LONDON PASSENGER TRANSPORT BILL.

HL Deb 01 March 1933 vol 86 cc897-970

Order of the Day for the Second Reading read.

THE SECRETARY OF STATE FOR AIR (THE MARQUESS OF LONDONDERRY)

My Lords, I would venture on this occasion to ask your Lordships' indulgence in the task which is before me to-day. I cannot plead that this is the first occasion on which I have addressed your Lordships, but I certainly feel that this is one of the most important occasions on which I have had the privilege of addressing you. I think it may be convenient that in moving the Second Reading of the London Passenger Transport Bill, I should spend a few minutes at the outset upon the Parliamentary history of the Bill itself. It originated, as I think your Lordships are aware, as a Hybrid Bill, and in accordance with the Standing Orders of Parliament notice was given in the Gazette of the intention to promote the Bill in December, 1930. The Bill was duly introduced and read a second time in another place on the 23rd March, 1931, and again in accordance with the usual procedure applied to Hybrid Bills, was referred to a Joint Select Committee of both Houses. The Committee was presided over by Lord Lytton. After 35 days, during which many learned Counsel were heard, and transport and financial witnesses were examined, the Committee passed the Bill, with a number of important amendments. This was the position when Parliament rose for the summer recess in 1931.

The Bill, as it left the Joint Committee, was very largely an agreed measure. It embodied agreements with the various companies forming the great organisation of underground railways, omnibuses and tramways, popularly known as the Underground, which by themselves represent over 75 per cent. of the capital to be merged in the co-ordinated undertaking; with the London, Middlesex and Hertfordshire County Councils and the other local authorities owning tramways in the area; with the four main line companies; with the principal omnibus undertakings operating on the fringe of the area; and with the organisations representing the staffs of the undertakings to be transferred. Clauses had also been inserted to safeguard the interests of various statutory gas, water and electricity undertakers, while the interests of the manufacturers of rolling stock and plant had been protected by a drastic limitation of the Board's powers of manufacture.

When, in the autumn of that year, 1931, the National Government was formed, it was decided that having regard to the pressing nature of the problem with which the Bill deals, the large amount of effort and money which had been spent on it, and the unprecedented measure of agreement. which it embodied as it emerged from the Joint. Committee, the Bill ought to be carried forward into the new Parliament. Both Houses of Parliament assented to the adoption of this course without a Division. But the pressure of business arising directly out of the financial crisis made it impossible to proceed further with the Bill during the first Session of the new Parliament, and the Bill was again carried over, by Resolutions of both Houses, to the present Session.

Meantime, however, the Government had not been idle in the matter. The Bill was overhauled with a view to the removal of any objectionable features still remaining after the thorough revision to which it had been subjected by the Joint Committee, and in July last a White Paper was issued indicating certain substantial further modifications which the Government proposed to ask Parliament to make in the Bill. Moreover, the late Minister of Transport (Mr. Pybus) with the full approval of the Government, had effected a settlement with the Metropolitan Railway Company, the principal parties affected who were still opposing the Bill. I am sure I am voicing your Lordships' opinion when I say how much we regret that my noble friend Lord Aberconway, for reasons which are too well known to us, is not able to be present to take part in this debate this afternoon. The details of this agreement were also included in the White Paper. These modifications and the terms of settlement with the Metropolitan Company were embodied in the Bill during the course of its passage in another place, and it is now my duty to recommend the Bill with these changes and additions to your Lordships' House.

So much for the history of the Bill; but the history of the problem with which it seeks to deal is very much longer, and some knowledge of that history is essential to a proper appreciation both of the problem and of the importance of finding a solution without further delay. Since the early part of the nineteenth century, numerous Royal Commissions, Select, Departmental and other Committees have considered the problems of London transport and have from time to time made innumerable specific recommendations, very few of which have so far been carried out. To come to more recent days, between the years 1903 and 1920, no fewer than four bodies of inquiry investigated the subject. The Royal Commission on London Traffic reported in 1905; in 1913, a Select Committee of the House of Commons reported on motor traffic in the Metropolis; a Select Committee of the House of Commons reported on transport in the Metropolitan area in 1919; and in 1920 an Advisory Committee, appointed by the Minister of Transport, reported on London traffic.

While their Reports differed to some extent in their recommendations, they all contained common elements. These common elements were: firstly, that the transport services of the Metropolis could not be efficiently administered by any existing organisation of local or central Government; secondy, that they ought to be placed as far as possible under the control of a single authority; thirdly, that the single authority should be a small and expert body; and fourthly, that that authority should be empowered to control and co-ordinate in the public interest all passenger transport agencies in the Metropolis. In 1921, a Royal Commission was appointed under the Chairmanship of my noble friend Viscount Ullswater to enquire and report what, if any, alterations were needed in the local government of the administrative County of London and the surrounding districts. The inquiry of the Commission extended to the Metropolitan Police District and the City of London (which areas taken together are known as "Greater London") and embraced the question of transport services in these areas. They reported in 1923 and recommended, inter alia, the setting up of a small statutory Advisory Committee to be called the London and Home Counties Traffic Advisory Committee to advise the appropriate Ministers upon questions affecting London and a large surrounding area in relation to transport, town planning, housing and main drainage.

The Conservative Government of the time prepared a Bill providing for the setting up of an Advisory Committee on the lines suggested by the Ullswater Commission, but limiting the functions of the Committee to those connected with transport. But, before this Bill could be introduced, the first Labour Government came into office. In March, 1924, as your Lordships will remember, the tramway-men in London came out on strike, as the result of the employers' refusal to grant them an increase in wages. The omnibus men ceased work in sympathy. The Minister of Labour (Mr. Shaw) appointed a Court of Inquiry into the cause and circumstances of the threatened stoppage of the tramway and omnibus services in and around London. The Court reported that a definite undertaking by the Government to introduce and press forward legislation placing the passenger traffic of the Metropolitan area under some co-ordinated control, afforded in their view, the basis, and the only one at that time suggested, for re-opening negotiations between the parties. As a resift the London Traffic Act was passed in August, 1924.

Following the recommendations of the Ullswater Commission the London and Rome Counties Traffic Advisory Committee set up under that Act were charged with the duty of considering and reporting to the Minister of Transport on: (1) the co-ordination of all or any of the various forms of transport services and co-operation between the persons operating the same or different forms of transport with a view to the combined operation of all meant of transport in the London Traffic Area in the best interests of the public; and (2) new transport systems or developments or extensions of existing systems proposed to be established or carried out within the London Traffic Area. Soon after its appointment, the Advisory Committee instituted a series of public inquiries with a view to ascertaining the main defects in the then existing means of providing transport for the millions of persons who required to travel daily between their work places in Central London and their homes in the outer parts of the area, and the means by which these defects could best be remedied. Their inquiries were held over a protracted period, during which they collected a large amount of evidence from local authorities and members of the public, and also from the railway, tramway and omnibus companies. After reviewing the whole of the evidence, the Committee submitted a Report to the Minister in 1927, which embodied recommendations for a "scheme for the co-ordination of passenger transport facilities in the London Traffic Area." This Report has become known as the "Blue Report," with which a great many of your Lordships are familiar.

An essential feature of the scheme proposed in the Blue Report was the establishment of a Common Fund to embrace all the local passenger transport undertakings operating in the London Traffic Area. The Committee fully realised that this would involve compulsory powers, as will be gathered from an extract I shall give from their Report. This is in the Blue Report:

"Whilst it is hoped that this will be effected by agreement, such powers must be conferred on the appropriate authority by Parliament as would ensure that all the undertakings concerned become parties to the Common Fund."

The passage of the London Traffic Act, so far as the major problems of London passenger transport are concerned, was obviously merely a preliminary step to the solution of these problems and merely ensured that they would be considered and reported upon by a statutory body set up for the purpose. The Advisory Committee themselves, in the introductory paragraph of the Blue Report state: Experience has shown that the powers conferred upon the Minister by the London Traffic Act, 1924, are quite inadequate as a means of eliminating the existing wasteful, uneconomical and unnecessary competition between the several transport agencies. The scheme could not, therefore, be put into operation without further legislation, as the Act of 1924 conferred no powers upon the Minister to bring any part of such a scheme into operation.

The Bill which I have the honour to recommend to your Lordships to-day is not only the logical sequence of the London Traffic Act, but also the realisation of the scheme contained in the Blue Report. The existing public means of passenger transport within the area covered by the Bill consists of railways (surface, subway and tube), tramways, omnibuses and motor coaches. The ownership of these various agencies is distributed over seventeen railway undertakings, seventeen tramways and sixty-three omnibus undertakings, exclusive of a large number of small omnibus undertakings operating outside the Metropolitan Police District, but inside the London Passenger Transport Area.

Finally, we have the motor coaches, comprising the Green Lines coaches and other companies operating motor coaches, which pick up and set down passengers in the London Passenger Transport Area. I have given the details of all these agencies to show the imperative need for the Bill which I am venturing to put before your Lordships this afternoon.

The establishment in 1915 under the sanction of Parliament of a Common Fund (to which the London General Omnibus Company and the four railway companies controlled by the Underground Company are parties) has enabled these companies to be worked as one unit, to pool their resources and to effect considerable economies without loss of efficiency. The Common Fund has furthermore enabled the companies concerned to provide facilities which could not otherwise be provided. A notable example of this is the reconstruction within the past few years of the City and South London Railway, a work which could not have been undertaken without substantial financial assistance from the Government or other external source, but for the existence of the Common Fund. Even with the existence of the Common Fund the companies were unable to proceed without a guarantee from the Government under the Trades Facilities Acts in respect of the interest and principal of the capital raised for this work. More recently, an extension of the Piccadilly Railway northwards from Finsbury Park to Cockfosters has been undertaken, but only with the assistance of a substantial grant from the Government of 3 per cent. on the capital involved for a period of fifteen years. The Common Fund has also considerably facilitated a re-arrangement of the omnibus services of the London General Omnibus Company and associated omnibus companies, so that they should be complementary to, and not competitive with, the railway services controlled by the group.

In spite of the amalgamation of the main line railways under the Railways Act, 1921, the measure of unified management of local railways, tramways and omnibuses achieved by the Underground group, and the "through running" of other working agreements between various tramway undertakings, there still remain, even if we regard the Under- ground group of companies as merged into one, which, strictly speaking, is not the case, over one hundred separate managements concerned with the operation of means of passenger transport in the London Passenger Transport Area. Each of these, of course, has its own separate financial and other interests, frequently in conflict with the interests of one or more of the other passenger transport undertakings.

Notwithstanding the multiplicity of services provided by the several managements a series of public inquiries, held by the London and Home Counties Traffic Advisory Committee in 1925 and 1926, clearly established that the travelling0 facilities between Central London on the one hand, and North, North East, East and South East London and adjacent areas on the other, were quite inadequate, and that a considerable proportion of the population who require to travel to and from their place of work do so under crowded, uncomfortable and inconvenient conditions. In the words of Counsel who appeared for the London and North Eastern and London, Midland and Scottish Railways at these public inquiries: There can be no question that at the present time more persons are seeking to travel in rush hours in and out of London than, speaking broadly, there are facilities either on the surface or in railway trains to carry them. Apart from the extension of the Piccadilly Railway northwards from Finsbury Park to Cockfosters, a work which has been partly completed, no additional facilities or improvements commensurate with the needs of the situation have since been provided in the areas covered by these inquiries.

The urgently required improvements in the travelling facilities in and out of London can only be adequately provided by further electrification of the suburban railways of the main line companies, extensions of the Underground railways and other works calculated to increase the carrying capacity of the railways. Additional omnibuses and tramcars, while adding to the congestion and danger of the streets, will provide no solution of the difficulty. In the Reports based on the public inquiries referred to, the London Traffic Advisory Committee made a number of suggestions which, if carried out, would effect substantial im- provements in the railway services. The companies concerned admitted the need for the improvements suggested by the Committee, but were practically unanimous in contending that, so long as the existing competitive conditions continued, they could not contemplate in-caring the capital expenditure involved without substantial assistance from the taxpayer or the ratepayer. In the opinion of the Traffic Advisory Committee, an opinion which is shared by those who have most experience in the matter, given unification there is enough money in the London passenger traffic not only to render the undertakings self-supporting but to provide the necessary credit and revenue to support a policy of development and expansion to meet the needs of the travelling public without either State or rate aid.

My Lords, unified ownership is necessary to ensure that the existing competition between the various forms of passenger transport shall disappear and be replaced by a co-ordinated system. under which railways, tramways, omnibuses and motor coaches shall each be operated so as to provide the particular service to which it is best adapted having regard to the public needs. At present the London tramways, both municipally and company owned, are, to some extent, protected against excessive omnibus competition by limitations placed on such competition by the Minister of Transport under the London Traffic Act, 1924. This form of regulation, as your Lordships will recognise, is unsatisfactory owing to its inflexibility. It prevents the omnibus services being really adapted to meet public requirements, and helps to maintain tramways in operation on routes which could be more economically and conveniently served by omnibuses with advantage to the public.

The control established over motor coaches under the Road Traffic Act, 1930, is open to the same objection and affords no real solution to the general problem of London passenger transport. Even with the existing control and regulation of omnibuses and motor coaches, large numbers of tramcars and omnibuses are being run almost empty at certain times of the day, and empty seats are in the long run paid fm by the public. Only under unified ownership can overlapping, wasteful, and uneconomic services be eliminated, and the maximum opportunities afforded to the public for through services, through bookings and interchange between one service arid another, without the need for cumbersome and expensive divisions of receipts between a number of separate undertakings. The fullest use of the existing means of transport can only be made when the obstacles of separate ownerships and competitive interests have been removed. The substantial economics effected under the unified management of the existing Common Fund companies can be extended to the whole field of London local passenger transport. The basis of the credit of London passenger transport will be considerably widened, and raising of fresh capital on reasonable terms for new developments will thereby be considerably facilitated.

The object of this Bill is to provide for the efficient conduct of the vast and intricate network of passenger transport in. the London area, for the progressive development of existing travelling facilities, and for the provision of new or improved facilities. As I have endeavoured to show, the problem of internal communication in the inner part of the area, and of transporting the millions who must journey daily between their work in the City and the West End and their homes in the dormitories which surround the Metropolis, is one unique in itself, colossal in its dimensions and unparalleled in its complexities. It has been the subject of anxious consideration by successive Governments and Committees for very many years. It concerns intimately the comfort and health of a vast population of some ten millions of people. It concerns the congestion and safety of our streets, and also the great problems of housing. It concerns the security of the millions of capital sunk in the provision of railways and other means of transport in the area. It is, in short, an essential public service, to the efficiency and stability of which no Government of this country can remain indifferent.

This Bill seeks to ensure that the needs of the travelling public in the area shall be the care of a body charged with the duty of providing for these needs, by a properly co-ordinated system of transport —a system which, while avoiding unnecessary or wasteful competitive services, shall be constantly concerned to extend and improve the facilities available, as and when required by the most efficient and convenient means. To this end the Bill proposes the unification of the ownership and management of existing means of public passenger transport in the hands of a Board of seven persons. For the first time there will be a body whose statutory duty it shall be to provide adequate passenger transport facilities throughout this densely populated area. This Board will be a, public authority, of a type already familiar in the legislation of this country in connection with other essential public services. I need only mention the Metropolitan Water Board, the Port of London Authority, and the Central Electricity Board, as bodies of the type which we have in mind.

What were the alternatives? There is no one local authority with jurisdiction over even the greater part of the area involved. The number of local authorities in the area, nearly 200, precludes the possibility of any sort of joint board of local authorities. Nor is it clear that a body of this kind, even if it were practicable, would be possessed of the qualifications necessary to the successful conduct of so intricate a business as London passenger transport. On the other hand, we had to take into consideration that there are in the area no fewer than fourteen municipal tramway undertakings, some of them—and notably that of the London County Council—of great importance, working side by side with a variety of private undertakings. It would not be practicable to hand these great public undertakings over to the ownership or control of a private association. Clearly, then, a new public Board, of the type which the Bill proposes to establish, is the only practicable solution.

Before proceeding to a more detailed exposition of the proposals of the Bill, it may be to the convenience of your Lordships that I should briefly summarise the means by which it is sought in the Bill to provide for bringing into London passenger transport that unity of direction and outlook which we feel to be a fundamental condition of its ability in future to perform efficiently its essential service to the public. The Bill provides for the establishment of a London Passenger Transport Board; for the transfer of existing passenger transport under- takings to the Board; for co-ordination of the Board's services with those of the main line railways; for safeguards for the public in the matters of fares and facilities. The Bill is a long one; it contains 107 clauses and sixteen Schedules; much of it is concerned with the necessary machinery involved in a unification of so many different and differing interests, and your Lordships will not desire me to embark upon a detailed exposition of the clauses and Schedules, a course more proper to the Committee stage of the Bill. I propose, therefore, to confine myself to the more important features of the Bill.

I come now to the constitution and general duty of the Board. Part I of the Bill is concerned with the constitution and general powers of the London Passenger Transport Board. The Bill in its original form provided for the appointment of the members of the Board by the Minister of Transport. The proposal to vest this power in a Minister, with all the risks of political influence entering into the appointments which it involved, was one of the principal criticisms directed against the Bill by the Conservative Party, and the vesting of the power of appointment in a body of five Appointing Trustees, instead of in the Minister, is one of the most important alterations which the present Government have secured in the Bill. Provision is therefore made for the appointment of the members of the London Passenger Transport Board by a body of Appointing Trustees consisting of the Chairman of the London County Council, a representative of the London and Home Counties Traffic Advisory Committee, the Chairman of the Committee of London Clearing Bankers, the President of the Law Society; and the President of the Institute of Chartered Accountants.

The five persons to constitute the Appointing Trustees have been selected after very careful consideration as being persons who, with the exception of the representative of the Advisory Committee, hold important office in local affairs or in a high professional capacity. Such a body constitutes at once a guarantee that the selection of the Board will be removed from the political arena and from any improper influences, and that the persons selected will be such as will show due regard, on the one hand to the interests of the travelling public, and on the other hand to the interests of the stockholders, and will ensure the conduct of the Board's affairs on sound financial lines. The Appointing Trustees are to make their appointments after consultation with such persons as they think fit.

The members of the Board are to be seven in number, and are to be persons who have had wide experience and have shown capacity in transport, industrial, commercial or financial matters, or in the conduct of public affairs, and, in the case of two members, must have had not less than six years' experience in local government within the London Passenger Transport Area. A member of the Board is to hold office for not less than three or more than seven years, as may be determined by toe Appointing Trustees at the time of the appointment. A Board so constituted can be confidently expected to approach its task with businesslike efficiency and with a full appreciation of the needs and wishes of the inhabitants of the area for which it will be responsible. We have thought it desirable to leave certain matters, such as the fixing of the salaries of members of the Board and the removal of members for inability or misbehaviour, to the Minister, but he is to act only after consulting the Appointing Trustees. I have already described the general duty of the Board which is found in Clause 3 of the Bill, and your Lordships will note that, in addition to their general duty to the public, the Board is expressly required to conduct its undertaking in such a way as to secure that its revenues are sufficient to meet all charges, including interest on its stocks. We regard it as an essential principle of the Bill that the Board is to be financially self-supporting without State or rate aid.

Part II of the Bill contains a number of its most important provisions. Here, and in the relevant Schedules, will be found the names of the undertakings to be transferred to the Board, the terms of transfer, where already agreed, and the provisions for fixing those terms in other cases. It is, of course, an assential feature of any effective scheme of coordination that there shall be a measure of compulsion. I have already shown to your Lordships that the scheme of the Blue Report rested on compulsion, and indeed expressly provided for it. Compulsory powers are a feature of innumerable Private Bills, which every year come before your Lordship's House, as well as of public legislation. The word "compulsion" is indeed something of a bogey; it is of the essence of the organisation of the State. In this case, however, agreement has been reached with the owners of over 95 per cent. of the capital involved, and these agreements have been embodied in the Bill. In those cases in which no agreement has been reached, the terms of transfer will be settled by an Arbitral Tribunal of three persons appointed by the Lord Chancellor, one a person of legal experience, one of experience in business and one of experience in finance.

Clause 14 of the Bill contains the instructions to the Arbitration Tribunal as to the basis on which they are to determine the consideration payable for undertakings for which terms are not embodied in the Bill. This clause was drafted on behalf of the Joint Committee itself after very prolonged discussion between the parties, and after the Committee had expressed themselves as not satisfied with the solutions propounded on either side. The clause directs the arbitrators to secure a fair and equitable standard of consideration as between the different undertakings, due regard being had to the terms already settled and embodied in the Bill.

It is the general aim of the Bill to ensure co-ordination by concentrating in the Board the ownership and management of passenger transport undertakings operating in the area for which it is responsible. The only exceptions are: (a) The main line railways whose suburban lines cannot be severed from the main lines proper; (b) long-distance coach services between places in the area and places outside; (c) coach and omnibus services operating wholly outside the central area (the Metropolitan Police District and the City of London) to which the provisions of the London Traffic Act, 1924, respecting the regulation of omnibus services, apply. I shall deal later on with the position of these three classes of undertaking proposed under the Bill.

The undertakings to be acquired are set out in the Second Schedule to the Bill. They are: (1) The Underground' group of railways, tramways and omni- bus undertakings; (2) the Metropolitan Railway; (3) all the local authority tramways in the area; (4) all the regular short-stage omnibuses operating wholly or partly within the central area. The terms of acquisition agreed with the Underground and Metropolitan companies are embodied in the Third and Fourth Schedules respectively and confirmed by Clause 7. Terms have also been agreed with the London, Middlesex and Hertfordshire County Councils for the acquisition of their respective tramway undertakings in return for an issue of a special prior charge stock, called "L.A." stock, to an amount representing the outstanding debts of the undertakings. These are set out in the Sixth Schedule and confirmed by Clause 9. In all these cases, the transfer is to be effected, with some trivial exceptions, by exchange or issue of stock.

As regards undertakings with whom the terms of transfer have not been agreed, it is provided (in accordance with the desire of the owners) that the consideration payable to the Tillings undertakings shall be in stock and that to the independent omnibus undertakings in cash or stock at their option. Thus one of the most serious objections to the Bill in its original form—namely, that the owners were being compelled to sell their undertakings in exchange for stock and without the option of payment in cash—has ceased to be valid; for under the Bill as it now stands none of the parties will be compelled to sell their undertakings otherwise than for cash, unless they have already agreed the consideration in stock or have expressed a preference for payment in stock.

The remaining local authority undertakings, with the exception of those of Bexley and Ilford, will be acquired in return for the payment by the Board from time to time of the sums necessary to enable the authority concerned to settle its outstanding tramway debt charges as they fall due, after taking into account the sums available in existing sinking funds. The effect will be to relieve the ratepayers of these authorities of all further charges in respect of their tramway undertakings and the proposal has been accepted by the authorities to which it applies, though the amount to be payable will have to be agreed by the Board, or failing agreement, settled by the Arbitration Tribunal.

Those of your Lordships who are inclined to regard trams as an anachronism and an obstruction may perhaps be disposed to take the view that the terms on which the local authorities' tramways are to be acquired are unduly generous. But it must be remembered that electric trams still perform a valuable and even essential function in transporting great masses of people, particularly at the rush hours. The tramways of the London County Council alone carry nearly two million passengers a day, and there is at present no other means available of dealing with this vast traffic. Moreover, the authorities who provided these systems pledged their ratepayers' credit, with the authority of Parliament, in the interests of their own public, and of a public wider than that resident within their own boundaries.

While the undertakings have not all been equally prosperous, and while some have been a charge on the rates, it does not seem unreasonable that, when the local ratepayers are required to hand over their undertakings into the hands of a new authority, they should be relieved of their outstanding liabilities. In all the circumstances, the outstanding debt is considered a fair measure of the value of the tramways, viewed not only on the basis of their earning power but also having regard to the cost of supplying any practicable alternative means of transport. I may perhaps remark, in passing, that the question of whether the tramways in a co-ordinated system of transport are obsolete is one on which the Board will require to make its own decision. A clause is included in the Bill to facilitate the abandonment of any tramways which the Board considers should be replaced by other means of transport. The Board will obviously be in a better position to deal with the question of obsolescence than are the existing owners of the tramways.

May I now turn for a few minutes to the settlements set out in the Bill with the Underground group and the Metropolitan Railway Company? I do not propose to go into these settlements at great length. The terms of acquisition of the Underground undertakings will be found in the Third Schedule. Broadly speaking "A" stock, yielding an equivalent income, is to be issued in exchange for the well secured debenture stocks of the companies, and, similarly, "B" stock is to be issued in exchange for preference stocks. Many of these stocks are already trustee securities. The "C" stock of the Board will replace the existing ordinary stocks and, in one or two eases, preference stocks, on which the companies concerned have not been able to pay a dividend.

The Common Fund companies—namely, the London Electric, Metropolitan District, Central London, and City and South London Railway Companies, and the London General Omnibus Company —who pool their receipts under special statutory authority granted by Parliament in 1915, were necessarily and properly treated as a single entity, operating both railways and omnibuses as a single system. The consideration in "C" stock was assessed for the joint under-taking as a whole, and not for five separate undertakings. The consideration was then apportioned among the five companies on the same basis as these companies share in the Common Fund. Thus it comes about that the London General Omnibus Company, which takes a double share from the receipts available in the Fund, will receive quite as much "C" stock for £100 of ordinary capital as the tube railways. This does not, however, affect the total amount of the consideration for the joint undertaking of the companies, but only its distribution within the group. Furthermore, those who seek to express the consideration to be paid for the Underground Company in terms of so many years purchase of profits ignore the fact that the consideration for the equity of these undertakings is a stock with a variable rate of return dependent on earnings. The expression of the consideration in terms of a capitalisation of profit is only appropriate when the consideration is paid in cash or entirely in fixed interest bearing securities.

The tramway companies are not parties to the Common Fund and the rates of exchange reflect the relative security of the prior charges and, in the case of stocks on which no dividends have been paid in recent years, had regard to the market prices of such stocks and to factors affecting their future prospects. These arrangements were reached after the fullest investigation and, we believe, are fair both to the public and to the interests concerned. Similar principles were adopted in the settlement with the Metropolitan Railway, which will be found in the Fourth Schedule and on which Sir William McLintock also advised.

There is, however, a special feature about this settlement which I should perhaps explain. As an alternative to taking £67 10s. of "C" stock for every £100 nominal of their present holding, the Metropolitan ordinary stock holders, together with the holders of certain convertible preference stocks, will have the option of taking, in lieu of "C" stock, what is called an "assented" stock carrying a guarantee from the main lines —not from the Board. The main lines will guarantee a return of 3¼ per cent. for 15 years, and of 3 per cent. for another 10 years, on every £100 nominal of existing Metropolitan stock coming within the terms of the arrangements. The guarantee is, however, subject to termination at an earlier date than the expiration of 25 years in certain contingencies. It may be asked why the main lines thought it worth their while to give such a guarantee. While recognising that the Metropolitan Railway in some respects occupied a special position, the main lines always took the view that the Metropolitan Company should be fully merged in the undertaking of the Board, and not left merely a separate party to the pool. An additional and separate interest, if retained, would almost inevitably have complicated and delayed all questions of development. Its removal, and the opportunity for more far-reaching economies to be secured by amalgamation, give greater security and stability to the fabric of London transport as a whole.

There will follow substantial advantages to the main lines as well as the Board, whose interests will, if this Bill becomes law, be largely mutual instead of conflicting as they can be said to be now. In providing this solution, which cannot in any way prejudice the public, and which must assist both themselves and the Board, the main lines have not acted imprudently. They have, on the contrary, taken a broad and statesmanlike view of the matter, in their belief that this Bill is necessary if London passenger transport is to be put on a sound basis. I may perhaps give your Lordships some figures to illustrate the scope of the companies' liability under the guarantee. Supposing that all existing stockholders entitled to do so took the assented stock, then there would actually be a margin in favour of the main lines jointly of about £10,000 when the "C" stock paid 5 per cent., and a call of somewhat about £105,000 to bb met if, for example, the "C" stock paid only 3 per cent. This liability would naturally be distributed among the main lines in their pool proportions, and your Lordships will see how limited the arrangement is both in scope and in duration.

This brings me to the next point with which I wish to deal, the scheme for the pooling of receipts of the Board and the main line companies from their suburban traffic, which will he found in Clause 31 and the Tenth Schedule. It was recognised by the Government, from the first, that any scheme of co-ordination of London passenger transport must take account of the position of the suburban traffic of the main line companies. It was agreed on all sides that there were insuperable difficulties in attempting to effect a physical severance of the suburban lines from the remainder of the main line systems, and that they must therefore be left out of any scheme of common ownership. The Bill, as originally presented, proposed the establishment of a Standing Joint Committee of the Board and the four amalgamated companies, with the duty of considering proposals for co-operation between the parties and other matters of common interests. The parties were to be empowered to carry out agreements and to adopt a scheme for the pooling of their traffic receipts.

The attitude of the main lines was that they were not in any way opposed to the principles of co-ordination as embodied in the Bill, provided that adequate provision was made for bringing their suburban traffic into the scheme, and that their interests were in other respects safeguarded. They expressed dissatisfaction with the provisions of the Bill as presented, on the ground that they were merely enabling, and did not ensure that there would in fact be a pooling of receipts between the Board and the main lines. While the Bill was before the Joint Committee a scheme of pooling was evolved which was embodied in the Bill and was made obligatory upon the parties. As a result, the opposition of the main lines to the Bill was withdrawn, and they have since strongly supported the measure.

The Bill, in its present state, guarantees the closest co-operation between the Board and the main line companies. Clause 31 provides for the setting up of a Standing Joint Committee of eight, consisting of four representatives of the Board and of one representative from each of the four amalgamated companies. This Joint Committee is charged with the duty of considering and reporting to the parties upon proposals for co-operation between them in the provision or working of services, including such matters as through bookings, running powers, interavailability of tickets and apportionment of receipts. Upon a. report by the Joint Committee, the Board or the amalgamated companies concerned may enter into agreements, and may apply their funds to the provision of facilities, and any of them may assist the others financially in the provisions of such facilities. Under the new arrangement, the main line companies will be enabled to -embark on the further electrification of their suburban lines and to carry out other necessary improvements which I think it will be agreed are long overdue.

I have already shown that the framers of the Bill in its present form have taken considerable pains to ensure that the Board itself shall be so constituted as to be in direct touch with local opinion, as expressed by the local authorities of the area. This in itself will afford a guarantee that the. needs and interests of the travelling public will not be subordinated. But the Bill provides other safeguards, both as to the level of fares charged and as to the facilities to be provided in the area, not only by the Board, but also by the main lines. Clauses 25 to 29 are concerned with the fares and charges which the Board will be authorised to make to the public. At the present moment there is no uniform procedure or jurisdiction in relation to the fares which may be charged by the various transport agencies in London. A proper co-ordination requires that all the varying controls and jurisdictions at present existing should be merged into one jurisdiction applicable to all the various forms of transport operated by the Board.

The Railway Rates Tribunal was selected as the most expert and suitable body in which to vest jurisdiction. For the purpose of exercising this jurisdiction, and indeed all other jurisdictions conferred on it by the Bill, the Railway Rates Tribunal is to be reconstituted by the addition of two members. One is to be a person of experience in matters relating to London local government and is to be appointed by the Minister, after consultation with the London and Home Counties Traffic Advisory Committee. The second is to be a person of experience in financial matters and is also to be appointed by the Minister. At the same time it is proposed to confer on the local authorities in the London Passenger Transport Area an entirely new right to make representations with a view to the improvement of services or facilities or the prevention of the withdrawal of Existing facilities. For the first time the local authorities will be able to bring effective pressure to bear on the operating body in this matter. Originally, jurisdiction in this matter was to have been conferred on the Minister of Transport, but this is another of the cases where powers of interference by the Minister have been expunged from the Bill, and it is now proposed that this jurisdiction shall be vested in the Railway Rates Tribunal.

Where an application is made, the Tribunal may make an order prohibiting the withdrawal or reduction of the service or facility in question or permitting such withdrawal or reduction subject to conditions, as for example, the provision of alternative facilities, or may require the Board to provide a new or improved service or facility. It may be noted here that there are provisions in Clause 59 which put on the Advisory Committee (which will consist predominantly of representatives of the local authorities) the duty of making representations to the Board with respect to any matter connected with the services or facilities provided by the Board in the London Traffic Area and for joint meetings of the Committee and the Board, or of their representatives, at least three times a year, to facilitate interchange of views on any such. representations or other matters of common interest. This may in practice prove the course normally followed, in preference to recourse to the Rates Tribunal.

It remains to be added that the main line companies have agreed to come under a similar jurisdiction in regard to the charges to be made, and the facilities to be provided, in connection with their suburban services. Thus the local authorities will obtain very much more effective rights than they have ever had of appeal in relation to charges made or facilities provided by the main line companies. The Tribunal must not, however, make an order on any of the companies which would prejudice its financial position, or would necessitate the raising of additional capital, without its consent, or involve the promotion of legislation.

In connection with the constitution of the proposed London Passenger Transport Board it became necessary to consider the area for which it was to be held primarily responsible for the provision of adequate travelling facilities. The extent of the area was in some respects predetermined by the operations of the various London passenger transport agencies to be transferred to the Board. The growth and expansion of dormitory towns and suburbs around London has necessitated the continual expansion of the services necessary to carry the working population of London to and from their homes. In the Bill as introduced, the area for which the Board was to be responsible and within which it was to have a monopoly of local road transport services, was the London Traffic Area. During the proceedings before the Joint Committee Counsel who appeared on behalf of certain undertakers operating on the fringe of the London Traffic Area pointed out that the boundaries of that area were defined to accord with the boundaries of local authority areas, and that. in a number of respects these boundaries do not conform to the actual operations of the various undertakings providing road transport services.

After full discussion before the Joint Committee a new area was defined which is referred to in Clause 15 of the Bill as the London Passenger Transport Area. This area extends a few miles beyond the London Traffic Area on the North and South, but is well within that area on the East, and corresponds closely with the existing division of spheres of operation between the omnibus undertakings which will be taken over by the Board and those which will remain outside. Consequential upon this change of area the exclusive right of the Board to run omnibus services was limited by Clause 16 of the Bill to what is termed the "Special Area," that is so much of the London Passenger Transport Area as lies within the London Traffic Area.

With regard to the exclusive rights conferred on the Board to provide services of stage and express carriages within the "Special Area," I may remark that this right does not preclude any operator of services from places outside the Board's Area from continuing such service to any part of the area, including Central London, so long as he does not both pick up and set down the same passenger within the "Special Area." He is thus precluded by the provisions from catering for traffic local to the "Special Area," unless he obtains the consent of the Board in writing. If consent is refused he may require the Board to take over his undertaking if it is mainly in the "Special Area," or may obtain compensation. The provisions conferring upon the Board the exclusive right of providing stage and express road services within the "Special Area" is an essential part of the scheme of the Bill as it would be impossible for the Board to discharge, fully and effectively, their duties of providing an adequate and properly co-ordinated system of passenger transport for the London Passenger Transport Area unless they were in a position to control and, if necessary, to manage the whole of such services within the "Special Area."

There remains one other clause in Part II of the Bill to which I should like to direct your Lordships' attention. It is Clause 19, which provides for the transfer to the Board of the powers obtained by the London County Council in 1904 to run services on the River Thames between Chiswick and Plum-stead. Originally the transfer of these powers was to be by agreement between the Board and the County Council, but by an amendment accepted by the Government (in agreement with the County Council) in another place, the transfer is to be mandatory and the Board is directed, as part of its general duty, to consider and take such measures as it thinks fit to utilise the river for the purposes of passenger transport. If the Board decides not to provide a service itself it may make arrangements with private persons willing to provide such a service.

Opinions may differ as to the commercial possibilities of regular services of passenger boats on the London reaches of the river, but there are many who feel it a reproach that so little use is made of the fine highway provided by the river. No doubt many of your Lordships have been stirred by the eloquence with which Mr. A. P. Herbert has championed the cause of river omnibuses and are familiar with a certain punning allusion to the name of the late Minister. At any rate the matter will, if this Bill passes, again become one of practical politics and its possibilities will be assured of thorough investigation by a body in a position to give such services their proper place in the system of passenger transport in London. We shall move certain Amendments to this clause in Committee with a view to making it more effective for the purpose at which it aims.

Part III of the Bill is concerned with the borrowing powers to be conferred on the Board, the various classes of stock to be issued by it, and a number of incidental and subsidiary provisions. The Board will be authorised to borrow money for capital purposes up to certain limits and subject to regulations to be made by the Minister with the approval of the Treasury. The total amounts which the Board may borrow under the Act arc Set out. First, there is the amount of the consideration payable in cash for transfer of undertakings. This is, of course, a figure which can only be ascertained when the awards to be made by the Arbitration Tribunal have been completed. Then there is the amount (about £1,200,000) remaining unraised out of the sums which the Underground companies were authorised to raise by their Act of 1930. This Act authorised the construction of the tube extensions to Cockfosters and North-fields and other improvements which were the subject of a Government grant under the Development (Loan Guarantees and Grants) Act, 1929. The balance of such grants unpaid at the date of transfer will enure to the Board. And, thirdly, £10,000,000. Except in the case of money raised by the issue of "C" stock all borrowings must be re- paid within ninety years of the date of borrowing.

Provision is made for the issue of five different classes of transport stock ranking in a certain order of priority. First, "A" stock. This is in the nature of a first debenture, and will be issued in exchange for the best secured debenture stocks and similar securities of the companies. In so far as it is issued in exchange for existing securities of transferred undertakings, it will bear interest at 4½ or 5 per cent., according to the rate of interest attaching to the stock for which it is being substituted. "A" stock issued in consideration for the transfers of undertakings may be redeemed at par at the option of the Board after 1985 and must be redeemed at par within ninety years of the date of issue.

Secondly, Trade Facilities Act stock. This is a limited issue of 4½ per cent. stock in exchange for certain debenture stock issued by the Underground Railway Companies under guarantees given by the Treasury under the Trade Facilities Act. "T.F.A." stock will be issued only against these guaranteed stocks and will preserve all the conditions of those stocks including the Treasury guarantees. The total issue of "T.F.A." stocks will be just over £12,000,000.

Thirdly, we have "L.A." stock. This also is a limited issue, to be made only to certain local authorities, and to the amount set out in the Sixth Schedule. This class of stock was originally proposed to satisfy the London County Council who desired a stock which could be held against their sinking fund liabilities. "L.A." stock will bear interest at 4½ per cent., and may be redeemed at par at the option of the Board after 1975, and must be redeemed at par within ninety years of the date of issue. It is a special condition attaching to this stock that it shall not be put on the market or otherwise disposed of within ten years from the date of issue except with the consent of the Board.

Fourthly, there is "B" stock. This stock corresponds generally to the preference stocks of the companies, though it is also being issued in exchange for some of the less well secured debenture stocks. "B" stock issued in exchange for existing securities, or as the price of transfer, will bear interest at 5 per cent., and in other cases at such rates as the Board, with the approval of the Treasury, may determine. It may be redeemed at par at the option of the Board after 1965, and must in any case be redeemed at par within ninety years of the date of issue.

Then "C" Stock. This, the junior security of the Board, is to be issued in exchange for ordinary stocks, and some preference stocks, of the companies. It thus reflects the equity interest in London passenger transport. While the interest paid on "C" stock will be dependent on the Board's earnings, the stockholders will be entitled to a standard rate of 5 per cent. during the first two years and 5½ per cent. thereafter, if the receipts, after meeting prior charges, suffice. After the first two years, holders of "C" stock will also be entitled to a moiety, up to an additional ½ per cent. (making 6 per cent. in all), of any balance of revenue available after paying the standard rate. The remainder of the balance is to be transferred to the Board's reserve fund. Six per cent. is the maximum rate which can be paid on the "C" stock. Interest on the "C" stock will not be cumulative. "C" stock may be redeemed at par after 1955, but there is no definite term for final redemption in the case of this stock. My Lords, all the Board's stocks other than "C" stock will be trustee securities. It is therefore necessary to ensure that a reasonable cover of "C" stock is always maintained behind the trustee stocks, and provisions to this end are included in subsections (10) and (11) of clause 39.

I understand that certain noble Lords feel anxiety as to the financial stability of the scheme of the Bill, and I therefore propose to turn aside from exposition of the Bill itself for a few minutes, in order to deal with this aspect of the matter. Let me say at once that the Government have always recognised to the full that finance is the essence of the scheme, and that if the Bill could not be shown to be founded on a sound financial basis it ought not to be proceeded with. Had we entertained doubts on this score we should not be commending the Bill to Parliament. No aspect of the matter has been subjected to so keen and searching an inquiry as this. Step by step it has been examined and re-examined and, at each stage, the Government and its financial advisers have fully satisfied themselves that the financial stability of the scheme of the Bill remains unshaken. We feel that the doubts entertained on this score by certain noble Lords are due to misapprehension of the facts, and, in order to clear away these misapprehensions, a statement has been issued which will, I hope, have made abundantly clear the correctness of the view taken by the Government of this matter.

I should like, if I may, to emphasise certain salient points. In the first place, it has been alleged that events since the Bill left the Joint Committee have seriously undermined the financial scheme of the Bill, so that it is no longer solvent. Those who take this view suggest that the settlement with the Metropolitan Railway has weakened the position of the Board by increasing the charge on its revenues. At the same time the falling off of receipts during the last two years has seriously invalidated the estimates of revenue of the Board. That is what has been put forward. As regards the Metropolitan settlement, it can be definitely asserted that, so far from weakening the position, it has strengthened it, because the Board is now assured of having, as part of its undertaking, this valuable and essential part of the system of passenger transport in London, and is relieved of any uncertainties as to the outcome of arbitration proceedings. Moreover, the cost of the settlement has not exceeded the estimate of an arbitration price originally made, as the figures already published demonstrate. I would again emphasise that the guarantee given by the main lines to the Metropolitan ordinary stockholders in no way affects the financial position of the Board.

Then, again, much has been made of the falling off of receipts of the various transport undertakings as a result of the prevailing depression. Admittedly these undertakings, in common with all others throughout the country, I might almost say throughout the world, have suffered and are suffering from this cause, and the effect is reflected in the reduced dividends which they have been able to pay; but it is easy to exaggerate the position, especially if one looks only at the gross receipts. The undertakings have naturally retrenched their expenses and thus achieved very considerable economies, as a set off against the loss of traffic. In framing his estimate of net revenue of the Board in a normal year, Sir William McLintock made the fullest allowance for the maintenance and renewal of the undertakings, but, very properly, refrained from embarking upon any estimate of the economies likely to result from the merger. Yet everyone with experience in these undertakings knows that such economies, though not immediately realisable to the full, must ultimately be very considerable. In such directions as centralisation of administrations and repairs, avoidance of unnecessary duplication of services and clearances of receipts between the different sections of the undertaking, and of bulk contracts, to mention only a few items, great economies will be realised.

However, even without allowance for further economies, and assuming a continuance of the abnormally depressed conditions, the Board will still be able to earn a return on its "C" stock at least equivalent to the return which the holders of the ordinary stocks of the existing companies could receive under like conditions. I make no apology for emphasising the essentially flexible character of the financial scheme of the Bill achieved through the nature of the "C" stock, for it is the omission to take this factor into account which is responsible for the misapprehension of the position from which the doubts of noble Lords arise. The holders of "C" stock, that is, those who hold the equity of the undertaking, will be entitled to receive only the balance of profits actually earned, just as they would have been had the present companies remained in existence. It is, therefore, quite misleading to speak of the margin of profit shown in Sir William McLintock's estimates as if it were the balance remaining after paying the standard rate of interest on the "C" stock. The true margin in the commercial sense is the balance after the interest charges on the prior stocks have been met and therefore consists of the whole of the earnings available for the payment of interest on the "C" stock,plus any margins remaining over after the standard rate has been paid. Those who take the figure of £159,000 shown in the pro forma statement issued last November as the balance of profits are misleading themselves. They should look higher up the page, where they will find a figure of £1,620,000 which represents the true balance, on the basis of the estimate then made. Any comparisons made with the results of subsequent years must start from this point.

It cannot be too clearly recognised that, in this essential feature of flexibility, the financial position of the Board will differ fundamentally from that of such bodies as the Port of London Authority or the Central Electricity Board, all of whose stocks down to the most junior are fixed interest bearing securities. Finally, I would ask any who are tempted to question the settlements made with the existing undertakings, on the ground that they were made before the present depression, whether they consider that it would be either fair or reasonable to claim that these vast enterprises, in which great amounts of capital have been sunk, should be forcibly bought out on the basis of their earning capacity in a time of extreme depression. Surely that would be confiscatory action of the most unjustifiable description, a course to which no Government commanding the support of Conservative opinion would be a party.

The main purpose of Part IV of the Bill is to bring the provisions of the Road Traffic Act, 1930, in so far as they apply to the London Passenger Transport Area, into line with the conditions which will exist when the London Passenger Transport Board is set up and takes over the management and operation of the various omnibus and motor coach undertakings which are to be transferred to it under the Bill. The existing area of the Metropolitan Traffic Commissioner extends only to the City of London and the Metropolitan Police District, a combined area which is substantially less than the area for which the Board is to be made responsible for the provision of passenger transport facilities. It is considered to be an advantage from the point of view of administrative convenience that the area of the Metropolitan Traffic Commissioner should be extended so as to embrace the whole of the London Passenger Transport Area. With the concurrence of the Home Secretary it is proposed that the jurisdiction now exercised by the Police Commissioner over omnibuses, tramcars and trolley vehicles, should in future be exercised by the Traffic Commissioner

The London Traffic Act was passed as a temporary Act due to expire on the first day of December, 1928. It has, however, been continued in force from year to year by the Expiring Laws Continuance Acts. The Act has proved of great benefit in arresting the rapid and irregular growth of omnibus traffic in the streets of London, bringing that traffic under control, mitigating traffic congestion generally, and thus mitigating to some extent the danger of the London streets. In this respect the Act has fully justified itself and it is desirable, in the public interest, that the London and Home Counties Traffic Advisory Committee, established under the Act, which has done much valuable work, should be continued in existence. Clause 57 of the Bill therefore provides that the Act shall become a permanent Act.

Opportunity has been taken to reconstitute the Advisory Committee, in order to strengthen the local authority representation on that Committee. The Committee as at present constituted, consists of nineteen members, of whom eight are representatives of the local authorities in the area. It is proposed that the number of local authority representatives shall be increased from eight to twenty-three. Other changes proposed are to give the London Passenger Transport Board two representatives on the Committee, and also two members to represent the amalgamated railway companies. The representation of labour is also increased from three to five members. Of the total membership of forty, twenty-three will be representatives of local government and be appointed by the local authorities themselves. The clause further provides that the Chairman of the Advisory Committee is to be chosen annually from the local authority representatives on the Committee. Thus re- constituted the Advisory Committee will become preponderantly representative of the local authorities in the area.

Part VI of the Bill deals with wages and conditions of service and gives effect to a settlement with the unions concerned. The provisions of this Part of the Bill will apply machinery similar to the existing conciliation machinery under the Railways Act, 1921. Part VII of the Bill provides that the existing staffs shall be transferred to the service of the Board with the undertakings in which they are engaged, and with their existing rights and conditions of service.

Part VIII of the Bill is concerned mainly with the carrying on of the various undertakings until the date of transfer to the Board, the financial adjustments upon the transfer of the undertakings, and the winding up of existing companies in accordance with agreements made and embodied in the Bill. It also contains certain protective provisions, provides for the valuation of the Board's railways for local rating purposes and includes a definition clause. These provisions are mainly of a provisional or transitory nature, and although some of the clauses are lengthy they merely set out the machinery, necessarily complicated, incidental to the transfer of the undertakings to the Board and the dissolution of the existing companies.

My Lords, some noble Lords may be tempted to look askance at this Bill, because they have been told that it is a nationalising Bill—a gigantic Socialist experiment. Let me examine this charge for a moment. It is based, I think, mainly on the fact that the Bill was originally introduced by a Labour Government and must ex hypothesi be socialistic. But whatever might have been said of the Bill in its original form, I claim that it has now been purged of any socialist character. It has indeed been denounced by members of the Labour Party as a "safeguard of capitalism?" I prefer, however, to accept the test applied by my right honourable friend the present Secretary of State for the Colonies who actually moved the rejection of the Bill on its Second Reading in another place in 1931. What were the grounds on which he attacked the Bill as it then was? Having stated that there were no two opinions as to whether there ought or ought not to he co-ordination of London traffic, and that no one would dispute the real necessity for legislation, he criticised the Bill on a number of grounds.

His first was that there was no measure of agreement with any of the parties concerned. To-day we have in this Bill agreement with over 95 per cent. of the capital involved. The second criticism was that the Bill conferred great bureaucratic powers in the hands of the Minister of Transport and in particular empowered him to appoint the Managing Board itself. That, Sir Philip CunliffeLister said, would be Socialism because the Minister could appoint anybody he liked. It would be a Ministerial appointment, and he could appoint five Socialist Ministers to run the Board. Moreover the Minister was the arbiter as to the withdrawal or provision of facilities and the judge between the main lines and the Board. Well, all that has been swept away. The appointment of the Board is delegated to a body of persons removed from political influences and the Minister cannot interfere. Jurisdiction as to fares and facilities and as to questions arising between the main lines and the Board is to be vested in a judicial body—the Railway Rates Tribunal. The third ground of objection was that the owners of the transport undertakings were not to be bought out, but would have to take stock. As I have already shown, no one will be required to take stock in lieu of cash who has not agreed to do so or expressed a preference for stock. The fact is that this Bill, in its present form, is no more Nationalisation or Socialism than were the Metropolis Water Act of 1902, which set up the Metropolitan Water Board, the Port of London Act, 1908, or the Electricity (Supply) Act, 1926, which set up the Central Electricity Board.

The Board, which is to be created under this Bill, is a public utility corporation, just as are those other bodies which I have mentioned. Nobody ever thinks of the Port of London Authority as a socialistic creation. There are certain services, so vital to the life of the community, that they cannot be allowed to fall into a condition of inefficiency or financial bankruptcy. If an undertaking, operating an essential public service, is unable, whether by its own shortcomings or from circumstances which it cannot control, to provide for the needs of the public which it serves, one of two things must happen: either the State must step in and take it over, making it a State service, or provision must be made for such a measure of reorganisation as will ensure its future stability and efficiency. The first alternative is what is called nationalisation; the second is the answer of those who believe with us that industry is best kept free from political control, and allowed to be run on business, rather than on bureaucratic lines.

That is the policy of this Bill; there is to be no acquisition by the State or reliance upon the taxpayer or the ratepayer. The body which it sets up is, both in its method of appointment and in its financial arrangements, even further removed from nationalisation or municipalisation than are its prototypes which I have mentioned. The Central Electricity Board is appointed by the Minister of Transport; the Governors of the British Broadcasting Corporation are appointed by the State; the Metropolitan Water Board by the local authorities; the Port of London Authority contains a number of nominees of State Departments and local authorities. The London Passenger Transport Board is to be appointed by a body of quite independent persons acting as trustees on behalf of the travelling public and the Board's stockholders.

The creation of this public utility corporation, to be known as the London Passenger Transport Board, is, therefore, not the triumph of nationalisation, but the alternative to it. I read in a Socialist publication called the New Leader, of January 22, 1932, a bitter cry that "the public utility corporation is capitalism rationalised and made secure" —in fact, a bulwark against the realisation of Socialist dreams. I would ask noble Lords to ponder, before giving a vote against this Bill, the words used by Sir Robert Horne in the course of the Third Reading debate in another place: I venture to say that if you do not have an arrangement for managing London traffic on the principle of complete coordination, you will inevitably lapse into real Socialism. We have here a Bill, the product not of any one Minister, nor even of any one Government, but the result of years of experience and of advice from successive Commissions arid Committees, who have considered this long-standing problem. There is no room for doubt as to the necessity for this Bill. None of its critics have been able to suggest any practicable alternative scheme. The coordination Bills promoted by the London County Council and the Underground companies in 1928 afforded no solution; they were merely enabling Bills, purporting to deal only with a part of the problem, and fact accomplishing nothing.

I therefore commend this Bill to the approval of your Lordships' House for these reasons: It provides a practicable and comprehensive solution of the pressing problem of co-ordination of the various means of passenger transport in and around the Metropolis. It commands a measure of support such as has never before been achieved in connection with this matter and will sot up a controlling body with the consent of the major interests concerned. It provides the only practicable means of securing those improvements of the travelling facilities of London and its surroundings which are long overdue. It brings the main lines into effective partnership with the other means of public transport. It provides full and adequate safeguards, on the one hand to the travelling public and on the other to those who have invested their money in the provision of travelling facilities in the area. By the elimination of a multiplicity of competing interests it will tend to the relief of congestion in our streets and to make them safer for other users. And finally, it provides for placing London passenger transport on a self-supporting basis and ensures that it shall involve no further charge either upon the general taxpayer or upon the ratepayer of the area. I beg to move.

Moved, That the Bill be now read 2^a.—(The Marquess of Londonderry.)

LORD BANBURY OF SOUTHAM, who had given Notice to move as an Amendment, That the Bill be read 2^a this day six months, said: My Lords, in rising to move the rejection of the Second Reading of this Bill I would like to point out that though a good deal has been said about the supposed fact that everybody is agreed, I hold in my hand a Petition signed by forty-four people representing companies interested in this question—a Petition to your Lordships' House praying that the Bill may not be read a second time. That Petition, I believe, has already been presented. We are told that this is a Bill which is going to deal with congestion in the streets. I propose to prove that it will not deal with congestion in the streets, but that it will confer a monopoly upon certain people to run passenger omnibuses forty miles outside London.

My noble friend has said that there are certain bodies which are somewhat similar to this proposed new body—the Metropolitan Water Board and the London, Docks Board—and that they have worked well. I am, unfortunately, old enough to remember all the circumstances connected with the making of the London Water Board and the London Docks Board; in fact I was a shareholder in both those companies. The result of the creation of the London Water Board —and I commend this to my noble friend below me—has been that the London householder has had to pay more for his water, and has no more water and no better water than previously. That is a fact which cannot be contradicted. The Port of London Board was in a very different position to that of the old London Water Company which was very prosperous. The Port of London Board was in a very bad condition. It had been very badly managed. What happened? The new London Port body was given power to impose rates which the old company could not do, and free water, which was a very great detriment to the old dock company, was abolished. Therefore we have this fact, that in regard to both those bodies which my noble friend has instanced the result to the public has been that they have to pay more for their accommodation. I venture to assert that there has never been a public board which has not increased expenditure. There may be public boards that have done well, but they have not the incentive that a private body has to run economically. As a matter of fact—and I challenge anybody to contradict it—there has never been a public board which has not resulted in increased expenditure.

My noble friend went at considerable length into the history of the Bill, and said that it was passed by the Joint Select Committee. But that was by a majority of one only, so that there was very great divergence of opinion in that Committee. I have the old Bill and I have the present Bill. The old Bill was a very different Bill from this one. It consisted of a reasonable number of clauses whereas this Bill consists of 107 clauses, and sixteen Schedules. I do not know whether the draftsman of the Bill is here, but if he is I would like to congratulate him, if his intention was to render the Bill incomprehensible, upon having drawn a Bill which nobody, unless he is a very learned member of the law and sits for some hours with a wet towel round his head, can be certain that he understands. He has put in certain clauses which seem all right, but when you come to read a little further on you find that they are contradicted by other clauses which render the good clauses bad, while the bad ones are left in.

My noble friend said that one of the original objections to this Bill was that the Minister appointed the Board, and he told us that had been swept away. I venture very humbly to contradict my noble friend. I say it has not been swept away. The name of the Minister appears in this Bill fifty-seven times, and all that has happened is this. A body called the Appointing Trustees, consisting of very eminent men no doubt, appoint a small body who are to manage the new combination, but if my noble friend will read a little further on, he will find that the Minister, after consultation with the Appointing Trustees, may dismiss any of these members on the ground of inability—not with the consent of the Appointing Trustees but after consultation. "After consultation," I venture to say, means nothing. Therefore what has happened is that the Minister, though he does not appoint, may dismiss. As a matter of fact, the power of the Minister remains.

At this hour I do not wish to take up your Lordships' time unduly, but you will find, if you turn to Clause 61, what appears to be a proposal that more or less carries out the statement of my noble friend that the Minister has not much to do with the matter, and that the Board may run passenger omnibuses over certain parts. Yes, but if you read a little further you will see that a gentleman called the Traffic Commissioner can interfere with them, and can say: "You are not to run there; you are only to run where I tell you." Practically, therefore, the Board are under the thumb of the Traffic Commissioner. But there is an appeal from the Traffic Commissioner. To whom is the appeal? It is to the Minister and the Minister's decision is to be final. Who is the Traffic Commissioner? I took some trouble to find out, and I found that he is one of three gentlemen appointed by the Minister. Two of them are appointed by panels provided for him by certain local authorities, and the third is appointed by the Minister himself. Therefore, instead of the Minister being eliminated he is camouflaged. On the face of it, if you do not read the Bill very carefully, you think that possibly he disappears, but as a matter of fact he remains, and has practically as great a power as he ever had.

Consider for a moment what this is going to do. First of all where is the traffic area'? It is not defined in the Bill in any kind of way that an ordinary person can understand. It is defined in this way. There are three maps; one is in your Lordships' House, one is in the House of Commons, and the third is in the office of the Minister of Transport. On those maps there is a line. These maps are signed by Lord Lytton, and they are to be the authority, and if the maps in your Lordships' House and in the House of Commons are lost the map in the Minister's office is to be the authority. This is all In the Bill. There is a clause in the Bill which extends the area ten miles beyond the line marked. That is, as far as I can make out, forty miles from London, and, therefore, in order to do away with the congestion in Oxford Street and Bond Street, you are going to arrange that somebody shall hive a monopoly of the traffic forty miles from London. Has anybody ever brought forward such an extraordinary proposition? I am sorry to say I can hardly believe so.

My noble friend says it does not mean nationalisation of the railways. Well, what is going to happen? All passenger traffic within forty miles of London is in the hands of this monopoly. What is going to happen if there is a strike I do not know, because all passenger traffic in London and fox forty miles out would stop. One knows perfectly well that a public authority is much more amenable to pressure. They will probably raise all the wages and all the salaries. Then they will be asked to do more and probably, in the end, they will turn and there will be a strike and be no means of getting about anywhere. The railway companies who first of all opposed the Bill have come into it and, as I understand it, the result will be that the Board will work and operate the suburban portion of the main line railways while the rest will be worked by the directors. A more complicated or absurd arrangement I cannot Possibly conceive. It is said that the boards of directors are in favour of it. They were in favour of the 1921 scheme. They were not all in favour because the board of the Great Northern Railway was strongly opposed to the amalgamations of 1921. The other boards came round and I remember Sir Eric Geddes saying in the House of Commons on Second Reading that the economies had been put at £10,000,000 a year; he did not put them at so much as that; he put them at £20,000,000. I ventured to get up and say that there would be no economies. I was right on that occasion and the boards of the other railways were wrong, as events have proved.

Now I would like to draw your Lordships' attention to certain statements made in another place. We all know that Mr. Morrison made a statement in which he said that this was a very great measure. I do not know that I need trouble your Lordships with that, but I will just read to you a statement made by Sir Henry Jackson—a Conservative—on October 27 last year. He said: A settlement with the main lines, to my mind, constitutes a part of the Bill which is unique. That is quite true, it is unique. Then Sir Henry Jackson went on—and I ask your Lordships' particular attention to this: I believe it is pregnant with tremendous possibilities, and if this London experiment succeeds over this great area, it may well be that an extension of it may be used to deal with the whole transport problem of the country. As sure as I am standing here, if you pass this Bill the result will be—and it is a result which was intended by the original promoters of the Bill—that the whole transport of this country will be nationalised.

What is likely to be the effect of that? I have here a statement of what has happened in Australia? It is from The Times and it says: In the course of his survey this correspondent will show that nearly two-thirds of the total deficiency in the accounts of the States for the year 1930–31 is represented by losses on the railways, in which £336,000,000 of public money is invested. The railway deficits in the principal States, after allowing for capital charges and for amounts received as special subsidies from general revenue, were; New South Wales, £4,421,620; Victoria, £1,870,633; South Australia, £1,685,920; Queens land, £1,6191,165; and Western Australia,.£379,992. We all know that in France the railways —not all of them, but those which are operated by the State—are worked at a loss. Therefore, I view with apprehension the fact that the result of this Bill, as far as I can see, is a certainty of nationalisation.

Let me now for a moment draw your attention to the map which has been issued by the Railway Companies' Association. It will show you the enormous area, which is included in this Bill. You must remember that under the Bill you can go ten miles outside this area. Beaconsfield is included, Taplow is included, Slough is included, Virginia Water is included, Chertsey is included, Weyhridge is included, Woking is included, Bramley is included, and, on the other side, Sevenoaks is included, Nut-field is included and Three Bridges is included. And you are able to go ten miles beyond that.

Now I should like for a few moments only to draw your Lordships' attention to the finances of the Bill. That is a very serious part of it. The White Paper which has been issued—Command Paper 4204—gives the balance to the reserve fund as £159,000, not a very large balance on a capital, according to the White Paper, of 120,000,000. The figures have been founded upon the receipts of 1928, 1929, and 1930. I have here statements made last week by the noble Lord, Lord Ashfield, to his shareholders and by the gentleman who occupied the chair at the meeting of the Metropolitan District Railway last week. They show that the net result for 1932 of those two railways combined was a deficiency of £259,000. Where is the margin of £159,000? It has gone already.

And what is the prospect of profit from these lines? I have some knowledge of the history of the tube railways and the acquisition of a controlling interest in the Metropolitan District Railway by Messrs. Speyer Bros., an American house which then occupied a considerable position in the City. They interested themselves in some of the tube railways and at that time the Metropolitan District was doing badly—very badly financially, and not very well from the point of view of the convenience of the public. They managed to obtain a controlling interest and asked me to become a director. For various reasons which I need not go into I declined, but I continued to be consulted by Messrs. Speyer on these matters. They appointed a gentleman as general manager who was by no means successful. Then they asked Mr. Stanley —as Lord Ashfield then was—to come over from America and become the general manager of the combine. I venture to say that no one could have done better than Lord Ashfield. I do not think many men would have done as well. Not only did he restore the financial position of the railways, but he improved the facilities and the accommodation for the public.

Lord Ashfield, I think everybody will agree, is an authority on these matters. What did Lord Ashfield say to his share-holders last week? I am quoting from The Times. He said: London transport, whether under private enterprise or under a public board, cannot remain solvent and progressive unless it is freed from the dead weight of taxation which it now carries. Therefore, according to the greatest authority we have, these bodies and this Board cannot continue prosperous unless freed from the present great burden of taxation. If it is freed, where is the money going to be found—from the pockets of Income Tax payers, from further increase of the Death Duties, or how? It has to be found somewhere. Let me quote a little more of what was said on the same occasion by Lord Ash-field: There are other factors which have contributed to the loss of traffic. In recent years the suburbs have tended to become self-contained. The standard of shops has been improved and luxurious cinemas have been built, so that there is not the same need or incentive to go to the centre of London for shopping or entertainment. Then the motor-car has grown to be an important feature in passenger transport, and there are now well over 200,000 private cars registered in the London traffic area. They carry not only the family, but neighbours and friends, and therefore withdraw more people from the public means of conveyance than at first sight would seem possible. The parking places and garages in the centre of London are filled with these cars. The theatre traffic, which at one time was carried upon the railways and omnibuses, has now largely passed to the private car. How can this public Board alter that? These are factors which remain.

Now I come to the question of finance. The finance is very curious. I received yesterday a letter from a friend of mine who is a holder of stock in the Metropolitan Company. It has been said—I think I am not misrepresenting my noble friend—that everybody had agreed to these arrangements, and I know it has been said that because of that neither this House nor the House of Commons has anything whatever to do with it. I venture to deny that. I say that it does not matter what is arranged outside; we have to decide whether a thing is good or bad and what has been arranged outside has nothing to do with the matter. But I venture to say that it has not been agreed. Let me read part of this letter from a friend of mine. It is dated February 27, 1933. He says he is a holder of Metropolitan 3½ per cent. debenture stock. £100 of that stock will be converted, not into another £100, but into £77 15s. 7d.

A NOBLE LORD

Of what?

LORD BANBURY OF SOUTHAM

Of "A" stock. It is true that though he will get his capital reduced he will get the same in interest because he will get 4½, per cent. instead of 3½ per cent. Yes, but what happens later? There is a clause which says that this stock must be redeemed and can be redeemed, and what at?—not at £100, but at £77 15s. 7d. My friend said he objected to this, naturally; and the result was that he protested not only to the Metropolitan Company, but to Mr. Pybus, as Minister of Transport, and as the Public Trustee held £5,000 of the 3½ per cent. debentures for his wife's marriage settlement, he also spoke to him. But Mr. Pybus was immovable and my friend sold his stock.

Look at my position. I have some 3 per cent. stock in the Metropolitan District. I have no recollection of ever being told that my £100 3 per cent. stock was going to be converted into £66, and certainly not that that £66 was going to be paid off at £66. I cannot understand how such a proposal could ever have been put before an English board. There is something worse than this. I have here a statement issued on behalf of the main line railway companies. The Railway Companies' Association, of which I was at one time Chairman, is a body composed of the various railways and the Council is composed of the Chair- men of the various railways, and in my time there was an addition of three members of the House of Commons. What does this document say? It says: Many of these stocks are irredeemable and the substitution for them of a redeemable stock is distinctly to the public advantage. Could anyone believe that respectable people would say—because this is what it implies—that, having entered into an agreement and bargained to borrow from a certain person certain sums of money on certain conditions, you can break those conditions to the advantage of one of the parties and to the disadvantage of the other if it is to the public advantage?

I do not know whether the Railway Companies' Association is following the Free State in Ireland or the Free State is following the example of the Railway Companies' Association, but I see in The Times to-day that Bills have been introduced in Dublin regarding railways and road transport, and The Times says: The Railways Bill's principal feature Is the drastic reduction of railway capital. The capital of the Great Southern Company will be reduced from £26.000,000 to £12,000,000. Holders of £100 stock will have their holdings reduced as follows:— Debentures from £100 to £85; four per cent. guaranteed preference stock, £100 to £50: four per cent. preference stock, £100 to £35; and ordinary stock, £100 to £10. Whether this is in consequence of the arrangements made by the London companies or whether the London companies are following the example of the Irish Free State, I do not know.

But consider what the effect of all this will be; consider the precedent it is establishing; and do not forget that the debenture stocks in the Metropolitan Railway, and the rentcharge stocks and debenture stocks in the Metropolitan District are trustee stocks in which people have invested—in many cases marriage settlements—on the understanding that when they were given an irredeemable stock they were given an irredeemable stock. And that stock should not be taken away from them and redeemed at a lower price without compensation being given to them. What would happen if this precedent were gone on with? It is not impossible that we may have a Socialist Government in three years' time. What is to prevent their saying that Conversion 3 per cent. stock shall be reduced, every £100 to £66—that 4½ per cent. stock should be given, and that it should be redeemed at £66. There is this precedent. There is nothing to prevent it, and I hope your ^*Lordships will not agree to this, which I cannot call by any name but "sheer robbery."

There is one other thing. I understood from my noble friend that the main lines have entered into a liability of £105,000 a year with regard to the Metropolitan Railway. Are the main lines in a position to take any more liability? They are not paying their dividends on some of their preference, as I know to my cost. Is it a time for them to enter into unknown measures of this sort? We are told that it is good to electrify. Is it? When I was chairman of the Great Northern Railway I went into this question of electrification, and I came to the conclusion that although, if you had not already steam trains and if you were going to start afresh, electrification might be useful, it would not pay if you had to scrap your steam trains and institute electricity. The Southern Railway have electrified down to Brighton. Whether that is going to be successful I do not know. My own idea is that it will not pay for the money spent. Electrification has been successful on the Underground for two reasons. One is the atmosphere and the other is that it was necessary on the Underground to run as many trains as possible within the hour, and especially during the rush hour. You can speed up much more quickly with an electric train than with a steam train and consequently can run more trains in the hour with electricity than with steam. Do the main lines want to run more trains within the hour? Except over short distances, in the rush hour, their trains are more or less empty at the present moment, and they do not want to run more trains which will be mostly empty. I apologise, my Lords, for having detained you so long, but it is really a very important question. I move that this Bill be read a second time this day six months.

Amendment moved— Leave out ("now") and at end of the Motion insert ("this clay six months").—(Lord Banbury of Southam.)

^* In the unrevised daily part this line reads as follows: "Lordships will not agree to this Bill." See cols. 1023 and 1024.

LORD MOUNT TEMPLE had also given Notice that he would move the rejection of the Bill. The noble Lord said: My Lords, in rising to support my noble friend Lord Banbury, I promise you that I will be as brief as possible, though it is not very easy to compress into a quarter-hour's speech all the different angles from which this very large measure can be regarded. We hear the argument that London traffic has been long under discussion; that this Bill has cost in its passage through Parliament perhaps £40,000; and that therefore you must pass the Bill. I dissent from that. London traffic is running very well indeed. It is the best in the world, and therefore there is no force in the argument that supposing this Bill does not pass chaos will arrive in London, or that chaos will continue. It is well known that, not excepting New York, we have the finest transportation system in this Metropolis of ours, and I gladly support Lord Banbury in saying that that is largely, if not mainly, due to Lord Ashfield, and long may he be spared to give the benefit of his advice to London traffic.

In any case it seems to me that there is no reason why we should pass a Bill which in its main structure is Socialism—that cannot be denied—in spite of the Amendments made in another place. When it was introduced it was denounced by the whole Conservative Party, and it was described by its fond parent, a Socialist Cabinet Minister, as the greatest Socialist transport scheme ever placed before Parliament. I submit, and will prove in a moment, that the comparatively small Amendments made since that statement was made have not altered it from a Socialist transport measure. That is because of the Socialist members of the Cabinet. This Bill sets up a State monopoly. No one can trade in the streets without the consent of the Board, and the Board will not consent because they want to have it all in their own hands. There will be no more competition between tramways and omnibuses of the General Omnibus Company. There will be no more independent omnibuses, and it is this competition which has enormously improved transportation in the Metropolitan area during the last thirty years.

This Bill means a rigid State monopoly, and, as is well known, a monopoly is against all progress. The monopolist says: "Why should we trouble to improve our means of carrying on our business? There is no one to compete with us. We have a monopoly, and the public may take it or leave it." Why is there this craze for complete amalgamation of these huge combines? Are we not going too far in the direction of huge combines? There is one aspect which has not been alluded to by the noble Marquess. What will be the position of the country if a general strike occurs, such as occurred in 1926? The difficulties would have been enormously increased in 1926 if there had been no independent omnibus proprietors, and if you had had all your enterprises under one control. It usually follows that all the trade unionists who have been separated under different bodies when the employers are different bodies, come under one body when the employers become one body, and that makes it all the more difficult for the nation, through the Government of the day, to deal with any general strike. In such a case you would not have, as you had in 1926, quite a number of people engaged outside the unions and indeed hostile to the unions. You would have one solid trade union against you, and they would go out as one man and thus make your task as a Government immeasurably greater.

The London County Council Bill and the Bill of Lord Ashfield's group which attempted to solve the problem on a voluntary basis was killed in 1929. In that Bill brought in by the London County Council and Lord Ashfield's group of companies there was no compulsion. It was a purely permissive Bill. They aimed at common management and a common fund. They would, I believe, have brought in everybody except the independent omnibus proprietors and the Metropolitan Railway, but that Bill was in conformity with Conservative principles: you would have had a voluntary combination and, above all, the various businesses would have remained in the ownership of the people, the municipal authorities and the private companies, to whom they belonged. Here, on the other hand, we have a Bill which expropriates entirely all private interests and all municipal interests and hands over the whole of the transport system up to twenty-five miles from Charing Cross, and in some cases ten miles more, to a State monopoly. That State monopoly will not allow any private enterprise or any municipal enterprise to interfere with it.

I was surprised at the noble Marquess, Lord Londonderry, who in his speech—I am sure unintentionally—gave a very erroneous view of the history of these London measures. He told us about the Blue Report which recommended compulsion, and then skipped all the intervening history and came down to the Bill introduced by the Socialist Government, which also had the feature of compulsion, giving the impression that the whole history of transport in the London area had been on a compulsory basis. As I have just shown, that is by no means the case, because Lord Ashfield's and the London County Council's Bill was entirely on a voluntary basis. I was instructed by the Conservative Government of the day to support that Bill in the House of Commons. It was intimated to the Conservative members in the House of Commons that they should support it, and it was so supported, and if the Dissolution had been delayed for another three days that voluntary Bill would have become law. We should never had had all this State Socialism and this compulsory obligation on people to give up their businesses. I hope that your Lordships in coming to a conclusion will not assume that the London traffic problem has always been approached by every Government, every Department, and every Committee from the point of view of compulsion, and that therefore this Bill is on those lines. No, the proposals that were supported by the Conservative Government were on a voluntary basis, and it was only by the purest bit of bad luck that they did not become the law of the land.

Then came this Bill, introduced in March, 1931, by a Socialist Government with compulsion and public ownership, and with a board of management appointed by the Minister of Transport. Sir Philip Cunliffe-Lister has been quoted by the noble Marquess in connection with this Bill. May I read what he said in opposing officially on behalf of the then Conservative Opposition, this Socialist Bill. During the debate on the Second Reading Sir Philip Cunliffe-Lister said: In this Bill we are getting Socialism in our time '… Anybody who votes for this Bill is, without any possible question, voting for nationalisation, and for nationalisation in a very peculiar and extreme form. He continued: Let us see what this Bill does. All are forced to transfer their property, whether they like it or not, to a public undertaking, the board of management of which is appointed by the Minister. It is a tremendous socialistic experiment, nationalisation and nothing else. I have no doubt noble Lords will be thinking: "Well, there have been some changes made. What about those changes?" It is being said now that it is no longer Socialism because, instead of the Minister appointing the board of management a Committee of Appointing Trustees is set up. These five gentlemen indicated by the noble Marquess are to select the board of management.

I suggest that the Bill does not thereby cease to be Socialism. The Government or Parliament appoints a selection committee to select the managing body, but will anybody say that, because the Marylebone Cricket Club appoint a Selection Committee to choose the team to play Australia, therefore, if bad selections are made, the Marylebone Cricket Club can wash their hands of all responsibility and say: "Oh, it is the Selection Committee which has done it, not ourselves." Not at all. They would be justly held to be responsible for the acts of their Selection Committee, and I submit that if Parliament passes this Bill Parliament and the Government of the day cannot divest themselves of the responsibility for the appointment of this Board.

In the same speech Sir Philip Cunliffe-Lister, in moving the rejection of the Bill, gave as two of his reasons for rejecting it—(1) that it took the property of private owners out of their control; and (2) that it gave them no option for sale. These two provisions still remain in the Bill. The Conservative Party strongly opposed that Bill at the time, and I submit that it should do so now. Surely it cannot support a Bill which takes the property of private owners out of their control and gives them no option for sale. The noble Marquess, I think, gave us the impression that anybody who had his property taken away could demand cash unless he agreed to take stocks. With great deference, that surely is not the Bill. What the Bill says is that small omnibus proprietors can demand cash, but all the other people are forced to take stocks in the new combine and cannot demand cash, as has always been done up to the present moment. That is a most important point and that alone, it seems to me, should kill the Bill. And it was one of the reasons given in the debate in another place a year or two ago why this Bill should not have a Second Reading.

No mention has been made during the debate of the views of London. I should have thought it was of some importance to know what were the views of the people who will be mainly affected by this Bill as far as traffic facilities are concerned. It is really very remarkable, if one probes a little to see what the views of London are, as expressed by its duly elected representatives, to see the practical unanimity that exists against this Bill. The London County Council, with its very large Conservative majority, has always been against this Bill. It has always fought against this Bill. In their municipal elections of 1931 the Municipal Reform Party, that is to say, the Conservative Party on the London County Council, fought the contest on three main issues—housing, public assistance, and transport; and I think my noble friend Lord Jessel will support me when I say that not the least important of the three was transport. One of the main subjects referred to at every public meeting on behalf of the Municipal Reform Committee was the detestation of this Socialist and Nationalising Bill of the Socialist Government. What was the result? Did London rise up in its wrath against the Municipal Reform Party and drive them from office? On the contrary, it added six more seats to their already large majority, so that we have in the County Council in the past, in the present, and I hope always in the future a detestation of this Nationalising Bill which we have before us.

Now, my Lords, take the Metropolitan Boroughs. I say it with bated breath, but if the County Council propose one thing the Metropolitan Boroughs go the opposite way. If the Metropolitan Boroughs propose something, the London County Council deem it their duty to take a different view. But in this case the Metropolitan Boroughs are as insistent in opposition to this Bill as the London Couny Council. Three weeks ago the Metropolitan Boroughs Standing Joint Committee passed a resolution against the Bill, not as it was, but as it is at the present moment, by fifty-one votes to twelve. Thus we have the London County Council by a large majority, and the Metropolitan Boroughs by an overwhelming majority, refusing to have anything to do with this Bill. I think your Lordships' House, and Parliament generally, ought to pay very considerable attention to the views of the duly elected representatives of the people who will be most affected by this measure. Who have we for it? We have about six Socialist Boroughs, and three or four Boroughs like Croydon and West Ham, who are in favour for the simple reason they will sell their trams to the new combine on very excellent terms.

I am sorry to have kept you so long, but it is difficult to deal with this matter briefly. Do allow me to say a few words on finance. You may have different views on nationalisation and individualism and on who is best suited to drive a tram or drive a motor omnibus, but it is quite obvious that even if this Bill were the most perfect Bill ever devised by man in other respects, unless its finance, is sound it ought to be rejected. It is no use passing a Bill which is going to land the enterprise in bankruptcy or in very difficult circumstances. We have had some very illuminating statements on finance, and my noble friend Lord Banbury has given us excellent instances of what happened in individual cases, but I should like to put before you only four figures which deal with the net revenue of the undertaking during its first and second year.

Your Lordships have in your hands, no doubt, the White Paper giving the views of Sir William McLintock on the probable results of the working of this Bill in the first and second years. Sir William McLintock, as the White Paper indicates, was asked by the Minister of Transport, to report to him as to what is likely to happen. Sir William McLintock in November of last year, that is 1932, issued a revised pro forma statement of net revenue. He gave a sort of second view of what he thought would happen, and he estimated that the net revenue during the first two years would be annually £5,800,000. The Attorney-General, on the. Third Reading in the House of Commons, estimated that the net revenue would be £5,700,000. Who shall say which is right when two such eminent people differ? But though £100,000 is not a very large sum in £5,800,000, yet it does show some small doubt in the mind of the Government when these two eminent protagonists for the Bill should not be able to arrive at the same figures on the net revenue during the first two years.

Then we have the very interesting statement—probably most of your Lordships have seen it—put forward by Sir Philip Dawson, M.P., as to net revenue. Sir Philip is known to be a very great expert in these matters, and he takes a much more pessimistic view. He says that the whole net revenue each year during the first two years will be only £4,800,000, and I humbly put forward the figure of 5,0190,000 instead of £4,800,000. The difference between these estimates is due to the accounts of the Underground Railways being issued this month, which I was able to put in and which Sir Philip could not put in because his estimate was printed before the accounts appeared. So we have this very great divergence of opinion. We have Sir William McLintoek and the Attorney-General showing a surplus over liabilities—a small gain. We have Sir Philip Dawson and the experts for whom I speak showing a large deficit. How does this difference arise?

I am not suggesting for a moment that Sir William McLintoek and the Attorney-General have not great authority behind them, and may perfectly genuinely be putting forward their figures; but the difference is this, that the Attorney-General and Sir William McLintoek have forgotten, as was mentioned by my noble friend Lord Banbury, that their estimates are based on the results of the various undertakings for the three years, 1928, 1929, and 1930 on an average, whereas the more up-to-date estimates are based, not on that, but on what is now the actual cost and what is unfortunately likely to continue for some time. There has been a general substantial shrinkage of revenue and last, but not least T think, since the date of their reports the cost of petrol has increased, which must add very much to the cost of the companies. To be perfectly frank with your Lordships, there are certain economies which should be effected by amalgamation, but these are small in comparison with the increased expenses, and personally having gone a good deal into the matter it seems to me, taking the conservative view, that probably in the first two years of working there will be a deficit of £800,000 each year.

Supposing there is a deficit, what are the alternatives? What is the Board to do? The Board can take three courses. It can either default in its interest payments, or it can reduce facilities, or it can increase fares. Obviously at the beginning of its existence the Board is not going to default in interest payments; besides it must pay some regard to Clause 3, subsection (4), which says that it shall conduct its business with the greatest regard to making it pay. Reducing facilities, Lord Ashfield will agree with me, is not a thing you can do on a Monday morning, having decided on it on the Sunday. You have to dismiss men, to compensate them, and make many other arrangements, and that is not a thing the Board is likely to do. What it is likely to do is to increase the fares. Is it really necessary to throw aside all our Conservative principles, to vote what is virtually Nationalisation, in order that the inhabitants of London and surrounding areas may have the benefit of higher fares?

What I think we should do is to agree to the proposal which will be put forward by Lord Clanwilliam—it seems to me the sensible course—namely, possibly to give a Second Reading to the Bill, although I should prefer to vote against it and probably will, and then have a thorough, prompt, and not too long investigation into the finance of the Bill, because if the finance of the Bill is sound obviously the case of the promoters will be ever so much stronger than it otherwise would be.

THE EARL OF CLANWILLIAM

My Lords, it may be for the convenience of your Lordships if I intervene now and say the few words that I have to say with reference to the Motion which stands in my name, to refer the Bill to a Select Committee to examine and report upon its financial provisions. The Motion will not be moved now, but, to suit the convenience of the House, at the end of the debate. I wish first of all to make it quite clear that in moving the Motion which I will move later I have no in- tention whatsoever of recommitting the whole of the Bill. My desire and intention is simply to see that the financial provisions of the Bill are reconsidered, and the Motion would be limited entirely to that.

I would like also to remark now, before I say anything further about the finance of the Bill, that I am not hostile to some of the principles of the Bill. I never have been; I was not on the Joint Committee, and I am not now. Many years ago, speaking in your Lordships' House from the other side—it was on some Motion connected with traffic—I said that if you wished to control the traffic of London you must control it from the outside; you must be ready to seize it outside before it gets into London. That is one of the principles of the Bill today. A year or two after that, speaking on this side of the House, I advocated that the Government should come forward and assist the Underground group to extend their tubes and improve them by giving financial assistance. I said it was up to the Government to decide what particular measures should be taken to provide the money, but I thought such assistance was very essential. I am afraid what I said at that time brought a very severe rebuke down upon my head from the noble Lord who is with us to-day and who, I hope, will long remain with us, my noble friend, if I may say so, Lord Banbury. He rose and said he was aghast at the idea of public money being utilised for the extension of tubes. Well, that has been done since. There have been two instances, I think, the case of Morden and the case of Cockfosters. I sat on the two Committees in reference to those extensions, and public money was used to facilitate the building of those railways.

I only mention these two points because I do not wish your Lordships to think that I am sailing under any false colours. I mean what I say in the Motion which I have put down, that I wish the financial provisions to be considered. I think that they are the important thing. This is the matter which has caused me anxiety ever since I sat on the Joint Committee, and it is the matter which I think now it is essential for your Lordships as trustees for the nation to consider. The financial provisions of the Bill, as your Lordships have already been told, were framed by Sir William McLin- tock in or about the year 1930 and the accounts were brought up to the 31st December, 1930. As you have also been told, and as you will see in the pro forma statement, those accounts were framed on statistics for the years 1928, 1929 and 1930. Those three years were, comparatively speaking, prosperous years, more prosperous than we have to-day, and possibly more prosperous than we may have the pleasure of looking forward to in the next two or three years. Those accounts were submitted to us in the Joint Committee in the summer of 1931. We sat till Parliament rose, and two months after that the country was in the throes of the greatest financial crisis it bas ever known.

Since then a great deal of water has passed under the bridges. The financial conditions of this country have entirely changed. The financial conditions of the world are changed. They have been turned upside down, and nobody knows to-day where they are. Look at America, at France, at Germany. Look where you will, the natural conditions are all upset. In this country, thanks to the will of the people, thanks to that fine asset we possess of never knowing when we are beaten, and thanks to the leadership of the National Government, we are still en our legs. Nobody can deny that our little raft, which has been in this whirlpool of financial chaos, is a steady craft, but nobody can say that we may not slip back into that whirlpool. For those reasons I think this is the time in which we should take into very serious consideration any estimates which were made in those three prosperous years before the 31st December, 1930.

To reinforce what I have said, may I read some excerpts from the speech of my noble friend Lord Ashfield to his shareholders about a week ago. I could almost rest the whole of my case for a reconsideration of the finances of the Bill once again on those statements. The first one is as follows: Compared win 1930, the number of passengers carried has fallen by 75,000,000, or by over 3 per cent. This measures the extent to which your undertakings are affected by the generally changed circumstances of the time. That is my whole case. The next quotation I want to make has already been referred to by my noble friend Lord Banbury. In this Lord Ashfield said: There is no way of creating casual or pleasure traffic when its disappearance is due to a lack of spending power, to the absence of a margin of earnings over the needs of the family. This lack of spending power is general throughout our area. Both those who live upon interest and dividends and those who live upon wages are alike affected. There are other factors which have contributed to the loss of traffic. In recent years the suburbs have tended to become self-contained. The standard of shops has been much improved, and luxurious cinemas have been built, so that there is not the same need or incentive to go to the centre of London for shopping or entertainment. Again, Lord Ashfield said: We dare not assume that the restoration of our prosperity will be rapid. I do not wish to exaggerate anything I have read. I have only read what Lord Ashfield, who is responsible for this great undertaking in London, tells his shareholders. Nothing could be simpler, nothing could be better than Lord Ashfield's statement.

Your Lordships have heard what I have read, and if you agree with what I have read from Lord Ashfield and what I have said, I ask, is it wise on your part, with your duties to the country, to part with this Bill until you are assured, by once more looking into the financial provisions, that they are sound in view of the change in the circumstances of the time? It will not be difficult to find five noble Lords in your Lordships' House eminent in financial affairs, who have been accustomed to figures from their youth up, to sit on a Committee, take these figures of Sir William McLintock and report whether the financial provisions are sound or not. It is a simple matter for noble Lords who are versed in financial affairs. I do not ask for a huge Committee with Counsel which will sit for weeks or, it may be, months. I simply ask for five noble Lords to be appointed to sit together to examine these figures. They can call evidence if they like, but that is a small affair. There is no necessity for them to have Counsel. They would not require it. After these noble Lords have examined these figures for, say, two or three days, they will report to your Lordships. If their Report is favourable, well and good, the Bill will proceed. If their Report is unfavourable the Government may very likely be saved a serious financial disaster.

Now may I go on? The main purpose of the Bill when it was introduced was to enable the Underground group to go to the public and raise money. I think that is correct. That was the main purpose of the Bill. The Underground had taken over the London General Omnibus Company in order to swell their own revenues and to help the Underground railways to make two ends meet. They found that that was not sufficient, so they said: "We must embrace more transport, we must take the railways, omnibuses, trams"—everything, in fact, that carried passengers and that crawled either above ground or underground within a radius of twenty-five miles from Charing Cross. This, they said, would enable them, having a very much larger concern, to go to the public and raise money. Well, that carries the story so far.

We must now examine the actual financial position which would enable the Underground group, this great combine, to go to the public with a reasonable hope of raising fresh capital. May I ask your Lordships to look at the pro forma statement which was drawn up by Sir William McLintock and was sent to the Minister of Transport on November 25, 1932. Your Lordships' attention has already been drawn to the net revenue of £5,798,602. That, as I have already told your Lordships, is drawn up on the basis of the annual earnings in 192S, 1929, and 1930—three prosperous years. If your Lordships will look half-way down the column of figures you will see a figure of £403,069. That is the balance which the company will have at the end of the first and second years after paying interest on stock and also—I must refer to this—on the "C" stock. I refer to that particularly, although it is really nothing new. Those of us who served on the Joint Committee had more or less the same figures before us all the time. They have been altered a little bit but there was considerable discussion on the "C" Stock. It went on for days and days.

But the first time I have ever heard it mooted that interest would not be paid on it was to-day when my noble friend the Marquess of Londonderry told your Lordships that, after all, it was not absolutely necessary to pay interest on the "C" Stock. Well, here is a Paper which is 'almost a prospectus and anybody looking at it would say that they were going to pay 5 per cent. interest on the "C" Stock. I really cannot believe that any Government would really undertake to be responsible for such a statement, absolutely gulling the public into the belief that they are going to pay interest, when my noble friend says there is no need to pay it for two years. If that is so, the margin of £403,000 might probably be increased to £1,403,000. That it a very easy way of managing a business if you wish to build up a reserve, but I really think it is breaking faith with the public to say such a thing as that. I cannot believe it. I take it that they will pay interest on the "C" stock for the first two years. After the third year and going on to the tenth year interest on the "C" stock rises from 5 per cent. to 5½, per cent. and then up to 6 per cent. There is a margin left of £159,679. Is that the sort of margin on which you could expect to be able to go to the City and raise large funds for extension? I hope my noble friend will succeed, but really I cannot think that that is the sort of figure on which you could go to the City and ask them to lend you money.

There is one other figure on page 4 of the pro forma statement to which I ought to refer and that is the capital of £111,000,000. That £111,000,000 has been increased since the Bill left the Joint Committee—I cannot tell you by exactly how many millions, but it is a few millions. Presumably this extra capital is provided to pay for the undertakings which have not yet been taken over. Nobody knows, there is nothing in the Bill and nothing here to show, how much these undertakings are going to demand for being taken over. Your Lordships know full well the amount of discussion which goes on when it is a question of an undertaking being taken over. We who served on the Joint Committee know how many weeks were passed in 'argument between the two parties as to how much should be paid. It is an unknown quantity. That is one of the figures which may well affect the balance of the undertaking.

The only possible safeguard that I can see is a paragraph in another White Paper called a "Statement as to certain modifications which it is proposed to make in the London Passenger Transport Bill." That was presented by the Minister of Transport to Parliament in July, 1932. On page 5 there is a paragraph with reference to these undertakings which have not yet been taken over. This is what is said: The Minister of Transport has undertaken"— these are the important words— so far as he is able, to see that the terms of settlement with other undertakings to be acquired by the new Transport Board shall not be such as to prejudice the financial stability the Board and thereby the position of the stockholders covered by the settlement. I do not believe that that statement is worth the paper on which it is printed for the simple reason that in it is included the words "so far as he is able." It is obvious that if the Board have to pay more for the undertaking than they wish to, the Minister turns round and says: "I cannot help it; it is not my fault; I cannot stop you paying more and there is an end of it." As I say, I do not think it is worth the paper it is written on.

Then I come to the question of wages and fares. Lord Ashfield says with reference to fares that: Our present fares are adequate to meet Lie costs of the services we provide, but as taxation is increasingly imposed upon us we must ask ourselves how this burden is to be borne. Is it to be borne by the users of our services, by the shareholders, or by the employees? Put shortly: If fares are to be lowered or wages to be raised, where will the Board be? Your Lordships have already been told that Clause 3, subsection (4) provides that: It shall 'be the duty of the Board to conduct their undertaking in such manner, and to fix such fares and charges in accordance with the provisions of this Act, as to secure that their revenues shall be sufficient to defray all charges which are by this Act required to be defrayed out of the revenues of the Board. A similar clause, Clause 29, relates to the Railway Rates Tribunal. The Board will be asked to consider a rise of wages or a reduction in fares and they will have to consider what effect that will have on the undertaking. You might well find that a. rise in wages or a reduction in fares would completely eliminate the balance of £ 159,000 odd.

With regard to the dividends in thispro formastatement, is it quite certain that you will be able to keep up this interest? Lord Ashfield has told us that the rate of interest has fallen from 5½ per cent. in 1928 to 3.4 per cent, in 1932. I can quite understand that, and I ask whether these great rates of interest are supposed to be maintained. All these things which I have been referring to react immediately and directly in connection with the Underground group going to the City to raise more money. Those who are asked to subscribe will naturally ask what the balance is and what is the rate of interest that they have been paying. The main object of this Bill is to enable the Underground, instead of going to the Government to borrow money, to go to the City, and all these matters are consequently germane to the matter at issue.

There is one subject connected with "C" stock which I also consider a grave danger. If for any reason the interest is not paid a speculator representing half a million of stock can apply to the High Court for a receiver to be put in. It is true that the company has hedged itself round with certain safeguards. They say there must be a meeting of the debenture holders. But if the company got into such low water that they could not pay on the "C" stock, I do not suppose it would make much difference whether you had a meeting of the debenture holders or not. And what happens then? A receiver is put in. The whole of the transport of London within twenty-five miles of Charing Cross cannot stop. Whatever the Government is, whether Liberal, Conservative or Labour, it could not sit with folded arms. It would be bound to step in and take over the transport of London. It could not allow 10,000,000 people to have to walk to work. It would be bound to take over and the taxpayers would have to provide the money to run the business. Then the dream of Mr. Morrison would come true—nationalization!—nationalisation like an octopus all over the country, to be followed by the nationalisation of banks, land, shipping, anything you like. That is the danger I see. Perhaps your Lordships do not agree with me, but I think the danger a very possible one. Those who are responsible for this Bill are inclined to say that it is all right for five years. But I do not think that is quite the right view to take. At least I do not think it is the right view for your Lordships to take on behalf of the people outside this House.

May I say one word about the Metropolitan Railway and the four main lines? The Metropolitan Railway Joint Committee were strong opponents of this Bill. Led so ably by Sir Leslie Scott, they remained, like the rock of Gibraltar, absolutely immovable till we rose. They demanded nothing less than cash. Some time after the Joint Committee rose an arrangement had been come to between the Metropolitan Railway and the Underground Company. I understand the arrangement is that the four main lines of railways guarantee the Metropolitan Railway— an excellent thing for the Metropolitan Railway; I cannot imagine anything better. But when examining the finance of this Bill one wonders where the money is coming from to carry out this guarantee. My noble friend Lord Churchill is the Chairman of a great railway, but has no particular concern with the Metropolitan Railway. Why should he, and his friends, come forward and guarantee this Metropolitan Railway? I presume they expect to get a very goodquid pro quofor doing it, but where can it possibly come from? It can only come from the coffers of the Underground group. I do not for one moment wish your Lordships to think that I am accusing anybody of doing anything. I only say what I think may have to happen, because we know nothing about the financial provision in this Bill at all. It is an entirely new business, and was never referred to, or discussed, for one second in Committee.

Lord Londonderry this afternoon informed your Lordships that this agreement was come to in Committee and embodied in the Bill. We never had anything to do with it in Committee. All that happened was that one fine morning, as is usually the case, someone, came along with a large sheaf of documents and put it before us, and so far as I remember somebody said that it had something to do with the railways. We never examined the documents for one second. No Counsel ever spoke, either for or against them. We knew nothing about the matter. This is an entirely new matter, and it is one of the things which may well upset the balance of the Bill. It is one of the reasons why I think, and ask your Lordships if you do not think, that it would perhaps be wise once more to spend a few days examining these financial provisions. You cannot examine them on the floor of the House. That is impossible. You must have evidence. Noble Lords who understand finance could look into these things in a very few days and report.

That is all I have to say. I hope I have explained my point of view, and I hope I have not kept your Lordships too long. I only wish to add this, which is really not at all germane to the financial provisions of the Bill. We have had many critics of this House in the past. We have been told what we should do and what we should not do. Many have different ideas as to how we should conduct our business, and what are our duties, but there is one thing as to which all Parties are agreed, except perhaps those who are blinded by political bias, and that is that there rests upon this House the duty to revise and, if necessary, to delay. This, my Lords, I cannot help thinking, is eminently a case in which your Lordships should exercise your duty of delaying this measure long enough to look into its financial provisions and to report whether they are sound or not.

THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW)

My Lords, it would perhaps be for the convenience of the House if I said one or two words on procedure and precedent, with reference to the proposal which has just been put before your Lordships by Lord Clanwilliam. In the first place I would observe that when your Lordships have agreed that a Private or Hybrid Bill— this is a Hybrid Bill—should be sent to a Joint Committee of both Houses, while the Bill is in another place, it has been the practice that the Bill should not be again referred to a Select Committee when it reaches your Lordships' House. I can find no precedent for the recommittal of such a Bill, but I would like to say most emphatically, and I think I have said it before, that the power of your Lordships' House to commit any Bill as often as you wish is perfectly clear. There is no bar to your action in that respect, although it is a very rare practice to recommit any Private or Hybrid Bill, and I do not think it has happened in the case of a Hybrid Bill.

There are, however, certainly precedents. For example, in 1859 the Thames Watermen and Lightermen Bill was re committed, and again in 1882 the Wrexham, Mold and Connor's Quay Railway Bill was also recommitted, but I think your Lordships will agree that the recommitted of any Bill should be regarded as quite exceptional, because, obviously, if it were to become a common practice of the House the security which now is available to all Parties to a Bill would largely vanish. In the cases I have mentioned my predecessor, the noble Earl, Lord Redesdale, supported the recommitted of the Thames Watermen Bill in 1859, and as regards the Wrexham Bill he was unable to support the proposal, because he did not think the circumstances warranted it, but the House decided against him. Still it shows, I think, that those w ho have held the office which I now have the honour to hold have been careful to urge upon the House the necessity for having before your Lordships very special circumstances before recommitting any Bill.

With regard to this particular Bill, I have gone carefully into it, and it seems to me that its history is quite different from that of any similar measure, or of any Private Bill. As my noble friend Lord Londonderry has told your Lordships, it was introduced nearly three years ago, and Lord Clanwilliam told us that its finance is based on an even earlier date. It was introduced in 1930, and it was referred to a Joint Select Committee, and the Report of that Committee is now nearly two years old. The Government which introduced the Bill, and which was in power in 1930, was, of course, the Government of noble Lords opposite. Then the first National Government succeeded, and they adopted the Bill, and the present Government have taken it over. There are plenty of precedents for ore Government taking over a Bill from another Government. Instances will occur to your Lordships' memory. Then again there is this unprecedented circumstance connected with this Bill. It was Carried over twice from one Session to another, and has even been carried over from one Parliament to another, a General Election intervening. Then your Lordships have heard that important modifications have occurred since the Bill left the Joint Committee, and important modifications have occurred in the general financial situation, especially because the Com- mittee reported before the financial crisis of 1931.

Taking all these circumstances into account it seems to me that the whole circumstances attending the history of the Bill are out of the ordinary, and in fact that there is no precedent for them. So I feel that should your Lordships decide to exercise your undoubted right of recommittal, I could not oppose such a course on the ground that it would be contrary to the previous precedents and practice of your Lordships' House. As regards precedent, therefore, I do not think there is any inconvenience in referring the matter to a Select Committee. It is a matter which this House must decide upon its merits. Of course further reference to a Select Committee will cause delay, and large expense has already been incurred by all concerned, in the various stages through which the Bill has passed. I must, however, say this, that if the course to be recommended by Lord Howe later on were adopted, it would cause more delay and expense than the course which is recommended by Lord Clanwilliam. I think your Lordships will agree that delay and expense are disadvantages. So it is a question for your Lordships to consider whether the advantages which will be gained by the further consideration recommended by the noble Earl behind me outweigh the disadvantages of delay and expense.

Now I come to another point, and that is the terms of the recommittal Resolutions. Your Lordships are aware that the ordinary course of a Private Bill when it is read a second time is that it should he automatically committed and then, if it is opposed, it is referred to a Select Committee, and the Select Committee considers the Petitions which have been deposited, hears Counsel and examines witnessesThe personnelof the Select Committee is chosen by the Committee of Selection, and, by the custom of the House, though not actually under the Standing Orders, the same procedure is observed in the case of a Hybrid Bill. That is the procedure which is going to be recommended to your Lordships by the noble Earl, Lord Howe. Lord Jesse] and Lord Clanwilliam, who are supporting the Motion on which the noble Earl has just spoken, that is to say, that the Bill should be referred to a Select Committee to ex- amine and report on its financial position, make a different proposal. In this case Counsel would not be heard against the Bill, and Petitions would not be deposited in the Private Bill Office, and the Committee itself would not be necessarily appointed by the Committee of Selection, but by the same means as the Committee which is now considering Lord Buckmaster's Bill for the protection of birds.

But I should like to say that that does not mean that the right of Petition is withdrawn from those who wish to make representation against the Bill. There is a constitutional right to everybody who petitions Parliament, and the recognised method for doing that is for the petitioners to entrust their Petition to a Member of your Lordships' House who will place the Petition on the Table. Doubtless, those who wish to petition against the Bill could adopt that course and their Petitions, when received, would stand referred to the Select Committee. That is a very usual procedure. So it would be possible to petition against the Bill and for the Petition to be considered by the Committee without the necessity of depositing in the Private Bill Office. This is quite a regular method and has been frequently adopted in regard to Bills which are opposed, and is familiar to the agents and others who serve your Lordships' House.

THE EARL OF KINNOULL

My Lords, I confess that it is with some trepidation that I address your Lordships at all. I am accustomed to being alone on the second Opposition Bench, but I am not accustomed to being left the sole occupant of these Benches. But the remarks I have to make will, in any case, be brief. The noble Marquess, Lord Londonderry, in the course of a very eloquent and lucid speech said that this Bill had been purged of Socialism, although the noble Lord, Lord Mount Temple, said that the alterations made in another place made small difference to it. I think the fact of the matter is that the Bill was really mangled in another place. Yet every thoughtful citizen in this country agrees with the principle of the Bill. All the big companies and corporations have welcomed it. And if this Bill does not become law you will have chaos; that is admitted by everybody. There can be no expansion whatsoever without this Bill, and London traffic is going to expand— that nobody can deny.

The noble Lord, Lord Banbury, would, I think, like to go back to the days of his youth. He quoted the case of the Metropolitan Water Board, which I am afraid I cannot remember, and he said that after that Board was created water cost more. The noble Lord, however, cannot say that it was a Socialist Government that brought in that measure, and it is not the fault of a Socialist Government if water costs more. The noble Lord went on to say that this Bill embraced a range of 40 miles around London. I believe that is most necessary, though he thought it preposterous. I think that with the arterial roads stretching out as they do, and with traffic growing as it is, it is most necessary that a large radius round London should be taken in. I heard not long ago of a hold-up in the Strand which affected traffic as far out as Watford, which is, I think, only 15 or 20 miles, but I think it is most necessary that this Bill should go to a radius of 40 miles from London. Personally, I should like to see transport nationalised altogether. I should like to see the transport not only of London but of the whole country nationalised, whether it be by sea, by air, by train, or by road. I should like to see overlapping done away with. Every sane thinking man and every company wants this Bill, and for these reasons I beg your Lordships not to kill it, but to give it a Second Reading.

THE EARL OF RADNOR

My Lords, the Metropolitan Water Board and the Port of London Authority have been quoted as precedents for this Bill, but to my mind it bears a much closer relation to the amalgamation of the main railway lines. The Bill is much more on those lines than on the lines of the Metropolitan Water Board and other bodies, in this sense, that the railway amalgamations were designed originally to eliminate wasteful competition and wasteful expenditure and to improve facilities for the public. This Bill, as I understand, is designed to do that, and also to assist in clearing up all the muddle in transport in the Metropolitan area. The railway amalgamations achieved their object, I think, to a far greater extent than anybody expected— a far greater extent than my noble friend Lore. Banbury at least expected. Elimination of competition was achieved and elimination of wasteful expenditure was also achieved, and is still being achieved.

My noble friend is very much afraid that the new London Passenger Transport Board will be an extravagant body, but if he looks at the main line railways and studies their figures for the past few years he will realise that the enormous saving made would; not have been possible had those railways not been amalgamated as they were. In addition to that, it has been possible in that way to form pools for the traffic where the main line railway companies come into direct competition with each other— pools which are of advantage to the companies concerned, and in no case, so far as I know, to the disadvantage of the travelling public. The net result in the case of the railway companies has been considerable saving in expenditure and improved facilities for the public, certainly at no greater expense, and in fact I think I am correct in saying travelling is actually cheaper to-day than it was before amalgamation.

The essence of this London Passenger Transport Bill is the pool arrangement that is embodied in it, certainly so far as the railway companies are concerned, and I think also as far as the other constituent bodies are concerned. It may be said that it might be possible to have a pool without this Bill, but if you will look at the Second Schedule you will see there are eighty-eight organisations which are to be included in the new transport organisation. Anybody who has any experience of pool organisations will realise it would be quite impossible to make any arrangements for a pool with that number of individual bodies, and therefore you must amalgamate them into one body and have your pool with the four main line railway companies. The result of that pool will be not poorer facilities for the travelling public but co-ordinating facilities for the travelling public, and possibilities for development and improvement, not only by the Transport Board but also by the amalgamated railway companies, which at the present time, in many cases, as may be seen from the speeches that have been made at the annual meetings, are prevented by the possibility of undercutting competition from improving their facilities to the travelling public.

Now, my Lords, I do not propose to detain you at any length to-night, but I would like to say a word about the finance of the Bill on which Lord Clanwilliam has already spoken at considerable length. I do not propose to go into details as he has done, because the finance is extremely complicated, and I am afraid my brain is not capable of assimilating it in a short time. I will only touch on one detail, and that is his mention of the arrangement with the Metropolitan Railway Company and the guarantee by the main line railway companies. I would suggest to Lord Clanwilliam that that guarantee by the main line railway companies is the measure of their anxiety to obtain this Bill in its present form. One of the fears so far as the finance of the Bill is concerned is that the margin is very small, as shown in Sir William McLintock's memorandum — that either wages will have to come down or fares will have to go up in order to enable the Transport Board to pay dividends. But the position would be exactly the same if there was no Transport Board. If you study the finances of the bodies which are going to be incorporated you will find that their traffics are going down, and that if they remain as entities they will probably have to increase their fares in order to remain solvent.

It does not matter whether we have a Transport Board or whether we continue as we are; in any case, under existing circumstances, there is every probability that fares will have to rise. But the balance is in favour of the Transport Board, because if we go on as we are at present there is no hope of economy in the elimination of wasteful competition, but with a Transport Board there is every possibility of such elimination, and consequently much less chance of a rise in fares or a decrease in wages. I think I may quote once again, as I have done already, that the fact that the railway companies are still deriving benefit from their amalgamation suggests that economies may accrue from the formation of a Transport Board. While they may not be apparent in the first year, they will undoubtedly be evident in the years to come.

There is only one other real criticism of the Bill, and that is it is socialistic in tendency and in fact. The noble Marquess in introducing the Bill said quite definitely that in his opinion it was a bulwark against Socialism, and he quoted words to prove that the Socialists themselves thought so too. I think that is the aspect we should look to. If we go on as we are going, and our existing transport facilities cease to be solvent, as is not without the bounds of possibility, somebody will have to carry oil transport, and that would mean Socialism; and in any case if they remain solvent and continue as at present, there is nothing to prevent a Socialist Government, if one came in, saying: "We shall follow the precedent set by the Irish Free State Government." If you leave things as they are you have no bulwark against Socialism. I do hope your Lordships will consider that this Bill is a practical proposition and is a necessity, not only to the railway companies but to the travelling public in the London area, and that you will not be led away by the false argument that the finance is unsound. I hope, further, you will not be led away by the fear of Socialism as portrayed by various noble Lords who have spoken.

VISCOUNT MONCK

My Lords, I must ask your indulgence, as this is the first time I have had the honour of addressing your Lordships' House, but I can promise that the remarks I shall make will have the virtue of brevity. In the first place there is opposition to this Bill on the ground that it is a Socialist measure. But surely what should weigh most with us is not whether the Bill bears the print of some particular creed or Party, but whether it is or is not a fitting solution, or even a fitting experiment, for the London traffic problem as it stands today. Secondly, the financial estimates have been criticised. We have been told that these estimates have been taken on prosperous years. I would ask your Lordships if, when passing through the years 1928, 1929, and 1930, we considered those years extremely prosperous. In comparison with 1931 and 1932 they were very prosperous years; but are we to work on the basis that the present situation will continue? Surely that is rather a pessimistic view to take. As we all know, revenue has decreased enormously, but there again, is that not an unanswerable argument for immediate action to be taken? The policy of amalgamation and rationalisation has been adopted by industry for some years past, and I venture to submit that in very few cases has it proved a failure.

Centralisation of control should be responsible for enormous economies— central direction, central planning, and many others— and also I was going to say, last but not least (I think it is the most important) the arrangement of services solely with a view to public convenience and economic running, with no possibility of these desirable aims being hampered by a rival and overlapping system. With regard to the efficient running of this large concern doubts have been expressed, but can any one doubt that the gravest deliberation will precede the selection of those who will serve on the Board, if for no other reason than that the popular opinion of nearly one quarter of the population of the country will have to be faced in the event of the service falling short of the public requirements?

We have to admit there has been opposition of some strength to this Bill in various quarters. There may be even some persons alive to-day who agree with Sam Weller that the railways are unconstitutional and invaders of privileges, but at any rate it does appear that the majority have failed to take the broad view which the magnitude of this measure demands, though at the same time it must be admitted that they have made their voices felt. They remind one of Tennyson's lines: The tiny-trumpeting gnat can break our dream When sweetest; and the vermin voices here May buzz so loud— we scorn them, but they sting. In this regard it may be well to call to mind the statements of three of the leaders in the transport industry which were uttered during the past week. In the first place I would like to take a short sentence from a speech made by Sir Josiah Stamp on February 24. He said the scheme. is the only way out of the present deadlock so far as London is concerned. Then my noble friend Lord Churchill, on February 22, said I do not think that anybody who has closely studied the traffic problem in and about London will disagree with the objects of the Bill, or deny that something should be done without delay to remedy the congestion and secure the better regulation of the competing services in that area. Finally, Lord Ashfield, on February 23, said: I am convinced that the London Passenger Transport Bill offers the best present solution of London's traffic problems hope, therefore, that the present Bill will speedily complete its passage through Parliament. The noble Lord, Lord Banbury, in his speech expressed qualms that the main line railway should take on more commitments when they had perhaps rather too many already; they were not paying dividends on their stock at present. But may I suggest that two eminent gentlemen who are both Chairmen of their respective railway companies would not have made those statements welcoming the Bill if they had thought a disastrous result would be likely to occur if it passed?

There is one other point I should like to make. It is said that when this Bill goes through fares will be raised. Can any one deny that if the present state of things continues fares are extremely likely to be raised, or else that subsidies from the rates will be called for? And is not one of the great safeguards of this Bill the fact that once it is passed London transport will not be in a position to be bolstered up by rates, but must gain an economic victory on its own? There is only one further point I would like to refer to. The noble Lord, Lord Mount Temple, said earlier in the evening that this great amalgamation would make matters very difficult in the event of another general strike. But surely if there is a scheme which should enable the traffic of London to be run more efficiently and economically the fear of a general strike, which we hope, and, may say, think we shall never see again, should not be allowed to stand in the way. Surely this is defensive action and pessimistic action taken to an extreme. Lastly, are we to be responsible for thwarting a scheme which will enable the great traffic units of London— the railways, the Underground, the tubes, the omnibuses, the trams— to combine together in common endeavour to solve the lack of cohesion which exists to-day, and to simplify the problem of the nine million people who depend upon them for their daily transport?

LORD STANLEY OF ALDERLEY

My Lords, after the very stirring and able speech we have heard from the noble Viscount who has just sat down, who, I may say at once, has stolen most of my thunder, I hope not to detain your Lordships very long. However, there are one or two points to which I would draw your Lordships' attention. One of the chief things that comes out of this debate is that the opposition to this Bill has come exclusively from noble Lords who have little or nothing to do with railways. I see my noble friend Lord Banbury appears to question that.

LORD BANBURY OF SOUTHAM

I was for over twenty years a director of a railway, and for twenty years Chairman.

LORD STANLEY OF ALDERLEY

I know the noble Lord was. All I can say is that this Bill has been sponsored by those who are in active touch with transport affairs, and I think I am right in saying it is their unanimous opinion that this is the only solution that has yet been offered for this great problem of London traffic. Let us take this Bill in its most pessimistic form. Let us assume, if you like, that the finances are perhaps ill-advised, that interest on the capital which is to be found in exchange for the present capital -of the undertaking to be merged will not be earned. What then happens? Fares will rise. I think noble Lords in all parts of the House will say that a rise in fares will be better than that the present chaos should continue, and, if I may say so in direct contradiction to one noble Lord, the chaos will go on getting worse. It has been denied that there is any chaos in London traffic at the moment. I do not believe that any one can seriously say that the traffic problem in London is not one of extreme urgency. Secondly, we have been told that this Bill is Socialism. Well, we have heard with a. united and a single voice from a Socialist himself that this is not Socialism, and if he does not know what Socialism is I do not know who does. I think, therefore, we may disregard this bogey of Socialism and the nationalisation of industries. I wish to support this Bill, and if I thought it was Socialism I should not be speaking in its favour.

Also our flesh has been made to creep on financial grounds. My Lords, I will not be panicked by that. I do not think that men of distinction in the transport world like Lord Ashfield— if he will forgive my bringing in his name— and Lord Churchill would sponsor a scheme which implied reckless finance at the back of it. I have seen no expert criticism against the financial provisions of this Bill which leads me to suppose that it will plunge us into the condition stated by the "fat boys" who have tried to make our flesh creep. I am a little diffident about expressing my views on this Bill because we have had a weight of expert testimony which I cannot hope to emulate, but if there is any value in the opinion of one who looks at the matter from the point of view of the travelling public— I should like to say that I do look at it from that point of view— then this Bill is designed to increase the services of the transport in London. If the noble Lord, Lord Ash-field, again will forgive me for quoting him, I will recall an interesting thing that he said to me some years ago. He said that his omnibuses were running along Oxford Street in competition with his tubes. I, being young and foolish, said: "That seems uneconomical and reckless." "No," said Lord Ashfield, "it is not so; if I take my omnibuses off someone else will put them on."

That is the sort of situation you have all over London. You have this reckless competition which means inefficient service to the public, and if you can unify the control of the traffic of Greater London then surely it will be possible for that controlling body to put on services to less congested areas which now might well be developed as homes for our working people. At the moment, quite rightly, boards of directors say: "We cannot undertake these schemes. They mean capital, and we have no assurance that if we do undertake them these schemes will be remunerative, on account of this insane competition." If you have control of all the traffic so that it is illegal for little companies to spring up as soon as a route is developed and take away the profits of those people who have expended capital in developing it, then surely there is some possibility by decentralisation of population to open up new localities in which our workpeople may live, and so relieve the congested areas.

It is getting late and I do not want to detain your Lordships unduly long, but there is one other point I should like to refer to and that is the question of finance, which has been so heartily attacked this evening. I want to refer particularly to this "C" stock which people do not seem to take to with any cheerfulness. I cannot see that the noble Lord, Lord Banbury, for instance, has any cause for complaint that his £ 100 of stock is to be converted at a rate of £ 88 and some odd shillings. These stocks now stand at a very low value and if things go on as they are now they will quite certainly not recover any of their value. Holders of present stocks will get the same rate of interest and they will get a very much better security because of increased efficiency in administration. Exception has been taken also to the fact that the interest has been based on the income during the years 1928 to 1930. On that I would point out that the figures got out by Sir William McLintock do not take into consideration the possible savings which will be effected by increased efficiency in administration. Those savings may amount to a very considerable sum.

A good deal has been said about the small balance of £ 159,000. Figures of that kind must be simply estimates and I, personally, am quite content if they show a balance of £ 159,000 or even if the calculations only comes out all square, because we have this great asset, that by increased efficiency in administration we shall be able to get a very considerable surplus, a surplus which, according to my rough calculation, will amply compensate for any falling off in traffic that there has been during these years of depression. I think the period 1928 to 1930 is a very fair and normal period on which to base these figures. The criticisms against the finance of the Bill are ill-founded I think, and if criticism is pushed so far as to result in committing this Bill to further investigation by a Select Committee, then I need hardly tell your Lordships who are much more versed in the practice of the House than I am, that it will be tantamount to Wing a Bill, on which, after all, there has been obtained a large measure of agreement. Agreement has been obtained, I think I am right in saying, on the part of hundreds of organisations with very varying interests and that is a thing which we ought not lightly to throw away.

VISCOUNT MERSEY

My Lords, on behalf of my noble friend Earl Buxton, I beg to move that the debate be now adjourned.

Moved, That the debate be now adjourned—(Viscount Mersey)

On Question, Motion agreed to, and debate adjourned accordingly.

House adjourned at quarter past seven o'clock.