HL Deb 30 June 1868 vol 193 cc353-62

Bill read 3a, with the Amendments.

THE MARQUESS OF CLANRICARDE moved to leave out Clause 26, which empowered the Directors to raise the maximum rates of fares for passengers. The noble Marquess said he was no advocate for extremely low fares on railways; on the contrary, he admitted that they must be fixed at remunerative rates. But when a railway company had undertaken, with the sanction of Parliament, to make and maintain a railway at certain fares, an application by that company to raise the fares, which they themselves then fixed as sufficient, ought not to be acceded to without careful and close inquiry, in order to ascertain whether the demand had not its origin in mere reckless and extravagant management; and, above all, such a case as this ought not to be drawn into a precedent. Now, as far as he could discover, for the last twenty years this Bill had no precedent. And what were the grounds stated for the increase of fares? Only one such ground appeared on the face of the Bill. There might be other grounds, and he was sure the Committee had considered them well; but the Preamble only mentioned one. Whereas," [it said,] "since the passing of the Act"—[meaning the Act of 1863]—"circumstances have become materially altered, and the Company have been involved in a large expenditure, and it is expedient that the Company be authorized to increase to a small extent the tolls and charges for passengers limited by that Act. But then the question arose how this expenditure had been incurred, and what was the position of the Company. If this expenditure had been incurred not through any reckless extravagance on the part of the Directors, but legitimately for the purposes of the railway and the service of the public, and if the railway had been discreetly managed without blame to the Directors, then a primâ facie case was made out for an increased tariff. Their Lordships would see how this was. Up to 1863 the tolls on the London and Brighton line were higher than were fixed by this Bill; but in that year a competing scheme was proposed for the construction of a line called, he believed, the Beckenham, Lewes, and Brighton line. The Directors, in consequence, voluntarily offered to reduce their fares, and did so; and the competing line did not pass. Was this reduction of fares conditional? No; it was absolute. Beckenham line or no Beckenham line, it was to be made. To show that, he would quote the evidence given by Mr. Slight, late Secretary of the Company, before the Committee of the House of Commons, to which the Beckenham, Lewes, and Brighton Bill was referred in the Session of 1863. The report of the examination was as follows:— Mr. ROUND: Is there a resolution about reducing the rates?—I have the full authority of the Board in this matter to act in this Committee Room. By the COMMITTEE: Have you any authority to communicate to this Committee any decision of the Board with regard to the future, or any pledge to give on their part as to the future?—Yes, I think I may say I have. Not in the form of a resolution of the Board?—Of course, if that question is put to me I am bound to say—, but I am speaking in the presence of three Directors, and there is no doubt about the fact. Mr. HOPE SCOTT: You are speaking in the presence of three Directors, and you are aware that what you say will be taken down?—Yes, certainly. You are aware, also, that being taken down it may at any time be quoted against the Brighton Company?—Yes, and quoted against me. Now, under that responsibility, will you say to the Committee what you are prepared and consider yourself authorized by the Board to state to the Committee as to the rates?—I think the question which was put to me was whether I was authorized to pledge the Board and the Company, not to increase the present adopted schedule of rates? I have full authority from the Board to give that pledge in the name of the Company. By these representations, then, the Company succeeded in their opposition to the Bill, and the reduced rate of fares was retained up to the present time. In 1866 a competing line was again proposed, but it was ultimately given up, and the Brighton Company retained their monopoly. The inhabitants of Brighton were therefore still dependent upon one line, and they depended upon the Parliamentary pledge and engagement entered into by the Company. To get rid of the Beckenham, Lewes, and Brighton line the Company were read to adhere to their reduced rates; but now, having a perfect monopoly and having no dread of competition, the Company asked Parliament to enable them to raise their fares and to make the burdens on the customers of the railway greater than they had ever been before. Looking at the broad facts, he thought their Lordships would pause before they passed the Bill in its present shape. How many railways of the country could adopt the language of the Preamble of this Bill? Or, rather, how many were there that were not in a position to adopt it? How many were there that had not been invoked in expenditure that had not been profitable, either to themselves or the public? If this Bill were passed, in the absence of any special circumstance to justify it, other companies would be put-tins in a similar claim, to the great disturbance of the commerce of the country and to the great increase of the tax which locomotion imposed upon it. The general receipts of railways had not increased as they ought to have done; and he was afraid that that indicated a comparative diminution of the trade of the country, upon which the cost of locomotion was really an inland duty. He believed that the gross amount paid by the public to the railway companies was not less than £38,000,000 annually. He warned the House to pause before making a precedent which might be injurious to the country.

Moved, "To leave out Clause 26."—(The Marquess of Clanricarde.)

LORD CAMOYS

said, that, as Chairman of the Select Committee, he was quite prepared to defend the decision it arrived at, and suggested that if the House did not approve that, decision, the proper course was to refer the Bill back to that Select Committee. He denied that any pledge had been given by the Company which ought to preclude it for ever from raising its tolls. It should be remembered that the proposed scale of fares was lower than the scale which was authorized from 1846 to 1868. During that period the first-class express, second-Class express, first- class ordinary, second-class ordinary, and third-class rates of fares were respectively as follows:—3d., 3d., 2 2–5d., 1 4–5d., and 1 1–5d. per mile; in 1863 the rates were 2½d., 2d., 2d., 1½d., and 1d.; and the scale proposed in the Bill was 2¾d., 2¼d., 2¼d., 2¾d., and 1d. This scale gave a small increase of ¼d. per mile for first and second-class passengers—there being no alteration as regards third-class passengers—beyond the amount which, by an Act of 1863, the Company were authorized to take. The scale authorized by the Act of 1863 was a considerable reduction on the scale which the Company were then, and from the time of the passing of their Act of incorporation of 1846, authorized to take, and it was a reduction which the Company volunteered as a concession to induce Parliament not to sanction a competing line to Brighton. But in a subsequent Session (1866), Parliament did sanction the competing line, after the Company had been put to an enormous expense, in the vain attempt to uphold the decision of 1863. It was, therefore, submitted by the Company that if the adoption of the toils of 1863 could originally have been considered as a contract between the Company and Parliament, the contract was put an end to by the action of Parliament. The Company were in 1863 supposed to be in a much better financial condition than, in fact, they were, as subsequent investigation had shown; and they had since laid out very large sums of capital in station and other accommodation on the main line for the benefit of the public, upon which they did not get any adequate return;—and indeed the net income for the lust year (1867) proved to be insufficient by upwards of £100,000 to pay preference charges. It was manifestly for the interest of the public that railways should be efficiently maintained, and it was impossible to secure that object unless a reasonable sum was received in the shape of tolls. The Company were not asking Parliament to restore the full amount of tolls authorized before 1863; they asked only an increase equal to about half of that reduction, and this only on the first and second-class passengers. They asked no alteration at all as regards third-class passengers, or animals or goods. The promoters submitted that the scale proposed was a very moderate scale, and below the ordinary standard. It was much lower than the authorized maximum charges of the South-Western, South-Eastern, Chatham, and other adjoining railways in the South of England, and lower than the actual average charges of the eight principal railways having termini in the metropolis. The promoters further said— The reduction of 1863 proves to be more than the undertaking can bear—the resumption of half the amount of that reduction is essential to secure the preference shareholders' interest—and the Company submit that, under the circumstances, they may fairly ask that they shall not be held bound to the full amount of a concession rashly made by their then Directors in 1863, when the shareholders were not aware of the actual position of the Company. The Committee to whom your Lordships referred the Bill gave the subject of tolls very patient, full, and careful attention, and, having heard nil that could be adduced on both sides, they decided in favour of the tolls proposed in the Bill. For these reasons he supported the clause.

EARL FORTESCUE

said, he had no interest except that of the public interest in the question before the House. He ventured to submit that this was just one of those great questions of principle which it was desirable the House should decide for itself instead of delegating the responsibility to five of its Members, who, however able they might be, would be destitute of the advantage of being guided by principles laid down by the House itself. At present the question at issue was whether railway companies should be empowered to levy what taxes they pleased on personal locomotion and the movement of goods; or, in other words, whether Parliament should practically hand over to those companies the power of levying import and export duties on the trade, manufactures, and commerce of the country. Railways were practically, and ought to be economically monopolies, well restricted and guarded by Parliamentary provisions enforcing adequate service and restraining them from undue charges. But if it were sanctioned in any one instance that a company was to break through these restraints, and obtain the power to raise their charges a crowd of companies would ask the Legislature for increased powers of taxing our trade and commerce. In the present case there were three Companies which proposed to amalgamate, and all of which had become notorious for extorting high fares from the public. They all had precisely the same object in view; and under the circumstances was it likely that any private individual would deem it worth his while to incur the enormous expense attendant on employing counsel and bring- ing witnesses before the Committee to oppose the Bill? It was obvious that the Companies possessed an immense advantage over private individuals; and it was, therefore, the duty of that and of the other House of Parliament to lay down general principles instead of throwing so great a responsibility upon a Committee which had before it two sets of counsel, both of whom were interested in recommending the plunder of the public. It was to Parliament itself and not to Select Committees appointed by either House that the public must look for protection against what might become a regular system of increased fares for passengers and increased charges for goods all over the kingdom.

LORD VERNON

, as a member of the Committee appointed to examine this Bill, could not for a moment call in question the propriety of submitting it to a thorough examination, without which it could not be framed on definite principles; and he thought their Lordships must feel obliged, to the noble Marquess for having brought the subject forward. Although he had had only a brief experience of the business of their Lordships' House he had already come to the conclusion that the whole system of railway legislation was very vague and uncertain, and that the more general principles were adhered to the more simple and less costly would be the working of the system. There was ample proof, however, submitted to the Committee that the fares on the Brighton line were not sufficient to earn a fair dividend. When the line was opened in 1841 the ordinary first-class fare from London to Brighton was 15s., and the second-class 11s. In July, 1867, however, they were reduced to 8s. 10d. and 6s. 8d. respectively. Therefore, although a slight increase was now proposed, the fares would be nothing like so high as those charged when the railway was first opened. In conclusion, he expressed his belief that the circumstances would fully justify their Lordships in passing the Bill.

THE DUKE OF RICHMOND

said, he could not assent to the proposal of the noble Marquess. The speech of the noble Earl opposite (Earl Fortescue) had reference to the whole system of private legislation, but did not contain a single argument tending to show that this particular Committee had arrived at a conclusion contrary to the evidence brought before it. For his own part he differed entirely from the noble Earl, being of opinion that a ques- tion of this kind ought to be sifted by a Select Committee, which had the assistance of the counsel on either side and an opportunity of examining witnesses. Indeed, everybody who had paid attention to the Private Bill legislation of this House must be aware that a Bill could not be submitted to a more searching tribunal than a Select Committee. The noble Earl was somewhat in error as to what took place before the Select Committee in 1863. There was no direct assertion made that the fares were reduced in consequence of the opposition scheme of the London, Lewes, and Beckenham railway; but it was notorious that during the progress of that Committee the Brighton Company practically said, "If you think our fares are too high we are willing to reduce them." The result was that the London, Lewes, and Beckenham scheme being thrown out, the Brighton Company had no line to compete with them. In 1866, however, the London, Lewes, and Beckenham Bill was passed. The London, Lewes, and Beckenham line was passed in 1866 as against the London and Brighton Company; but it had never been proceeded with, because the affairs of all the companies had got into so very disastrous a state. The increase of tolls now sanctioned by the Committee did not bring them up to what the Company were entitled to charge in 1863. The total of that increase amounted to only ¼d. a mile for first and second-class passengers. There was no increase on the third-class passengers, nor was that injustice done to the agricultural interests which seemed to weigh so much on the noble Marquess. The Committee had displayed great industry. It had brought before it a very large scheme, a part of which would have entitled a company to charge any toll without being bound by any maximum. He had no doubt that the Committee was an able one, and that it had very fully considered the whole subject. He thought, therefore, it would be unwise in their Lordships to do anything which might lead the public to suppose that the Committee had not the confidence of their Lordships' House. In consequence of a decision to which the Committee had come, the Amalgamation Bill, to which so much objection had been taken in their Lordships' House, had not been pressed. Believing that the small increase sanctioned by the Committee was necessary in order to enable the Company to carry on their affairs with advantage to themselves and the public, he hoped their Lordships would not agree to the Motion of the noble Marquess.

LORD REDESDALE

regretted the views of the noble Duke. Railway fares, once fixed, should not be increased; and, if the proposed alteration was made in this case, there would soon be a flood of similar applications from the other railway companies of the country. This was a question of principle, in which the House had a right to interfere, and he should certainly support the proposition of the noble Marquess. With regard to the Brighton Company having reduced their fares under fear of competition, they were now in precisely the same position, and held just the same monopoly of the traffic as when they agreed to the reduction, for the London, Lewes, and Beckenham line had fallen through, and was never likely to be revived.

LORD TAUNTON

concurred with his noble Friend the Chairman of Committees. He protested against the proposition that railway companies, after giving solemn pledges to Parliament, and obtaining powers and privileges on the strength of those pledges, being allowed afterwards to throw their engagements to the winds. From his former experience in "another place," he could say that it was the practice of the House of Commons to keep railway companies to their pledges. If a company violated any pledge it had given to a Committee of the House of Commons, when it came before that House again, the Board of Trade appeared against it, no matter how unobjectionable the scheme in hand might be—and represented that, as it had broken its promise, it had no right to come again before the House of Commons. That mode of proceeding had made companies very careful of giving pledges which they did not intend to keep. Knowing the ability of his noble Friend the Chairman of the Select Committee (Lord Camoys), in this case he should have voted for upholding its decision, if his noble Friend had not stated the reasons for that decision. His noble Friend said the Committee had been guided by the consideration, whether the increase of toll was not necessary, in order to enable the company to pay its way. He objected to holding out facilities to companies to levy from the public money which they had squandered. He could not concur with the noble Duke the President of the Board of Trade in thinking that the pro- posed increase of tolls would not have an injurious effect on the trade of the district. But then he could not certainly approve of the course taken by his noble Friend the Chairman of Committees, whose duty it was to preserve an attitude of strict impartiality. On the whole, if the Motion was pressed to a division, he should be obliged to vote with the noble Marquess.

LORD STANLEY OF ALDERLEY

thought their Lordships would not act wisely in tying up the companies too tightly in the matter of fares, as the companies would be driven to protect themselves by diminishing the accommodation, and so force passengers to pay the higher rate of fares. He trusted their Lordships would not refuse their sanction to the decision of the Committee, as such a proceeding would be calculated to increase the difficulties already felt by Committees, and cause questions of this description to be withdrawn from the legitimate tribunals and bandied about and discussed among the Members of the House.

EARL GREY

said, he never wished to over-rule the decision of a Committee upon matters turning on considerations of detail; but it was the positive duty of the House to see that questions of principle received due consideration. It was perfectly clear from what had been said in the course of this discussion that the importance of maintaining the implied contract between the companies and the public had not been duly considered. There were numbers of persons, clerks and others, who had fixed their residences along particular lines of railway on the faith of what they considered the scale of fares established by the companies. An increase of the travelling charges would be practically an increase of rent in the case of these persons, and would be manifestly unjust to the public. There could be no doubt whatever that the Brighton Company possessed exclusive control of their own district; and had the amount of capital expended by them in the construction of their railway been only proportioned to the requirements of the district and the actual cost of the line, they would now be dividing a handsome dividend. It was contrary to all sound policy to sanction an increase of fares under circumstances like the present, merely to earn a dividend upon the preference shares.

EARL GRANVILLE

said, he had come to the House not knowing how he should vote upon the Question, and determined to give the benefit of any doubt to the Committee, who had carefully examined the subject, and that disposition certainly was strengthened by the declarations which he had heard as to the intentions of the Government. To rid themselves of competition the Company promised to lower their fares: the bargain was struck, and low fares were tried; but now the question arose whether the fares were remunerative or not. The Committee having gone into the question and decided that the fares were not sufficient to support the railway in a proper condition, he was inclined to side with the Committee.

THE DUKE OF CLEVELAND

thought it would be unwise to reverse the decision of the Committee; but, at the same time, felt it most impolitic to allow railway companies to break solemn promises.

THE MARQUESS OF CLANRICARDE

said, the case resolved itself into this—that as long as the Company feared competition it was prepared to lower its fares, and as soon as it had secured a monopoly it asked for powers to levy increased rates from the public. He would not, however, persist in his opposition to the clause.

On Question, Resolved in the Negative.

On Question, That the Bill do pass,

LORD REDESDALE

felt bound to protest against the principle of allowing a Company to raise its fares. Up to this time he had always resisted any demand for such an increase; now, however, the demand had been granted in opposition to him, and he asked,—What am I to do next year? Parties will come asking for an increase of fares, the decision of the House will be quoted against me, and my hands will be tied.

Bill passed, and sent to the Commons.