IRISH RAILWAYS (CONFIRMATION OF AGREEMENT) BILL. (Hansard, 11 December 1919)

THE CIVIL LORD OF THE ADMIRALTY (THE EARL OF LYTTON)

My Lords, this small Bill has been introduced for the sole purpose of giving statutory effect to certain provisions of the agreement made between 963 the Government and the railway companies of Ireland. This agreement was made in 1917 when the Irish railways were taken over by the Government and the operations which require statutory confirmation are set out in the Schedule of the Bill. The agreement follows the line of that made between the Government and British railway companies and provides that for the purpose of accounts which are prepared by railway companies in Ireland in connection with any guarantee of interest, dividend, or working expenses, the net receipts for 1913 shall be deemed to be the net receipts for the corresponding half-years during the period of Government control.

In Ireland, as in England, this year was considered a favourable one to take as the datum year for the Irish railway companies because the net receipts of that year exceeded by £200,000 the average of the preceding years. But when this agreement was drafted it was not realised that some cases differed from those which are referred to in paragraph (10) of the Schedule from which I have just quoted. It was not realised that in some cases the line, in respect of which the guarantee is given, is worked by another company on the basis of the payment by the working company to the owning company of a percentage not of the net receipts but of the gross receipts from the guaranteed line. In these cases the position is different, because the factor of working expenses does not come in and it is possible that in some cases the gross receipts from the guaranteed line may have increased during the period of control, in which case, the payment by the guaranteeing authority would be proportionately reduced. The passenger fares have been increased by 50 per cent. and there may have been some increases in agricultural traffic, but against this must be set the reduction in the number of trains.

A specific case has been brought to my notice by Lord Killanin—the Loughrea and Attymon Railway which is guaranteed by the Galway County Council. Another case has also been brought to my notice by Lord Oranmore and Browne on behalf of the County Council of Mayo. The case of the County Council of Galway may be taken as a precedent for all the other cases. In that case the Loughrea & Attymon Railway, guaranteed by the Galway County 964 Council, is worked by the Midland & Great Western Railway Company of Ireland under an agreement which provides for payment by the working company of 45 per cent. of the gross receipts to the owning company. The latter is in turn guaranteed by the Galway County Council a 5 per cent. dividend upon a capital of approximately £50,000. The amount payable therefore under the guarantee depends upon the difference between the amount representing 5 per cent. of the gross receipts of the line and the sum necessary to pay 5 per cent. on the £50,000. In this case the local authorities fear that their ratepayers may be prejudiced by the passage of this Bill. They feel that their ratepayers may be compelled to pay in future upon the basis of the net receipts instead of on the basis of the gross receipts as provided under the guarantee, and I think the fear is amply justified, because in the past year they have actually paid on that basis; and in the case of the Galway County Council that authority at the present moment is taking action to recover from the Government sums which they consider have been overpaid.

I hope that Lord Killanin will agree that I have stated accurately the fear of the County Council which he represents. I am able to give an assurance to the noble Lord, on behalf of the Government, that just as the agreement set forth in the Schedule of the Bill did not contemplate a case of that kind, so the passage of this Bill will in no way affect the position of such a local authority. On behalf of the Government an invitation was extended, while this Bill was under consideration in another place, to those local authorities to confer as soon as possible with the Minister of Transport, with a view to arriving at an agreement, mutually satisfactory, which would not only govern the relation between the Government and the railway companies in the future, but also be retrospective in its effect. The Government gave a further undertaking that in view of an agreement being reached they would be prepared to bear the expense of the action taken by the Galway County Council up to this point.

I would ask my noble friend to use his influence with the county council of which he is a member—and other noble Lords who may be interested in this subject on behalf of other local authorities—to persuade those authorities to reply to that 965 invitation and to confer with the Minister of Transport at an early date, with a view to arriving at a decision, and that the litigation now pending should be suspended until such agreement can be reached. I would only say in conclusion to the noble Lord that if there is a failure to reach an agreement on this point the local authorities will be in no way prejudiced by the passage of this Bill. So far as past action is concerned they would have the remedy which the Galway County Council are now taking, and with regard to the future the Government will be compelled to keep accounts in such a way as to show the gross receipts of the railway. Therefore they will be in no way prejudiced by the passage of the Bill, and other local authorities will be considerably benefited. Therefore I hope that your Lordships will allow the Bill to proceed.

§ LORD KILLANIN

My Lords, I should like to express my obligation to my noble friend who has moved the Second Reading of this Bill, for the careful attention which ho has given to the representations which I made to him in reference to this Bill as soon as I knew that he would have the conduct of it in this House. I am much interested in the matter, because it was thought that this Bill might affect adversely and wrongly the interests of county councils and bodies of rate-payers in Ireland, and I happen to have the honour of being a member of one that would be affected. For that reason I have followed carefully the progress of this Bill in another place, and it seemed to me that there was considerable misunderstanding about the whole matter. Even the official authorities seemed in considerable doubt about the scope and effect of this Bill, judging from communications which I had with them. Certainly the local authorities in Ireland were in a considerable state of fear as to how this Bill would affect them.

These doubts and fears arise from the fact that when the terms of agreement were come to by which the Irish railways were taken over by the Government in December, 1916, a certain particular class of railways in Ireland was entirely overlooked or forgotten. They were a small class of railways, but they have their statutory rights. When therefore the Government proceeded to carry out the 966 I terms of the agreement it was found that this agreement was inapplicable to many of these cases, and the county councils, rightly in my opinion, in many cases objected to the demand made upon them, and hence a considerable amount of friction, difficulty and litigation has arisen in the matter. Now I am thoroughly satisfied, so far as I can understand the matter, with the statement of the noble Earl this afternoon, because I gather that he says that the terms of this Bill would not apply to or affect in any way the Baronial Railways, where the guarantee is based on the gross receipts. I am thoroughly satisfied with that statement, and I thank him and the Minister of Transport for the manner in which they have treated my representations in the matter. He asked me to use my influence with the Galway County Council to induce them to come to an understanding in reference to pending litigation. I will certainly do all I can, and I ask him on his part, now that he is thoroughly familiar with all the facts of the case, to do all he can in order to bring this matter to a speedy and fair settlement.