THE PUBLIC SERVICES.

HL Deb 17 June 1942 vol 123 cc415-44

LORD REITH rose to ask His Majesty's Government whether with a view to maximum efficiency in the national interest, they are giving immediate attention to the future constitution, control, and management of the essential public services; and to move for Papers. The noble Lord said: My Lords, I submit this Motion with a view to inviting your Lordships' attention to the public corporation form of constitution, control, and management of public services—public services now either under private ownership or conducted directly by government, local or national. I submit the Motion now because of the need for making preparations against the time when problems, in some respects as serious as those of war, will arise, and when there may be little of the patience and submission and unity bred of war.

Efficiency is the inevitable and infallible objective and criterion of public service, provided that term be used comprehensively to include decent working conditions and decent treatment for all grades of staff, including welfare and some measure of security of tenure, but not the absolute security, one would hope, of the Civil Service. Although efficiency should be the objective and criterion—that is, the untrammelled and unburdened ideal of public service—there are distracting and conflicting objectives and criteria: profits and politics; and profits do not necessarily spell efficiency, as is sometimes held, nor do politics. In fact, one finds the three—the ideal of public service, politics and profits—struggling for precedence.

In private ownership—and I should like to make it clear that I belong to no politi- cal Party and that I would rather have private ownership than nationalization, if nationalization means the conduct of public services by Government Departments—in private ownership there is often (in the railways, for instance) a high ideal of public service, but their first obligation is to shareholders, and I am going to submit that those two obligations are incompatible. I neither criticize nor underestimate the power of the profit motive, nor do I suggest that the risk of capital should not have at least a chance of reward. What I do suggest is that it is increasingly difficult to serve, so to speak, God and Mammon, and that the position of directors and managers is more and more invidious, with their ideals of public service on the one hand and, on the other, the hungry but quite natural expectation of the shareholders. If it be held that the capitalist system is failing in public service, it is more in sheer economic impossibilities than in lack of enterprise, overweening ambition, or inefficiency of management, though these all arise too.

In services conducted by local and national government the profit motive, as such, does not obtrude. Its presence with varying degrees of urgency is necessary to conduct the service economically. Politics may, and often do, obtrude and issues are determined by them. The criticism of private ownership and even of the public corporation system that one sometimes hears is that they and their methods are undemocratic, meaning, perhaps, little more than that the elected representative cannot control the management.

Might I say a word about democracy—too much the philosopher's word and the politician's? It is necessary that its living, as distinct from its theoretical, content should be linked to real life around us, and the means should not obscure the end. Democratic methods, as sometimes we see them practised, cause one to wonder whether desirable, democratic purposes and principles will, in fact, be established and served by these methods, and whether the ways of politics, national and local, will give the efficiency so desperately and urgently needed in war and post-war.

Anyhow, there is required of the elected representative strong, courageous and definitive action. But can he think only of the issues immediately at stake? And incidentally for how much of our present state is fear of the elector to blame, a fear which may well have been unnecessary because his capacity to understand and to respond may be underestimated. But there are elections, especially the next election, and the representative quite naturally desires to safeguard his position. I cast no reflection on him at all. I suggest that he is in a difficult position. If we can relieve him of the management of public services, or refrain from putting the management of public services under him, then we are serving those services and the elector, and acting in the interests of the representative himself. There are immensely important spheres where he must continue to manage our affairs in community and country. Can we not give him more time to do it?

That leads one to comment on the Civil Service and Civil Service methods—and I want to make it clear that I am speaking of the possible passing of public services to Government control, as some would have it. There are civil servants for whose intelligence, capacity, and general conduct of affairs, one has the highest respect, but it is often difficult to distinguish the system from the man and the man from the system, to determine, for instance, whether it was unreasonable of one to expect what one was clearly not going to get, and whether the impatience one felt was chargeable to the man or the system. That system is not wholly of his own devising. Much of it is attributable to the Parliamentary question, in principle salutary and excellent, but too often in practice an imposition taking up a great deal of time to little or no purpose, and inducing such political tear as causes issues to be settled, not on the basis of what should be done, but with the political question in mind. There is a tradition of caution and a love of precedent, and Treasury methods of control, with their emphasis on prior authority rather than on efficiency, do not encourage a proper sense of responsibility in Departments.

The position of a Minister—and may I again make clear that I am talking about the passing of public services to Government control and not about the civil servants and the conduct of their present responsibility—the position of a Minister vis-à-vis his senior civil servants, and in particular the permanent head of his Ministry, cannot entirely be determined by the experience, capacity, and energy of the Minister. I cannot myself see how a Minister can refrain from taking at least an interest in the personalities of his assistants, and in the internal order and management of the work for which he is responsible. He is entitled to do what he likes, but he may in practice find that such an interest or concern is unwelcome. He may be inconvenienced by individuals with mandates and procedures of their own, and may not feel happy in the mastership of his own Ministry as he is of his business. I submit, therefore, that civil servants should not be concerned with the management of these essential public services. New requirements, new methods, my Lords. And I go a step further in suggesting this. Postal service, telegraphs, telephones and wireless services now under the Post Office, highly efficient to-day owing to the extreme competence of the civil servant Director-General, would be notably more so if they were not a Government Department subject to Government methods of financial accounting and control. And there are other services such as pensions and insurance to which this might apply.

I will now indicate briefly some of the public services which I have in mind either under private ownership or under direct political, local or national control, notably transportation. I submit that there should be a national transport corporation covering railways, road transport, canals, coast-wise shipping and internal air services; that the railways should be brought under unified management and become part of the corporation. Railways are in a peculiarly difficult position to-day on both sides. On the railway side and the Government side there is power without responsibility and there is responsibility without power. If I were concerned from the railway side I should be giving urgent thought to the matter with a view to devising some system which, on the lowest terms, would be more nearly what I would like as a railwayman than what other people would be likely to devise for me. Equitable treatment for shareholders should be assumed, and that does not mean necessarily taking current Stock Exchange figures as true values.

It is widely held that the railways will not pass out of Government control. Well, if I were a railway director, faced with a real and growing demand for some change, and that demand confined by no means to one Party, and whether I thought it reasonable or not; realizing the increasingly difficult position of management with the conflicting obligations to which I referred earlier, and conscious finally of the obvious economies of united operation, I would take the initiative, so that I would be sure that railway affairs were rationalized and ordered by railway men rather than by politicians and civil servants. Obviously it is wrong to do that with the railways, which provide and maintain their own roads, and do nothing about road transport; so I submit that road transport should be part of this corporation and under its direction and control. That does not necessarily mean that the corporation would amalgamate all the road hauliers and all road passenger services into one and make them a department. It would, anyhow, direct and control them and have the right of acquisition. Similarly with canals, coast-wise shipping and internal air services. One result of that would be that a customer with goods to be carried would be given rates according to speed and other considerations, but would not himself determine the system by which his goods were carried.

Then I come to building and civil engineering and the building materials industries. Some measure of central regulation and control is required by some kind of national board whose powers would include price control. It would settle prices and secure economies of materials and machinery. There will be an enormous amount of work to be done by both public and private interests. All work, public and private, over a certain figure should be subject to licence. All public expenditures should be subject to a standard schedule of prices, and work would be done according to standard forms and methods of contract. Work on standard specifications and on standardized codes of practice and research should be pressed on and recommendations if possible adopted.

Next, electricity. I have never been able to see why the Central Board and the Commissioners should not be amalgamated; and I would have them given rights and powers over distribution with this object in view, that over the whole country there should be one uniform price for electricity, with consequent benefit to planning, as, for instance, in the location of industry. Gas and water, roads and river management and sewage and subsoil water—there are too many authorities and too many types of authority.

With regard to coal, the new system is a compromise and one wonders whether the mixture of State and private ownership will be found satisfactory. It is fairly widely held that we shall come to State ownership. I pray that we do not come to State management. And quite as difficult and urgent as the getting of coal is the distribution of it.

All this inevitably leads to local authorities, and I would like to say a word about them. Local authorities are as strong a vested interest as any in the country. There are too many of them, and a drastic reduction in the number of authorities or a drastic increase in the area should be made, because the obvious unit for the efficient administration of services is much larger than the existing authority areas. So we must ask, I submit, for combinations of authorities or for corporations established by them or by the State for some of these services.

Now to deal briefly with the main features of the public corporation system owned and established by the State, and the duties and responsibilities defined by the State in Charter or Statute, with Parliament consulted on policy. How I wish I could make this clear. Over the whole range of the execution of those duties and responsibilities in organization, administration and management, there is the same freedom as in commercial undertakings. Parliamentary control should be limited and, as it were, remote. It maybe objected even by those who do realize that the Government, though owning, do not manage, that the absence of the profit motive and the absence of competition will produce the complacency so commonly associated with Government Departments It is not so, and it ought not to be so. Everyone knows that those who make profits do not normally benefit. In the public corporation system you can have a motive if you want it, and there are clear criteria of judgment available in almost any business, such as increased output and decreased cost. And is it suggested that there are no motives so compelling as that of making profits for shareholders or benefits so great as those of competition which we hear so much about? I submit that there are at least as many disadvantages in undercutting and overbidding for custom, and often, paradoxically enough, it is the competitive system that has to play for safety. Surely we ought to be able to feel that the motive of giving the best possible service at the lowest possible price is stimulus enough. Public services, if no longer answerable to shareholders at annual meetings, would still come under the continuous and intensive fire of public opinion voiced in Parliament and elsewhere.

I would like to say a word on leadership because some still say that we do not breed for it, which is true; and we often discourage if when it emerges. Where are the men to be found to carry such enormous responsibilities? They can be found, but two things are needed. First, they must be institutionalized, meaning that they must be given the right constitutional setting in which to work. Secondly, they must be trusted. Institutions, you may say, are little apart from the personalities who control and operate them, but I plead that institutions should be regarded, not as protection against individuals, but as protection for the social activities of right-minded men. I suggest that our lack of institutions has prevented our getting full value from key men. Individualism is still needed. It is an immense power and is still necessary for progress and development, but individualism is at its best when attacking its problems and not just when defending itself. Individualism is not the only worthy aim, and even if it were it would not necessarily be the means. The place for an atomizer is at the end of the hose pipe and not in the middle.

It has been asked, where are the safeguards? Quis custodiet ipsos custodes? Here is the answer, I suggest. If conforming to, and at the same time taking command of, the inevitable tendency of the times Parliament and public impose upon these key men the ideal of conscious social purpose, encouraging it and supporting it where it exists by institutions that fortify as well as control, then the guardians guard themselves. But governors and managers must be permitted to govern and manage. Corporations and key men must be trusted. Taking the long view, it is not necessarily coincident at any given time or in any mood with the short or popular view. After all, efficiency is not despotism, and as far as I know there is no peculiar democratic virtue in incompetent administration.

So I urge that we plan ahead for these essential public services now as we plan for war. May I quote from a recent publication by P.E.P.? There is a traditional inclination to imagine that an incapacity for foresight leading to failures to be forewarned or forearmed is a positive advantage. The stolidity which can take the consequences of such failures without panic or defeatism is a national virtue of which we have a right to be proud. But there is no merit in muddling through when the muddle is unnecessary and the issue doubtful.

Those are temperate words. I myself feel that our capacity to muddle through, if virtuous, is also disastrous; and that stolidity cannot be assumed when the discipline of war is gone.

Social justice is an agreed aim, but the whole structure of modern society is as haphazard and non-sensible as roads which follow ancient sheep tracks. Laissez-faire Liberalism must be replaced by some form of planning. We only know of two forms so far, and would not be very happy under either. Cannot we create our own, lest something we dislike be imposed on us by the sheer force of circumstance? Individualism and freedom we cherish. Both may be in jeopardy. A planned society may yet be a free society and should be—in fact must be—planned for freedom. However necessary and urgent planning in this or that department may be, it is of little value——it is almost planning in vacuo—unless it be part of an integral whole, an ideal of society based, one would imagine, on the Christian ethic about which we have not heard much so far. Anyhow it should be such an ideal of society as would inspire and command the dedication and service of all the people, as others are inspired by, and dedicate themselves to, other systems. But ours should be home made, British in conception, in formulation and in execution. I beg to move.

LORD STRABOLGI

My Lords, my noble friends have paid me the compliment of asking me to state our point of view about the important Motion moved in such an interesting way by the noble Lord. I am sure I can congratulate him on behalf of all your Lordships on the very adroit way in which he packed a tremendous array of facts into a commendably brief speech. I thought at the beginning that I could hail him as a Daniel come to judgment and, still using a Biblical expression, could say to him "Come ye over to Macedonia and help us." But as the noble Lord developed his arguments I found that, speaking for my noble friends and for the Party which we represent, I shall have to traverse some of his conclusions, particularly his objection to what he called political control, which means Parliamentary control, over those great vital services on which so much depends. Indeed the noble Lord suggested, if I understood him aright, that the Post Office should be removed from Parliamentary control. My noble friend the Earl of Selborne was hotly rebuked in another place, I remember, when as Assistant Postmaster-General he made some such suggestion.

LORD JESSEL

He got the sack.

LORD STRABOLGI

I was not quite so blunt as that. I said he was rebuked, but he was none the worse for that, and I hope he will go on committing indiscretions. I hope that the noble Lord, Lord Reith, will continue, if I may so put it, making speeches which from our point of view are full of dynamite. We need dynamite at the present time in many directions. In regard to the question of political control over vital public services, Parliamentary control, democratic control has been the fixed policy on which the Labour Party have been working for many years. We have to join issue with the noble Lord on that argument. Take for example the question of the future control of banking and finance. In the last war and in the present war we had immediately to take political control, Parliamentary, democratic, Governmental control of finance, currency and, indeed, banking. We had to do it in order to survive. But in between the two wars these vital services were left untrammelled by any form of Parliamentary control or even Treasury control. If we had had Parliamentary control to a greater extent, is it to be imagined that Parliament would have tolerated the activities of the Shipbuilding Securities Corporation, fathered by the Bank of England, which sterilized, closed down and ruined shipyards all over the country? Parliament puts up with a great deal, but I am certain Parliament would not have tolerated that if it had known what was going on. We are paying dearly for that shipyard policy now and we shall pay still more dearly for it in the future.

The sort of organization for controlling our great vital national services which my noble friend Lord Reith suggests is most interesting, and I congratulate him on the way in which he has described it. But it is really a new form of syndicalism. I do not think that the public would tolerate it. May I, however, agree with Lord Reith, if he will allow me, in what he says about the need of new leadership? I believe that we need, at the present time, a new aristocracy, and I believe that it will come out of this war. We will get, as leaders, young men and young women who can be trusted to put the public interest before the profit motive and to manage these great undertakings efficiently. Members of the Party for which I have the honour to speak are most anxious about this whole problem, and I am sure I am speaking for all of us when I say that we support Lord Reith in his contention that plans should be made now. I will, indeed, go further and say that they should be made known now.

The war, as we are told—the Prime Minister himself has suggested it—may end quite suddenly. The last war ended six months before it was expected to do so. There may be a collapse in the camps of our enemies, and if we do not look to it we may be faced with problems of demobilization before we are ready for them. I suggest that it is necessary to proceed now to consider what we are going to do: how we are going to face these important problems after the war. I suggest also that the plans which are made should be known and accepted. More than that, I suggest that it would help the war effort if these plans were known, accepted and approved by the general public. You will, as I say, have this great demobilization and you must know in advance how you are going to deal with it. It will not do to sit down after the war to discuss and settle what you are going to do—what you are going to do to deal with the great questions of transport, the rebuilding of cities, the location of industries, and so on, and how you are going immediately to employ the great masses of munition workers and discharged Service personnel who otherwise will be faced with a period of idleness. Lord Reith has rightly said that you must plan for peace as you ought to have planned for war. It will be too late when the war has ended to sit down, discuss and argue, and go through the sieve of Cabinet decisions with two or three million men and women waiting for work immediately and urgent work waiting to be done. These plans, if they were known and approved, would be a reassurance for the great bulk of the people.

All those who are in touch, as many of my noble friends are, with serving soldiers and munition workers, can bear out my own observation and experience that among the ranks of those men and women there is great anxiety as to what is going to happen after the war. This anxiety is especially keen among the younger men. They know what happened to their fathers after the last war; they have heard about the slumps which occurred, about the long periods of unemployment, about the trade cycles and so on, and they are determined not to come back to such conditions. If the Government have not appreciated that, then I suggest that the sooner they do appreciate it the better. Lord Reith mentioned the coal miners. Sir Stafford Cripps has been to South Wales and has sought to reassure the coal miners on the question of their future after the war. But why the coal miners only? Why not other workers in industry—those in the service of the railways and those in the transport and engineering industries? They also have a right to know what is going to happen after the war. Are they going to be left once more at the mercy of the labour market? Will they be thrown on the scrap heap because high financial authorities, such as bankers in London, decide that there are redundant coal mines or shipyards and so on? That is what the people want to know now.

So far as the great Party for which I speak are concerned, we can assure them that our plans are ready and are designed to prevent that very thing. We say that many services now are ripe for communal ownership. It is increasingly recognized that on balance the public interest would benefit by the elimination of the private profit motive. How this is done—and here I apologize to my noble friend Lord Reith for any hard thing I have said about him—is not so important as that it should be done. My noble friend Lord Reith's name will always be remembered, and very gratefully remembered by us, particularly for his great services in the B.B.C. We believe that that was a form of public service which was justified by its results. There was not over-much political control, but there was enough Parliamentary control there we think to have helped in bringing about those results.

Our policy for the future is perfectly clear. It was stated and passed without opposition at our National Conference a fortnight ago. It is quite short, but I think it covers the point of view which I am trying to place before your Lordships. We regard the socialization of the basic industries and services of the country, and the planning of production for community consumption as the only lasting foundation for a just and prosperous economic order in which political democracy and personal liberty can be combined with a reasonable standard of living for all citizens. That I understand is what Lord Reith wants, and the only quarrel that I can see that we have with him is on this question of Parliamentary or political control. Your Lordships will note that we speak of "a reasonable standard of living for all citizens." That is the third "freedom" laid down by President Roosevelt. He called it "freedom from want"in his famous message to Congress on January 6, 1941, which has been so frequently quoted since, and which is the basis of the Atlantic Charter. "Freedom from want" is the way he puts it, and we say "a reasonable standard of living for all citizens." The same idea reappears in the fifth paragraph of the Atlantic Charter and in President Roosevelt's speech on United Nations day—June 14.

Now I only wish, if I may, to refer to one particular service, for I do not desire to stand between your Lordships and other noble Lords who I know have valuable contributions to make to this debate. Lord Reith did not mention overseas transport. I do not complain of that; he referred to internal transport and of course he could not deal with everything. But I suggest that in the future we shall encounter great difficulties in regard to overseas transport unless we make up our minds in advance what we are going to do. Overseas passenger transport in the future, I think, is bound to be shared between civil aviation and the passenger liners. There will be great competition between the great passenger aeroplanes and the liners not only in the matter of the Atlantic crossing but also in the Pacific.

I suggest to your Lordships that it is very difficult to see how civil aviation after the war—whatever the intentions of certain people may be—can be handed back to unrestricted private enterprise. This was recognized even before the war in the establishment of British Overseas Airways with which my noble friend Lord Reith's name was associated. It is a much greater problem now. Aviation will not only compete with sea-going liners for passengers, but I suggest that in the future aeroplanes will compete with ships for freight as well. I believe that freight-carrying long-distance aeroplanes will be a commercial' possibility before very long, stimulated, of course, by their use in the war in the same way. If you are going to have a Government corporation managing your external civil aviation, how can that be asked to compete with passenger liner companies under private ownership? Or, to put it the other way round, how can you expect private shipowners to compete with publicly-controlled or publicly-owned civil aviation under a public corporation? I do not think that that would be fair; that is a sum that will not add up. I think that you will have to grasp the nettle and put all external transport under some form of Government control.

It also raises another complication. I do not see how you can have sovereign aviation corporations. I think it will have to be recognized in the future that to a very great extent that is not possible. Surely we are not going to allow either the Germans or the Japanese to have their own aviation companies traversing the oceans of the world, at any rate for a great many years to come, until we are quite sure of the complexion of their future Government and the attitude of their people? On the other hand, you cannot deprive great nations of the facilities of external aviation, and therefore those facilities will have to be provided for them. You cannot trust the Germans and the Japanese to have great trans-oceanic aviation companies, but you cannot deprive their peaceable merchants of the facilities of air transport, which must therefore be provided by some great international corporation. The complications are obvious, and I suggest that we had better recognize the fact that aviation cannot be handed back to private enterprise, but will have to be international to some extent, and that all overseas transport, including shipping, will have to be brought under some form of Government control and ownership. We must also recognize that to a very large extent there must be international co-ordination. That is the only one of the problems on which I venture to touch, and I suggest to your Lordships that it requires special attention at the present time. I should again like to congratulate the noble Lord, Lord Reith, on bringing forward this very important subject, and on the way in which he has presented his case.

LORD BRABAZON OF TARA

My Lords, I also should like to convey to the noble Lord, Lord Reith, our very grateful thanks, and first of all for appearing again on our scene. He is very welcome; he is a great figure in public life, and he must not disappear. He has made a speech which is, if I may say so, so full of meat, so full of the most admirable suggestions, that it needs to be carefully read. I want to deal for a few moments with one side only of the very broad picture which he has given us—namely, with transport.

I listened with interest to the noble Lord, Lord Strabolgi. If there was one extraordinary thing about his speech, it was that the word "nationalization" did not come into it at all. I think it is remarkable that, while some people are drifting towards the "corporation" idea of ownership, if I may so describe it, some extreme Socialists are drifting away from nationalization as a general political idea. I was brought up to think that competition was a healthy thing in industry, and I must confess that there are some companies and organizations with which I am connected in regard to which I still believe that to be true; in fact, in the case of some companies I would almost encourage the invention of a rival, so as to keep them up-to-date and progressive. I very much doubt, however, whether competition in transport is a good thing at all.

I do not know whether your Lordships remember that the great Lord Ashfield, who I regret is not here to-day, in the last war obtained control of the 'buses and the Underground, and he came to Parliament and asked for a pool, so that the receipts from both those sources could be distributed between those two organizations. At first the Underground paid towards the upkeep of the 'buses, but, after the war, people insisted on going by 'bus, and the situation arose in which the 'buses paid to keep the Tubes alive. If it had not been for that pooling arrangement, the Tubes of London would have been bankrupt. Can any one think for a moment that it would have been good for the traffic of London that the Tubes should have been bankrupt? That was the first great pooling system. After a time, Mr. Herbert Morrison started the first great Transport Board. Is that looked on to-day as a great nationalization scheme? It is public ownership. Do you think that it is inefficient because it is run in this way? Not at all; I do not believe that the traffic of London and the general co-ordination of all the various methods of dealing with it have ever been better done, or could be better done, than at present.

So far as the general system of transportation which has grown up in this country is concerned, however, we have seen, and are seeing to-day, cut-throat competition between one form of transport and another. There was first built at enormous expense a system of canals up and down the country, and then we had the tremendous drive to build railways, when our top-hatted ancestors, with their side-whiskers, drove railways in every direction all over England, even in places where to-day we have not the moral courage to build a road. That was indeed private enterprise in the railway sphere. I must here tell an anecdote which relates to the grandfather of my noble friend who is going to reply. His grandfather was Chairman of the London and South Western Railway, and in those days it was run as a line on which the Chairman wished to know everyone who worked on it. In order to do that, he always travelled by the slowest trains, so that he could get out at every station and speak to the stationmaster; and, so that people should know who he was, he always wore a red tie; and everybody on the South Western Railway, in deference to him, wore a red tie for very many years. That sort of thing is not possible to-day; whatever kind of tie Mr. Holland Martin wore, he could never get to know everybody on the Southern Railway. These organizations have become so big that that sort of thing is not possible.

The railways are now merged into four great groups, but before that they did their best to kill the canals in every way, so that to-day, when the canals would be of vast use, we find that many of them are undredged and unusable. Then along came the motor car and road transport, and these are eating the guts out of the railways in exactly the same way as the railways did with the canals; and soon we shall have civil aviation taking the cream of the traffic away from the roads and trying to kill them. Is that a very good scheme of planning for the general transport of this country? I maintain that it is far from it. Under the stress of war, we have had to run the railways in a combined way. They were a very curious organization, entirely by themselves, and with few cross-junctions; the Great Western Railway stood almost as a barrier between north and south—a most extraordinary condition of affairs. If this arrangement which we have adopted is efficient during the war, are we to go back to the old system after the war? Surely if we have found efficiency by dealing with them as one unit now we are not going back after the war to running them as four. I sincerely hope that the Government will find some way of making the nominal amalgamation of to-day a permanent one, and that, if that is done, the Government will do it along the lines suggested by my noble friend Lord Reith, by a corporation which is neither private ownership nor nationalization.

On this question of post-war transport, whatever we do to the railways we shall not really put them in a secure position if we are going to allow uncontrolled competition by road. It would be only playing with the position to amalgamate the railways and leave them at the mercy of road transport. Are we going, then, to hinder road transport by a series of penalizations, such as have been attempted in the past? I maintain that that will be wholly reactionary. I should like to see the kind of corporation suggested by my noble friend Lord Reith. I should not like to see the railways running road transport, but I should like to see a corporation running the railways and corporations running road transport and canals and coastwise shipping, but all joined at the top in a pool, so that they could all run efficiently. They could all do what they can do best by themselves; and although one might be penalized yet they could be helped out from a financial point of view at the top. Sometimes people think that these schemes would mean a very great cost to the Exchequer. I do not think that is true. I think one could very easily get together a scheme of this sort, in which really all that happens is a change in the nominal scrip owner, but it should be done and worked out as much as possible at the present moment. If you do not do that you will get back to that strong individuality which is so very difficult to overcome in peace time.

There is such a lot to do. Even if you allow the roads to compete with the railways as much as they like, what an immense field there is for railway improvement. Look at the Southern Railway. The Southern Railway in its various components was once the standing joke of England. What is it to-day? It is one of the most efficient of our railways, and it has got great dormitory traffic which will never go back to any form of transport but the electric train. It only shows what immense scope there is. If you give security to these great corporations, allowing the receipts to come in, to be joined at the top so as to give long-range planning for these various forms of transport, I believe that along the way indicated by the noble Lord, Lord Reith, we could get a co-ordinated system of transport in this country which should be unrivalled in efficiency, and not cost the taxpayer anything.

House adjourned during pleasure, and resumed by the LORD CHANCELLOR.

LORD BALFOUR OF BURLEIGH

My Lords, I should like to offer my congratulations to the noble Lord who introduced this Motion on his speech. If I may say so, I think he has rendered the public a service, not only in bringing the matter forward to-day, but in the manner of his presentation of it. Nobody is better qualified to speak with authority on the subject of public corporations than the noble Lord. As the noble Lord opposite has already reminded your Lordships, he had great experience both of the B.B.C. and in forming and for some some time directing the British Overseas Airways Corporation. Consequently words from him on this subject cannot fail to command the closest attention of your Lordships and of the country. I should like to re-echo what was said by my noble friend Lord Brabazon as to how much we all regret that the noble Lord is no longer in the seats of the mighty. We hope it will not be long before he finds the way back to the position in which the country will have the advantage of his great ability.

The noble Lord's Motion covers very wide ground. I intend to make a few remarks only, more or less from the point of view of the railways. The first point I want to make is to record my satisfaction that it is now admitted on all hands, with our experience of three years of war, that an efficient railway system really is a prime necessity in the transport of this country. It seems almost absurd to make that statement to-day, but if your Lordships cast your minds back to the days not long before the war, when railways were asking for, and not finding it easy to get accorded, a square deal, you may recollect that some of the supporters of road transport undertakings were almost inclined to allege that the whole thing could be done by road transport, and that railways were an anachronism. I need say no more than that the war has proved what so many of us were convinced of before, that if you were planning the transport system of this country all over again the backbone of it would have to be an efficient main line railway system.

In considering the future of railways and other forms of transport, of course it is obvious that the first consideration is the achievement of an efficient system of transport. The interests of the public have to be paramount. No other interest must be allowed to conflict in setting up the most efficient form of transport of goods and passengers at the lowest possible rates. I would like to remind your Lordships that if there was a time when the railways were subject to criticism, it was in the days when they had a monopoly, and I think therefore it follows from that that a simple reversion to State ownership alone, with a monopoly of railway transport, must be obviously a bad thing. The noble Lord opposite, as Lord Brabazon has pointed out, did not use the word "nationalization" but he used the word "socialization." I wondered what it meant at the time, but I suppose it means national ownership of some kind or another. The noble Lord quoted a slogan from his Party conference of a fortnight ago. I must admit I thought on hearing it that it was just one of those vague generalizations which may mean everything or nothing, according to the point of view from which you regard it.

There again I thought the noble Lord opposite was finding fault rather unfairly with my noble friend who moved the Motion because, after all, they both want national ownership. It is an essential of this public corporation system that it should be nationally owned. Consequently I do not know why the noble Lord opposite should find so much fault with it. Moreover, the noble Lord opposite said that the noble Lord, Lord Reith, wanted to remove the railways from Parliamentary control. That is quite untrue, because my noble friend made it perfectly clear that Parliamentary control, although of a remote kind, was an essential in his system. The noble Lord opposite said it was syndicalism. I am not quite sure that I know what syndicalism is, but I am perfectly sure it is not the system which my noble friend was advocating. The noble Lord opposite, I understood, was satisfied with the B.B.C. when it was under the noble Lord, Lord Reith; at least I understood him to give praise to that system as it was then worked. That is the very system that the noble Lord is advocating for public services to-day, and therefore again I do not see why he found so much fault with the system which my noble friend was advocating.

I think that the public corporation system has a very great deal to commend it in theory, but I am not prepared to prejudge the issue whether it would work in practice. Take the B.B.C. example again. We are all agreed that for a number of years Lord Reith ran a very efficient British Broadcasting Corporation under the public corporation system. What is the position of the B.B.C. to-day? I think it has come right under direct control of the Government. It is not quite clear, but there is certainly a great deal more Government control of the B.B.C. now than there was in the days when the noble Lord, Lord Reith, was managing it. That is a danger in the public corporation system which has got to be borne in mind. Quite clearly the Government could set it up, put a key man in charge, and give the corporation a great deal of responsibility, but sooner or later there must be a danger that what was remote Parliamentary control will tend to become more direct Parliamentary control. I do not see how you are going to guard against the danger that ultimately it will become interference with the management, which is the very thing the noble Lord wishes to avoid.

Much the same thing has happened with the Airways. The British Overseas Airways Corporation is, I understand, now entirely managed by the Air Ministry. I have no doubt it is necessary in time of war that the Airways should be managed by the Air Ministry, as the railways have to come under the general direction of the Ministry of War Transport, but I cannot believe it is right that that should continue indefinitely. I am perfectly certain that the development of civil aviation will be checked unless the British Overseas Airways Corporation is taken out of the Air Ministry after the war. I cannot imagine that the Merchant Navy would have developed in the way it has done if it had always been run inside the Admiralty.

The only thing I want to say in conclusion, from the point of view of the railways, is that the railways are not unmindful of the future. If the railways were asleep when they had a monopoly, they certainly are not asleep now. The railways are, individually and collectively, thinking about the problems of the future, and the plea I want to make to the noble Lord who is going to reply (and perhaps it ought to be addressed also to the noble Lord, Lord Leathers), is that before any decision is come to about the future of the transport systems in this country—particularly of the railways—consultation shall take place with the railways themselves. I hope that such consultation may fake place not only before any scheme is produced to Parliament, but while indeed the Government are considering the details of what such a scheme ought to be. I can say with confidence that the railways will be entirely ready to offer every possible co-operation, but we do feel we should like to be consulted before decisions are taken about matters on which our people have intimate technical knowledge.

VISCOUNT BLEDISLOE

My Lords, I hope that your Lordships will forgive me for intervening for two minutes in this debate. Personally I was so immensely impressed by the convincing eloquence of my noble friend Lord Reith, particularly as regards the principles that he enunciated rather than with the particular plan or plans he adumbrated, that I cannot help stating that his physical stature, which is so impressive, is only equalled by the stature of his eloquence and statesmanship. I also share the hope, in the light of his past services to this country, that some responsible position will be found for him during this very critical period through which we are passing. If I understand the contention which he desired to emphasize, it is that individualism, on the one hand, has not secured, in the light of modern progress, what is essential for national requirements, nor, on the other hand, is nationalization or State ownership or even excessive State control likely to prove by itself an effective substitute. Therefore he put before us the suggestion of some intermediate agency of control which he described as a national corporation. In other words, if I understand him aright, he advocates corporation control rather than Government ownership with bureaucratic domination.

Some of us have served in Government Departments, and we have seen, during the last few years, an enormous increase in the number of civil servants, with a reflected increase in the national taxation required for their support, but without any corresponding conviction of efficiency in Government administration or in the rapidity of output of Government business. My noble friend referred to democracy. The longer I live the less I am convinced that pure and true democracy is to be brought about simply by the passage of Acts of Parliament, or by the utterance of principles expressed in eloquent phraseology, such as the noble Lord, Lord Strabolgi, presented to us this afternoon as representing the policy of his Party. I do not believe we are ever going to have a national system that is going to work smoothly and as part of an international system—which, by the way, we have more and more to consider in days to come—unless we get away from the Party standpoint and make up our minds that we are prepared to sacrifice something in our political outlook if only we can get something like national unity and national co-operative effort.

The noble Lord, Lord Reith, indicated—I am not quite sure that he put it in exact language—that if you expect the electorate of a democratic country effectively through its representatives to control the public services of this country, it must be better educated and better trained than it is to-day. If that is his view, I entirely reiterate that sentiment. There are only two countries with which I am acquainted—and I know them both well—which are, in my judgment, true democracies in every sense of the world. One of them is Denmark and the other is New Zealand, and in each of them, I venture to think, the average standard of education is higher than it is in any other country in the world. I am very glad to read what was said in the House of Commons yesterday on the subject of education, but I am bound to say that I remember similar forecasts being made by my late much-respected friend, Dr. Fisher, during the last war. I can only hope that Mr. Butler's policy and anticipations will be crystallized into something more effective than took place in the case of the excellent programme of education that the late Dr. Fisher adumbrated during the last war.

It is only a fortnight ago in this House that we were discussing the subject of middle-men in the matter of the distribution of agricultural produce. I cannot myself be convinced that a multiplication of middle-men, whether in the field of Government administration or in the matter of commodity distribution, is in the national interest. More than one noble Lord to-day has referred to the necessity of planning. I may be absolutely wrong, but it seems to me that in so many directions the Government lack any very definite plan. Surely it is up to the Government, not necessarily to own public services or to own industries, but to tell the nation perfectly plainly, and those who at present on individualistic lines direct industries or services, exactly what in the interests of the public is wanted. Let the Government plan, and to a certain extent control if it is necessary, and let the most highly trained and efficient individuals carry out those plans. If they fail to carry out plans in the public interest then only let the heavy hand of Government interference and Government control be introduced to ensure efficiency and progress.

What really further induced me to intervene is the contemplation, which by the way has been adumbrated by my noble friend Lord Addison, that sooner or later food production should become a national service, and I believe he is one who would like to see in that connexion the nationalization or Government ownership of agricultural land. All I can say in that connexion is this. If there is one industry more than another which depends upon individual enterprise it is agriculture, and its operation by the bureaucracy under any scheme of State ownership would, in my judgment, be fatal to its efficient conduct. What furthermore seems to me to be absolutely essential—and I speak with some little knowledge in regard to the industry I have just mentioned—is this, that if you are going to nationalize your industries, if you are even going to nationalize the public services to which reference is made, you must have highly-trained officials amongst your civil servants with some vocational knowledge of what they are actually directing or controlling. The noble Lord, Lord Strabolgi, gave, as I thought, a very convincing illustration of the defects of the policy which he advocated. He said, quite truly in my judgment, that if you are going to have an external transport service carried on by liners in competition with a State-financed and taxation-supported air service, sooner or later the liner service would go to the wall. Is not that the very strongest argument in favour of the continuation of private enterprise against public direction and control? Do we not find already in many directions today that where the Government step in and take the control of any industrial or national enterprise, the cost of management, the cost of conducting it, increases very materially, and any private undertaking of a similar kind attempting to compete with it has its existence seriously threatened?

What I do not quite understand is this—and my noble friend Lord Balfour of Burleigh seems to reflect the idea—that where you have national control by some public corporation there must necessarily be national ownership, I do not know if I repeat his view correctly, but personally I see no necessity for that. It may be that even in regard to the agricultural industry and food production a national corporation will have to be established after this war, but I see no necessity whatever for State ownership of the land as a necessary consequence. Surely the corporation can represent the Government view, and undertake the execution of the Government plan and a certain amount of Government control without the painful development, as I think it, of Government ownership and what is generally called nationalization. I, for my part, believe that whether we like it or not, for many years after the war there will have to be very considerable Government control—control of transport, control even of agricultural production—but I do not consider that that necessarily justifies State ownership. I firmly hold, in the light of past history, to the recognition of the fact that it is the enterprise and industry of the Britisher that have made the British Empire and British industry what they are, and I venture to hope that direction and control will not necessarily imply State ownership.

VISCOUNT SAMUEL

My Lords, I had not intended to take part in this debate, but its scope has become widened, and no one has spoken from these Benches. I therefore would desire in two or three sentences to draw attention to one historical fact. In 1928 the Liberal Party, of which Mr. Lloyd George was then the Leader, appointed a committee to go into all these matters, in which some of us who had been members of previous Liberal Ministries, including the noble and learned Viscount who is now on the Woolsack, and I myself, took part. There were also as members of it men who are now regarded as the principal economists in this country—all of them members of the Liberal Party—namely, Mr. Keynes, who will shortly be welcomed in this House, Sir William Beveridge, Sir Walter Layton, Mr. Seebohm Rowntree and Mr., now Sir Hubert, Henderson. After a long inquiry a book under the title of Britain's Industrial Future, which dealt with these matters among many others, was published.

While not endorsing the suggestion that the General Post Office should be taken away from the direct control of the Government, and while insisting upon the necessity in all cases of full Parliamentary control, I have no hesitation, in view of the results of that inquiry, in cordially welcoming the views expressed to-day by the noble Lord, Lord Reith, in his admirable speech, and by other speakers. In that book we urged that many of the national services should neither be acquired and managed by the State, nor left to chaotic private enterprise, but should be entrusted to the ownership and management of public corporations; and we did indeed devise that name "public corporation" for that purpose. I need not say with how much pleasure I listened to the adhesion to the Liberal programme of members from the Labour Benches, from the Conservative Benches, and from the Cross Benches in the person of Lord Reith, a location where we hope he will not find it necessary to reside for long.

LORD MONKSWELL

My Lords, last October I ventured to bring before your Lordships a Motion on the subject of planning the railways for the post-war period. I received a sympathetic reply from the noble Lord, the Minister of War Transport, and some weeks later the railway companies issued a communication to the Press announcing that they were setting up a committee on their own account with the same object in view. In that announcement nothing was said about the debate here, but I understand the Railway Companies Committee is in touch with the War Transport Department. I hope the Government may be able to give us some account of the lines on which the Department and the Committee are working. My own Motion was confined to suggestions for the consideration of certain technical and administrative matters, but, as my noble friend Lord Balfour of Burleigh pointed out in that debate, the inquiry could quite logically be extended to include the planning of all transport by land, water and air in and around these islands.

THE MINISTER OF WORKS AND BUILDINGS (LORD PORTAL)

My Lords, I would like at the outset to add my congratulations to those already tendered to my noble friend Lord Reith on the fluent and eloquent speech in which he expressed himself on this Motion. My noble friend covered a wide range of subjects and so have other noble Lords in their speeches. The ground which the Motion itself covers comes under the duties assigned to my right honourable friend the Paymaster-General. The main argument of the noble Lord was that corporations or public utility companies are the best means for dealing with the public services and other large organizations, rather than public companies or State ownership. To put these methods in his order of merit: 1, corporations; 2, public companies; 3, State ownership. That is the order which he considers to be the right one.

I am not here to-day to discuss that question as it would be far too controversial. With his remarks about efficiency, I feel sure there will be complete agreement. I remember that even twenty years ago I stated that 80 per cent. of the efficiency of any undertaking rested with the management, and I would say the same to-day, whether it was run by a Government Department, public utility company, or a public company. I must also myself admit that during my business life before the war I hankered after the idea of being chairman or managing director of a corporation so that I should not have to face angry shareholders, but I was never considered worthy of such a position. I agree with the noble Lord that one of the advantages of corporations or public utility companies is that you can have a continuity of policy, which is all-important. My noble friend Lord Reith also mentioned in his speech the Civil Service. With that part of his speech I cannot deal to-day, because your Lordships will realize that in all Government Departments the Minister himself is answerable to Parliament for his own Department.

Before I deal with the questions of transportation, building and civil engineering, electricity, etc., I think your Lordships should first be told the procedure that is being adopted by the various Ministries concerned for post-war reconstruction. The Ministry of War Transport are preparing their own scheme; the Ministry of Works and Buildings are doing likewise; the Paymaster-General is dealing in the first instance with electricity, until the Ministry of Fuel and Power gets into its stride, while water comes under the Ministry of Health. Gas will come under the new Ministry of Fuel, Light and Power. The location of industry will come under the Board of Trade. Reports in regard to all these are being collated at the present time and presented to a Ministerial Committee presided over by the Paymaster-General.

I agree with the noble Lord that these questions are urgent, but the right timing of them is also essential. We are still in the middle of a war, but we must have the machinery being prepared, so that at the right time we may have the necessary schemes for public services ready. As the noble Lord has already stated in reference to transportation, the future of this enormous system, which embraces railways, roads, canals, and coastwise shipping, is in the hands of my noble friend Lord Leathers, Minister of War Transport. There are no interests either in the industrial or social life in this country which are not vitally concerned with the operation of transport. It follows that a transport system cannot be planned otherwise than in the light of a general policy which embraces these wider objectives. One must bear in mind that at this stage it is hardly an exaggeration to say that the war will be won by that side which can ultimately bring to bear the greatest transport resources and use them most efficiently. Nothing must be allowed to interfere with this, and it would be a grave mistake to introduce at this time controversial issues which would have the effect of diverting our energies from the war effort. Let there be no mistake—any effective solution to the transport problems will be controversial.

While, therefore, the Government are bound to devote their energies first to the war effort, yet I may state that in the Ministry of War Transport and in the various organizations of transport itself, the necessary information is being collected. The various proposals and recommendations which are already in existence are being re-examined and from these a transport policy for the future will be formulated. If such a policy is to be realistic it will not only have to take into account the national, but the world situation at the termination of hostilities. Noble Lords must realize that it was provided deliberately in the agreement for the control of the railways that this control will be continued for at least one year after the end of the war, which will give the necessary time for the Government to bring forward their proposals. I may add that other bodies are examining these problems as they affect the interests for which they are responsible. The Chamber of Shipping, the railways, British Road Federation and others are all formulating their proposals. I can assure my noble friend Lord Balfour of Burleigh that the Minister of War Transport will see that all matters affecting railways are fully considered. It is desirable that they should do so and in good time these proposals should be laid before the Government so that they may be taken into account.

The Paymaster-General is looking into the matter of electricity and will report in due course to the Ministry of Fuel and Power. He is examining the reorganization question of electricity from these main points of view: (1) to secure a better diversity of load; (2) to secure a greater standardization of voltage; (3) to work towards a uniformity of charge throughout the country; (4) to adopt a common policy with regard to development; (5) to put the best engineering advice at the disposal of all distributors. I am sure that your Lordships will have been among the first to realize that the question of a more equitable rate for electricity is one of the many factors that will have to come into consideration in conjunction with the question of the location of industry in the future. Even before the war this question of the electricity rate and also the question of voltage were taken into account when plans for locating an industry were being considered. Gas in relation to the post-war policy will now be in the hands of the Ministry of Fuel and Power, while water and drainage are in the hands of the Ministry of Health. The new Minister of Fuel and Power has told me that the gas industry has already been invited to consider its own reconstruction problems, and the necessity for proceeding without delay is being kept prominently before representative bodies.

My noble friend Lord Reith spoke about building and building materials. The building industry of course does not really come under public services, but it is an industry in which both the noble Lord and I take a great interest, so perhaps I may be allowed the privilege of referring to some of the building problems. I dealt with some of the points he raised in my speech in your Lordships' House on April 21. Lord Reith mentioned, and in my view quite rightly, that there must be some form of control of the building industry after the war. I feel certain that in the building industry there will have to be control continued for some time after the war. I am convinced, too, that when you have a big building programme—shall I say an arranged programme, a balanced programme?—if you have control of the materials required for the completion of that programme you will have to have priorities. There will be so much to do that it will be essential to have priorities to carry out your building programme. That is why on this matter I concur with Lord Reith. I think that his ideas and my own on this question run very much together. The questions which have been raised in this debate have shown that your Lordships are greatly interested in seeing that these matters are being proceeded with and I would now, if I may, say a word on the question of the timing of these programmes.

LORD STRABOLGI

If my noble friend will permit me, may I ask him if by timing he means timing in the sense of the time at which the schemes will be known to the public?

LORD PORTAL

No. I meant timing in the matter of the getting of these programmes ready by His Majesty's Government. I think the Government are very much alive to the necessity for proper timing, and that every Department which should do so is getting on with its plans. I can speak for my own Ministry, which of course has a part to play. One is anxious that all the different plans should be co-ordinated so as to be ready at the proper time and not left to be hastily planned after the war. I would like to thank the noble Lord, Lord Reith, for bringing forward this Motion which has given rise to what I think I may say, from the point of view of the Government, has been a very useful discussion.

LORD REITH

My Lords, I am glad the noble Lord felt that we have had an interesting discussion. I thought so too, and it has been a matter of pleasure to me to have been the instrument of bringing it about. May I also be permitted to thank noble Lords who have taken part in the debate for the kindly personal comments which they have made? Particularly am I grateful to Lord Portal for the trouble which he has taken in replying on behalf of the Government. It is good to know that before long we shall be hearing further. I beg to withdraw my Motion.

Motion for Papers, by leave, withdrawn.