RAILWAYS (No. 2) BILL. (Hansard, 18 February 1913)

§ THE EARL OF GRANARD
My Lords, as your Lordships are aware the object of this Bill is to carry out an undertaking which was given to the railway companies after the strike of 1911. The Government, in order to put an end to a very critical state of affairs, appointed a Royal Commission under the chairmanship of Sir David Harrel. As your Lordships are 1420 aware, the actual pledge given by the Government was this— The Government will propose to Parliament next session legislation providing that an increase in the cost of labour due to the improvement of conditions for the stall would be a valid justification for a reasonable general increase of charge within the legal maxima if challenged under the Act of 1894. Under this Act, if a company increases any rate or charge, a trader may complain to the Railway and Canal Commission, and the company have then to prove that the increase is reasonable. The Commission in several cases have held that increased cost of labour justified an increase of rate; but the companies have always shown—and it appears that the Commission would require them to show—that the cost of carrying the particular traffic on which the increased rate is charged has risen.
What the companies foresaw was that they would probably be compelled to increase wages and lower hours wholesale, and they therefore asked, not unreasonably, that they should be allowed to meet this general rise of cost by a general increase of rates, without being required to prove in any particular case that the cost of carrying the traffic had risen by an amount justifying that particular increase. The undertaking quoted was accordingly given to them; they agreed to accept the findings of the Royal Commission; and the revised conciliation scheme recommended by the Commission, with some alterations settled between the parties, came into force. Under the new scheme considerable advances in wages and reductions of hours have already been agreed or awarded. The Bill provides that the Railway and Canal Commission shall, on complaint, treat as justified an increase of rate which the railway companies prove to be a not unreasonable proportion of an increase reasonably required to meet a rise in the cost of labour employed on other than passenger traffic.
Two alterations made in the Bill during its passage through the House of Commons deserve to be mentioned. A proviso was inserted with the object of making it clear that, in considering whether the total increase is reasonably required to meet the rise in cost, the Commission may take any relevant circumstances into account—that is, they are not bound to consider merely the rise in labour cost, but may, 1421 if they think fit, have regard to other items of cost Or profit. As your Lordships are also aware, another clause was introduced limiting the operation of the Bill to five years, and an undertaking has been given by us that we shall continue this Act in the Expiring Laws Continuance Act every year so long as Parliament desires it. There is another small Amendment which I shall move, with which I will deal to-morrow. I do not think there is anything more I need say except ask your Lordships to give this Bill a Second Reading.

LORD BALFOUR OF BURLEIGH
My Lords, I do not think I can find much fault with the summary of events which the noble Earl has given in introducing the Bill. He specially referred to the circumstances of the year 1911 and to the critical state of affairs which was then occurring. There was a serious strike existing and, an even more serious development threatening, and it was bringing practically the whole traffic, including the food supplies of large towns, to a dangerous position of stoppage. The noble Earl told us that a Commission had been appointed, and, as your Lordships will recollect, it made a Report. After that Report there were a series of conferences, under the auspices of the Board of Trade, between those who represented the railway servants and those who represented the directors and shareholders of the railway companies. I do not know that so far as that goes I have much to comment upon. The noble Earl read the undertaking which was given in perfectly fair terms.
But what I want to emphasise is this, that I think the delay which has occurred has caused a certain amount of prejudice to the railway companies. I am not finding fault with His Majesty's Government on that point. They were, to some extent at any rate, the victims of circumstances, and I want to be quite fair to them. They endeavoured to include in the Bill, which they had promised to introduce in the interests of railway companies, a number of other clauses dealing with general railway policy, and I have no doubt that if events had made it possible, they would have carried out their intention of sub- 1422 mitting that Bill for discussion in another place. But circumstances were too strong for them, and that Bill had to be withdrawn and this Bill substituted for it. What I want to point out, and I want to emphasise this because it may be of importance when we come to a subsequent stage, is that all along, all through the course of procedure in regard to this particular Bill, there never was, until the last few days, any suggestion of a time limit of any sort or kind. The original undertaking of the Government was read by the noble Earl, and on November 7, when the Prime Minister withdrew the former Bill and announced in another place in reply to a question what the policy of the Government would be, he said, what we all know to be the fact, that in view of the pressure of time upon Parliament it was not possible to proceed with the whole policy; but, he said, "We hope to introduce and pass in this session a one clause Bill." That makes it perfectly clear that at that time at any rate there was no intention of a time limit, because that would have had to be in a separate clause.
The necessity for the Bill arises in this way. It recalls to my mind circumstances which are perhaps fresher in my memory than that of noble Lords, because throughout the year 1889 when I was serving in the Board of Trade I was charged, along with the late Sir Courtney Boyle, with looking into the question of railway rates and charges, and after about fifteen months' work we succeeded in codifying some eight hundred Acts of Parliament. The Act of 1894 contained a provision which prevented a railway company from raising a rate, if the rate was objected to, without the consent of the Railway Commission, even if those rates were within the maximum which five years before had been agreed to; and the effect of the undertaking given by the Prime Minister in 1911 was to make sure that owing to the changed circumstances and the increased cost of fuel and of wages, and so on, to which the railway companies were being put, they should not be prejudiced in that particular matter, and that if they proved to the Railway Commission that the increased cost made it necessary for them to increase their charges that was to be given effect to. I can truly say that from August, 1911—that is, eighteen months ago—down to February 12 of this year there never was, 1423 so far as we know, a single suggestion for a time limit in regard to this Bill. It has come upon us with absolute' surprise, and it has never, unlike some of the other Amendments which have been put into other parts of this Bill, been the subject of negotiation, or at any rate in any way of consent by the railway companies; and it does seem to me rather hard that this should be imposed upon us.
I think it reasonable, therefore, to say that I shall move to omit that particular clause, and then if necessary I shall take an opportunity of arguing the matter at greater length. But I thought it respectful to noble Lords opposite to say that this change of policy had caused a great deal of astonishment amongst those to whose prejudice it certainly would enure if the Bill was passed in its present form, and that we shall take an opportunity of raising the question when we come to the subsequent stage of the Bill.

§ THE MARQUESS OF SALISBURY
My Lords, I think it is right to add that we saw with the greatest surprise the course of proceedings in the House of Commons on the last stage of this Bill. I hesitate, especially at this late hour, to go into the circumstances which led up to the sudden change of front on the part of His Majesty's Government and to their insertion in the Bill of this very important Amendment which, upon the face of it, appears to be directly in conflict with the pledges which they made in the course of the negotiations. I do not want to put it higher than that. I think it is possible that the noble Earl opposite and the noble Marquess the Leader of the House may be able to say something by way of explanation, but if that is not the case I would earnestly urge upon them to consider between this and the Committee stage whether they cannot accept an Amendment such as my noble friend has foreshadowed in order to put the Bill back into the position in which it was before this Amendment was inserted on Report stage in the House of Commons. The noble Marquess must be, if I may venture to say so, to the last degree punctilious in accepting responsibility for the pledges which His Majesty's Government gave to the railway companies in this particular matter. The railway companies were engaged in a great controversy at the time. I hold no brief for them, 1424 and I have no desire whatever to say that they were right and that the railway servants were wrong. In some respects I hold the other view. I think that the railway servants were underpaid in many cases. But the railway companies were engaged in a controversy at the time, and in order to bring about peace the Government persuaded them, under certain conditions, to accept an arrangement, and it seems to me that the Government are bound to carry out those conditions and adhere to them; and unless they can show that they are in spirit bound to pass the Bill with this time limit, I would earnestly appeal to them before it passes out of your Lordships' House to set right this which may be counted as a breach of faith. I hope the noble Marquess will accept my remarks as being made, not in an aggressive spirit, but in order that the public faith of the Government, if it be so, should be maintained.

§ LORD FABER
My Lords, this seems on the face of it a simple little Bill, but it takes a certain amount of understanding. The arguments advanced by Lord Balfour of Burleigh and by the noble Marquess who has just sat down are good arguments, and I could only repeat them almost in the same form. But perhaps I might add this. I should like noble Lords first of all to bear in mind that the Railway Act of 1894 fixed certain maximum rates for railways; and there was this peculiarity about that Act, that if a railway company lowered the rates and then wanted to raise them again, although they were only going to raise them to the maximum, they could not do so without going to the Railway Commissioners, who were to say whether the proposed increase was reasonable or not. Competition came on after 1894 between the railways, and naturally enough the rates got down below the maximum. In 1911 certain serious railway troubles developed. The railwaymen asked for a great increase in wages, and the railway directors, hearing in mind that after all they represented shareholders, said that they could not make those tremendous grants to their workmen. On the other hand, the Government were very anxious, and I do not wonder at it, that the railways should continue working, and that therefore the men should receive these extra wages. Upon that the Government and the railway directors came together, and it was decided that, if the wages were 1425 increased, that in itself was to be a sufficient justification hereafter before the Railway Commissioners for raising rates. That was a hard and fast bargain.
Now we are faced to-night, after the directors had thought that the whole matter was settled once and for all, with a time limit. A time limit is the very thing that railway companies do not want, and this will accentuate matters in the future. After five years this thing will be brought up again, and the railway companies will not know where they are. They will not know what their position with their workmen is, and, further than that, it will distract their attention from economies that they have been desirous for long to carry out. There seems to be something in human nature which apparently renders it permissible—nay, I will say praiseworthy—for anybody to try to get the better of a railway company, and, I might add, of a Government. That is thought praiseworthy by men who in ordinary life would not do anything in the least approaching to the dishonourable, but they take a different view when attacking a Government or a railway company; and here, when it is a fight between the Government and a railway company, it seems to me to be a case of dog eating dog. I venture to say it would be greatly for the benefit of the public and of the railway companies of this country that they should be strong and unharassed, so that they can have time to devote to their business. I entirely agree with the noble Lord who spoke just now that we ought not for one moment to listen to Clause 3 of this Bill, which says that this matter shall come up for consideration at the end of five years, and thereafter every year.