed by Fords at higher wages. When people talk about industrial relations they should realise that bad relations are often the result of bad wages, but in the long run more disturbances arise because of shortages of staff than from industrial disputes.

British Railways have been expected to balance their books in the narrow way suggested by the Beeching Report. For many years we have suffered from the effects of that report. Although it was at one time acclaimed by the Press and the majority of Members, I think that there are now few people who hold to their original opinion, and the Bill is the last nail in the coffin of the Beeching Report.

I warmly welcome the Bill because it provides a new system of financial support for British Railways and implies a revolutionary change of attitude in this country. British Railways have been the favourite Aunt Sally of the Opposition parties, and they have suffered accordingly. At one time the right hon. Member for Yeovil (Mr. Peyton) very definitely regarded British Railways as an Aunt Sally—old-fashioned, backward, mean and nasty—and not only was he waiting for her to die but he tried to hurry her death.

British Railways no longer have the Aunt Sally image, but are more like Aunt Mame, and I welcomed the U-turn taken by the right hon. Gentleman, especially in his 1973 White Paper on urban transport. The right hon. Gentleman expressed his appreciation of Mr. Richard Marsh, and I am not greatly surprised, because, although the right hon. Gentleman and Mr. Richard Marsh hold different views about the ownership of British Railways, their ideas about running the railways are not all that different. I am glad that my right hon. Friend the Minister introduced a certain amount of enlightenment into the running of British Railways, in that he supported the electrification of the line to Scotland even though, in the strict bookkeeping terms of Beeching, it was doubtful whether that would result in a profit.

It is interesting to note that one reason for the change of attitude is our membership of the Common Market. Countries outside the United Kingdom hold a different view from ours about their railways, whether they are nationalised or in private hands, though most of them are nationalised. Railways in those countries have not been a political shuttlecock to be knocked around in political encounters between the parties at election times and in between. The attitude to the railways has been different from ours in Europe, in the USSR, in Japan and even in the USA in recent years. Those countries have long recognised the need for special aid to the railways to enable them to provide a social service and compete successfully with road freight.

Why is this special help needed for the railways? I think that we should examine that issue because it has not so far been considered. One hon. Member spoke about the need for a special inquiry, or a Select Committee, and there is something to be said for that, because there is so much argument about the real costs of road transport vis-à-vis the railways.

Why are the railways a special case? Why are they a special—or "peculiar", as one hon. Gentleman said—nationalised industry? It is not because the railways are less efficient. Their fuel efficiency is four times greater than that on the road. In addition, any kind of fuel can be used. The railways are not limited to only one kind of fuel. The railways' use of manpower is more efficient per unit carried. Their use of land is much more efficient, and the cost to the environment is far less.

The track is already laid, but it is not used to capacity. The right hon. Member for Finchley (Mrs. Thatcher) spoke about extra track being laid, and she mentioned the unusual case of the Channel Tunnel. The Minister proposes to use the existing track to capacity, and that is sensible in two ways: first, because it will limit capital costs secondly, because railways pay only when they are run to capacity.

With every improvement in technology British Railways become more acceptable from an environmental point of view. They are quieter, because of the continuous welded line. They are cleaner with the use of electricity, and they are faster than road services. Every advance on the railways is made with an advantage to the environment. The most important factor of all is that the track is there and is under-used, and that is unacceptable. The only disadvantage of the railways compared with the roads is that road vehicles, especially on shorter journeys, have greater mobility, but that is not so important with long through-hauls.

Why is help needed for the railways? It is fundamentally because road haulage has fewer costs than the railways. The argument about how road taxes do or do not cover total road costs is not important in the context of whether the railways can compete fairly with commercial road users. The important argument is the extent to which the financial burdens of building and maintaining roads fall equitably on commerical and non-commercial road users. If a lighter burden falls on the commercial road users they will be cross-subsidised by the non-commercial road users, and have an unfair advantage in commercial operations over railways.

According to many experts, that is what happens. Research was carried out in the United States by the American Association of State Highway Officials in about 1960. The association was looking into the costs of repairing roads and found that the wear and tear on the roads varied according to the fourth power of the weight on the axle. That works out in this way: one 10-ton lorry does 10,000 times the damage of one car, weighing I ton, on the road; in other words, 10,000 cars must pass tover the same stretch of road to do damage equal to that done by one lorry weighing 10 tons.

Not everyone has accepted these figures, but the findings have been confirmed by a British expert organisation, the Transport and road research laboratory of the Department of the Environment. It seems to me—I would like this to be studied by a Select Committee—that motor cars help enormously to keep on the road the very vehicles which are causing most annoyance, and the greatest burden is on the private motorist. Company-maintained cars, which form about 40 per cent. of the traffic, produce what amounts to tax refunds for the companies and thus the net contribution to the road fund is much lower than the gross figure of contribution. This is not taken account of by those in the road lobby who talk about how much tax is paid into the Exchequer.

However, small short-journey privately owned cars are paying the same road vehicle excise duty as Rolls-Royces, Jensens, Bentleys and Jaguars and, therefore, subsidise the expensive long-journey cars—in other words there is a cross-subsidy by those people who do not have to run their cars economically. Just as the owners of small cars help, as taxpayers, to pay for these and other company cars, so do they help through taxation all those people who receive various company perks.

If time allowed I would look at the question of how many types of road cost are not charged to the road fund, such as those arising from the policing of the roads, road lighting, court cases involving motoring offences and damage to buildings, for which there is no compensation. My parents' house was damaged by heavy lorries taking goods which could have been conveyed by rail from Barry Docks. The goods were taken along Buttrills Road. The cost of accidents and traffic congestion must also be borne in mind. This amounts to about £1,000 million a year. I would like my right hon. Friend the Minister to look into the question of level crossings and sec whether they can become the responsibility of the Secretary of State.

Time does not allow me to deal with this matter in detail, but on the problem whether roads meet their costs, what is the return to the nation on the capital value of the 200,000 miles of highway which we have in this country? The right hon. Member for Finchley earlier objected to the capital charges on the railways being met out of revenue, but what is the system on the roads? Can my right hon. Friend say, for instance, that all the mileage of roads has been paid for out of capital that has been borrowed and on which interest rates are paid? I do not think so.

I hope that money which will now become available to British Railways will be used to improve the railway system, especially for the carrying of freight. Hon. Members have talked about vast sums of money becoming available to British Railways, but the maximum involved would be about £305 million. I intervened during the speech of the right hon. Member for Finchley to say that the French Government pay a subsidy of £500 million to French railways and that the German Government pay a subsidy of £600 million to German railways. But my hon. Friend the Member for Newport (Mr. Roy Hughes) has shown me some notes which indicate that the subsidy to French railways is, in fact, £600 million and that to German railways is about twice as much. Therefore, it seems to me that we are being mean, not generous, to British Railways, compared with Continental railways.

I wish to emphasise the need to carry more freight on British Railways. Such a move would be very acceptable to the country. I hope that my right hon. Friend the Minister will be able to use his powers and insist on certain projects being carried forward, bearing in mind that the Government will be able under the Bill to provide capital. It is, for instance, ridiculous that we are unable to have a railway depot for the new Covent Garden market at Nine Elms. The need for high-rise development at Liverpool Street has also been mentioned, and I remind the House that high-rise development is still required at Euston Station. It was turned down, stupidly I believe, by the Labour-controlled LCC some years ago. Such developments should be speeded up. They would benefit the environment.

Many civil servants in the Department dealing with transport are rather road-oriented, having worked on road projects for so long. They say that to add 50 per cent. to the rail ton miles would reduce road traffic by 2 per cent. That is a terrible understatement. If the reduction was only 2 per cent. there would be no objection from the road hauliers' organisations. This is a weighted argument as the word "traffic" is assumed to include cars which have nothing to do with the issue under discussion. The British Railways Board point out that 200 million tons of goods travel distances over 50 miles in heavy lorries. This amounts to 45 per cent. of total road ton miles. A transfer of even half of that amount from road to rail would meet with general public approval and would largely settle British Railways' financial problem.

It would be in the interests of the nation to make the utmost use of the Bill, and I press the Government to do all they can to ensure that more goods are put on the railways.

7.39 p.m.

Mr. Neville Trotter (Tynemouth)

I believe that it would be possible, but foolish, for this country to manage without railways; foolish because, as is recognised by both sides of the House, railways have an essential part to play in the overall transport planning for our country. But I find it rather odd that tonight we are debating the future of the railways without a paper in front of us setting out that overall policy. As previous speakers in the debate have mentioned, we should have had a White Paper on the broader issue before being asked to agree to the very large financial commitment indicated in the Bill.

I make the total sum £2,114 million over five years. It is a total of £400 million a year, which is the same amount that we spend on the whole of the agriculture and fishery industries. Put in another context, it is two-thirds of Government spending on housing. We are, therefore, being asked to commit ourselves to spending very large sums indeed. The aim must be to receive value for money for this very large expenditure, and to see an efficient railway of which the country and those who serve on it can be proud.

The question of capital spending is probably the most important that arises as a result of the Bill. It is a pity that we have no clear indication of the long-term capital plans of British Rail. Indeed. I think that it is true to say that British Rail has no indication of its long-term capital plans because no such indication has been given to British Rail by the Government. Not only is that injurious to the development of railways; it also has an adverse effect on the export potentials of the British Rail workshops. If the workshops are unable to plan for their future requirements in terms of capital spending, it is extremely difficult for them to obtain export orders and to plan for them to the fullest extent.

All of us must have been saddened by the way in which, recently, we were unable to demonstrate the advanced passenger train to the Americans who had been brought over here by the Chairman of British Rail, who used considerable initiative. With the possibility of considerable export orders and the rejuvenation of passenger travel on the American railways, it was necessary to put the Americans on a rather old train to Derby, or some other railway centre, to look at the advanced passenger train without their being able to travel on it, when they had come all the way from America to do so. That was because of some unfortunate industrial dispute.

Some hon. Members have said that electrification is an essential aspect for the future. I entirely support that view. I believe that we should follow the example of other leading European countries and aim to electrify the whole of the main line network. Italy, France, Germany, Switzerland, Sweden, Holland and Belgium—everywhere of any importance in Europe—have all gone over to very large-scale electrification for all their main lines. That must be the long-term aim for our railways. Not only is it a more efficient system; it has been proved by the Euston electrification to have a considerable psychological advantage and to attract more passengers simply because of electrification.

I ask the Government to give us some indication of their thinking on the future of the advanced passenger train. Not only has it export potential, it is a very exciting concept for passengers in this country. Again, I return to electrification because there are two proposals for the APT—one is for an electric machine and the other is for gas turbines. In both cases there would be a revolutionary new system of suspension. In the case of the gas turbine there is the additional complication of the new and somewhat untried form of power. I believe, therefore, that the future lies with the electric APT rather than the gas turbine. But the answer should be to electrify all the main lines rather than to proceed with quite expensive research on gas turbine machines, which may prove to be unnecessary and will certainly be very complicated.

Regarding the other stock of British Rail I suppose that hon. Members of this House must be among the most regular users of British Rail. They will know that there is an urgent need for new sleeping cars. I believe that none has been built for 20 years. They appear to be square-wheeled sauna baths. If ever there was a case for air-conditioned stock, it is sleeping cars.

As I understand it, there is a shortage of equipment necessary to expand the motor-rail service, which is apparently very satisfactory and which has the obvious advantage of taking private cars off the crowded roads. Again, I should have thought that capital equipment was needed to develop that service to the maximum.

Regarding restaurant cars and rail catering while the inter-city services and the general standard on those services for speed, catering and so on, is good, the catering on cross-country services is normally deplorable. The standard varies. Last year there was one extraordinary cross-country service from the North to the South-West, in respect of which the question whether or not there was a restaurant car depended on which day of the week one was travelling. On Mondays, Wednesdays and Fridays one could have lunch. On Tuesdays, Thursdays and Saturdays one had a cheese sandwich and a glass of beer. This led to many arguments from those who had expected the former service and obtained the latter. This is something to which the senior management of British Rail should give their urgent attention.

When trying to attract passengers it is not good enough to rely on very old vehicles and a very limited menu that is normally confined to cheese or ham sandwiches and beer or tea. The chairman, whom I met recently, said that the old image of the curling rail sandwich was a thing of the past. That is probably true, just as the rock bun preserved for 20 years on Crewe Station is a thing of the past. But a great deal more imagination needs to be given to catering on cross-country services and to the speed and type of stock used on services over a 300-mile journey from, for instance, Newcastle to Bristol. It would be a worthwhile investment to improve services on that route, and on the other route from the North-East to Manchester and Liverpool, passing, as both of them do, through many of the main cities in Britain. The services at present are poor.

I turn now to the subject of diesel multiple units. Again, none has been built for many years. There is a need for re-equipment. On cross-country services, a question that British Rail should examine is whether there may not be two levels of service upon which one could obtain the same financial result. It may well be that on the slightly more frequent services one would lose no more money. It is probably being too optimistic to assume that one would make money on cross-country services, but there could well be a low-level and a high-level service for the same financial result. It is obviously better to provide more frequent services for the same cost.

I shall leave the question of commuters largely to my hon. Friends who represent other parts of the country. I want to raise the important point of the subsidies which are at present being paid by local ratepayers in the passenger transport executive areas. I have always thought it unfair, whatever the complexion of the Government of the day—the Govern ment who introduced it, the previous Government, and the present Government—that there should be a system whereby ratepayers of certain conurbations have to pay from their rates an ever-increasing part of the cost of providing local commuter services while at the same time paying, through taxation, for commuter services in other parts of the country. It is quite unfair that they should pay twice. I hope that the Minister will be able to assure us that in the general review of railways finance this inequity will cease.

A number of comments have been made about the extent to which the Government and civil servants will in future be interfering with the management of the railways. Obviously, this is a difficult subject. It is hard to strike the right balance between excessive Government control and insufficient control, but it is essential that the railways be left with a reasonable degree of freedom of management. I had hoped that we would have tonight some indication from the Government of the lines upon which the railways will be asked to proceed. We are told in the Bill that the lines will be settled with the Minister. It would be helpful if the House could be informed as soon as possible what sort of system of monitoring it is intended to institute.

The aim of the railways must be to provide an efficient and well-used service. Only thus can we obtain full value for the considerable amount of taxpayers' money that is involved in the proposal before us. Like some other hon. Members, I hope that the trade unions involved in the railways will accept the faith shown in the future of their industry by Parliament in the Bill and will not regard it as a blank cheque for the future. I have a very high regard for the ordinary member of the staff of British Railways, whatever his union. It is a pity that the troubles between the National Union of Railwayment and ASLEF, which go back for perhaps a century, have not been resolved. The ordinary railwayman whom one comes across in one's travels has a high degree of dedication.

One hon. Member opposite said that drivers regard it as unfair that bunny girls in London earn £55 a week. I could not help reflecting, when that comment was made, that, whatever the present rules on discrimination, very few ASLEF members would qualify for the job of bunny girl. However, there may well be a case for further differentials in rates in an industry such as the railway industry between different parts of the country. This possibility should be explored, however difficult it might be to introduce.

Hon. Members on both sides have said that in general it is regarded as realistic to accept that there are limited prospects, however much we may regret it, for attracting a great deal more freight to the railways, because the nature of so much of the freight on the roads is such as to make it very hard to transfer it to the railways, although one would like to see it transferred, if possible. We must leave it to the railways to attract freight on commercial terms, using good marketing techniques.

As for passenger services, the need is a fast, frequent, comfortable and reliable service, with the added advantage of a reasonable standard of catering.

There are two main new passenger markets for the railways. The first is to attract the motorist. It is extraordinary the way people are prepared to put up with the inconvenience of a motor car rather than avail themselives of rail services. I believe that there is still a great deal that the railways can do to win the motorist over to them. Secondly, I believe that by means of differential fares there is scope for a considerable increase by the attraction of new travellers. I suggest to the Minister that he, together with the Railways Board, should carefully consider the suggestion that old-age pensioners should have a concession of half-fare travel at off-peak times when there is spare capacity.

7.52 p.m.

Mr. David Stoddart (Swindon)

I welcome the Bill. I suppose I should declare that I have some interest, in that I am a member of the Electrical. Electronic and Telecommunication and Plumbing Trade Union, which is not often mentioned in connection with the railways but nevertheless has a number of members working at the railway workshops.

I represent a town which fortunately, in spite of British Railways and the last Government, still has some activity going on in the workshops there. It has been interesting to learn from the debate so far how many remarkable conversions there have been over a period. Nobody will now say a word against British Railways. Nobody is prepared to say a word about the infusion of money into the railway system. Not so many years ago many people said that we were throwing good money after bad by investing any money in the railways.

This conversion is all to the good. Many of us have been warning the country for a long time that Governments would run down the railway system at their peril. Fortunately, although the railways have been already run down far too much, there are signs that we have at last learned the lesson, that at last we recognise that we cannot have a rational transportation system unless there is a good, viable, efficient and large railway system.

A little while ago I was afraid that the lesson had not been learned. I, like others, read in the Sunday Times that there were people in the Department of the Environment who were contemplating running the railways down even further than the 8,000 route miles which we have at present.

Mr. Ronald Atkins

To 3,000 miles.

Mr. Stoddart

It was called "the blue book". When I raised the question on the Select Committee for Nationalised Industries, I was told that this should not have been published: it was a highly secret document. All the copies which were anywhere about were quickly withdrawn and hidden from the view of not only the public but the staff.

The Sunday Times did the country a great service in getting hold of that document and publishing it to show that there was still such antiquated thinking in the Department of the Environment. It alerted the British population to what was happening and what might well happen unless the public told the Government in no uncertain terms that they would not have their railway system further run down at the behest of some Government or some civil servant in the Department of the Environment.

We are now apparently all agreed in the House that the railway industry needs a great deal of support, for reasons we now clearly understand, and a great deal of capital investment. Over the past few years the railways have been starved of necessary investment. Since the railways were nationalised, and, indeed, long before, the capital investment has not been sufficient to meet the needs of the railway system. Over the past 10 to 15 years it has been a crying scandal that we had invested so little in this great national asset.

At the same time as we have been starving the railways of investment, personal transport and road building have taken a disproportionate share of the country's resources. I have asked questions about this. Indeed, amongst my best friends I have become known as a railway bore—I have "BR", not "BO". Over the past three and a half years I have had to keep fighting for the railways, because over that period my constituents have been badly affected by wrong decisions taken as a result of the lack of capital investment.

The annual total investment on roads, including vehicles, as I have learned from ministerial answers, is about £2,700 million. That does not take into account any other costs such as accidents and damage to property. At the same time as we have been spending £2,700 million annually on vehicles and roads, we have been investing in the railways barely £100 million annually—barely £100 million per annum. Little wonder that the railways are not as efficient as we would like them to be; little wonder that there have been complaints from hon. Members about these services and about the ride on square wheels. The investment level is the reason. We have invested only £100 million on the railways compared to £2,700 million on the roads. I have said that several times because I want to get the message across, to explain why the railway system has declined to its present position.

This policy has led to enormous environmental problems and has resulted in the total neglect of the travel interests of the non-car-owning public. People without cars are entitled to as much consideration as the car owner. The old are entitled to their own travel arrangements, including rail travel. The young, the poor and the disabled are entitled to a good railway system. Because of this lack of investment these people and their travel arrangements have been neglected under successive Governments.

There is at least a glimmer of light, an indication that the problem has been appreciated and that something will be done about it. The task given to the railways in 1968 to become commercially viable was an impossible one. They would not achieve it because they were competing with heavily subsidised road services, a fact not generally realised. What did that task lead to? First, it led to the railways concentrating only on those services which could be profitable—the inter-city services. Of course, the commuter lines in Essex and elsewhere were neglected through low capital investment. That is why hon. Members' constituents are not getting the satisfactory service which they should have and which cannot be provided unless the railways are given the necessary resources.

The railways have also turned away freight traffic, although that is not generally realised either. I discovered this when I visited the Pressed Steel-Fisher works in my constituency. I saw heavy lorries rolling out with six or eight cars on them, leaving to congest the roads in Oxfordshire and Wiltshire. I asked why the products were not sent by rail since the firm had a railway siding. I suggested that they would be easily transported, probably quite cheaply, and that the villages like Faringdon and elsewhere would be spared the congestion. The manager said that he would be delighted to send them by rail but that the railways would not accept them, that they did not want the work, which was not profitable, and that they were concentrating on the inter-city services. How stupid!

I am glad to see that since I raised the matter there has been a change of policy and that train loads of car bodies will now be travelling between Swindon and Longbridge. That is a development I very much welcome, but I should have been even happier had it happened much sooner.

My right hon. Friend the Minister will know all about the railway corporate plan because he and I and trade unionists discussed it ad nauseam. Under it large sections of the railways, including the railway workshops, would be run down. The plan ensured that many of my constituents were put out of work. Workshops were closed down or run down, including those at Swindon. Highly skilled staff who had been with the railways for many years were dispersed to other trades. British Railways, with a fine example of administrative sadism, made 300 of my constituents redundant on Christmas Eve. That caused a great deal of hardship to many of my constituents.

Mr. Spriggs

Regardless of the large number of people who were driven out of their jobs by this policy, regardless of the hardship that this policy caused, the road lobby got its roads.

Mr. Stoddart

My hon. Friend is right, but I am glad to see that with the present Minister the roads lobby is to he perhaps put into perspective as it should be, and I hope that my right hon. Friend will continue in that approach.

Mr. Bob Cryer (Keighley)

I entirely endorse what my hon. Friend for Swindon (Mr. Stoddart) said, and I look forward to confirmation from the Minister on that point.

Mr. Stoddart

Perhaps we should not believe everything we read in the newspapers, but we believe what we want to, and I hope that my right hon. Friend will confirm that his attitude is to put expenditure on the roads into perspective.

In the workshop rundown we at Swindon were told that the locomotive repair activity would cease, and it ceased. We reached the situation where I was asking the Railways Board to ensure that redundant railway engines, only 10 years old, were broken up at Swindon in order to give my constituents jobs at a time of high unemployment. That was the pitiful level then reached. Only a few months later and only a short while after the breaking up started, British Railways suddenly found that they had insufficient locomotives.

Mr. Atkins

Was that not another of Beeching's mistakes?

Mr. Stoddart

It certainly was one of his, but unfortunately it was repeated by people who should have known better. The British Rail workshops are busy trying to reclaim locomotives which British Rail said were redundant two years ago. There is a grave shortage of locomotives and wagons. The difficulty my right hon. Friend will find when he is encouraging British Rail to carry more goods by rail is that it does not have the wagons or locomotives to enable it to do that.

Fortunately, we still have in Swindon a big railway workshop potential, but the workshops are not building or repairing locomotives. They will keep going by building railway cranes for Krupp of Germany. I am worried that the British capacity to build the necessary locomotives does not exist, and that very shortly we shall be importing locomotives. That would be a serious matter. It would be badly received by railway workshop personnel who have been thrown out of jobs over the past three and a half to four years.

I hope that my right hon. Friend will be able to confirm tonight that it is not the intention to allow British Rail to buy locomotives from abroad, and that he will tell it that it has the capacity in Britain, if it cares to use it, to build our own locomotives. I hope that he will tell British Rail that it must do that.

The right hon. Member for Yeovil (Mr. Peyton) seemed to object to the Minister's intervening in railway matters. I can well understand that, because I repeatedly asked the right hon. Gentleman to intervene to prevent the rundown, and he repeatedly refused. I hope that in the light of what I have said tonight right hon. and hon. Members will agree that there was a case for intervention to prevent the rundown, which was against the national interest. I hope that my right hon. Friend will not be diverted from his task by the words of the right hon. Gentleman, who was formerly Minister for Transport Industries—and not a very good one.

I trust my right hon. Friend. I have known him for a long time, and I know that he wants the railways to succeed and to play a much greater rôle in this country's transportation policy. It is encouraging that in part of the Bill he is to provide grants to firms for private sidings and other railway handling facilities. Although the sum involved is only £5 million, it is at least a start.

Mr. Mulley

There has been a misunderstanding about the £5 million. That is our estimate of the provision in the first year. There is nothing in the Bill to restrict the sum. If the demand is greater, we shall try to meet it. The £5 million is merely an estimate of what the amount will be in the current year.

Mr. Stoddart

I thank my right hon. Friend for that information. There has, indeed, been a misunderstanding. It is encouraging that this is only the first stage, and that if there is a bigger demand it will be met by my right hon. Friend's Department. I have been advocating such aid for the past three and a half years, and I am pleased that my right hon. Friend has acceded to my request. I am sure that it will help the railways in their bid to carry more traffic by train.

I repeat that I welcome the Bill. However, I believe that it is only a start. I urge my right hon. Friend to carry the matter through and make sure that British Rail is continuously supported so that the morale of the British Railways Board and the people who work in the industry is maintained at a high level, because that morale will quickly build up the railway transport system to the peak that we need and deserve as a country.

8.16 p.m.

Sir Anthony Meyer (Flint, West)

The constituency I represent would be in a sad way if there were any reduction of rail services to it. On that ground alone, I am among many hon. Members on both sides of the House who are delighted that the Government, following the policy decided upon by my right hon. Friend the Member for Yeovil (Mr. Peyton), have decided against any policy of reducing the size of the British Rail network.

The hon. Member for Swindon (Mr. Stoddart) is probably right when he says that the provisions in the Bill for future investment in British Rail are not large enough to meet the needs of the situation. That is a point of view which I am inclined to share. We must also take into consideration that there is a need for large investment in the coal industry, the electricity industry and the steel industry, quite apart from the massive State investment that must take place in schools, hospitals and subsidised housing, none of which can be expected to operate at a profit.

Somewhere there must be a limit to this process. Someone must make the profits out of which those loss-making industries and services can be subsidised. Therefore, it behoves the Labour Party to adopt a somewhat more friendly attitude towards those industries that succeed in making a profit, so that those profits can be made and in their turn subsidise the great public industries.

I say that only to remind myself and hon. Members on both sides of the House that there are limited resources available to do what we want to do with the railways, and that therefore there must be priorities. We cannot do everything.

I hesitate to criticise the Bill when it is supported by the Minister—for whom I have a high regard—and by my right hon. Friend the Member for Yeovil, for whom I also have a high regard, but what bothers me about it is that it contains no incentive to the railways to increase their efficiency. The form in which the subsidy is given—I am not talking about its size—does not contain any built-in incentive to operate in a less costly manner or in a more cost-effective manner

There have been complaints from both sides of the House that we are not given a transport White Paper as a general framework of transport policy in which we can consider the Bill as a contribution to that policy. It so happens that in the past day or two there has appeared a report of the Independent Commission on Transport, chaired—rather oddly perhaps—by the Bishop of Kingston. I arrived only very shortly before the debate and I have not had time to study it in detail, but it seems to me to provide some framework of reference. It makes specific suggestions for gearing a subsidy on the basis of the number of passenger-miles and the number of ton-miles carried by the railways above a certain limit, and that it should be on the basis of that mileage, and of specific figures which the report gives of so many pence per passenger-mile and ton-mile, that the subsidy should be given.

Whether or not that is the right basis for a subsidy, it seems that it must be better than the totally open-ended approach that is adopted in the Bill. Desiccated economists—I do not include my right hon. Friend the Member for Yeovil among them—keep telling us that whatever people may wish it is foolish and impractical to try to get a large amount of traffic off the roads and on to rail. Some figures have been quoted today to illustrate that point. However, the plain fact remains that many people want to do it. Included among that group are people who do not themselves make much use of the railways and who would be in the position of having to contribute towards the expense of shifting traffic off the roads without using rail themselves.

If people want to do something like that, and if it is not manifestly wicked or manifestly impossible, it is our job as politicians to consider whether something can be done. I believe that we can do something as long as we are prepared to pay the price and as long as the people whom we serve are prepared to pay the price.

Not even the most desiccated economist can claim that the car is an efficient method of carrying out the operation of commuting. It has been said that confidence in the reliability of the rail system is such that it has resulted in a situation in which far too many people attempt to commute by car with disastrous consequences all round.

The economists seem to be quite happy with the kind of situation that we have along the London-Birmingham stretch of the M1. To my mind that stretch of roadway presents one of the most dangerous and terrifying sights and experiences that it is possible to encounter. I drive home to my constituency along the M1 and every time I join it at Watford or Hemel Hempstead I am petrified when I have to fit my car into an inexorably moving mass of vehicles, three abreast, travelling at 70 mph, with never much more than 20 feet between one vehicle and the vehicle in front, every vehicle belching smoke, making the most terrifying noise and leading to the most appalling pile-up and loss of life if there should be any interruption of the flow.

That seems to be the most nonsensical way of going about things. It reinforces the suggestions which have been made that there should be a considerable extension of the facility of motorail. Obviously it is much better to put a car on to a train and to put oneself into a sleeper and to wake up the next morning at one's destination. Equally, there are strict limits on what can be achieved in this direction. The present track could not possibly cope with the amount of wheeled transport which uses the motorways for longish journeys.

I am wondering—I hope that my right hon. and hon. Friends will not be too shocked—whether it would be possible for British Rail to enter the hovercraft market and to extend from the rails to the motorways. They could then provide some kind of carrier service whereby carriers carrying six or eight cars would be available at interchange points on the motorways—they could operate, fox example, every 10 minutes—to carry vehicles for a minimum distance of 100 miles to another major motorway exchange. That would drastically reduce the number of private cars travelling along the motorways.

I believe that such a carrier operation would be extremely profitable for whoever carried it out, and that it would go a long way towards improving the environment. The question whether or not such a scheme would be practical would have to be considered further, but one thing that has emerged clearly from this debate is that there is general recognition on both sides of the House that British Rail cannot be allowed to diminish in size and that there is some disposition to hope that it may be allowed to grow a little.

I speak as a fan of British Rail. I enjoy travelling by rail. From that statement hon. Members will be able to deduce that I travel a great deal by inter-city and very little on the commuter lines. I enjoy excellent meals when I travel by rail. Our standards compare admirably with the standards of catering on most Continental railways. I just wish that the Bill not merely guaranteed that British Rail will be able to continue at about the same level and at about the same standard of efficiency; but held out hopes of real improvement as a result of building into it incentives to make things better.

8.26 p.m.

Mr. Bob Cryer (Keighley)

I must begin by declaring an interest. I hold five £10 shares in a private railway. I am probably the only Member of this Parliament who drives a full-sized steam engine for relaxation on a former British Rail branch line. It is a branch line that in its last year of operation some 14 years ago carried 135,000 passengers and 20,000 tons of goods. That is the sort of quantity and volume of traffic that has been declining from the railways ever since.

It is not to the past that we must look but to the future. There have been some threads of nostalgia running through tonight's debate, but we want to see a modern, efficient, and forward-looking railway system. That is, I believe, what the Bill will help to achieve. The hon. Member for Flint, West (Sir A. Meyer) mentioned that the Bill does not contain any incentives to efficiency. It is easy to say that, but we must remember that the railways have a high standard of safety and that increases in efficiency that cut corners are not necessarily compatible with safety. We all, of course, remember the Hickson level crossing disaster, when manned level crossings were abandoned and electronic equipment was substituted. It will be realised that, although in theory that is more efficient, the dangers are commensurately so much greater that the cost of hazards looms very large and the full concept of efficiency is lost. We must bear in mind the concept of safety so that the railways can maintain their enviable record.

The Bill provides a necessary injection of capital because it is necessary not only to retain our existing passenger network of approximately 11,000 miles but to improve it. It has been suggested that the railways should never have been nationalised. Perhaps that is true, because all the time that they operated before nationalisation they were sliding into bankruptcy. It would have been far better to let them slide into bankruptcy and to demonstrate their difficult capital position and then to take them over and rescue them from the certain doom to which they were heading. That is an indication of the difficult financial position in which the railways found themselves soon after the war, let alone in 1973–74.

It is useful also that the Bill gives wide powers to the Secretary of State under Clause 4 and perhaps restores to the House some of the accountability for this State-owned industry which it should never have lost. Unfortunately, as I understand it, the nationalisation Act actually reduced the amount of accountability to the House. It is good that the Secretary of State will have some measure of control again, because he in turn is accountable to us.

I hope that, under his fairly wide powers, my right hon. Friend will encourage some sort of workers' participation and democratic control. There has been much talk about the industrial relations difficulties on the railways. One of the concepts of nationalisation was that the hierarchy should bear some relation in representation to the rank and file workers. Alas, far too often the board seems to have been saddled with discarded generals or others footloose and wanting a cushy job. It did not improve the attitude of the porter, the signalman or the shunter, working throughout the night, to know that their wages were still comparatively low and that the hierarchy had not really changed. One of the aims of nationalisation was to improve worker participation and democratic control, and I urge my right hon. Friend to do so, because this sort of move is something that the trade union and Labour movement looks to the Labour Government for.

Mr. Tyler

I am sympathetic to the point which the hon. Gentleman is making. But would he not agree that the centralisation of British Rail has also reduced the impact and the influence of the individual railwaymen on the policy in which the hon. Gentleman is interestd?

Mr. Cryer

This is a problem of organisational control, but one must also bear in mind that one of the difficulties, even to this day, of the nationalised rail system is that in some instances the boundaries of the old pre-grouping companies still exist. In my constituency, for example, British Rail started a very good advertising campaign, but the first timetable there showed a boundary at a signal box, which most members of the public did not readily appreciate. The reason was simply that the regions divided there, as did the old pre-grouping companies. If we are to have the benefits of a unified national system, there will inevitably be some degree of central control. It is not an easy matter to solve, but we have never really investigated it yet.

The Secretary of State, under his new powers, could well give greater meaning to the position of the consumer. I do not think that any of us should be satisfied that the railways serve the consumer as well as they might. In many respects one of the faults of the railway system is that it exists as though it were still in the nineteenth century with a monopoly rôle in transport, whereas that position has changed. My right hon. Friend should consider ways of giving the consumer more say. The transport users' consultative committees—consisting of appointees who are never very satisfactory because they are always conventional figures, which is why they are appointed—should be replaced by a far more extensive and radical form of organisation, with representatives from directly elected bodies, certainly including local authorities.

The railways have important environmental implications. My right hon. Friend said, when we were discussing the Channel Tunnel Bill, that this aspect of the railway-oriented tunnel was not yet satisfactory. I said at the time that hoped he would also bear in mind the environmental advantages of the railway network when considering motorway schemes and their high costs. I hoped that he would also bear in mind the relatively low costs which would be involved in improving the railway network beyond measure.

The railways are cleaner and swifter and lack the congestion and high construction costs of urban motorways. Track capacity is often under-utilised. In this respect we are all concerned to increase the utilisation of the railways for freight. It is worth bearing in mind that the rail-borne proportion of freight in this country is the lowest in Europe, so we have a good potential for improving it.

It is worth substantiating the claim of my hon. Friend the Member for Swindon (Mr. Stoddart) that about 10 years ago British Rail had a policy of turning traffic away. One hopes that that policy has been long since reversed. Only 10 years ago demurrage charges—charges for the hire of a wagon which is not in use by the railways and is waiting to be unloaded—were virtually doubled overnight. But one of the things that commercial enterprise must know with some certainty is the level of demurrage charges, because if an industrial concern is hiring 50 wagons per day—which is the sort of traffic British Rail will deal with because it tends to avoid smaller numbers—an increase in demurrage charges can be very swingeing indeed.

I am very encouraged, as, I know, other hon. Members are, by the fact that up to £5 million per annum is being provided for private siding connection. Two Ministers of Transport have now said they are encouraging the top 100 firms, or some hundreds of firms, to participate in railway traffic. In the past three years private siding connections have declined by several hundreds, and my right hon. Friend really must get down to this matter and start encouraging traffic, and use this money and not simply talk about it, because the tendency unquestionably is for private sidings to be shut and for traffic to be transferred to the roads. This is a business which must be pursued with vigour.

Many freight yards have been, and are being, sold off to road haulage contractors. Railway premises which have been used for railway purposes are actually being used by road haulage contractors for the self-same purpose of breaking down bulk—but not for door-to-door delivery, which is one of the most vaunted boasts of road freighters.

I hope that my right hon. Friend will consider urging on the railways restrictive covenants when railway land is sold. I would urge on him Labour Party policy, that where tracks are taken out of use they should be retained complete and intact for the passage of railway vehicles so that a 10-mile section is not bought totally out of use by the middle half mile being sold off, as so often happens.

I must make a brief mention of industrial relations. Hopefully, this Bill is a shot in the arm for the railwaymen. When Conservative Members criticise the railway men, I would ask them to consider what their reaction would be if Parliament were declining and we were cutting down the membership of the House by two-thirds. Would they not be anxious about what could come next? It is this sort of consideration which motivates the railway men in seeking to safeguard their jobs and wages and in that situation appointments of retired generals are looked at by railway men somewhat cynically.

Lastly there is the amount of investment mentioned in the Bill. It is no more than adequate. The electrification side is the glamorous side but let us always remember that it is the local services which affect the vast majority of ordinary rail users, and not those, for example, on travel warrants or other means of free access. The secondary, branch lines, on the cross-country routes, carry the bulk of them. The diesel motor multiple units are fast ending their lives; they have been running 10 years at least and most of them for 15 to 20 years. That sort of capital investment is necessary to the branch lines and cross-country routes, which are important.

I hope there will be consideration of the possibility of the reopening of lines because as the general trend of remarks has indicated, we are now in an age where environmental considerations are continuously with us and the railways will assume, therefore, an ever-increasing importance in our lives.

8.40 p.m.

Mr. Roger Moate (Faversham)

The hon. Member for Keighley (Mr. Cryer) revealed himself, rather unexpectedly, as a capitalist shareholder in a railway line. I cannot compete with that, but a week or so ago I had the pleasure of travelling on the footplate of a steam locomotive belonging to a railway that receives no subsidy, never suffers from any industrial dispute and gives great pleasure to all who travel on it—the Sittingbourne and Kemsley Light Railway. This line has a number of locomotives which operate on a four-mile journey. If any hon. Member wishes to pay a visit to my constituency I am sure that he will enjoy travelling on the railway, which is becoming an increasingly important tourist attraction in the area.

Mr. Cryer

I must make it clear that the railway of which I am a director does not pay a dividend and is run on democratic Socialist lines.

Mr. Moate

It is sounding increasingly like British Railways—certainly when the hon. Member talks about dividends.

The hon. Member for Swindon (Mr. Stoddart) made a less than fair attack on the work of my right hon. Friend the Member for Yeovil (Mr. Peyton) when he was Minister for Transport Industries. Other hon. Members have been rather more fair in talking about my right hon. Friend. If a conversion has taken place in the public's attitude —and the attitude of hon. Members—about the size of a viable railway network, I suspect that a great deal of the credit for that is due to the action taken by my right hon. Friend.

Under the last Labour Government 3,400 route miles of railway were closed. Under the previous Conservative Government about 135 route miles were closed. This Bill clearly has its roots in the decisions taken by my right hon. Friend, and the hon. Gentleman should pay him full credit for that.

My first concern is to speak for the 4,000 or so constituents of mine who regularly commute the 45 miles' journey into London from Faversham. These points have been made earlier, so I will not labour them. A fairer deal for commuters ought to emerge from this Bill. I hope that the Minister will realise that these people periodically suffer enormous inconvenience. I was surprised that so many Labour Members who have connections with the railways should be so defensive and sensitive every time anyone dares to comment on the disruption caused by industrial disputes.

We recognise that there are often legitimate reasons for such disputes and that it is necessary to take into account the history of the industry. But it is surely self-evident that industrial relations on the railways are unsatisfactory. It is unsatisfactory that two railway unions should fight among themselves, as happened in the last dispute. Disruption occurs not infrequently, particularly when weather conditions are at their worst and the inconvenience to commuters is at its greatest. Surely it is unsatisfactory when unions are reluctant to take their case to arbitration. There must be better ways of settling such disputes.

The Government are prepared to invest large sums of money in the railway system through this Bill. The estimate varies between £2,000 million and £2,800 million. They have, therefore, considerable moral authority in going to the unions and trying to establish better relations. It may not make sense to Labour Members but it makes sense to the public that these unions should merge so that there is one railway union. That would end the arguments about differentials which cause such disruption.

This is an opportunity to ease some of the suffering caused to my constituents throughout the year. It takes very little to upset the railway routine. Even at the best of times the trains at Faversham are running 10 to 15 minutes late, night after night. We know that the railways are suffering from an acute shortage of staff. The unpunctuality has, however, prevailed for a long time before this staff shortage, which is of fairly recent vintage. It is a matter of immense frustration and anger to tired commuters when they are constantly delayed and constantly given pretty odd reasons for the delays.

The Minister obviously has considerable influence over the management decisions of British Railways. He should take some steps to encourage better communications between British Railways and their passengers. I have put this point to British Railways many times, suggesting that there should be better communications from one station to another and between drivers and stations. I gather that on the inter-city services there are very good facilities, with radio telephones in the cab and on-train communication. I gather that it will cost about £2,000 or so to ensure that there is a radio telephone to each driver and to provide on-train communication. If passengers could be given clear, intelligible explanations for delays, much of the frustration and anger of commuters would be eased and many of British Rail's problems would be eased. Complaints would be fewer, and that would contribute massively to good will between British Rail and the commuters. I urge the use of at least one commuter line for experimental purposes in the improvement of communications.

I have always had courteous treatment from my area committee, but the Transport Users Consultative Committee is, generally speaking, regarded as ineffective. I ask the Minister to consider suggestions that have been put from both sides of the Chamber for more teeth to be given to the TUCC so that it genuinely and effectively represents consumer interests. Thousands of commuters express legitimate complaints, often to their Members of Parliament, but Ministers will not take parliamentary Questions because they concern matters for British Rail management. There is no other channel through which questions can be directed to British Rail. British Rail management is always immensely courteous and helpful, but the process is ineffective. Given more powers, the TUCC offers a sensible basis for satisfying genuine consumer complaints.

Today rail fares for my constituents and for everyone else go up by 12½, per cent. The rail fare from Faversham to London is now approximately £6 a week. That is the largest item in the budget of many of my constituents. They see fares going up inexorably year after year while they are being subjected to appalling delays and overcrowding. That is not the quality of life that we are seeking to provide. The phrase "social railway" rings hollow for many people.

On French expresses there are boutiques and hairdressing salons, and on the inter-city lines on the Continent there are radio telephones. People do not ask for that. All they ask for is reasonable comfort and punctuality the whole year round. The fares they are paying entitle them to better conditions. I hope that the Bill will give British Rail the incentive to invest more rapidly in those services and that the Government will play their part in persuading unions to reconcile their differences and give a guarantee that, during the winter months particularly commuters will travel in greater comfort.

Mr. Spriggs

The hon. Gentleman will appreciate that many hundreds of thousands of passengers wish to travel to work within a certain period in the morning and to return at approximately the same time in the evening. How is the Railways Board to cater for rush-hour traffic without overloading trains? Can the hon. Gentleman help us with any suggestions?

Mr. Moate

I certainly recognise the tremendous pressure of commuters on the South-East network. Not nearly enough has been done to encourage the staggering of hours. Some years ago I asked whether the head office of British Rail staggered hours and I was told, rather shamefacedly, that it did not. We have not taken the staggering of hours seriously at national level. I understand the point, but it needs only a marginal improvement to get trains running on time for most of the year. That is all I ask, and I do not think it unreasonable.

I turn next to the matter of parliamentary control. It is a little frustrating that in respect of minor management details it is difficult to find some means of questioning either Ministers or the railways. This is one aspect which could be dealt with by the TUCC, but certainly on the matter of parliamentary control of finance we must get to grips with the situation. It is all very well to say that British Rail should conduct its own affairs without interference, but it is surely wrong to allow the industry to proceed with the modest amount of control which it has had.

My hon. Friend the Member for Woking (Mr. Onslow) said that it was 13 years since a Select Committee investigated the railways. It must be remembered that in that period of time, rightly or wrongly, £3,000 million of public money has been written off. This matter should be carefully watched by the House. If the present Bill is to allow some £2,000 million to be spent in the next five years, we must be sure that it is spent wisely.

The Minister made some interesting comments about the increased control which the Government and Parliament could exercise as a result of the Bill. I am not sure that that is clear to all of us. I think that at a later stage of the Bill it would be helpful if the Minister could spell out the extent to which he expects the House, and indeed himself as Minister, to become involved in the details of management and finance.

Mr. Mulley

This is a matter for the Standing Committee. I wish to make it clear that it is not my intention to deal with decisions on why trains are late, staffing and similar matters. One would then be in a position of trying to run the railways, whereas when a Minister gives directions he is always answerable to the House.

Mr. Moate

I thought that the Minister would want to clarify that point. I cannot imagine anybody wanting to discuss railway timetables across the Floor of the House. But I hope he will take the point that it is difficult to get these matters discussed anywhere and that these are legitimate matters of consumer interest.

In respect of financial control it appears that there is to be a system of open-ended grant. It might be argued that this is a legitimate way to proceed, but I believe that it is giving a blank cheque to British Rail and does not offer the extra amount of control to which the Minister referred. I noticed an interesting passage in a speech made by the right hon. Member for Blackburn (Mrs. Castle) on 4th July last year when she was in Opposition. She said: In answer to Mr. Marsh's demand that he should be given a more flexible financial framework, I say that the way that he has presented his case is the best justification for refusing—as we refused—to continue writing off from time to time capital debts accumulated as a result of over-optimistic forecasts, and instead, as we did in the 1968 Act, making a clear distinction between the areas and forms in which we ought to subsidise the railways on social grounds and, on the other hand, those areas of the board's finances in which it ought to be subject to commercial discipline."—[OFFICIAL REPORT, 4th July 1973; Vol. 859, c. 558–9.] There is a great deal to be said for that. At least it appeared that we would have more control over what was happening, whereas under the present system it is difficult for Parliament to know what is going on within the railway network. Until we know how to exercise control over railway finances, the more detailed supervision we have the better.

This Bill is not the final answer to the management of railway finances by Parliament. I suspect that it will not be long before we shall be faced with more financial requirements and more difficulties. No doubt we shall live and learn, but in the meantime there is all-party agreement that this type of measure is needed.

I noticed that in the Economist it was said in respect of this Bill that half of British Rail's costs will be borne by the taxpayer. If this is true, it demonstrates how far we have moved along the road to a massively subsidised system.

One reason why most of us welcome the Bill is the realisation that there is a vital need to transfer as much freight as possible from road back to rail. I am saddened when going round my constituency to see unused rail sidings at various factories. What worries me is that whenever I cross-examine industrialists about transferring back to rail they appear to be cynical about the situation because of their past experience involving difficulties, delays, lost freights and so on. It will be very hard for British Railways to persuade industrialists to use these sidings again and to transfer as much freight as they can back to rail.

I was a little worried when a Government supporter who has some experience of the railways suggested that British Railways were still negative in their approach to the transfer of freight. I accept that they are very interested in the large and regular users, but it is the wagon loads and the smaller operations, which are just as important to road users, where progress should be made.

I have seen two instances which support the case. One was referred to by the hon. Member for Swindon and it is a very useful illustration. Nine trains each week will carry car components from Swindon to Birmingham which would require 300 lorry loads in the same period. That is obviously of interest to British Railways and to the environmentalists. What is more, one 700-ton train load per day all the year round will move industrial salt from Cheshire to South Wales. That is 250.000 tons a year. That would mean 40 to 50 full lorry trips per day and an equal number of empty runs.

Obviously, it is important to get that traffic off the roads. There is a great deal more that could be done. However, the position must not be exaggerated. We know that it will not make a tremendous difference to our present road congestion, but it is accepted that it could make a significant difference. It was calculated that if the railways increased their carryings over 50 miles by 50 per cent., heavy lorry traffic over the same distance would be reduced by a quarter. That is significant, and, if we could move in that direction to a degree, it would be of considerable benefit.

In the correspondence that I have had with British Railways it has been pointed out to me that not only is there a shortage of wagons but there is still a planned reduction in the size of the wagon fleet. Although these are more modern and more efficient units, I wonder whether a reduction of the order which is planned will be able to cater for a positive effort to switch freight back to rail.

I should like to feel that British Railways, backed by the Government, will make a positive sales effort to use their new facilities in the Bill to exploit the opportunities for grants to new sidings and to help regenerate old ones. If they do this, it could make a significant difference to some of our environmental problems and at the very least prevent their getting any worse. That is one reason why I and other hon. Members welcome the Bill, although we view with caution the question of future parliamentary control over these massive sums which we again plan to hand out to British Railways.

8.57 p.m.

Mr. Daniel Awdry (Chippenham)

We have had a very interesting and worthwhile debate on this Bill, which is of historic importance to British Railways. As many hon. Members have said, the Bill reflects a completely fundamental change in the attitude of the Government towards the railways, and its implications are very far-reaching.

I shall always remember the many hours that I spent in the Standing Committee which considered the 1968 Transport Bill. Those of us who served on that Committee will never forget it. It was the longest Standing Committee stage ever to take place in the history of Parliament, and it was extremely controversial. However, we were all agreed on one matter. We thought that it might be possible to get away from deficit financing of the railways.

In her Second Reading speech, the then Minister of Transport, the right hon. Member for Blackburn (Mrs. Castle) said: The new financial framework will also mean that there will be no provision for deficit finance. British Railways will be standing on their own feet and will be expected to pay their way…Thus, the depreciation element in the deficit grant will be correspondingly reduced. I believe that this is a fair challenge to the railway industry, but it w ill certainly be a tough one. The Joint Steering Group and the Government are under no illusion that a massive write-off debt will in itself make the railways financially viable."—[OFFICIAL REPORT, 20th December 1967; Vol. 756, c. 1293] Later, when the right hon. Lady gave up her job of Minister of Transport her place was taken by Mr. Richard Marsh, the present Chairman of British Railways. He took the same view. He also believed at that time that the railways could be run as a commercial profit-making organisation provided that grants were made available for the unremunerative passenger services which would be kept going for social reasons. That was the view of Mr. Richard Marsh when he joined the 1968 Transport Bill Committee. He was lucky; he joined the Committee stage towards the end.

In 1969 and 1970, after the Bill became law, the railways made a profit for the first time since 1953. The figures were £14.7 million and £9.3 million respectively. But by 1971 the profit became a loss of £15.4 million, and in the following year the deficit increased by another £10.8 million.

I believe that my right hon. Friend the Member for Yeovil (Mr. Peyton), then Minister for Transport Industries, was right to ask the railways to carry out their own review of future railways policy. He could have called in outside consultants or civil servants to look at the railways. However, he felt it much wiser to ask the managers of the industry to make an analysis of their own business. I support and still support him in that decision.

Almost a year ago the Railways Board made its report to the Government. It is worth reminding the House that the board said: There is no viable railway network, and any significantly smaller network would require greater financial support than the present day railway. That was the first finding of the Railways Board.

Secondly, the board said: The 'necessary railway' can only be defined in the context of overall national transport policy as decided by the Government, but the Board recommend a railway similar in size to the present network. That is the network of 11,500 miles.

Following that report, the then Minister made his announcement of policy in this House on 28th November last year. As we have heard, the basis of that announcement was to maintain the present railway network, to spend £900 million over five years on investment in British Railways, and to support his proposals with a White Paper covering the whole spectrum of transport policy. I emphasise the last point particularly because I shall return to it later.

Since then we have had a General Election. Now the present Minister has asked us to approve this Bill. We can examine quickly what it does. It abolishes the existing subsidies for branch lines and makes available £1,500 million for the general subsidy of passenger services over the next five years; it writes off £189 million of capital debt which will save British Railways about £15 million per year in interest charges; and it increases the maximum borrowing power to £900 million.

The Bill does not state what additional money will be made available for investment. Many hon. Members were looking forward to hearing the Minister give more details of the investment to be made available for the railways. Frankly, we are a little disappointed that he could not tell us more. I understand that the Government are to review all their public spending, but it is essential that British Railways should be given details of the investment that is to be made available to them.

The hon. Member for Leicester, East (Mr. Bradley) described the Minister's statement as vague. The hon. Gentleman was supported by his hon. Friend the Member for St. Helens (Mr. Spriggs) who wanted to hear more about investment in British Railways and he in turn was supported by my hon. Friend the Member for Tynemouth (Mr. Trotter). They all took the view that it would have been helpful to be told more about investment in British Railways. If the Railways Board is to run the railways it must know several years in advance the long-term planning and investment proposals.

I make the same point for industrialists who work for the railways. The hon. Member for Swindon (Mr. Stoddart) made some good constituency points about the railway workshops in his constituency. I should like to make a constituency point for Chippenham, where Westinghouse—a very large company which has many years' association with British Railways—is situated. That company needs orders for several years ahead so that it can set up specialist teams to deal with these orders. If the orders are not given and if the planning of investment is not long term, those specialist teams may be broken up. Westinghouse, like British Railways, must be able to plan well ahead. I hope that when he concludes the debate—or at a later stage—the Minister will give us more details about the investment plans for the railways, because the Bill does not do that.

No one can doubt that the Bill will result in an immense increase in the rate of Government support for the railways. It may even mean, in due course, that half the cost of the system will be borne by the taxpayer. Before we part with the Bill, therefore, we are entitled to get some clear answers to a number of issues that have arisen throughout the debate.

I shall touch on only three matters, because I said that I would speak for only about 15 minutes, but we shall wish to raise other matters in Committee. First, what has happened to the Government's integrated transport policy? Secondly, how will reasonable and proper financial discipline and control be maintained by Parliament? Thirdly, what guarantee is there that an improvement in industrial relations on the railways will take place and justify this large payment of taxpayers' money? We have not had answers to those questions so far, and we await the Minister's speech, during which we hope that he will reply to them.

I ask the Minister to let us into the secrets of his ideas on an overall transport policy. The Minister may know that last month the TUC devoted one-third of its statement on transport to this very question of an overall transport policy. The TUC wants a national transport planning authority, it wants to extend public ownership to all road haulage operators who have more than five vehicles of over 2 tons unladen weight, and it asks that all major road planning decisions in future should be taken by this national transport planning authority. No doubt the TUC will ask that half the members of the authority should come from the trade unions.

We have not heard very much about the road haulage side tonight—though we heard from the railway lobby—and I ask the Minister to say whether those ideas put forward by the TUC are in line with his thinking on an overall transport policy.

I ask the Minister to tell us a little more about the road programme, because we have not heard very much about that. Last week the right hon. Gentleman said that there would be a reduction in the road network programme from 3,500 miles to 3,100 miles. He also indicated that a lower standard of road building would have to be accepted, and that has caused certain anxieties for the road haulage industry.

We have heard about transferring traffic from road to rail, but even the TUC accepted in its policy document that the old road versus rail argument is irrelevant, and I think that all hon. Members will agree with that. If one excludes coastal shipping, the average haul for all transport in the United Kingdom is 32 miles of the total ton mileage of the road haulage section, hauls of more than 75 miles amounts to only 10 per cent., and only half of that concerns bulk materials which could possibly be switched from road to rail. Only about 2 per cent. to 4 per cent. of all road haulage traffic could possibly be attracted back to rail. It therefore follows that it is essential that sufficient investment in the motorways and other principal roads around the cities should continue. The Opposition feel that over the years the Government have talked a lot about an integrated transport policy but have not yet done very much about it. That is a glaring weakness in the Bill.

The second point relates to financial control and discipline. I realise that there is a serious dilemma here because one has to steer a delicate course between control and interference. My right hon. Friend the Member for Yeovil made a forceful statement about this and so did my hon. Friend the hon. Member for Tynemouth. Over the last few years there has been a tendency for parliamentarians and the Civil Service to intervene a great deal in the day-to-day running of the railways. One chairman of British Railways said that he felt like the chairman of a public company with its annual general meeting in permanent session throughout every day of the year. That is a hopeless proposition. It is very bad for management, and it gives them a ready-made excuse for inefficiency.

If Governments intervene and affect decisions of management against management's better judgment, at the end of the year management can blame the Government for the bad results. We believe that the Government should give management a job to do and then let it get on with it. The Minister agreed with that view in his opening speech. No industry, in either the public or private sector, will survive too much interference from Ministers, Members of Parliament or civil servants.

Having said that, we do not consider that the powers in Clause 4 of the Bill are yet satisfactory. The Minister should insist, by means of the Bill, that yearly detailed figures are published of the traffic and the cost of each service. For example, it is intended that freight charges should reflect their true share of infrastructure costs, and we feel that unless detailed requirements are written into the Bill it may become impossible for Parliament or the public to make any proper distinction between losses which it is prepared to meet because of social and environmental advantages and losses incurred simply because the service is badly run. We shall return to this point in Committee and see whether we can improve the provisions so as to get better supervision.

I come to the thorny question of industrial relations on the railways. I assure the hon. Member for Leicester, East—who is not present at the moment—that I do not wish to make any mischief. The hon. Gentleman raised this matter in his speech and it is not surprising that much of the debate has concentrated on this issue, bearing in mind the sufferings over recent months by commuters as a result of industrial action. This point was mentioned by my hon. Friends the Members for Woking (Mr. Onslow), Essex, South-East (Sir B. Braine) and Faversham (Mr. Moate). I wish to make clear that I do not want to say anything which might make a difficult situation worse, but if large sums of public money are to be spent on the railways the public will demand both efficiency and an end to restrictive practices which they feel are now totally out of date. This is not the occasion to review the history of the dispute between ASLEF and the other unions—

Mr. Leslie Huckfield

I presume that the hon. Gentleman is aware that since 1962 the number of footplate staff has been reduced from about 80,000 to about 28,000. Where are the restrictive practices in that?

Mr. Awdry

I do not want to stir things up, but the public do not understand drivers who are prepared to take a train out one day when it is not fitted with a speedometer or a windscreen wiper, or has some other small thing wrong with it, but next day utterly refuse to take it out, leaving hundreds of commuters left standing in the cold. This is all to do with the rule book. The hon. Gentleman is aware of this. He has made several interventions in the debate and has tried to make a good case for his own union in this connection. But I am not trying to stir up trouble. Rather, I wish to point out that the public will not accept the position unless industrial practices can be improved.

As I was saying earlier, this is not the occasion to go into the history of the dispute between ASLEF and the other unions, which dates back to the proud traditions of the engine drivers. The dispute gained impetus by attempts to restructure pay rates—perhaps the 1968 Penzance agreement was a major factor, but there have been other occasions.

I admit that pay on the railway is still probably too low. Staff have to work difficult hours and have problems of their own. I accept that there are many difficulties, but I cannot accept the argument of Mr. Buck ton that only train drivers have a special case. Modernisation and high speed trains have also changed the jobs of other workers. There have been innovations such as automatic signalling, automated marshalling yards and new track-laying networks.

The drivers sometimes claim that there is a great shortage of drivers, but the most serious shortages are in the key grades of guards and signalmen. Some members of the public wonder why it is even necessary in the 1970s to have a separate trade union for drivers, but I shall not pursue that matter now. What is absolutely agreed—everyone who has spoken in the debate has agreed about it—is that it must be in the best interests of those who earn their living on the railways to produce a service which is attractive to the public and, therefore attracts more business. That is the common interest which should unite the unions and not divide them.

Mrs. Elaine Kellett-Bowman (Lancaster)

Does my hon. Friend accept that the nation must appreciate that if it is to get service from railwaymen, all those who have to work unsocial hours, whatever their job on the railways, and who are deprived of normal family life at weekends, and so on, must he properly remunerated?

Mr. Awdry

I am grateful for that intervention. However, we all know in our heart of hearts that the sheer bloody-mindedness of one or two militant drivers did a great deal of harm to the whole image and reputation of the railway industry. It is a matter of the highest priority for the industry that a better attitude is achieved. This must be a common interest. That has been recognised by all who have spoken in the debate. There is nothing on this subject in the Bill, but I hope that the Minister will mention the question of industrial relations in his reply to the debate. In this debate, speaker after speaker has mentioned this issue. It is an issue that the railways will have to get right if they want to move forward, as we hope they will, to great success in the future.

As I have said, this has been an important debate. Many questions have been raised, and we hope that we shall get some answers. But although there is clearly a number of matters on which we should like more information, and although the Bill leaves many questions unanswered, we shall not oppose the Second Reading of the Bill.

9.17 p.m.

The Under-Secretary of State for the Environment (Mr. Neil Carmichael)

Everyone will agree that we have had at least a very definite declaration of interest. That got a grand boost today. Practically everyone who has spoken in the debate has declared some interest in the transport industry, including the hon. Member for Chippenham (Mr. Awdry), whom I congratulate on making his first speech about transport from the Opposition Dispatch Box. As he said, a number of us served on the Committee which dealt with the Transport Act. I was unlucky in that I did not join that Committee until some time had passed, but I joined it early enough to get the feeling of that Act. There was then a great amount of opposition and much genuine argument. One cannot be up all night arguing with people without a certain cameraderie building up. The hon. Member for Chippenham came to be known as "His Worship" because it was known that he had been the Mayor of Chippenham.

The hon. Gentleman has raised a number of points with which I hope to deal. The debate has taken longer than many people had thought, although most of the points raised have been extremely interesting. They show that transport is a very important part of our lives. We are influenced very much by our interests and those of our constituents, and we are very good barometers of the latter.

The hon. Member raised the question of an integrated transport service. But he should be fair. In three and a half years the Conservative Government did not produce an overall plan for transport. The Labour Government have been in office for three and a half months. With matters such as the road network and the new Bill to be put forward, the hon. Gentleman is asking a lot of us.

Mr. Peyton

The point that the hon. Gentleman persists in ignoring is that he and his right hon. Friends and many of their colleagues, when they were in Opposition, bleated for something called an integrated transport policy. What somewhat surprises my right hon. Friends and me is that, given an opportunity in office, they do not immediately come forward with some little chunk of this pie in the sky about which they have been talking for so long.

Mr. Carmichael

As my right hon. Friend said, we have introduced the Railways Bill, and he has also made a statement on the road programme. That is fair progress in three and a half months. The hon. Member for Chippenham, if he will look again at the programme, at the statement, at the Press conference that followed, and at the many Press comments, will understand exactly what was meant by the 3,100 miles, and he will also understand that the road haulage industry is not as worried as he suggested that it was.

As my right hon. Friend brought out clearly earlier, the main purpose of the Bill is to replace the present inadequate ad hoc arrangements for putting public money into the railways by a new financial structure based on carefully considered policies which take account of the facts of railway operation and which will give the Government some real control over railway strategy as well as finance.

The central theme of the speech of the right hon. Lady the Member for Finchley (Mrs. Thatcher) was that we were proposing to replace a fine system of specific subsidies by a blanket grant which took no account of the social and environmental rôle of railway operations. In fact, the opposite is true. While in theory the 1968 Act is based on the attractive concept of identifying and paying for those specific services which would be maintained in the public interest by Government grant, the difficulty we have found in practice is that the financial results of a railway operation are such that the 1968 approach, if logically and thoroughly followed through, could well result in all but a handful of railway passenger services being individually grant aided. What would be the point of this?

The concept is all very well in circumstances where a basically profitable undertaking is operating a comparatively small number of services, but where almost all the services would seem to be unprofitable, why go through the administrative accounting contortions, at considerable expense, involved in an arbitrary allocation of joint costs?

Incidentally, I think that many right hon. and hon. Members who have been appealed to for help by their constituents when there has been a question of a rail closure or an application for a rail closure will want to know that the formula known as the Cooper Brothers' formula will not apply any longer for determining Government grant to branch lines which are likely to be closed. I take the point which has been made that it will be a paring operating only; there will be no slashing.

Moreover, the allocation of railway costs for grant purposes does not help the management or the Government to run these services more efficiently or to determine how they could be improved. The Cooper Brothers' formula does not tell us anything about how joint costs allocated to individual services are, in fact, incurred.

Finally on this point, I again remind the House that the 1968 Act system was proved totally inadequate. The right hon. Lady asked for figures. In 1973 grants for specific loss-making passenger services amounted in all to only about £80 million, whereas the total cash shortfall of the board which the Government had to finance was some £72 million. It is estimated that in 1974 specific passenger grants will be over £100 million, but the likely deficit on revenue account, after allowing for these grants, could be half as high again.

Much of this is due to the refusal of the last Government to allow the Railways Board to increase prices in line with its costs, which was, perhaps, the main reason for the rapidly escalating costs to which the right hon. Lady drew attention, which it falls to this Government to deal with and which is another example of many of the financial problems which were bequeathed to us.

In short, what my right hon. Friend is doing is to bring out clearly for the first time the full costs which the community will have to bear for the railway system which it so clearly wants to continue in existence and to establish a grant regime which will not only provide sufficient support but will incorporate new controls over what is happening. It is emphatically not deficit financing, as I shall now try to explain to the House.

The right hon. Lady proposed a "capital and revenue budget with allowance for contingencies". That is just what the proposed system would provide. The proposed grant under Clause 3 will be based on estimated net costs subject to adjustments only for predetermined factors. Estimates will be derived from the board's annual rail budget, which is in turn derived from the rail business plan. Under the Bill the Minister and the Department will be involved in that plan from the outset and will thus be in a position to influence the scope and quality of the whole network of services on which grant will be paid.

The right hon. Lady made some play about the EEC regulations. The new system of support for British Railways is entirely consistent with EEC regulations concerning railways. Regulation 1191/69 which requires Governments to compensate railways for any public service obligations whicvh they impose upon them, allows support to be given, either for specific services or for the passenger system as a whole. Regulation 1192/69 which requires Governments to abolish or compensate for unfair burdens imposed on railways in the past, is less relevant to this country than to most other European countries because British Railways have benefited from successive write-offs of capital and accumulated debt.

I emphasise, however, that the system of support has not been dictated from Brussels. In passing, may I mention how much the Brussels system owes to British thinking? The Government are providing grant for the whole passenger system because they recognise that the railways are basically uncommercial but perform a valuable social service. Both the Bill and the EEC approach have much the same objective—to put railway finances on a proper basis. Perhaps some members of the EEC will come in due course to accept the way that we have been choosing to structure our grant as the right procedure for settling their problems.

Parliament and the Secretary of State will retain control over the large subventions which are being made available. There are new provisions in the Bill to enable Parliament to review public service obligations when the support limits are reached and for the Secretary of State to be involved in the formulation of the board's policies and plans.

Mr. Onslow

This is a point on which I tried to press the Minister. Is the hon. Member saying that we should be lucky to get three quarters of an hour in debate if the present fixed ceiling is exceeded?

Mr. Carmichael

If additional finance is required there will be a requirement to come back for more, but once the process of discussions with the board have taken place and the board has put forward an agreed policy with the Government Parliament will certainly have an opportunity on annual reports and at other times to discuss the board's returns. The Secretary of State will keep his existing powers to approve all major investment projects, and he will continue to lay the board's annual report before the House.

Another important point is that rail passenger services will not be able to be withdrawn in the future as they were in the past unless they are subject to the same rigorous procedures as now exist.

My hon. Friend the Member for Leicester, East (Mr. Bradley) and other hon. Members suggested that British Railways were being prevented from carrying out long-term planning by Government policies and this prevented their economising by bulk ordering of rolling stock. We must consider the overall investment programme in the railways in the context of the review of all public expenditure, but I would not accept that this is preventing British Rail from carrying out any planning, since there is already a substantial level of commitment for next year and later years on an existing number of projects. Moreover, we are continuing to approve the new projects in principle subject to the overall investment ceilings which may be approved in due course. I can also assure my hon. Friend the Member for Nuneaton (Mr. Huckfield) that investment in freight generally will be given the priority it deserves, and that includes investment in the freightliner service mentioned by my hon. Friend the Member for Leicester. East.

The right hon. Lady asked whether the new borrowing limits in the Bill included borrowing required for the Channel Tunnel rail link. Some allowance has been made, but no decisions have yet been taken about the project.

I also confirm my right hon. Friend's reply to the right hon. Lady's question about the Long Title. I am advised that the words To amend the law relating to the British Railways Board are wide enough to cover the extension of borrowing limits in the Bill. The same applies to the reduction in Clause 1 in the board's capital debt.

The hon. Member for Essex, South-East (Sir B. Braine) suggested that there should be a more flexible structure of fares, with the reintroduction of cheap workman's tickets and concessions for off-peak travel to maximise traffic. Only last year the board made substantial changes in its fares structure. It introduced special weekend fares, 17–18 day returns, and many other concessions. They were made as a result of judgments of the board, which is always entitled to make adjustments in its fares structure as long as there is not an overall increase. I am sure that the board will note what the hon. Gentleman says, particularly in view of the area from which he comes, about which he has a great deal of information and which he understands very well.

I should like to say something about industrial relations. The Government recognise the heavy strain placed on the whole industry by the rapid rundown of manpower over recent years, mentioned by many hon. Members, and the change in the method of working from steam to diesel and electric. The fact that modernisation has been achieved with remarkably little trouble is a tribute to all concerned—management and labour. The board and the unions have both long accepted the need for a more rational pay structure to meet the needs of a modern railway system. A workable solution to the problem must be based on mutual consent; it cannot he imposed. I think that the right hon. Lady and other Conservative Members are aware of that.

In 1972, as part of the pay agreement, the board undertook to review the whole railway pay structure, an enormous and complicated task. Working parties were set up with the unions to do the job, and the board's proposals were put forward last autumn. Unfortunately, they were not acceptable to all concerned. The whole problem of the pay structure was eventually submitted to arbitration, and a decision is expected shortly. The Government hope that it will at last provide a basis on which the industry can solve this longstanding issue and ensure good industrial relations in coming years.

The rule book was mentioned by the hon. Members for Woking (Mr. Onslow) and Faversham (Mr. Moate). It is essentially a safety manual. That is part of the problem. The manual has recently been revised and brought up to date in consultation with the Railways Inspectorate. It is intended to be used reasonably by reasonable men. One of the difficulties is that because the book is so complicated—necessarily complicated—it can operate properly only when relationships within the working situation are very good. That is what we are trying to achieve with the new pay structure and in going to arbitration. It must work well within the industry because of the enormous importance of safety.

Mr. Onslow

The Minister said that the rule book had recently been revised. Was that since the troubles of the winter period, with which we became so familiar? If the rule book is integral to safety, why is it such a fruitful source of dispute? Surely, trains either go out safely or do not go out at all?

Mr. Carmichael

The details of the revision of the rule book are a matter for the railway management and the Railway Inspectorate. The hon. Gentleman, with his interest in the aircraft industry and aircraft, knows well enough that the incredibly complicated checks that need to be made could hold up an aircraft indefinitely. There could be similar delays on the railways if such checks were carried out to the letter. That is what working to rule means. We can all find many examples of detailed working to rule which ultimately reach the point of being unacceptable. That arises only because of the atmosphere in which they are being operated. The atmosphere has in the past been bad, but if it is the right atmosphere the men, whether they are working on aircraft, railway engines or buses, will behave reasonably. If they are treated reasonably or if they feel that they are being treated reasonably—and I am not saying that their feelings are always based on logic—they will behave reasonably. Sometimes the illogical can be very real to the people concerned.

My hon. Friend the Member for Preston, North (Mr. Atkins) spoke about the wear and tear on roads. Hon. Members will remember that this matter was discussed at some length during the Transport Bill, but the parts dealing with the wear and tear on roads were ultimately dropped. The hon. Member for Tyne-mouth (Mr. Trotter) who had to leave—he sent me a note to that effect—raised a number of specific, interesting and important matters which I shall have to take some time to consider.

My hon. Friend the Member for Swindon (Mr. Stoddart), who represents, of course, a very important railway town, said that we have learnt the lesson that the railways are important. I think that we have always believed on both sides that the railways are important. The important thing is how important we thought they were and how much we were willing to contribute towards keeping them going.

My hon. Friend the Member for Keighley (Mr. Cryer) declared an interest in a light railway. He spoke about workers' participation and involvement. The railways are getting round to those matters. In fact, some years ago there was a railway study of such matters with which I think the right hon. Member for Yeovil will be familiar. I had left office before the study was available. I hope that I may have a chance to see it later. However, there was a study regarding the possibility of more participation. There is no doubt that the rails still exist and the track beds will be kept until the Minister gives his authority to have them removed.

The question of private sidings has been raised by hon. Members on both sides. My right hon. Friend has already written to the companies concerned. This is not something that might happen, because my right hon. Friend has already written. The sum of £5 million is mentioned but that is not an upper limit. If the response is sufficient and worth while, I can assure hon. Members that my right hon. Friend would be only too pleased to find some way of increasing considerably the amount available.

Mr. Spriggs

I hope that my hon. Friend will remember that I put several pertinent questions to him. I hope that he will try to answer them.

Mr. Carmichael

I have a note of the questions which my hon. Friend put. I know his great involvement in these matters. The problem is that many points have been raised by many hon. Members. We shall be going into Committee and there will be ample opportunity to discuss many of the points that have been raised today.

I hope that the House will agree that the Bill deals with the problems which beset the railways as realistically as possible. It provides an assurance of continued Government support for a national network while giving opportunities to review strategy in the light of changing circumstances. For the first time the problem of the enormous and long-standing inherited pensions liability is tackled fundamentally. In future, railway pension schemes will be put on an independent financial basis. The Bill also encourages more suitable freight traffic to be carried by rail. It is up to all concerned—I hope that all hon. Members will accept this—management, workers and customers alike, to demonstrate in practical terms that they share the faith which the Government have today shown in the long-term future of British Rail.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).