§ 2.55 p.m.
§ Order of the Day for the Second Reading read.
My Lords, I rise to move the Second Reading of the Transport Bill. I am afraid I have rather a long speech to make to the House, and in order to keep it within tolerable limits I have committed it to paper. With the consent of the House, I will keep more closely to my manuscript than is sometimes thought either graceful or proper. Before coming to the Bill itself—and when we reach it we may find ourselves not altogether in harmony concerning all its provisions—I am sure that your Lordship's' House will join in paying a tribute to all those connected with the transport services for all they did during the war and have done since the end of the war.
Having said that, let us approach the Bill itself. Many things will be said about this Bill, some highly favourable and some slightly less favourable, but right from the outset I would submit two propositions to your Lordships. The first is clearly incontrovertible and the second difficult to resist on mature reflection. We must 874 all agree that this is a tremendous Bill. Parliament is being asked to transfer to public ownership the railways of the country, with all their assets and all their ancillary undertakings, including their hotels, ports, cross-Channel steamers and investments. The public under the Bill will also acquire the canals of the country on a similar basis. At the same time they will acquire the London Passenger Transport Board, which is responsible, as your Lordships will be aware, for buses and tubes in the London area. The public will also acquire 600,000 railway waggons now in private hands, in addition to a similar number which will accrue through the acquisition of the railways themselves. On the road haulage side it is estimated that upwards of 20,000 vehicles now in the hands of some 2,000 operators will be transferred to the Commission, which in addition will inherit over 10,000 vehicles of the railway companies and of companies controlled by the railways.
It is quite true, and indeed I am anxious to allay any anxiety on this point at the earliest possible moment, that the figures I have just given for road haulage vehicles to be publicly acquired are not more than a quarter of the total "A" and "B" licence vehicles in the country; that is to say, of the vehicles now carrying for hire or reward; and the figure does not loom very large against the 306,000 "C" licence vehicles which are used by traders for their own purposes. At the same time the public acquisitions on the road haulage side are considerable, and when we add to them the acquisitions I have mentioned earlier, and when we add also certain projected schemes of reorganization—for example, bus services and ports— and when we consider all these things, we shall agree, I feel sure, that a great responsibility falls on the House for giving the most careful consideration to the Bill that is being brought forward to-day.
I would submit at the outset that whether or not one waxes enthusiastic over these great developments, one is bound to admit, if one is at all objective and dispassionate, that something of this kind was quite inevitable. For many years before the War, as your Lordships will remember, competition between the railways and road haulage was creating a situation which was universally recognized to call for correction; and few, if any, public questions were more discussed 875 or inquired into than that of the coordination of transport. The Road Traffic Act of 1920 brought the passenger side of the road industry under licensing control, and in 1933 the Conservative Government carried the Road and Rail Traffic Act which introduced a somewhat smaller regulation over the haulage of goods by road. But this measure proved inadequate to the need, and the agitation for a "Square Deal" for the railways just before the War led the pre-war Government to promise further legislation.
It requires very little capital investment, as we all know, to start a road haulage business, and the process of attrition of the railway revenues from merchandise traffic, due to the competition of the roads, forced the railways to quote exceptional rates in ever-increasing numbers to an extent which threatened to destroy the whole basis of the railway rates structure. The Government are satisfied that all the prewar proposals and the subsequent deals between the various interests are quite inadequate remedies. We regard them not only as inadequate but as open to an overwhelming objection. They would go a long way, if approved, to create a monopoly in goods transport, but to vest it in private hands, a situation which we do not think the House would willingly accept and which we would certainly regard as highly improper to recommend, particularly as a public subsidy might have been involved.
We are convinced, and we hope to convince your Lordships, that there is only one remedy. We are satisfied, to put the matter in a nutshell, that any sound reorganization of our transport system must involve closer integration. We are satisfied that such integration must produce a measure of monopoly, and that such monopoly could only be tolerated if it were subjected to the public interest through the principle of public ownership. In other words the only remedy for this acute transport problem—a problem which baffled us before the war, and which would confront any Government that were in power to-day—is to introduce the principle of public and unified ownership of the railways, and of long-distance road services. In passing, your Lordships will remember that Governments of various complexions were driven to the same solution of a similar problem which existed in London. There also the real remedy had to be found 876 in unified ownership under a public board of both road and rail services.
The noble Viscount Lord Swinton, who, I believe, is to follow me, played a most distinguished part, for which the country has every reason to be grateful to him, in bringing the Act of 1933 to the Statute Book. I am also pleased to think that when the noble Viscount has addressed the House, the noble Lord, Lord Beveridge, will speak for the Liberal Party. He and I on this matter (I think I am right in saying this and I hope that I do not do the noble Lord any injustice) have something in common which we do not share with the noble Viscount, Lord Swinton. We bring to this subject the purity of virginal minds. The noble Viscount, on the other hand, has been wedded to it, in lawful matrimony, I believe, for many years, and his holy wedlock was not at all a form of holy deadlock, because his views developed and I have no reason to think that they have stopped developing. It would indeed be most unfair to accuse the noble Viscount of any element of arrested development, and when I have finished I hope that he will arise and say that even while I have been talking his mind has been moving, and he is now ready to accept, at any rate, the main principles of the argument. But time will show.
Before passing to the main features of the Bill I would like—if by doing so I shall not be detaining the House unduly—to quote, in relation to the policy of unification of the means of internal transport, views expressed by members of your Lordships' House who held successively, and successfully, the post of Minister of Transport. The noble Lord, Lord Reith, on June 17, 1942, said:I submit that there should be a national transport corporation covering railways, road transport, canals, coastwise shipping and internal air services; that the railway should be brought under unified management and become part of the corporation.That was said by a great Conservative, who was Minister of Transport.
§ VISCOUNT SWINTON
The Chancellor of the Duchy, I am sure, would not wish to do injustice either to the noble Lord, Lord Reith, or to the Conservative Party.
I would be the first to apologize to both if I have wrongly coupled them together. I shall await further enlightenment on that subject both from Lord Reith and from those who 877 speak for the Conservative Party. On the same day Lord Brabazon spoke—and he, I think, is a great Conservative. Of course, as the House knows, I was once a Conservative myself but I have become out of touch and have not got back.
I am afraid I took a shorter route. On the same day Lord Brabazon said: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.Lord Leathers, while not going so far, stated on October 27, 1943:Even if it should be proper in any postwar circumstances to proceed with the 'Square Deal' proposals, I am firmly convinced that some more radical solution has still to be found, although I am not yet able to bring forward any precise suggestions.We have thought it our duty to bring forward precise suggestions. We should have regarded ourselves as shirking our duty had we failed to do so. Your Lordships will, perhaps, allow me to indicate as briefly as I can their main outlines. The Bill concentrates the ownership of all the services and undertakings to be acquired in the hands of the British Transport Commission. Without this concentration of ownership and control the problem will not be solved. In our submission, separate financial interests would otherwise be bound to go on warring for their own particular concerns, without sufficient regard to the needs of the public service. Important undertakings might well not feel justified in embarking upon the investment of further capital, or indeed be able to raise it on their own credit. Common ownership and pooling of resources will remove many of the existing difficulties and will give a positive basis for technical and other developments which are needed but which must inevitably be very costly.
Part I of the Bill sets up the British Transport Commission composed of five members, defines its relation to the Minister, and lays down the principles of its organization through functional executives which are to be the Commission's agents. The functional executives will be four in number: one for railways, one for docks and inland waterways, one for road trans- 878 port, and the fourth for London Transport system, with an hotel executive to be added at a later date. The conception behind the Commission is that it should be the central authority in which all the assets and properties of the transferred undertakings will vest, and it will be the authority which will decide and direct policy. On one side of it, however, there will be the Minister of Transport and on the other side the four functional executives.
Take first its relationship to the Minister. It is not the intention that the Minister of Transport, on behalf of the Government, should interfere with the administration of the transport system or with the discretion of the Commission and the executives. The Government feel confident that they can rely on the Commission to carry out its general duties as defined in Clause 3. Nevertheless, it would clearly not be right to leave an organization of this magnitude aloof from the possible requirements of public policy. It is, therefore, necessary that Parliament should have the ultimate control and that the Minister should have the powers, indicated in Clause 4, of issuing general directions to the Commission on matters affecting tie national interest. These directions are required to be published unless the Minister intimates that the publication would be against the interests of national security.
Take next the relationship of the Commission to the executives. One of the main duties of the Commission will be to control its executive agents—that is, the railway executive, the road executive, and so on —so as to secure that there should be proper co-ordination and integration between their services and the various forms of transport which they will operate, at all levels, national, regional and local. It may be said that the Bill does not tell us exactly how integration is to be secured. I quite agree. No Bill could do any such thing. The exact ways in which this aim is to be secured cannot be laid down in any Statute, and it would indeed be most undesirable to lay down some rigid framework within which all development must find its place. But because public ownership does not, automatically and without further effort, bring about integration, that does not mean that public ownership is not an essential condition of any effective integration. It is indeed a sine qua non.
879 We are fully alive, as the Commission must be alive, to the importance of not perpetuating rival and competing services, and it will be particularly necessary to see that the commercial organization, as distinct from the engineering organization of the different executives (and it is the commercial organization which will be most closely in touch with the travelling public and the traders), should be closely correlated and work in harmony together. Before leaving Part I of the Bill may I draw your attention to Clause 6—a very important clause which provides the machinery whereby the Commission will have at its side a series of consultative committees to keep it advised as to' the needs of the travelling public and of trade and industry. I would linger longer upon this clause but for the fact that my noble friend, Lord Walkden, who has had much greater experience of these matters than I have had, is going to speak later, and I understand that he will be dealing with this among other topics.
Now I come to Part II of the Bill; that is, Clauses 12 to 38. These are the clauses which affect. the transfer of railways and canals to the Commission. The Commission will take over along with the railways the whole of the companies' assets, including a substantial proportion of the country's canal mileage, a large number of important harbours dealing with about one-third of our overseas trade, a substantial interest in passenger transport by road, together with a large business in short-distance road haulage. As for those canals which are not owned by the railways —and of course they also will be taken over—I need not say more than that every inquiry into the problem since and including the valuable report of Mr. Neville Chamberlain in 1921 has been unanimous in saying that there was no alternative to compulsory amalgamation if the canals were not to go further into decay. We cannot escape that conclusion. While we cannot encourage the hope of any large expansion of canal traffic, we believe that with the economies to be secured by amalgamation and with the aid of new capital to be raised on the basis of public credit, something can be done to restore their position.
Part II also deals with railway waggons. Those owned by the railways will pass to the Commission, as already explained. The 880 privately owned stock, numbering about 600,000, will also pass to the Commission. No one, I think, disputes the advantages of this step. The pooling of waggons proved necessary in two wars. Terms of compensation have been agreed and are specifically set out in the Bill. Part III is concerned with transport of goods by road, a very intricate subject. It is an essential feature of any satisfactory scheme of transport integration that long-distance road haulage and the services of the railways should, in future, be regarded as complementary instead of mutually destructive, and the first step towards curing the difficulties of the past is to create a common financial interest in respect of long-distance haulage. It is probably not realized what a large field for private enterprise is left for the road haulier under the provisions of the Bill. We propose that the lest whether or not a haulier should be subject to complete acquisition by the Commission should be the proportion of his total traffic, judged either by tonnage or receipts, which is carried for distances of forty miles or upwards—that is dealt with in Clause 39—exclusive of certain traffics which are carried in tank or refrigerated vehicles, or furniture vans. The formula is, I admit, inevitably somewhat complicated, but I think it can be explained without serious inaccuracy in this way.
Suppose the noble Viscount, Lord Swinton, and I myself both conduct a certain amount of road haulage business over distances of more than forty miles, and a certain amount over distances less than forty. If more than half the noble Viscount's business is conducted over distances greater than forty miles he will be nationalized, while if more than half of my business is conducted over distances of less than forty miles I shall not be compulsorily nationalized at all. That is not a completely detailed example, but it shows how the thing will work out. On the other hand if the noble Lord, Lord Beveridge, has a total business which would just bring him into the area of nationalization but includes substantial traffics carried in furniture vans, he may find himself free from any nationalization because he will be allowed to exclude all traffics of this special character when the calculation comes to be made.
This criterion of forty miles certainly does not err on the short side, if the aims 881 of the Bill are to be achieved and road and rail to be co-ordinated. By taking this test we will find ourselves, on the best estimate available to me, acquiring some 2,000 undertakings operating some 20,000 vehicles in addition to something over 10,000 railway vehicles. Outside acquisition under the Bill, there will remain some 100,000 "A" and "B" vehicles, and about 300,000 "C" vehicles used by traders for the carriage of their own goods. Apart from the forty miles test there will be a twenty-five miles test of a different character. I am very anxious that these two tests should not be confused in any way. There is no question of using the twenty-five mile test to acquire vehicles, but it is essential that the British Transport Commission should be able to control haulage outside a radius of local operation, and we have provided that no haulier shall be entitled to run for distances of more than twenty-five miles from his authorized base without a permit from the Commission. Let me repeat that, to avoid any danger of misunderstanding. If most of your business is over distances less than forty miles, there is no question of your business being compulsorily acquired; but if you are an "A" or "B" licence holder you will have to get a permit to run outside a radius of twenty-five miles. That does not mean that you have to get a permit every time you go outside the radius. It will be given for a given period. The individual haulier is thus left a very substantial field of operation amounting in each case to an area of some 2,000 square miles before he requires to obtain any permit.
§ LORD BEVERIDGE
Will the noble Lord answer this question, to make it quite clear? What is the definition of "short" and "long" haulage business undertakings? Is the business a long-distance undertaking if either more than half the mileage travelled or more than half the receipts relate to long-distance work. Does that not mean that since a man will naturally get larger receipts for long-distance traffic he may well be brought in as a long-distance haulier, though most of his haulage is short distance?
It is conceivable, but if the position is as the noble Lord has stated, he will have an opportunity to criticize it when it comes to his own speech.
If he is not criticizing, I am entirely grateful for his observation. The radius of twenty-five miles has, it is true, been criticized as miserably inadequate, but, to judge from a pamphlet published in 1943 entitled The Road Carrying Industry in the Future the leading personalities in the road haulage industry were at that time, at any rate, inclined to regard twenty miles, rather than twenty-five, as the kind of radius within which the small man should be allowed to continue. We are genuinely anxious to leave the small man a reasonable field of operation but we cannot altogether exclude the British Transport Commission from this type of business. In Many areas it may be a most useful combination with their long-distance services and their services by railway or canal. In many cases already there is an immense business of collection and delivery which is done, and always has been done, by the railway companies and their subsidiaries. In areas of this kind there will be an opportunity of close co-operation between public and private enterprise.
Before leaving the subject of road haulage I need hardly remind your Lordships that, in order to allay the apprehension of industry, the Government have already deleted from the Bill those provisions which would have subjected to control the "C" licence holder or private trader using his vehicles for the carriage of his own goods beyond forty miles. As the Bill now stands the private trader using his own vehicles is completely unrestricted. I wish to lay great emphasis on that point. I would remind your Lordships also that the Government have inserted a provision expressly laying down the principle that where the Commission is providing regular goods transport services of different kinds between the same points, any person desiring to use these services between these points is free to choose the service which he considers most suitable for his needs. This was always the intention, but strong anxieties were expressed on the subject in another place. We were anxious to meet any reasonable doubts on this point and we feel sure that our action has given satisfaction to the trading community. So much for Part III and road haulage. 883 Part IV is concerned with passenger road transport, harbours and coastal shipping. The larger municipalities have operated trams, and more recently buses, largely within their own boundaries. Outside those boundaries, bus services have been provided on no definite plan by private undertakings, and although in recent years, amalgamations of the services into larger groups (in which the railways have been financially interested to the extent usually of 50 per cent.) have been taking place, there remains great scope for coordination of services, whether municipally or company owned, both with themselves and with the railways. The Government have not felt it right to lay down any uniform pattern for the future, nor to make it obligatory that the Commission itself shall run road passenger services. Local initiative and local enterprise have played a part in developments to meet local needs and habits of daily travel, and it is important that local contacts should not be lost.
Further developments and improvements, however, cannot be regarded in isolation, but must be viewed as part of the whole transport system of the country. Clause 62, therefore, requires the Commission to review road passenger transport services with a view of determining for what areas they shall prepare and submit schemes. They are required to enter into full consultation with local authorities and with the operators. The schemes require the approval of the Minister, and in the event of opposition are subject to special parliamentary procedure. The Bill itself does not lay down the details of the schemes which must be fitted to the needs and circumstances of the areas selected. The passages dealing with the ports are somewhat similar in conception to those which deal with passenger road transport. That part of the Transport Bill which relates to ports proposes that the Commission shall be enabled, after full consultation with the interest concerned, to formulate schemes for reorganization. Any schemes dealing with reorganization of our ports will be the subject of full inquiry and will require the approval of Parliament if objection is maintained against them.
Part V establishes the Transport Tribunal and the machinery for fixing transport charges. No doubt the House will look into all that very much more closely 884 later on. The Bill proposes that the British Transport Commission should draw up schemes of charges and submit them to the Transport Tribunal for approval. No doubt before doing so they will enter upon all the necessary consultations with traders and others, and in the proceedings before the Tribunal all representative bodies concerned will have ample opportunities for making representations for amendment or alteration of the schemes. I should point out that under our plan neither the Commission nor the Tribunal is subject by the Bill to rigid statutory rules such as have caused so much difficulty in the past. I know that there are those who think that it should be easy to lay down a simple basis of charging in future, but I do not think that is at all the view of the traders or of the railway experts. Quite recently, Mr. Sewell, Chairman of the Railway Panel of the Road and Rail Conference, in addressing the Institute of Transport, recorded his view:That the whole question of the future charging of merchandise in transit is still very much in the laboratory stage.That is the fact at the moment. When the British Transport Commission is able' to direct the researches of the laboratory, free from sectional interests, it is reasonable to expect that a more satisfactory scheme of charges will result than has hitherto been the case, when there has been no sort of community of interest between road and rail. I have already detained the House somewhat longer than I intended. Other Government speakers, far more qualified than myself, will be speaking during the debate, including the Leader of the House. I will pass rapidly through the remaining part of the Bill. Part VI deals with finance, Part VII with conditions of employment, pensions, and compensation to officers and servants, an aspect to which, I know from experience your Lordships are always anxious to devote your most careful attention. Part VIII and IX deal with various consequential and miscellaneous matters.
In these opening remarks I have deliberately refrained from dealing with compensation, a subject which has been very fully explained and debated elsewhere, and which, no doubt, will be debated with ardour and energy in this House, if necessary. We believe that the terms laid down in the Bill in this 885 respect are fair and suitable to the different cases. As is well known the basis of acquisition in the case of the railways is the market value of the securities at the beginning of November, 1946. In the case of the road hauliers, the compensation will be based on asset values, plus an allowance for the cessation of business. We believe that the terms laid down in the Bill in this respect are fair and suitable to the different cases. Nevertheless, the Minister in another place indicated his readiness to examine further one or two points of importance, but not involving major principle. At a later stage, I hope that the Leader of the House will be able to indicate to your Lordships certain directions in which the Government will be prepared to advise that no point of privilege should be raised if certain proposals we can put forward are acceptable to your Lordships.
I have sought, in moving the Second Reading of this Bill, to give you the broad picture— to show you the wood, leaving others to fill in the trees. I have, I hope, said enough to convince you that the scheme before you has been carefully worked out, and is, in its outline, well conceived to secure its purposes. But, of course, there may well be a lurking doubt in the minds of some members of the House as to whether it is necessary or desirable to have a Bill of this sort at all. As to that, I would say only this: I do not believe there is any member of the House who does not realize that things could not go on in the sphere of transport as they were before. Some great comprehensive, co-ordinating measure was quite inevitable— indeed, it is overdue. Such a measure was bound to seek to put an end to the pre-war chaos. It was bound to seek to dispose our resources in the world of transport in the fashion that approximated as nearly as possible to that in which they would be disposed by a single all-seeing management concerned only with the national advantage. For the life of me I cannot see how any measure could have escaped introducing the principle of unification of ownership which in its turn was bound to enhance the existing element of monopoly.
The choice, in fact, is simply this. Are we to establish a private monopoly in transport or a public monopoly in the public interest? We have unhesitatingly chosen the latter course. Many com- 886 plicated issues arise in giving effect to such a project. We shall welcome, I need hardly say, the fullest consultation with your Lordships, and the full benefit of your highly expert advice, but I should be evading my duty if I implied that there could be any weakening on our choice of principle—the principle that, since there must be integration, there must be a strong element of monopoly, and it must be a monopoly in the public interest conceived on public For that choice we have the clear authority of a mandate from the electors. It is a choice to which we in the Government are wholly committed. It is one which I hope the House will consider in its most judicial temper, and in its wisdom, accept. I beg to move that this Bill be read a second time.
§ Moved, That the Bill be now read 2a.(Lord Pakenham.)
§ 3.30 p.m.
§ VISCOUNT SWINTON
My Lords, it is an agreeable surprise that the Chancellor of the Duchy has, so soon, felt able to take a holiday front his German empire in order to expound to us this cumbrous and complicated Bill. I hope that his presence here and his conduct of the measure are an indication that all is quiet on the Western Front. He has undertaken a queer holiday task! He has characterized this as a tremendous Bill. It is! I should say never, in the experience of the oldest member of this House, has so strange a Bill been presented in such extraordinary circumstances. I do not think that I shall have any difficulty in establishing both counts in that charge. As the noble Lord has said, this is a Bill to nationalize rail transport, road transport, inland water transport and docks. (There is some doubt about docks—even after the noble Lord's speech.) That, I admit, is clear. But, having said that, all the rest is obscure—obscure in the Bill; obscure in spite of all the debates which have taken place in mother place and, if he will forgive my saying so, stilt obscure even after the charming speech which the noble Lord has delivered.
The noble Lord went out of his way to say how unwise it would be to particularize on any plan—even to adumbrate the principles which would guide His Majesty's Government in this strange adventure. Any impartial observer, I think, would characterize this as a leap in the dark. The noble Lord has asked us 887 to be enthusiastic about it. I think that even the most enthusiastic supporter would admit that it was, at best, a stumble in the twilight. In the debate on the Address, the noble and learned Viscount, the Lord Chancellor, said that we must apply to this problem of transport a practical test. These were his actual words:I agree very largely with the test which the noble Lord, Lord Balfour of Burleigh, enunciated. That is to say, it is not primarily a question of ownership but a question of co-ordination —closer co-ordination between the railways and closer co-ordination between road and rail ….But no one—even after the speech of the Chancellor of the Duchy—can tell us what that co-ordination is to be; or, indeed, how all or any of the transport systems are to work after this Bill is passed. This is a Government of planners. Where is the plan?
Let your Lordships observe the extraordinary structure of this Bill. There is the Minister: he is to have great powers. I shall have something to say about that later on—particularly in view of the rather curious statement of the noble Lord who introduced the Bill, which implied that the Minister will have very little to do. But the Minister has no plan. The Minister is to appoint a Commission of five men. We do not know who they are to be. But they are to make a plan for the whole of transport. We have no idea on what principles or lines those five "wise men" are to plan; nor have we any idea how they are to operate the vast undertakings which are to vest in them on January 1 of next year. We know only that these five men are to operate through five or more executives. But observe: although it is to operate through those executives, the Commission is not to appoint the executives. The executives are to be appointed by the Minister. Could vagueness and irresponsibility go further?
Your Lordships may recall that in the days of the South Sea Bubble some ingenious promoters, by the issue of a prospectus, invited a credulous public to subscribe to what was entitled "A scheme hereafter to be revealed." History relates—if I remember aright—that both promoters and investors came to a "sticky" finish. Surely this is another case of the unfortunate public being in- 888 vited to subscribe to a scheme "hereafter to be revealed"? In such a fog, it is difficult to deal intelligently with the details of the Bill. I shall not deal with much detail to-day. I think I shall be more usefully employed if I try to obtain from the Government some light on important questions of principle which go to the root of the Bill, and which are still hopelessly obscure.
Let me take first the question of responsibility, because it is vital. With whom does the responsibility really rest? There are three authorities who are to function at the same time: there is the Minister, the Commission and the executives. Under Clause 3 the Commission is charged with the duty:to provide, or secure … an efficient, adequate, economical and properly integrated system of public inland transport and port facilities. …In fact, the Commission has to frame the plan— "the scheme hereafter to be revealed." It has also to frame the ultimate rates structure. But the Minister can give the Commission directions—not about national security; the noble Lord has his brief wrong—on any matters which he considers are in the national interest. The security part refers only to what he has to publish. He has to publish the directions in the annual report that he gives to the Commission, unless he thinks it is contrary to national security that they should be published. But he can give directions on any matter "in the national interest" or that he considers is in the national interest.
To the best of my recollection I stated the meaning of the clause as it has been read out by the noble Viscount.
§ VISCOUNT SWINTON
I am very much obliged. I followed the noble Lord most attentively, and I did not know what his reference was to national security. He knows that the last thing I would wish to do would be either to trip him up or to misrepresent him. We are at one. The Minister can give directions on any matter which he thinks is in the national interest. He has this general power to override and to initiate. And all through the Bill are to be found provisions that the Minister shall do this or the Minister shall do that. It even goes so far as this; that the Minister can tell the Commission what assets they are to 889 get rid of, and what they are not. If that is not interfering with ordinary management, then English has no meaning. I know it may be said that the Minister is going to do these things" after consultation" with the Commission. We have had some experience lately of what "consultation" means. The Minister of Defence executed his famous forty-eight hour volte face after "consultation" with the Chiefs of Staff—a pretty good indication of what the words "after consultation" mean. What is the real power and responsibility as between the Minister and the Commission?
But it is not only between the Minister and the Commission that responsibility is obscure and difficulty may arise. There are the executives—five or more of them —who are to operate all these undertakings. They are the instruments through which the Commission is to carry out its policy and, as I have said, one would naturally suppose that the Commission would appoint its own instruments. Not at all: the Minister is going to appoint. But what happens if the Commission, the Minister, and the executives all have different ideas? We are all familiar with the historic question quis custodiet ipsos custodes? I am not sure whether a satisfactory answer was ever given to the question. Let me put to the noble Leader of the House another question: Quis co-ordinabit ipsos coordinatores?—Who will co-ordinate the co-ordinators? If the Government are shy of answering, perhaps the noble Lord, Lord Dukeston, who delights us with his speeches, will be able to enlighten us when he speaks as to whether the ultimate arbiter will be the T.U.C.
Then there is co-ordination, of which we heard a good deal in the opening speech. The object, as the noble Lord said, is not primarily ownership, but coordination. On what principle is coordination to be established? One would suppose that, before embarking on this hazardous enterprise, the Government would have settled the lines on which they proposed to achieve co-ordination—not every detail, but the broad lines. There is no indication. Have the Government any idea about it? The noble Lord said that it would emerge as they went along. Solvitur ambulando, if I may use another Latin expression—not a bad motto for the enlarged Ministry when all the transport breaks down and we have to walk. 890 Co-ordination, as the noble Lord said, implies integration. I could understand a system under which the Government said: "We want to co-ordinate the railways and road and water transport in appropriate regions." That might indeed be integration. But, so far from doing that, the Government produce a scheme which does the exact opposite. They set up a series of parallel executives radiating from the centre—a separate executive for railways, a separate one for roads, and a separate one for docks and waterways. I always understood that the one characteristic of parallel lines was that they never met. These parallel executives are a very odd way securing co-ordination or integration.
Then there is the question of rates policy. The noble Lord, the Chancellor of the Duchy of Lancaster, skated lightly over it; he said that it was in the laboratory stage. The rates; structure must be a cardinal factor in co-ordination; indeed, I should have thought it was the essence of co-ordination. The rates policy must have the most profound effect on industry, and particularly upon heavy industry. Industry is asked to plan (I do not think it wants much asking; it is only too anxious to plan); but how can it plan effectively without knowing the principles upon which rates are to be fixed, and without having some idea of what transport costs are to be? Yet the Government have given no indication of even the principles which the Commission will follow, or the principles on which the Minister is going to proceed in the interim period.
Because, observe, this is not only a question of what the Commission is going to do after two years, or four years, or whatever period exceeding two years the Minister likes to fix. The day after this Act is passed, or certainly after the vesting day, January 1, the Minister can do anything he likes with rates under the Bill as it stands. He can put them up 100 per cent, or he can put selected rates up 100 per cent. These are the powers. Surely the Government can tell us now, while the Bill is passing through the House, what lines the Minister intends to follow in this rates structure. It is not a hard question to answer but it is an answer that every single person in agriculture and industry must know in order to plan his business. Do let the Govern- 891 ment of planners let us into some of the secrets of the plan.
Let me ask this specific question also: Who is going to propose this ultimate rates structure? I know it says that the Commission will do so, but the Minister is entitled to give orders and directions to the Commission on any matter that he thinks fit in the national interest. There is no doubt that the whole rates structure is a matter very much affecting the national interest. Can the Minister tell the Commission what are the lines upon which they are to frame their rates structure? If that be so, then the power is not in the Commission, but entirely in the Minister. These things ought not to be left vague; they ought to be made clear.
There is then the matter of road transport. The Minister said that he was dealing only with long-distance haulage. I ventured to challenge him a little on the complete accuracy of his illustration. We shall have an opportunity of going into this in more detail at a later stage, but I do think the tests which are laid down are really misleading and inequitable. It does not really turn on tonnage, as you would suppose, or only partly on tonnage. As the noble Lord, Lord Beveridge said, the great bulk of a haulier's tonnage may be carried on short-distance haul, but he will be caught up and called a long-distance haulier. Does not the twenty-five mile radius take away with one hand what the forty mile permit purports to give with the other? I do not want to go into those details; I want to take a much more general line about this road haulage. I am not against co-ordination; that is all right. I go on moving, I trust.
§ VISCOUNT SWINTON
The only difficulty is that some of us do not quite agree what constitutes progress. Running round in a circle, or, indeed, moving backwards—which is what the noble Lord, I am sorry to say, is a bit inclined to do since he ratted from the true faith —is not making much progress. There was much more progress in what we did when we were together. There is no need to nationalize road transport in order to secure co-ordination of road transport itself, or co-ordination between road and rail. Passenger road transport is already co-ordinated under the 892 Road Traffic Act, 1930. I am sorry the noble Lord treats that with contempt. It was his Government that passed the Act, and it is a good deal better Act than this one, because it was regional coordination and not co-ordination in parallel lines from Whitehall. The road hauliers are co-ordinated by the Road and Rail Traffic Act, 1933.
How is nationalization going to help? All experience—and I challenge denial of this— is that over-organization in great trusts, and excessive control, defeat their object. In Germany the evidence is now complete. The Government themselves have been able to look at the inner records of what the German General Staff and the German Army felt was the cause of their defeat—over-organization. There is the most overwhelming evidence that the bottlenecks, the delays and the obstructions which are caused to road transport by over-centralization, was in Germany a potent factor in their defeat. But we do not need to go even as far afield as Germany—and the noble Lord, when he returns to his command, will be able to verify that example. In this country the same thing has been established by the most unprejudiced testimony. Sir Cyril Hurcomb, the Director-General of the Ministry of War Transport, has borne witness to the defects in the road haulage organization of 1943. Those defects were condemned, with a wealth of example and proof, by the Select Committee on National Expenditure in the following year.
Let me just give the House one or two extracts from their Report. This is what they say:Numerous cases were quoted where a convoy of empty lorries had been sent long distances while goods were waiting transport to the very areas to which it was going. — General running expenses and freight charges have in some cases been nearly doubled. … There was no settled formula of assessing a charge which was fair and reasonable. … Drivers were said to be losing heart, to be no longer interested in saving time on their trips.The noble Lord, Lord Ammon, was a member of that Select Committee, and it would be interesting to hear how he reconciles that admirable Report with this Bill; but perhaps that is the reason why he has not been included in the Government cast for this purpose. Is this the system which you seek to re-establish and to inflict upon the industry of this country? 893 The noble Lord said that the Bill started by nationalizing all the "C" licence holders— 300,000 of them—or putting them out of business. The Government said at the start that they could not possibly work this scheme without including the "C" licence holders. I dare say they are right—it is a very bad scheme. But the strength of the case, and public opinion, forced the Government to drop the "C" licences, and they were quite right. The very arguments which forced the abandonment of the "C" licences however—the argument that the manufacturer, the farmer, and the trader, knows his own business needs best and runs his own lorries, if that is the best way of conducting his business—apply equally to the value of the services which "A" and "B" licence holders render to the trade and industry of this country. The traders employ the independent hauliers because they get from them cheap, quick and convenient service—just what they did not get from control in the war—and transport is vital to our industrial revival.
To get increased production at low cost, industry, agriculture and traders want certain, quick, cheap transport services as and when they need them. The variety of the transport services required is as great as the variety of trades themselves. What argument is there for nationalizing these "A" and "B" road hauliers? They give good service without cost to the taxpayer; they are regulated by the Regional Traffic Licensing Authorities to avoid wasteful duplication; they offer a free choice and service which the trader can take or not as he likes. Why should they be put out of business? They do not want compensation; they want to go on giving the service they know how to give, to venture their modest fortunes, to back their judgment and to take risks It is no consolation to these active adventurers — individualists, if you please—to become State servants. If the Government persist in this scheme there will be only one result, and that is an enormous increase in the number of "C" licences, because people will have to own their own lorries in order to do the work which at the present time they are satisfied these little road hauliers can do for them. Finally, in this connexion, if it is said that if you nationalize railways—and this has been said—you must nationalize road transport, that seems to me to be an argument against nationalizing the railways, and not 894 an argument in favour of nationalizing rail transport.
Now let me turn to the ports. What do the Government really intend to do? They have set up an executive for docks and inland waterways. Why on earth are docks and inland waterways linked together? Was it because there was not enough for inland waterways by itself, and they thought they must give it something else as a make-weight? I could understand putting inland waterways and railways under the same executive, but certainly not docks. It would be a very unsound principle to put ports under the sectional direction of an executive which is itself operating inland transport. The port is the link between land transport and sea transport, and it ought to be the servant of both but under neither. What is wrong with the well-established system of Port Public Trusts? London, the Mersey, and the Clyde, have all worked admirably and to the complete satisfaction of traders, shippers, ship-owners and everybody. Here surely is the right working model.
Nor can it be said that these Port Trusts are tainted with the profit motive. The profit motive is coming back a little into fashion now, even on the Benches opposite, but of course with the condition, quite rightly, that increased wages or increased dividends should be accompanied by increased output or cheaper production. I wonder whether it is the application of this principle which has led the Government to try and force so much legislation through, and that if you pay the members of another place more they must respond by an increased output of legislation? I think the public will probably say that they would rather have less quantity and better quality in that particular case. But surely this Port Trust system is the right one and ought to be continued and extended.
Then the noble Lord dealt cursorily—and I am only going to say a word or two about it—with compensation. I have tried to understand the compensation provisions of this Bill. They are very varied, as varied as the different elements which are taken over. More variants have been introduced while the Bill was passing through another place, and I understand that more are to be produced in your Lordships' House. They have only one feature in common, and that is that not one of these variants, so far as I can see, 895 bears any relation to the old, simple, well-established principle of what is a fair price as between a willing buyer and a willing seller. It really seems as if the Government, have taken their inspiration from the Spanish Cloister:There's a great text in GalatiansOnce you trip on it entailsTwenty-nine distinct damnationsOne sure if another fails.That is about a fair estimate of the compensation. Now I would like to say a word about the vesting date. Surely the Government would be well advised to reconsider that date. Under the Bill, not only does the ownership of all the railway and canal undertakings vest in the Commission on January 1 next, but, as from that date, the railway boards and managements are dissolved and the Commission and the executives have to start afresh.
Whether we like nationalization or not, surely we are all agreed that it is vital that there should be no breakdown or delay or hold-up in transport. We are all anxious to increase production and trade, and to make up the leeway we have lost through the coal crisis. The President of the Board of Trade has estimated that £200,000,000 of production has been lost through the coal crisis. We cannot afford to risk a similar loss through a breakdown in transport. This Commission will have a terrific job to do. You cannot, by a clause in an Act, transfer staffs as you can transfer rolling stock or securities. Surely it is folly to set a narrow time limit on the transfer of operation regardless of unknown conditions. Would it not be common sense to give the Commission the right to postpone the fixed date and continue the existing system until it is satisfied something better can be put in its place? That would be not only a proper protection for the Commission itself, but a safeguard which the whole trade and industry of the country are entitled to demand.
I think I have justified the claim that this is a strange and obscure Bill. It will fall to us to try to make it less obscure and more workable. We shall not divide against this Bill; we shall, I am sure, give it a Second Reading—in spite of the advice which was tendered to us recently by the noble and learned Viscount, the Lord Chancellor, that we must be chary of giving a Second Reading to a Bill which tries to translate a political manifesto into an Act of Parliament! We shall give it a 896 Second Reading; and, when we have done that, it is equally our duty to subject it to a close, critical, constructive examination in Committee.
In the debate on the Address, to which I have already referred, rejecting a suggestion that such a Bill ought to be preceded by a public inquiry, the Lord Chancellor said:The right place to have this inquiry is in the High Court of Parliament, and the High Court of Parliament in due course will have the opportunity of pronouncing on the Bill to be introduced.Nobody can pretend that the Bill has received the consideration which Parliamentary inquiry demands. Thirty-one clauses and five schedules have received no consideration at all—not a line of debate. Under the operation of the guillotine other clauses have been only partly or cursorily discussed. Upwards of 200 Government Amendments have been made without any discussion at all; the Government themselves did not have a chance of explaining what they were all about. I suppose at least as many important Opposition Amendments have not even been submitted to a vote, much less to any process of debate. And this in a Bill which affects every traveller in town or country, and every business and industry in the land! Is this giving the High Court of Parliament, in the Lord Chancellor's words, the "right of inquiry and the opportunity of pronouncing"?
I know that in this House we shall conduct our inquiry in the same fair and constructive spirit in which we have dealt with other Bills. Your Lordships will maintain the precedent and the standards you have established in other Bills, and which have won the praise of Ministers in this House. In keen and informed debate we made important amendments to the Coal Bill; and at the end of our deliberations the Lord Chancellor himself, always a keen but fair controversialist, bore witness. He said:Before asking the House to agree to the Third Reading, of the Bill, I should like to say that I feel myself under a great sense of personal obligation to your Lordships for the way in which you have assisted me to handle this matter. Once we had agreed that this policy must be carried out—a policy which some of us like and some of us dislike—the difficulty was to try to devise as good a machine and as useful a Statute as we could. I realize to the full that through the discussions I have had your Lordships' collaboration, whether you agree with the policy of the Bill or not, in trying to make this a workable 897 measure. I should like to express my thanks to your Lordships.In the same way, at the conclusion of our debates on the Civil Aviation Bill, where again extensive Amendments were made, the Minister in charge was equally emphatic in his appreciation:The Bill has occupied a considerable amount of your Lordships' time, although I believe your Lordships will agree with me that, on a Bill of such importance, not one minute too many has been spent. I should be very ungrateful if I did not express my thanks to your Lordships for the care and thought which has been given to the consideration of this Bill, and to say that I feel that many improvements have been effected in it as a result of the thought given to it.I know your Lordships will wish to treat this Bill in the same way, to give it the same thorough, unprejudiced, constructive consideration. Our task will be more arduous. This measure is more complicated and more obscure. Much of it comes to us with little or no consideration in another place. As the noble Lord the Chancellor of the Duchy has very fairly said, this House brings to the consideration of the Bill a wealth of knowledge and experience, as well as a determination to do what is fair and right. We shall be animated by no sectional interest. We shall seek to serve the best interests of the travelling and trading public, every one of whom is vitally interested. That will be our duty and our purpose.
§ 4.7 p.m.
§ LORD BEVERIDGE
My Lords, I share the pleasure which all your Lordships must have felt in hearing the noble Lord, the Chancellor of the Duchy of Lancaster, in his new role of defender of the Transport Bill. It was to me a special pleasure that he should have made it an occasion for discovering a fresh point of contact and community between himself and myself. To some extent we are both virgin-minded in this matter. Perhaps I am the more virgin-minded of the two because I have not had the benefit of any kind of departmental brief on this subject. I have merely read what has been said. I have read nearly everything that was said in any other place about the Bill and I have sought to apply Liberal principles to this problem of transport.
Let me assure the Chancellor of the Duchy that the result of this is that if there is a vote on this Bill I and my friends here will vote for its Second Read- 898 ing. That is not because we think it is a good Bill. It is rather that we have great confidence in the bracing and reformatory character of the atmosphere to which the Bill has been translated in this House. We welcome the Second Reading of the Bill because we are satisfied that transport cannot be left as it is. That this Bill does some things which are necessary and good is accepted by us on these Benches. One of them is the unification, under a national authority, of railways, canals, the road transport owned by the railways and their ancillary services—hotels and so on. That is substantially Part II of the Bill.
The railways we recognize as a natural monopoly, and it is reasonable, in our view, that a thing which is necessarily and naturally a monopoly should be a public monopoly, rather than a private monopoly. Therefore we should be prepared to support that—not every detail of it but the principle of it—wholeheartedly. There are some things which we think are wrong. We do not think that the compensation terms proposed by the Government are just. If they are not prepared to submit the terms to an independent tribunal for judgment we should suggest, on the ground that this is a compulsory purchase, that they are bound to pay more for the stocks which they are taking over than they are proposing to pay. Another part of the Bill deals with harbours. Although we think, and shall try to show in Committee, that the powers given there are altogether too vague and too wide, and need more control than is given, the general principle of bringing harbours under the supervision of some kind of national authority we should certainly not oppose. That is in Part IV of the Bill.
Then there is Part I, which deals with the British Transport Commission. We think you must have a transport commission, though we consider that the actual size of the Commission proposed is open to serious criticism. That, however, is a matter for Committee. There will necessarily be—and we hope that there will be—amendments of detail in all these parts of the Fill. What I want to speak about mainly is Part III, which deals with road transport. In that connexion I want to suggest that something is wanted as a change from the present position, but not in the least the change that the Government propose. 899 What is the present position of road transport? Road transport to-day operates substantially under two Acts of Parliament—The Road Traffic Act, 1930, dealing with passenger transport, and the Road and Rail Traffic Act, 1933, dealing with goods. I will speak mainly about the latter. As we all know, there are three sets of licences, "A" "B" and "C." "A" licences are for public carriers. They are issued to a man who is to carry goods for others but not for himself: there is that one restriction about them. The "B" licences are for the man who is to carry goods for himself and also, under conditions applied in each case, for others. "C" licences are licences granted so that you may carry goods only for yourself.
Roughly—I think the noble Lord has given the figures, and they were stated in another place—there are 86,000 "A" licences, 53,000 "B" licences, and 306,000 "C" licences —that is 445,000 altogether. With a "C" licence you are limited in what you can do; you are in fact rigidly restricted. On the other hand, entry to the class of "C" licensees is pretty free. Anyone, broadly speaking, can get one. In the case of the "A" and "B" licences, you are much more free when you get them but they are much more difficult to obtain. In order to secure one you have to prove that what you propose to do could not be done by any of the existing carriers. It is not enough to show that you have a lorry, that you want to run a service with it, that there are lots of people who want to employ you, or that you could do it more cheaply and efficiently than others. You have almost to show that the work you wish to do could not be done at all by other people. This means that this branch of the industry is, in effect, a closed industry. In order to enter it a man has to do the hardest possible thing —that is to prove a negative.
Perhaps it is not proper to call it a monopoly, but it is an industry protected by law, and in the light of that the Government say: "We must make it—because it is a monopoly—a public rather than a private monopoly." On the other hand, the road transport interests claim that on the whole, with a few minor changes, the position should be left as it is. The Government say, indeed: "Let us take this into public hands." But 900 they do not propose to take it all, and they cannot do so. It is important to emphasize that. I suggest that what the Government propose will multiply restrictions and rules which will make difficulties for everybody concerned. As I have said, they are not to take the whole industry; they are going to take only long-distance, and not short-distance haulage. Also, they leave the "C" licences completely outside. They say that the natural step is from private monopoly to public monopoly, and that that is the only step. I want to suggest that quite a different step is possible to-day with monopolies of all kinds, whether private or public, in this particular field.
Before I come to explaining that line, however, I hope your Lordships will allow me to try to paint a picture of this world of restrictions and negatives in which the transport industry has to live to-day. There are restrictions which say to a man who wants to go out and carry on this business: "No, you cannot." That is simply a legal restriction. Though the man can do the work, and people want to employ him, he is not allowed to do so. It is in a world of restrictions of that kind that this vital new road transport industry has to grow and develop. Take the case of the "C" licence holder. He may carry his own goods anywhere, provided that if he has no goods of his own to bring back, he brings back his vehicle empty along the roads. If there is, for example, in Town X, a trader who sends goods to Town Y, and another operator in Town Y who is sending a lot of business to Town X, each must have his own separate vehicle: that is to say, there must be two vehicles instead of one, and each vehicle must make one journey empty. The two traders cannot share their vehicles.
That sort of thing, I suggest, makes for inefficiency because it is inefficient to run vehicles empty, and it also makes for maximum congestion on the roads as two vehicles are run where one would serve. That is the case under the "C" licences, and remember that the "C" licence is apt to be the licence most commonly held in the urban areas. It is in the built-up areas that you will find a great many of "C" licence-holders, and their vehicles will cause congestion in those areas. The Government are proposing to leave "C" licences free. That will give a strong bias in favour of development of operations 901 under "C" licences; that is to say, for the development of a system which makes for inefficiency in running vehicles half empty, and makes for congestion by duplicating vehicles.
Now let us look at the position with regard to "A" and "B" licences. "A" licences are for the man who is to carry goods for others: not for himself. The "B" licence holder, subject to conditions, may work for himself and for others, but, as I have said, it is nearly impossible to get into this branch of the industry. But the Government are not content with that. They have a clause which is beautifully headed—indeed the heading is typical of their proposals in this Bill. Being an expansionist Government they go in for more and more restrictions. So you have Clause 52 which is headed: "Restrictions on Carriage of Goods for Hire or Reward otherwise than by Commission." A side note to it reads: "Additional restrictions on carriage of goads for hire and reward." Those words make it sound as though carrying goods for hire or reward might be a crime or a disease which somehow had to be restricted and controlled.
What are those restrictions? One of them is that if you do not happen to be one of the undertakings taken over by the Government, then you cannot operate more than twenty-five miles from your base. If, on the other hand, you are an undertaking taken over by the Government then that nationalized undertaking can use those vehicles both for short and long-distance haulage. That is the Government's proposal. I ask if that is giving real freedom to the consumer? Is it fair competition between a nationalized undertaking and an undertaking not nationalized? People without their own vehioles will have some goods to send long-distance and some short-distance; and if a trader has some goods to go more than twenty-five miles and others only a short distance, he will be unable to put all his business into the hands of a single private undertaker. He will be driven to the national undertaking or else to split his business when he does not want to split it.
I do not think from what has been said in another place that that last argument will much affect supporters of the Government. Their concern seems to be that national undertakings will be a financial success at almost any cost. There are 902 any number of additional absurd and arbitrary distinctions which have been made in laying down what may be done by private traders and what may be done only by the nationalized undertaking. All that long definition in. Clause 39 of the kind of business excluded will give rise to absurd distinctions in practice. Take furniture removing: it is excluded and therefore will be free. That means a furniture remover can take your own furniture from one house to another, but if on the way you want him to pick up a table you have bought somewhere else, apparently he cannot do it. I do not want to dwell on this because there will be plenty of time on the Committee stage for showing these absurd and arbitrary restrictions.
I want to come to the last of the prohibitions which rule the world of road transport to-day; that is, the statutory regulation of all rates charged to consumers. We accept absolutely on these Benches, of course, the need for ensuring that any vehicle put on the road is safe. We accept completely the need for ensuring fair conditions for the people employed. We accept completely the necessity of charging licence fees which will make road traffic bear its fair share of the cost of maintaining the roads. But we ask why is it necessary to have statutory rates, minimum rates, for all road traffic? It means that in this virile, enterprising, new industry any man who can organize better so that he can carry much more cheaply than another, not by paying less wages but by more efficiency, will not be able to give his customers in rates the benefits of what he has done. He has to keep his profits for himself and the benefit of the Chancellor of the Exchequer.
This whole business of fixing rates is another prohibition in this industry. How has all this world of saying "No," of restriction and of arbitrary distinctions come about? It began with the movement in 1930 to protect the invested railway capital against what was undoubtedly unfair competition of the roads. That was its origin, and that is an injustice that ought to be put right. It has largely been put right. But I am not sure, after all they have proposed about the railway stockholders, that the Government will say that defending the invested railway capital is an important reason for any part of what they are doing to-day, because in fact they are proposing to deprive railway 903 shareholders of something more than half of their present incomes.
The second reason was quite simply to prevent competition. The Labour Party have become supporters of the view that competition is in itself somehow a crime. I suggest it is not. I want to put the other position; that people are not entitled to security in their present job, whatever it may be, against the competition of better methods of doing that job. You can have an expansionist economy, where there are more jobs to be done than people to do them, without it meaning that you must defend every old system against anything new. The Chancellor of the Duchy spoke as if the condition of affairs in transport before the war had been dreadfully bad. The harm, apparently, was that there was vigorous competition. Is that really harming the development of a cheaper and more efficient service to the consumers? He talked about pre-war chaos. I have no idea what he meant. There is always this talk about pre-war chaos.
A third reason is that if we are leaving it free to enable a man who can put a really efficient lorry on the road to do it, then we should get congestion of the roads. It is possible that in certain parts you would get congestion—in London for instance—but London must be dealt with as a special problem. I suggest to the Government that what they have done about giving freedom of "C" licence—and they have been forced to do it and could not help doing it—makes the maximum congestion by allowing two lorries for one in the most crowded areas. The more I see of the present condition of transport, and I approach it from a virgin but liberal mind, the less I like it. We are against the present system and we think a new Act is needed.
It seems to us a complete misuse of words when we find the Road Haulage Association issuing a pamphlet of which the title is "State Ownership or Free Enterprise?" When they apply "free enterprise" to an industry into which practically nobody can get, that is an absolute misuse of words. It also seems to us not really effective competition to say they want to have rates statutory, and competition in service rather than rates. I find it difficult to see how you can get effective competition in service without rates. I do not like the language used by the supporters of the present system, 904 but I like even less that used by supporters of the Government. They are always talking about an expanding economy, and proposing a mass of new restrictions.
They talk of integrating the transport industry, and they are proposing to bring it into a large number of water-tight compartments with people managing it who are in strait-waistcoats. That is what they call "integration," and it is not really a good use of words. Certainly we on these Benches are not prepared to swallow blindly the Government's remedy for what we agree is the bad state of transport to-day. The Government remedy involves a vast State monopoly, but the Government have not yet shown that they are capable, or that anybody is capable, of running a vast State monopoly with sufficient space in it for initiative and experiment. They have not shown, though I hope they may in due course be able to show, that the vast State monopoly is going to be able to resist sectional pressure by its employees for continually getting more and more for themselves and charging more and more to the consumers. The real danger of their system is that the Transport Commission, which can put up prices here, there and everywhere, will put something, we will say, on the harbour dues in order to give additional wages for road transport, and then put up road transport charges in order to give additional wages to the people in the harbours.
We are against hasty nationalization. We agree that one should nationalize the railways and their road transport, but we believe that what one ought to do with road transport is to free it for entry and have fair competition between it and the nationalized railways and roads. As the Chancellor of the Duchy has pointed out, the actual number of vehicles at issue between the scheme in the Bill and what I am proposing is not great—it is only 20,000 vehicles. The Government contemplate they will take over 30,000 vehicles altogether, of which 10,000 are with the railways and will be taken over in any case. It is a question of the ownership and control of 20,000 vehicles and, therefore, it is not an absolutely vital part of the Bill. On the other hand, what is done about those 20,000 vehicles does raise a vital issue of principle. The Chancellor of the Duchy has presented as in- 905 evitable this Government monopoly of all transport, or of as much transport as they are taking over, as being the last stage of the rake's progress of restriction that has gone on for the last twenty-five years. He says there is no alternative. I want to suggest to him that an alternative should be looked for.
I suggest this also to noble Lords on this side of the House: that the time has come to call a halt to the process of ripening monopolies by conservative restrictions so they may be ready to be taken over by a Socialist Government. We believe that road transport, above all, affords a golden opportunity for taking this new and different line. There is a special reason why road transport should, if possible, be made free. Road transport is one of the industries in which it is possible for an employee of initiative to become his own boss. We believe that it is desirable to keep that opportunity as wide as possible in this country. For that reason we do not want road transport nationalized, but, as we do not want it a private monopoly in private hands, we want an industry which is really free again.
I want to suggest a change of direction from that taken in the past twenty-five years in dealing with transport. With such study as I have been able to give to this problem, I have no doubt that this could be done, that it would be beneficial, and that there is no real argument against it. But I am not proposing that the Government should instantly accept this view, or that anyone should accept it. All I am proposing—and I shall try to do it by an Amendment we shall put down for Committee stage—is that, instead of Part III of the Bill nationalizing certain parts of the road transport, we shall have provision for an exhaustive inquiry within the next two years into the operation of the present system, and recommendations as to what should then be done to secure for the consumer, I will not say an integrated, co-ordinated system, because they are meaningless words, but the most efficient and cheapest road transport run on lines fair to other systems of transport. I suggest that that is an inquiry which has never yet been made. It would be an inquiry to look at what is happening in the road transport industry, to see whether we cannot take a new line altogether, 906 and to postpone the taking over of the 20,000 vehicles until we know what is the right line. I do not expect the approval of any doctrinaire Socialist, but I suggest that on its merits there is really no argument against it.
I read with great care all that was said in another place about this Bill, and particularly what was said by the supporters of the measure. One of the arguments for the Bill was the urgency of doing something about transport. I agree there is an urgency; but if one looks at what was said by the Minister of Transport one finds that he considers that there is urgency only for dealing with the railways so that they can be restored from their war-time difficulties. It was also said that there had been a mass of inquiries. I confess that I have not found a mass of intelligent, impartial, inquiries. There has been no inquiry into the actual operation of the system we have at present on which we can judge whether it ought to continue. Finally, I want to suggest that to leave out Part III and to substitute the holding of an inquiry would not destroy the Bill, because it is only concerned with 20,000 vehicles, whose fate would have to be decided sooner or later but need not be decided in this month of May or June, or whenever it is that we shall come to a conclusion. We support the Second Reading of this Bill because we are satisfied that Transport cannot be left as it is, because some things in the Bill are good, and because, by Amendment, it can be made a means of getting this vital industry efficient and free again.
§ 4.28 p.m.
My Lords, the Chancellor of the Duchy, in his opening remarks on this Bill to-day, complimented the railways, as he always does in a most charming way, on their efficiency. As he mentioned their efficiency during the war, I can speak without any bias because that was the only time I have been absent from the railways for the last seventeen years and, therefore, I take no credit.
I thought that, after he had said this the Chancellor of the Duchy was going to help by saying he had changed his views—he has changed them before—on the question of the nationalization of railways. Instead 907 of that, he proceeded quickly to describe the large surgical operation that was to be carried out, a surgical operation in which he did not know which instrument he was going to use. I think that by the end of that operation my old colleague the noble Lord, Lord Walkden, will be attending the funeral of the railways. I would like to add that the speech of the Chancellor of the Duchy was, as always, full of humour and wit, and for some of us it would be a great advantage if we could gloss over some of the big points as he glossed over them by his charm and personality.
I spoke on the nationalization of the transport industry in the debate in your Lordships' House on the King's Speech, in which it was announced that the Government proposed to bring in a Bill to nationalize the inland transport services. In that speech I begged that before so drastic a step was taken the Government would hold a public inquiry. I will quote a part of the speech the noble and learned Viscount the Lord Chancellor made in reply to me on that occasion. My noble friend, Viscount Swinton, has left this part for me to quote. The Lord Chancellor said:There really is no occasion whatever for another inquiry. The facts are known.Since that debate the Transport Bill, as your Lordships know, was introduced and passed its Third Reading in another place, and is now before your Lordships' House. When I heard the noble and learned Viscount the Lord Chancellor say that there was no need for another inquiry and that the facts were already known, I expected—as I am sure did most noble Lords—that, when the Bill was produced, we should find that a really constructive scheme had been produced, dealing with the question of road and rail, upon which both the railway and the road interests had already reached an agreement. One found, however, that the Bill consisted of setting up a Commission which was to work out a plan, while the various transport interests—as the noble Viscount, Lord Swinton, has already mentioned—were to be controlled by five executives working under the Commission. The usual practice, surely, is to prepare and have a plan ready before you make any drastic change of the kind contemplated. That is what you generally do in business or otherwise. But on this occasion you 908 are attempting to impose a major operation on an industry before you have even thought out a plan.
I do not need to tell your Lordships that the railways are still under control, so it should have been an easy matter to continue the control until a plan had been thought out and approved. One would have thought (and this is why I differ from the noble Lord, Lord Beveridge, who said the only people with whom to deal quickly are the railways; the railways are under control at the present time and therefore the Government can deal with them and keep them under control as long as they like) that two of the major considerations in the plan to be prepared would be the co-ordination of road and rail, which has not been dealt with and has been left to the Commission to think out, and also the question of financing any very large capital commitments. I can assure your Lordships that the four main line railway companies would be more than able to finance any commitments that they can carry out during the next five years. It will not be finance that will be the limiting factor; it will be materials and manpower. Anyone associated with the railways will know that this is so.
The annual allocation at the present time for maintenance and renewals cannot be spent because it is not possible to get materials for the purpose. Your Lordships know as well as I do of the limitation of coal which is cutting down the number of trains; the limitation of timber which is restricting the renewal of sleepers, and other limitations on the repair of the permanent way and of locomotives, and so on. But I want to make my point, that the question of finance for the next four or five years is not a matter which can be raised, because at the present time the limiting factors are materials and manpower.
What do we find? As the noble Viscount, Lord Swinton, has already pointed out, apparently the Government have been unable to devise any workable scheme for the co-ordination of the various forms of transport, or to reach any decision as to the principles whi[...]h should govern the fixation of rates. All that the Bill really does is to make provision for the acquisition of the railways and canals on January I next and to appoint a Commission consisting of a Chairman and four other members with powers to acquire 909 long-distance road haulage undertakings; to prepare area schemes for co-ordinating passenger transport services—which apparently would not embrace long-distance road services covering more than one area—and to prepare schemes for the maintenance, development and management of trade harbours or groups of harbours. The Commission is to be charged with the duty of providing efficient, adequate, economical and properly integrated (all three speakers have used that word; it is like "Puzzle Corner" on the B.B.C.) system of public inland transport, and port facilities for passengers and goods to meet the needs of the public, agriculture, commerce and industry: and they are to be assisted by five public authorities to be known as executives, the members of which are to be appointed, not by the Commission, but by the Minister. The noble Viscount, Lord Swinton has already pointed out that fact, but it is a point which I should again like to emphasize because it is a very important one.
The burden of finding a solution to the many problems involved in providing a properly co-ordinated system of transport is thus thrown upon the Commission, without any guidance from the Government. Obviously, it will require to make a comprehensive survey of the whole position before reaching a decision on the broad principles on which co-ordination should be effected. I wish to point out that, if there are members of the public who have been led to believe that they will see great advantages in the change of ownership, they are going to be sadly disappointed and disillusioned when it comes about. I am convinced of that. The revenue is dropping much lower than was anticipated, owing to the cutting down of trains caused by the fuel crisis and the lack of materials and manpower in carrying out the ordinary maintenance and repairs. Travelling, which was improving up to the autumn of last year, may, during the holiday months, well be comparable with the worst days during the war. The Minister of Transport is faced with very heavy additional expenditure which is bound to send up the rates much higher than was contemplated.
I venture to doubt whether the Government appreciate the magnitude of the task to be carried out by the end of this year if the railways are to be vested in the Commission on January I next. The 910 companies will then cease to exist as separate entities except for the purpose of winding up, and new arrangements will have to be made to carry on the functions now performed by the directors; for example, decisions of policy, and the constant review of operations, sanctioning of expenditure, letting of contracts, signing of documents, payment of accounts, appointment of staff, increase of salaries, and so on, will all have to be dealt with before January I. The Commission will also be faced with many problems when they are framing schemes for the delegation of the functions to the various executive bodies.
The railways, as has already been pointed out, are the largest hotel owners in the country. Who is to be responsible for the control of the hotel and refreshment business? Apparently the Government have decided that there is no need to set up the proposed Hotels Executive concurrently with the other executives. Presumably, the railway companies road collection and delivery services, and also their wholly-owned subsidiary road haulage companies, will come under the control of the Road Executive. I should like to draw the attention of your Lordships to that point. If so, will the railway staff concerned cease to be treated as railwaymen and come under the same conditions as the staff engaged in the subsidiary road haulage undertakings? Those are all points which people do not realize. Similar questions arise in connexion with the dock and canal staff, who will presumably come under the control of the Docks and Inland Waterways Executive.
The activities of the wholly-owned railway subsidiary companies cover a wide field, and their position will require careful consideration. Is it the intention of the Government that the Commission should dispose of all such undertakings, or parts of undertakings whose activities are not essential to the provision of a coordinated system of transport? Take, in particular, the business of Thomas Cook and Son. They have world-wide ramifications, and compete with many tourist agencies throughout the country. When the railways acquired Thomas Cook and Son, Limited, they had to give the Government an assurance that they would not discriminate in their treatment of existing agencies, whether railway-owned or otherwise, and that any dispute would, 911 if necessary, be referred to arbitration. What will be the position of outside tourist agencies if the Government take over Thomas Cook and Son, and Dean and Dawson's? Will the same assurances be asked of the Government as were asked of the railway companies when they took them over?
Other questions which will have to be determined before the end of the year are the terms and conditions under which new staff are to be appointed. The conditions of service—pension, travelling facilities, promotion arrangements, and so on—are not identical on all railways. Is it proposed to introduce standard conditions for new entrants, or how will they be dealt with? Some of the noble Lords on the Government Benches will know there are different conditions, and those things will be difficult to settle. These are only some of the preliminary problems which will have to be dealt with before the end of this year.
In conclusion, I would like to point out to your Lordships that, after the experience of the railways—when it took over five years to amalgamate and consolidate one form of transport alone—the Government are proposing to undertake a much more comprehensive and intricate task in dealing with the whole of inland transport, with the consequent dislocation which, as I see it, must follow, by making the vesting date (January 1, 1948), a fixed feast rather than a movable feast. I ask His Majesty's Government to consider very carefully whether they should not alter the vesting date, as by fixing January 1 of next year they will be put in a position which will make it very difficult to carry out this vast undertaking. In my remarks I have tried to show some of the difficulties with which they will have to contend.
§ 4.54 p.m.
§ LORD KERSHAW
My Lords, before I touch upon the phase of this Bill to which I want to give special attention, I should like to express my thanks to the noble Viscount, Lord Swinton, for assuring noble Lords on this side of the House that there will be no Division on this Second Reading. Especially, I think, we are grateful to the noble Lord, Lord Beveridge, for telling us that for the moment, at any rate, the Liberal Party will not oppose this Bill.
§ LORD KERSHAW
Behind the noble Lord, Lord Beveridge's, assistance to us at this stage there is evidently a threat that later they may take a different line. I have been a member of this House but a short time, and I cannot but feel humility at the fact that at all times this Government, which are the representatives of the people, fully elected, should be at the mercy of the other Parties opposite. It seems to me to be quite wrong that in these days of popular government, in these days when everyone is pointing to this Mother of Parliaments as the example which all nations should follow, we should here have to wait with hated breath for the decision of the other side as to whether or not at a given point they will support, reject, or delay the measures that come from the Government.
I remember a few days ago feeling that perhaps we were getting something like the real attitude of Parties opposite when I heard, I think it was the noble Earl, Lord Mansfield, offer the complete support of his Party if only we would jettison the whole of our programme; and, further, that we should sack the Ministers, including the Prime Minister.
I do not know whether this is a time for back Benchers to intervene, but I think the noble Lord opposite will have heard our noble Leader say that he did not associate himself with those remarks.
§ LORD KERSHAW
I am glad the noble Lord reminded me of that; I was going to refer to it. Nevertheless, that is the position in which we are placed. I object to it as an individual new to this House, and I am entitled to express that objection. I understand that on Second Reading it is not customary to deal with the details of a Bill that may be before the House. Not only to-day, but on previous days (I think last Thursday was one of them) that rule has been honoured more 'in the breach than in the observance. I do not propose to attempt to justify the nationalization of the railways and transport as such, but I would like to remind the noble Lord, Lord Beveridge, who was unable to understand what was meant by pre-war chaos, that shortly before the war there was such a thing as a "Square Deal" campaign by the railways. 913 I am more interested in the compensation proposals, and in particular the compensation that is proposed in relation to railway shares. I am bound to say that those proposals cannot fail to have caused a good deal of anxiety to many people. For twenty years I have been intimately connected with, and perhaps responsible for, very large trustee funds, and naturally I am fully aware what will be the effect of these proposals on those funds. But, even so, I cannot seriously argue that the proposal to take the Stock Exchange prices at certain dates is not sound, and that those prices will not reflect the intrinsic value of the securities, particularly the redeemable securities. The irredeemable securities do stand in a class apart. I felt it was worth while considering whether some amendment might not be possible in relation to the irredeemable securities.
I think noble Lords will agree that in a nationalized scheme it would be unthinkable to continue in perpetuity a 4 or 5 per cent. rate of interest to the stockholders. If that is true, then noble Lords will have to consider at what point between that 4 or 5 per cent. rate of interest, and the rate suggested in the Bill, it would be equitable to compensate the shareholders. We know that the present aggregate yield of interest to the stockholders of railways is £40,000,000 a year, and that under the Bill it will be £22,750,000. It is not true to say, as has been said in another place, that the price of a stock regulated by the principle of supply and demand of that particular stock. I have lists—and I have no doubt other noble Lords have lists—which show that the price for a given stock is determined not only by that stock alone but by the yield on comparable securities of all kind within that class.
The noble Viscount, Lord Swinton, has said that none of the methods which has been adopted applied the principle—he called it the simple principle—of a willing buyer and a willing seller. But I think I have read that in another place the opponents of the Government have estimated that the price on the Stock Exchange was not in fact a buyer and seller price. You cannot have it both ways. Arbitration has been suggested as another method, but the assessment of the value of the physical and materials assets of the railway companies is almost an impossible task. I suggest that it is impossible to 914 assess the future prospects of the railways. There is only the most slender hope of the income being maintained at the £40,000,000 level. Even the 1927 to 1938 average of £36,000,000 is problematical. If the noble Lord, Lord Beveridge, had his way and we had the healthy competition from road transport that he desires, then the prospect would be even worse.
It is as well to remember that the £908,000,000, which is the aggregate amount of compensation in the Bill for these stocks, represents 22.7 years' purchase on a net maintainable revenue of £40,000,000 and if von take the 1935 to 1947 average profits, the £908,000,000 represents 25 years' purchase, which is not at all a bad price for the concern of the railways. There is, in fact, a complete answer to all the alternatives which have been put forward so far, and it will be provided at the proper time. At the same time, as a back-Bencher, interested directly in this subject, I should be glad to discover an alternative which, while doing justice to the holders, does not place an unwarrantable burden on the nation as a whole.
If an alternative is not forthcoming, for my part I shall remember some of my experiences as chairman of military services hardships committees during the war, when I saw at first hand the hardships and sacrifices imposed upon small business and professional men. I shall bear in mind, too, that the livelihoods of great numbers of people have been affected, and will continue to be affected, by developments of State activities, developments which transcend all Party divisions, and activities which would be strangled at their inception if everyone who suffered pecuniary loss had to be compensated. If some hardship is inevitable in this endeavour to rehabilitate the economic and social life of the nation, I would console myself with the thought that only through the united efforts of the whole nation in the war years are we now able to attach any real value to any of these securities about which we are speaking.
§ 5.5 P.m.
§ LORD BRABAZON OF TARA
My Lords, this must be a very enjoyable day in the lives of the Government, and of noble Lords who support them in this country; who have for many years dreamt about the nationalization of railways. 915 Here we are at a stage in that process in which it has passed one House, and it is now before us for our consideration here. It must have given them even more joy to hear that this House is not to oppose the Second Reading, although curiously enough the most pungent criticism of the Bill has come from the noble Lord, Lord Kershaw. But, as we draw nearer and nearer, I wonder what the ordinary citizen, the man in the street, is thinking about it from the point of view of what he is to gain? There will be the same people running the railways, the same guards, the same managers and the same rolling stock. The only thing which will disappear, to be replaced by civil servants, will be the directors, and the ordinary passenger does not meet directors of railway companies: they are always found either in the House of Commons or the House of Lords, so it will not make very much difference to the passengers.
I cannot believe, when one looks round the world and finds that most nationalized railways are not run as well as English railways have been run in the past, that people will be overjoyed. Of course, we are promised a lot of wonderful things in the near future. I think the railway companies could have supplied the same changes which we shall see, if they had been allowed priority in this and that. Of course, now that the Government are the owners they will, I hope, see to it that they get those improvements which are long overdue; but one cannot judge the merits or demerits of the change of that basis. I regret that the Government did not, in their wisdom, take a line which is peculiarly English; that is, one of compromise, and set up the peculiarly English system of a corporation, which is neither one thing nor the other, but a system which has been of great success in this country with such organizations as the Port of London Authority, the Electricity Board and that sort of thing.
Had we had that, I believe there would have been much more chance of running the whole machinery more efficiently with no politics coming in at all, and we should have hail the advantage of the employees being remunerated, not as civil servants, but according to their merits and their lob, which is one of the difficulties in a nationalized system. If at a later time we could change the nationalized transport 916 system into a system of a corporation I believe it would be for the benefit of the country, because the transport would still belong to the Government but all that elaborate machinery of accounts would become crystal clear. When I was Minister of Transport I was always struck by the separate life which was lived by the four different companies. They seemed to run, all ignoring each other, with their own ideas on this and that; and certainly with a great lack of co-operation. When, for military reasons, we had to indulge in what I must admit was a very curious happening—that is, moving coal from north to south—it was almost impossible to get from one system to another. We had to build a new line for the Great Western on to the Southern. And unification, I must agree was overdue—nobody would dispute that, except perhaps a partisan railway director.
On the other hand there is this argument: that already it was believed in many circles that the great L.M.S. railway was getting too big as an organization to be run as one show; and yet here we are going into something bigger still. The great Lord Stamp was an outstanding genius in running the L.M.S. It is true that he was, at one time, a civil servant, but you are not going to get a whole collection of people of that calibre. If you wanted a "Stamp" to run the L.M.S. you will want something like a super postal order to run all transport. People of that sort do not grow on trees. From what we have seen of the present nationalization endeavours, people have been appointed, for instance for the coal industry, on the ground of their political career and not of their efficiency, and we have seen the same thing happen in regard to electricity. It does not augur well for the direction of transport in this country. Everyone thinks he or she understands transport, but it is a very specialized job. If it is going to be apportioned to people with only political claims, I think it will be a pity.
The noble Lord, Lord Kershaw spoke about the terms upon which the shareholders were to be compensated. I am not going to speak about that, but the situation is, of course, extremely difficult, because if the terms are not accepted and if the Government were to drop their guarantee, then the present receipts of the railways would depress the price of shares 917 to such an extent that the whole thing would be too melancholy for words. One cannot help reminding the Government that under the very hard agreement which was made with the railways during the war, the Exchequer pocketed out of the railways no less than £158,000,000. I think they can afford to be a little generous to the shareholders, remembering the enormous amount paid over during that period.
It has been said, in this House and elsewhere, that it is wrong to touch the road hauliers. Frankly I cannot take that view. For many years now, not, of course, because of any fault of the railway companies, but because of the advance of the internal combustion engine, transport by road has eaten into the guts of the railway companies, and it will go on. And the question arises—a question which we have to decide—are you prepared to let the railways go bankrupt, and let everything go by road, or do the railways supply something which is of national importance and which ought to be kept alive? I do not think many people, apart from the extreme motorists who would like main lines turned into roads, would deny that the railways do form a most important and valuable part of our national life. But if they are to be preserved in this country, to preserve them is to co-ordinate them with road haulage. I do not say you should take them over by nationalizing, but anyone who takes over the railways without, at the same time, taking a very close hand in road haulage, is just taking over a bankrupt affair, and that is, in logic, an absurdity and nothing else.
It is no good saying that competition in transport is always a desirable and wholesome thing. it is not. We have seen that in the traffic of London. The great Lord Ashfield early saw that there was going to be competition between the Underground and the buses, and early in the day he made a common pool into which receipts were to go to look after both. In the early days, curiously enough, the tubes paid for the buses, and later there was a switch over and ever since the buses have paid for the tubes. But for that wise arrangement the tubes of London would have been bankrupt to-day. Some unification and some pooling is of the essence of the problem. And when we come to the question of pooling I sincerely hope that at the 918 top there will be this pool from which the railways can draw, revivifying themselves and making themselves the finest in the world. I sincerely hope that the railway men will not play about with road transport, because they know nothing about it and they would ruin it. At the same time road transport people know nothing about running railways. For goodness sake, keep them separate. Run them as efficiently as possible, and keep that common pool at the top to feed them with the capital, initiative, and experience which they both require.
It is only right, when one speaks on this question, to disclose exactly what one's interests are. I have, for some years, been a director of till great firm of Tillings, who own many bus companies up and down the country, and we are a little concerned about the acquisition of the bus companies. When the railways are nationalized the Government will own half of most of the bus companies in the country. The terms, however, are extremely nebulous and not such as should be put in a Bill. I hope the Government will move an Amendment to make them clear, because at present they can take over bus companies on the road haulier terms or on the railway terms, according to how the companies resemble either the hauliers or the railways. If they resemble neither, then the Government can take them over on terms which they "consider proper." The Bill really cannot be left in that shape, and in Committee I shall have some suggestions to make.
There is another point of substance on which I would ask your Lordships to allow me to speak. It is a point upon which I feel very strongly. It is manufacture by nationalized undertakings. It was a tragedy in the past that railway companies were allowed to make their own rolling stock and carriages. If it had not been so, we should have had enormous business in the export of locomotives and railway carriages. In the London Transport Act it was specifically laid down—and this was inspired by the Labour Government—that they should not manufacture buses. In this Bill I see that the Minister, speaking in another place, said that there are two specific limitations on the Commission's powers: they will not be able to manufacture chassis for road vehicles.
919 Now that looks pretty clear. One would think that it was as clear as one could get anything. but it is not so, because about two paragraphs later it is stated that the Commission shall have power to continue doing anything which a company they take over did before. Some of the companies they are going to take over manufacture chassis. Therefore, I suggest that in the same part you get a perfect contradiction of what the powers are. I believe that persons who are skilled in reading Bills would confirm that what I say is correct, and I think that, rather than that it should be tested in the courts, it would be appropriate If the Minister could tell us quite early on what he means to do about this. I am certain that the Minister of Transport does not mean to be in any way deceitful about it, but the thing does look a little "fishy." Already I see, in one schedule—Schedule 15, I think it is—that the Government have absolutely annulled the embargo that there was upon the London Passenger Transport Corporation for making chassis.
There are many other points I could go into. I have been for many years a very keen advocate of unification, and have hoped to see the transport system in this country self-supporting under a corporation, for I am certain that it can look after itself without any subsidy from the Government. So now, although I see it launched in a way that I do not like, all I say is that I hope it will be a success, even if in its launching it seems to have come a little off the rails.
§ 5.22 p.m.
My Lords, this Transport Bill is a vast subject, and its passage into law will affect the lives of every man, woman and child in this country. I have given a great deal of thought to its ramifications during the past few weeks and, although I am a member of the Conservative Party, I have tried to look at the Bill from the widest point of view—that is to say, from the point of view of whether the Bill is in the national interest or not. The more I study it, the more I think about it, the more convinced I am that it is not going to do the slightest good to any single person in this country, except perhaps to certain gentlemen who are to receive large salaries as Commissioners and executives.
920 I have every sympathy with the noble Lords opposite in the difficulties with which they are faced to-day—shortages of fuel, shortages of food and shortage of overseas credits, to name just a few. Speaking in this House, I have always tried to see the point of view of the other side, and I have never hesitated to do or to say what I thought right in the national interest, irrespective of Party politics. I should therefore like to ask noble Lords opposite this simple question: Do they honestly and sincerely believe that this Bill will do one single thing to improve the economic position of Great Britain at the present time? Surely, even the most ardent supporter of nationalization, if he searches his own soul and is really honest with himself, must answer "No." Whatever the merits or demerits of the Bill, it must, for a period of several years after it becomes law, cause dislocation and delay, at a time when we can least afford either. What I have just said, has, of course, been said before by people of much greater ability than myself. But when one feels sincerely and honestly that a most ghastly mistake is being made, I think it would be wrong to keep silence. I, therefore, add my humble plea to His Majesty's Government to think again before it is too late.
I wonder whether noble Lords opposite have ever taken the trouble to study the records of nationalized undertakings in other parts of the world and other parts of the Empire, in parts where even Labour Governments have decided that many of their State trading activities and industrial undertakings cost them too much and have handed them back to private enterprise. Australia is a country I know very well, and I would like to give your Lordships one or two examples of industries which were run by State and Federal Governments and on which losses occurred. I know that the facts are true, for I was there myself, for a large part of the time.
One of the State Governments lost more than £300,000 running trawlers and small vessels and £23,000 on running a power station. Another State lost £5,000 running hotels. Then there was the colossal loss of £2,500,000 by the Commonwealth Government on the running of a shipping line. The trams and buses of the cities of Sydney and Newcastle lost to the extent of nearly £600,000 in 921 a year, and that in an area of high industrialization where transport undertakings ought to be able to be run at a very good profit. A certain Judge of the High Court at an inquiry said that the Government Railways were paying from 2s. 6d. to 2s. 9d. more per ton for coal from the State mine than they would have had to pay had they bought from a privately owned mine in the same district. In a good many of the instances which I have mentioned—not, of course, that of the trains and buses—a Labour Government subsequently decided that they could not afford the Josses entailed in running the concerns as Government undertakings, and they handed them back to private enterprise which runs them profitably.
Now I have taken particular interest in the portions of this Bill dealing with the passenger road transport industry. I have no particular interest in that industry except that I happen to be a travel agent and so I sell tickets for all kinds of vehicles. Other noble Lords will plead the case for the railways and their various ancillaries, but I think that the case for passenger road transport being run under private enterprise is the strongest of all. Indeed, I venture to say that this branch of the industry has a case to put forward which is almost unanswerable. The noble Lord, Lord Pakenham, in his opening remarks said that road transport had been built up on no definite plan. Of course it has been built up on no definite plan. It has been gradually built up from the days of the coach which ran between London and York, and as power operated vehicles came in (even some of the younger ones among us here can remember the first motor buses coming on the streets of London) it has gone ahead, and to-day it is perfectly co-ordinated by a body known as the Traffic Commissioners, which I think everybody will admit gives satisfaction both to the public and to the operators of passenger road vehicles.
§ LORD LUCAS OF CHILWORTH
Before the noble Lord leaves that point, will he tell your Lordships how like a monopoly the road passenger transport services of this country are at the present time?
If the noble Lord will wait, some remarks I am making later will answer that point. Let us suppose that a roan concerned with public 922 transport should come over from America to learn some of our methods—and, believe me, in the field of public transport we can teach the Americans a great deal. I know America fairly well and there is no question about it: our system of public transport in this country is streets ahead of that in America in every possible way. The vehicles are cleaner, smarter and more regular. When this man heard that the Government intended to take over our magnificent passenger transport system, he would naturally ask a few very pertinent questions I will now suggest what a few of his questions would most certainly be, and endeavour to answer them honestly. The first question he would ask is, "Is the present passenger road transport system efficient?" And I think the answer would be unquestionably, "Yes". Then his next question would be "Are fares reasonable?" The answer to that surely must be, "Yes". The fares, of privately owned buses are well below those of the publicly owned transport vehicles in the London area. Of course, I know that there is a reason for that since the buses in London help to pay for the tubes. Still, the fares of the private operators are reasonable on the whole, and I do riot think there is any general grumbling or discontent about the fares charged.
The third question would be, "Are vehicles in good condition?" The answer would be that considering the great shortage of, new vehicles and the fact that many of them are to-day running well past their economical life, the maintenance and freedom from breakdown has been excellent, and that in face of the vast mileages which some of these vehicles have done. You know you would think twice about buying a car which has done more than from 70,000 to 80,000 miles. I understand that quite a number of these vehicles have done over 300,000 miles and still look smart and, due to excellent maintenance, are running reliably, if not economically. Nobody can deny that the vast majority of road transport companies take pride in their vehicles. It is a delight to see the brilliant scarlet of the Midland Red coming down the road, and the bright green of the Southdown, or vehicles of any other of the great companies we all know so well, and also of small operators not so well known but who equally take a pride in their vehicles.
923 The next question would be, "Is cooperation between the various undertakings satisfactory?" There again the answer must be, "Yes." The licences for particular routes and the number of vehicles on that route are controlled by the Traffic Commissioners. If one operator fails to give a satisfactory service, his licence can be revoked and granted to someone else. He would then ask: "Do the public have an opportunity of making complaints or stating their needs for improved transport?" Again the answer is, "Yes," because individual citizens or bodies may make representations to the Traffic Commissioners. The next question would be, "Would the service be improved by nationalization?", and the answer is "Emphatically, no." Conditions are infinitely variable all over the country. Fares and services must be adapted to suit local requirements.
Another question would be: "Are staff relations good?" Yes, I think even the noble Lords opposite must admit that they are. There have been, on the whole, very few disputes in the passenger road transport industry, and in cases where disputes do occur there is excellent machinery for negotiation with the trade unions in an atmosphere of mutual confidence between the heads of the industry and the trade unions concerned. Now I have finished with our American friend's questions; and with these answers in his pocket, set out in a neat little report, I imagine him going back to America, I hope in the "Queen Elizabeth," and reporting back to his chief. I suggest this is what he would say: "Say, these British are 'nuts.' They have the finest passenger transport system in the world and their Government is going to try to wreck the whole darned works."
The road transport system is infinitely variable—and here I answer the point made by the noble Lord, Lord Lucas. There are some 1,800 operators owning one vehicle only. There are 900 operators owning two vehicles, 600 operators owning between five and ten vehicles and then, at the other end of the scale, there are 17 operators with over 500 vehicles and one which has the enormous total of over 5,000. Some of the bigger companies tell me frankly that they have come to the conclusion that some of their undertakings are too large, just as has been said just now about the L.M.S. 924 They consider the size of an undertaking in order to obtain maximum efficiency should be not more than 500 vehicles. This is the conclusion of men who have been in the transport business all their lives. Is it not a foregone conclusion that a great nation-wide octopus, operating 50,000 vehicles, must become unwieldy and impossible to control, even though I am told that it will be divided into a number of areas that are probably comparable to that of the London Transport?
I was talking the other day to the general manager of one of the biggest road haulage organizations in this country, and he made to me a most pertinent remark, something which had never occurred to me before, and it caused me most seriously to think. This is what he said: "If my organization is nationalized, I shall do my best to run it efficiently if the authority desires me to do so, but in my opinion nationalization must cause a slowing down of the administrative machinery. In my present position I can authorize quite a large expenditure without reference to anybody, and the check on me, if I make a mistake or a wrong decision, is that I will lose my money or lose my job. Such a check would be removed under public ownership and must be replaced by something else. There must be strict financial control on a nationalized undertaking." I think anybody will admit that such financial control is inevitable where public money is concerned, and it is quite right. No Minister can possibly face the responsibility for unwise or extravagant expenditure made by a public servant. This is a very important point, and it is bound to mean a clogging of the administrative machine.
The Bill allows the Commission to produce schemes for new road transport services and to take over existing services, either piecemeal or in bulk, and the services taken over by the new Commission are not subject to the regulations of the Traffic Commissioners. Surely the Traffic Commissioners should have authority over all services, whether they are run by private enterprise or by the proposed Commission, for during the interim period there will be chaos and the possibility that the private road transport operator will be unfairly treated. If this safeguard is not made, the private operator could be put out of business by having some of his routes overwhelmed 925 by publicly owned vehicles. I am glad the noble Lord, Lord Brabazon, raised the point about the building of chassis, because I also feel that that point in the Bill is obscure, and I would request the noble Lord, Lord Pakenham, to look into this before the Committee stage.
I understand that it is not intended in this House to deal in detail with the terms of compensation, but I would say that principles have been laid down under which compensation will be granted in the case of the railways and road hauliers, although there may be differences of opinion as to the exact terms. No principle has been laid down at all, however, in the case of the passenger road transport industry, and we have the extraordinary position that the Minister is the sole arbiter with regard to compensation. I would say only this about compensation; His Majesty's Government have admitted that the passenger road transport operator has a much greater stability of profit than the road haulier, due to the regulation of fares and the regularity of the services. These enable the vehicles to be better maintained, and therefore they have a longer life. I do think there is a case for a higher rate of compensation for the passenger road transport operator than for the road haulier.
There is one further point about the powers of the Minister. He can take over an undertaking piecemeal, which means that if he wanted he could take over the more profitable routes of a particular company, and leave them with routes they were running at a loss. I feel that the passenger road transport operator should be entitled to say—to put it shortly—" All or nothing." In other words, if the Minister wishes to take over a portion of a certain undertaking, the operator should have a chance of saying, "All right, take the lot." Before passing on, I should like to emphasize that this point about the jurisdiction of the Traffic Commissioners is most important. The new Commission should be subject to the same regulations with regard to fares as the other operators with whom they are running alongside, and to all conditions with which the Traffic Commissioners deal at the present time.
If I may sum, up, this is what I think the passenger road transport operator is entitled to say:" We are running an 926 efficient service; our vehicles are clean and smart; the conditions of our staff are good, and our relationship with the appropriate trades union is also good. We are certain that a nationalized road transport undertaking cannot possibly be efficient in view of the many and varied conditions throughout the British Isles; and—most important point of all—we are giving a good service to the public." There is no doubt about it that, compared with the public transport system in any other part of the world, the system in this country is giving excellent service. I think it is quite fair to say that. There is also a very personal relationship between the local bus crews and the local people, particularly in isolated districts. The bus crews often perform small commissions for the villagers when they go to town.
I know of one conductor who knows the sizes of the shoes of all the children in a particular village, and he used to buy the shoes when he went into town on his run. I am sure that the five Commissioners cannot keep that in their heads, with all the other things with which they have to to deal. I think, on the whole, our people are satisfied with their transport services, subject to present-day limitations with regard to the supply of new vehicles, for which we cannot blame the industry. If the people are not satisfied they have every opportunity to state their case to the Traffic Commissioners.
There is one further point that has been touched on by the noble Lord, Lord Brabazon, and it is so important that I wish to say something about it myself. That is, that supermen are rare. The man of average or above-average ability can easily be found. The chairman of a large undertaking once said to me: "It is quite easy in our organization to find a man to fill, say, a £1,000 A year job, but when we have to find a man to fill a £2,000 a year job it is very ha rd indeed. "Are we not depending upon supermen for the success of this great new transport organization? Is it possible to find men of such calibre to fill the positions of Commissioners and executives of these vast undertakings? During the war one found plenty of men fit to command a division, but it was very hard to find an Army commander In the same way, in the Navy (in which I had the honour to serve) it was easy to find an Admiral to command a squadron, but not so easy 927 to find an Admiral to command a fleet. One also knows that on many occasions during the last war men were appointed to high office who were not up to the very great responsibilities of that office. I suggest that in this new organization we shall be too much dependent on finding supermen, and I do not think it will work. I will end by again asking the question "What will any man, woman, or child in this country gain by the passing of this Bill?" I would suggest that the answer is "Nothing."
§ 5.50 p.m.
§ LORD WALKDEN
My Lords, to myself, as an old railwayman, it has been a very enjoyable debate. I would like to express our thanks for the high appreciation that has been bestowed upon the railway and transport workers for the way they undertook their tremendous tasks during the war. Heaven alone knows what they went through, especially those employed in shunting yards and other outdoor work. The success with which our war transport was carried through was very remarkable indeed. I think that those who "bent their backs" have merited the encomiums which were expressed towards them. With regard to British war transport—we do not seek comparison with any other country; we did our own work in our own way regardless of what they did or did not do, or could or could not do, anywhere else—the way we did our work in this country was made possible only because all the railway companies were brought under a single control. State control was the over-all power in the matter of direction as to policy and general arrangements.
There was a quite small body of men having executive control. There were five general managers, with Sir Alan Anderson as Chairman. That body conducted the whole of the operations under the then Minister of Transport, Lord Leathers. That single control is the real reason why the work was done so well. We wish to retain this foundation, which constitutes the framework of our plan, a plan already in existence and working very well. Therefore we feel quite confident that we can go on with it and achieve even greater results by it. Seventy-five railway directors were free to go away on "holiday." The noble Viscount, Lord Portal, has told us that he was doing other 928 work—very splendid work, if I may say so-for the country. There was only one railway director, and the five managers looked after the all-in work of transport during the war.
§ LORD BALFOUR OF BURLEIGH
I am sorry to interrupt the noble Lord, but I cannot let that statement pass. The boards continued to function very much as they did before.
§ LORD WALKDEN
Yes, they continued to function in that they had their Board meetings, but the direction came from above, from quite a new source. That mechanism is now in operation and can be utilized.
§ THE EARL OF DUDLEY
How can the noble Lord say that it would not have worked very much better under the old system?
§ LORD WALKDEN
As a practical railway worker I say that, under the separate companies, it would not have worked at all. We could not have done it. It was necessary to have unification for the purposes of the war. That fact was learned in 1914. There was then a Committee of twelve with a Chairman and they did their job amazingly well. In the last war we simplified it and had a Committee of only five; and, under the Minister of Transport, that Executive Committee directed all the transport for the Government and the country.
The first fruit of that single control was the abolition of inter-company rivalry and strife. All were united in spirit in the great national effort. All company questions disappeared. There was a simplification and unification of working arrangements. For example, there were the train planners, the men responsible for arranging the trains—exceedingly difficult work, probably the most difficult work at railway headquarters. Those men had the choice of various routes. For example, if they had trains to go to Plymouth, they could route them either via the Great Western or the South Western. If there were trains to go to Scotland they could send them either via the East Coast or West Coast. They could use alternative routes. All routes were available to be used, and those people who had to plan the train services could do their 929 work very much better under that system than if there were a lot of negotiations between the various companies. That was indoor planning, but the actual operative work of the railways was made easier.
The key place is the shunting yard. There all the rolling stock was brought into common use. There was no distinction between the various companies on the question of their waggons. A waggon was just a waggon. The shunters could do their work and not be concerned with getting certain empty waggons "home" by six o'clock in the morning. All that work was simplified and the men were able to do their job as never before. In 1921 they were all deeply disappointed when they went back under separate company management, with private waggons, companies' waggons and everything else as it was in the beginning. They hope that they are not now going to have to go back to the old mixed-up system. I was grateful to the noble Viscount, Lord Swinton, for indicating that his Party are not likely to kill this Bill. It would be a serious thing if they did. Under single war-time control the work of the men was made much easier. Most of their work is done in the night and a. lot of it during the war had to be done in darkness or in semidarkness. There is no harder work, especially in foggy weather, when snow is falling or on a stormy night. The work is very rough. We hope to maintain the arrangements which will enable that work to be carried out with the least possible difficulty.
There were formerly an army of men called canvassers, and another little army serving the railway clearing houses, where they divide the receipts of two-company or three-company traffic to decimal points to see how much each company is to have. All that was done away with. There was no more division of receipts. Those men could be utilized, and were utilized on better work. The canvassers, who under the company arrangements had always been competing for traffic were put on more useful work and the indoor work was carried on with great advantage without additional staff.
The finances under which there was payment to the shareholders from the agreed £43,000,000 a year was simplified by a block payment to each company. It was perfectly easy to make that payment 930 and to save an enormous amount of accountancy. Those advantages are still in operation, and we consider them very sensible. I say here and now that they ought not to be dislocated. Some of your Lordships have talked about dislocation as if this Bill would bring it about. The wrecking of this Bill would cause the dislocation of a very important piece of machinery which has been built up for national purposes and which is working splendidly. I suggest to your Lordships that it should be conserved and improved, and that there should be no going back as there was in 1921.
The results then were disastrous for the shareholders. Shares declined to a very low level. With the decline of revenue the management had to go to the trade unions, begging them to help them keep the stocks on the trustee list. We voluntarily made an agreement with them to help the companies, that there would be certain deductions from pay, but the stocks went clown and the revenues fell further through road haulage competition, which was skimming the cream of the traffic, leaving the railway companies to carry the empties. The road hauliers do not bring back their own empties. I think the noble Lord, Lord Beveridge, might bear that in mind. They take the best traffic and leave the bulky, fluffy, unprofitable traffic for the railways; which is not at all fair. The reversion in 1921 to company control was most unfortunate. The period we went through between the two wars was agonizing.
I suggest that further reform is now urgently necessary. The position of the companies is gradually declining again. I see from the latest figures published that by the end of this year: with the diminution of revenue, the decline in net revenue may reach £32,000,000, leaving only £11,000,000 net to meet the demands of the shareholders.
§ THE EARL OF DUDLEY
That is the the fault of the Government control which the noble Lord has been eulogizing.
§ LORD WALKDEN
But how much worse it will be if we go back! Talk about labour troubles and everything else! What a pit of strife you will be in with your workpeople! But we are going to save you from that. The object of this Bill is conservation and progress in 931 the transport industry, "conservation" which I hope will encourage noble Lords opposite to be enthusiastic about this Bill, and "progress" which I hope will revive the Liberal Party too and remind them of their old slogans. Some of their minds seem to be deep set back in the 19th Century in the doctrines of philosophers of long ago. But this is the 10th Century, a very great period, and we want to go forward.
The public advantages of the new system we are going to build quickly and easily from the existing set-up are many and substantial. I cannot understand any noble Lord asking: Where is the plan? 1t is before us. There will be five men, as at present, to take the high control and to decide policy, but they will be responsible to the Minister. They are to report to the Minister every year, and their reports are to be laid before both Houses of Parliament and may be the subject of discussion, which means that both Houses will have suzerainty over the whole business. That is a fortunate arrangement. As to the executives, that is quite a simple arrangement. You always have to departmentalize in every great business. They will take the different sections working under the direction of the Commission. just as they do in the various departments of the railway services to-day, they will carry on the day-to-day business; but they will be entirely without interference from politicians.
§ LORD WALKDEN
It will be only the Minister. The Minister belongs to Parliament, and no one would suggest that he is going to descend to "pruggling" about amongst the day-to-day working of this vast business. He will be above all that.
§ VISCOUNT SWINTON
May I put one question to the noble Lord, as he has been so helpful? If the politicians are to have no concern with the executives why does not the Commission, and not the Minister, appoint the executives?
§ LORD WALKDEN
Because the Minister is the link with Parliament. We do not want this to be a detached business that Parliament cannot touch. There will be no more interference with the day-to-day working than there is by politicians in the working of the Post Office. Parliament does not interfere with the postal workers, but Parliament can bring the 932 postal business under review. That is the advantage of this arrangement.
Alongside this there will be something that the public have never had before: there will be a range of consultative committees—not ordinary advisory committees, which give advice if and when they are asked, but consultative committees which will have a proper constitution. Those committees will represent the transport users, and they will thereby for the first time have a say in policy and in the operation of services. There is not that representation under the present railway administration, or any other of which I know. These committees will meet not less than twice a year. They will be perfectly free and independent (this is my point to the noble Lord, Lord Beveridge) and will have the right of initiative to inquire into any transport questions, as well as such matters as may be remitted to them by the Minister or by the Commission.
The central main consultative committee will have a Commissioner present at each meeting. It is laid down that one of the members of that committee must be a Commissioner. That being so, of course, the users will be in very direct contact with the high administration—the high policy body—and if on the consultative committee there is anyone present like my noble friend, Lord Quibell, I am sure he will have the opportunity of telling them quite straight what he thinks about anything he considers wrong. That is rather an innovation in connexion with any business or public structure of which I know. It is also all perfectly democratic; there is no dictatorship about it. There is no opportunity for sheltered bureaucracy to do what it likes, because the light of these consultative committees will be thrown upon the whole of the administration.
The main committee will issue annual reports; they will go to the Minister and to the Commission, and they will be laid before both Houses of Parliament. Parliament will be informed regularly every year as to what is in the mind of the users of the traffic services, as well as receiving general reports from the Commissioners with their accounts, and indications as to future policy. May I assure noble Lords that there will be a separate consultative committee for Scotland and another for Wales? National sentiment and interest is very properly safeguarded in that respect.
933 There will also be area committees for lesser regions. These will be arranged by discussion with the Minister; they will all be supplied with secretarial assistance, and will be entitled to any information they require from the authorities. If noble Lords refer to Clause 6 of the Bill, at line 42, they will see that it is specifically provided that:there shall be no part of Great Britain which is not within the area of a Transport Users Consultative Committee.That gives the closest contact to users of the services, both passenger and goods, also by water and by road, with those who are carrying on those services for the public. There are further new and valuable advantages provided in the Bill. For the first time in many years a Government have given some attention to the question of the canals.
I well remember in 1906, when the great Liberal Government sailed in with a large majority, they immediately set up a Royal Commission to consider canals. A Report was prepared which represented two years of hard work; it was a splendid piece of work—a sort of family Bible, with maps and everything else; it had a great welcome from the Press, and was very popular with business people. But the Liberals with their peculiar laissez faire mentality let it all go. Had that been put into operation then, for just a few million pounds there could have been provided a great service of waterways from the Humber right through to the Severn, and from the Mersey to the Thames—a cross formation with a lot of criss-cross canals in the centre serving the Midlands, giving them the option of water or rail transport—a very valuable alternative. That would have been of value to the country when war broke out. But nothing was done about it, and the canals deteriorated.
I would like to inform the House that the late Mr. Frank Pick (it was one of the last public duties he performed) made a survey of our canals and gave us some very valuable information. A report was prepared by him—it has not been published—which shows that a new branch of transport service could be brought into existence which would be of great value to the people and to the country. The noble Viscount, Lord Swinton, spoke about national defence. I want to see these canals developed, and road trans- 934 port organized properly—as well as our railways—so that if ever we are in trouble again with an enemy, and if ever we face another emergency, our transport system as a whole will be just as ready to deal with war circumstances as is the Royal Navy.
On two occasions when we have had a great war the Royal Navy, the same hour that the clock struck. "war," was ready for action. The railway part of the transport services certainly had been provided for under the Act of 1871, which gave the Government power to commandeer and use it when war broke out. But not so the other forms of transport. When war broke out, the canals and the road transport were not organized or prepared, and many of the docks and harbours were in a deplorable state. Under this Bill they can all be raised to the highest possible level, and the docks and harbours built up and improved to meet requirements, so that if we are thrown out of action on one coast we shall have provision enough for big and little ships to go to another coast, either in the west or south, and a very great benefit from the standpoint of defence will accrue from these arrangements.
I do not wish to detain your Lordships too long, because the hour is rather late, but reference has beer made to the rates and charges question. I deem it one of the most valuable provisions in this Bill that we are to have a new National Transport Tribunal to deal with rates and charges. They do want dealing with, and dealing with de novo. There needs to be a large scale simplification, because I can assure your Lordships that in the offices of railway companies, both at headquarters and at the stations, the men hardly know what to do about rates and charges because there are so many of them and they are so complicated. There are millions of rates—every little roadside station has a rate book as big as a family Bible.
§ LORD WALKDEN
Less complicated. With confidence in the skill of gentlemen who are familiar with railway rates and charges, we believe that rates can be built up so that any trader—and he will have a free choice to send his goods how he likes—will be able to look in a little 935 book and see what it will cost him to send goods, for instance, to Hull. He can send them by rail, water or road. The whole thing will be perfectly simple if the job is done properly. It will be an enormous advantage to the railway people and will save masses of labour. Their books are loaded up with outstanding debts, and railway directors ought to know that their accounts are reeking with had debts arising from disputed rates. I hope they are not counting them in the credit account, because I remember a general manager being discharged because his company found that they were loaded up with bad debts on the books which he had not disclosed and which he was reckoning as assets.
So far as the future is concerned, we are quite confident that the Commission will be able to do a great many things to develop the service and aid the community—as the noble Lord, Lord Gifford, wished to know—in a way that the companies would never be able to do. Their credit has gone, and they cannot raise the money. I know they have a little in hand, because they were allowed to conserve some for renewals during the war, but we want a lot more than that. There is the job of electrification, requiring new capital, and they have not enough in their lockers to do that, and they cannot raise it. But as the Exchequer will be behind them, the Transport Commission can be provided with new capital at round about 2½ per cent. It may not always be at that rate; it may be 3 per cent., but we know that the railway companies could not get it at 4 or at 5 per cent. If they wanted to raise it at all they would have to issue a debenture stock; the poor, wretched ordinary shareholders would have more debenture stock wedged in between them, and the possibility of a dividend on the ordinary shares will sink lower and lower. That is what has been going on for years.
§ THE EARL OF DUDLEY
The present railway companies are not limited in the least degree by financial restrictions. The only restrictions which limit them are material restrictions, and I would like to hear where the raw materials are going to come from for this wonderful scheme. Is the whole of the housing programme going to be held up? Are the railways going to get priority? 936 LORD WALKDEN: We have a splendid population of 47,000,000 people; we have resources and we shall get over our immediate stringencies. Materials will be available, iron, steel, bricks and mortar, and everything else, will be produced. There is nobody unemployed, and we are working as hard as we can. The country is making a tremendous effort to catch up with the awful losses caused by the war. I will not suggest for one moment that you can start electrifying the railways now, but I do suggest that the lesson of the Southern Railway, which has been almost entirely electrified, is in front of us all.
Has the noble Lord any figures about that, because I have been trying for years and years to get figures from the Southern Railway and I cannot get any.
§ LORD WALKDEN
I will get them for the noble Lord if he cannot get any. The Southern stocks are better than those of any of the other railways, and if they were left alone they might have a better future than most of the other companies. The best stocks of all—if you do not mind my giving you advice—are those of the London Passenger Transport Board.
§ LORD WALKDEN
Their lowest stock is above that of any of the great main line companies, and that shows the value of co-ordinating road and rail, which is what has brought that about. The L.P.T.B. is almost as great as our postal service. The benefits of which I have spoken, of course, will come in time, and I am not without hope that some noble Lords here may be instrumental in bringing them about. They might very well, with their experience, lend a hand. There are many other new improvements needed. Four track lines are wanted where there are now only two. Many of my friends in another place say that when they come into London from the north of England they cannot get through in under three or four hours. Well, when you get near Knebworth there are nine tunnels, and four of them have simply two barrels so to speak, like a pair of gun barrels, one to run up and one to go down. There are many stations like Hadley Wood in a cutting, and every great train from Leeds, Scotland, Lincolnshire or 937 wherever it comes from, has to pass over a single pair of metals. There is another single pair at Potters Bar, and at Peterborough there is also only one pair of metals for the "up" trains.
But there is a relief pair of metals from a place about thirty miles out of London to Wood Green, where you can go the whole way round and avoid that.
§ LORD WALKDEN
I think not. If anything goes wrong in one of those four tunnels all trains get held up. The simple fact is this. Just as in the case of one or two other great railways where there are four sets of metals, two up and two down, on the London and North Eastern, a very important main line railway, there ought to be four sets of metals from Doncaster to London, and then there would not be the perpetual delays which take place on that line. But, of course, the London and North Eastern Railway—of which I am really most fond, because I worked on it, and my father before me, many years ago—cannot raise the money to do this doubling of the line, or to make more tunnels, or to make wider bridges. Improvements of this sort can be brought about by us if we get the new set-up. Then, we want much more new and better rolling stock. The bulk of our rolling stock has come from the 19th Century. It is very old and shabby and not at all comfortable in comparison with the modern competitive road transport vehicles. This will all be made possible by the backing of the Treasury. The Treasury will lend without stint to the Traffic Commission.
It has been said that there is no pronouncement from any inquiry worth quoting in favour of the policy embodied in this Bill. The noble Lord, Lord Beveridge, said he could not find anything in any Report that would help him. Nine or ten years after the 1914–18 war a very important Royal Commission was set up. A good Conservative, Sir Arthur Griffith-Boscawen, was Chairman, and two members of your Lordships' House wore on it—the noble Earl, Lord Clarendon, and the noble Marquess, the Marquess of Northampton. They spent two years exploring the whole subject. Their terms 938 of reference were wide and very important. They were asked to take into consideration the problems arising out of the growth of road traffic with a view to securing the employment of all the available means of transport, including transport by sea, coastwise, and by ferries, and to consider and report on the measures, if any, to be adopted for their better regulation and control, and, so far as was desirable in the public interest, to promote their co-ordinated working and development. These were splendid terms of reference.
Unfortunately the members could not all agree but they left on record some very valuable findings. In Chapter VIII, on the co-ordination of transport, which we consider the most important, they indicated that if we could reach a state of affairs "whereby every passenger travelled and every ounce of goods was carried by the most economic route and form of transport," many of our transport problems would disappear. Overlapping and unnecessary services would be eliminated; there would be a complete "controlled monopoly" of all transport agencies; rail, road, canal and coastwise shipping would convey just those passengers and goods for which each was best adapted, and the savings effected would enable better services to be secured on existing routes and the establishment of services where, for economic reasons, none existed at the present time. That is ideal, and it can be realized by our Bill and only by our Bill. There is plenty of justification for bringing in this Bill.
Here again, although there were differences on the Commission, after saying on page 150 that they found it impossible to reach unanimity on the larger questions discussed, they said:We are all impressed with the immense importance of internal transport as the handmaid of British industry and we are all agreed as to the necessity of making it as cheap, easy, and efficient as possible. Some of us hold strongly that this is best obtained by the adoption of a form of nationalization of transport, or alternatively by the adoption of a national transport trust. Those of us who hold these views feel that transport should be carried on not for profit in the ordinary sense but as a great national service. Although recognizing that such a plan is not immediately possible, those of us who take this view think that it should be the aim of the Government to endeavour to accomplish it as soon as possible and practicable, and that in the meantime our transport policy should be directed to this end.939 That was laid down in 1930 and I suggest we are pursuing that advice.
It has been suggested that we have no need and ought not to bring in the independent road hauliers, that we should let the railways have what they had, and leave the others perfectly free to skim the cream of the traffic and to cut rates and kill the standard rate book. The rate book has been pretty well destroyed already by piratical hauliers who have very little regard for any principles. The Royal Commission said on page 173:The nationalization of the railways has been advocated by several witnesses, but the nationalization of the railways alone, leaving other forms of transport in other hands, would certainly not produce any real co-ordination of transport. It appears to us that without unification, however it may be accomplished, no attempt to bring about complete co-ordination would be successful.They indicated the right thing to do, and we are following their policy in this Bill.
From my own practical knowledge I know that the whole of the organized railway workers are waiting for the Bill to be carried; they are all behind it. You will have splendid goodwill in the transport service if you give them this measure. I know it will work. Work on the railways has been better throughout the war period than ever before. Here is our plan, the foundation of a model scheme. I say to your Lordships very earnestly that if you give this measure your benediction and help us to expedite it to the Statute Book you will be doing something that will strengthen the life of this country for either peace or war. It will be a unifying instrument in helping the country. It will give the best possible terms for transport, which is vital to the welfare of the nation. By establishing goodwill we shall be bringing about a happier and more prosperous country.
§ 6.28 p.m.
My Lords, this is one of the most important measures ever presented to your Lordships' House, because it is bound to have a far-reaching effect on the industrial life of the country and on the well-being of every household and every man, woman and child in the community. The Parliamentary Secretary to the Ministry of Transport recently stated that the capital cost involved was nearly one thousand million pounds, and that it was nearly six times that required 940 for the nationalization of the mines. That is a gigantic figure. He also said that the number of workers involved was nearly twice as great as was involved in the nationalization of the mining industry: that, in fact, this Bill was by far the biggest measure of Socialism which had ever been proposed in the world outside Russia.
It has been pointed out that this Bill contains no properly co-ordinated plan to achieve the aim of its promoters. It is, in fact, a very poor skeleton, without even a backbone. The noble Viscount, Lord Swinton, has referred to a speech made last week by the noble and learned Viscount who sits on the Woolsack, but who is, unfortunately, not able to be in his place at the moment, in which he said that a particular Bill was, in fact, a manifesto dressed up as a Bill. The noble and learned Viscount further stated that in his opinion the Bill was "ill-conceived, ill-considered and half-baked." I would venture to suggest, with all due respect to the noble and learned Viscount, that this Bill before us to-day suffers from all these three defects—and more besides.
If we examine the proposed control of harbours, your Lordships may well think that, with such a vast enterprise as the management and operation of harbours, His Majesty's Government would have initiated a public inquiry to determine the best method of control and regulation; but instead they have merely inserted in the Bill a direction to the Transport Commission to keep the harbours under review and submit a scheme to the Minister. There is, in fact, no plan at all to replace the present efficient system of harbour administration. The noble Lord, Lord Walkden, has said that harbours were in a deplorable state before the war. I am afraid that I cannot agree with that at all, and I think it would be difficult for him to substantiate it.
During the war years the Government had a measure of operational control over the ports, and during the blitz period I had the honour to be in charge of the convoys and merchant shipping in the Port of London, and I know how admirably the Port of London Authority carried out their work and ensured that fuel and food supplies 941 reached the Metropolis. But one very important fact emerged from this Government control. The Government had to employ the services of many people with wide commercial and port experience. Even then it was found that once the Government had jurisdiction over port administration and operations it was impossible to confine their supervision to a general policy; and the result was that they inevitably became involved in the details of day-to-day administration which, of course, a central Civil Service are neither trained nor organized to undertake. The majority of the harbours are already under a form of public control which we know as the trust system, which has been found to be very efficient and effective And except for the provision of a Docks and Inland Waterways Executive, as a co-ordinating authority, I presume, there is no plan in the Bill that might lead to an increase in the efficiency of harbour administration: only a pious hope that, in the process of time the Transport Commission will be able to think out a plan and present it to the Minister.
Again, when we turn to the proposed integration of the railways and the road haulage systems, as the noble Viscount, Lord Swinton, has mentioned, do we find in the Bill the basis on which their integration might he effected, a basis which must, of course, be a charges scheme or rates structure? There is nothing of the kind in the Bill, but, again, a direction to the Commission to prepare a charges scheme and rates structure to be submitted to the Transport Tribunal within two years or such longer period as the Minister may allow. This means that there is no policy at the moment at all. It means that if the Bill becomes law by January, no one in industry will know, for probably two years or longer, how transport costs are to be fixed; and without this information industry cannot plan ahead at all. It is a very serious matter. There is little doubt that the Government are anxious to press on with legislation for the nationalization and control of the means of production and distribution with a blind faith that all will be well, without waiting to see if any previous experiments are a success before embarking on fresh ones.
They are rather like a surgeon who is anxious to perform several operations on his patient at the same time, and which, 942 in his opinion, are very necessary for the patient's health. The patient himself is not so sure, and wonders if the surgeon is not trying to do too much at one time, and if it might not be better for him if one operation were performed first and the results assessed before continuing with the others. But the surgeons, apparently, have made up their minds. They know that they can keep the patient under the anaesthetic of the electoral mandate only for a limited period, and they mean to do all they can while there is time. It is true that at the time of the General Election the Socialist Party put forward their ideas of nationalization of transport and, in a sense, of course, they did receive a mandate to carry out this work. But the mandate is permissive. Now that the people in the country are beginning to realize what is meant by this Bill, and how their lives may be adversely affected by it, it is very doubtful if a majority of them are in favour of these nationalization proposals.
Your Lordships have, no doubt, heard of the Gallup Poll which is a scientific system designed to gauge public opinion by interviews with a typical cross-section of public opinion. The British Institute of Public Opinion recently carried out such a survey to ascertain the opinion of the public as to Whether road transport should be nationalized, and the result is very interesting, for it shows that only 36 per cent. are in favour of nationalization. It may be argued that this is merely a stunt figure, but the well-known periodical, the Economist, in April this year, said:The record of the Gallup Poll for accuracy has, in the past, been very impressive, both in this country and in its native land.The Gallup Poll, is, of course, used by many Government Departments to ascertain public opinion on a variety of subjects. It is frequently used by the Ministry of Food and the Board of Trade. I think the figure I have given is a warning to the Government that the greatest care must be taken to see that this Bill, if they intend to proceed with it, will in no way interfere with the rights of the people or injure trade and industry. This Bill will require most careful consideration in Committee, and the fact that it has been very inadequately discussed in another place, owing to the operation of the guillotine, makes it all the more 943 necessary that it should have the most searching scrutiny and be amended where necessary.
I propose to draw your Lordships' attention for a few minutes to the problems of the nationalization of the railways. I am not a railway expert—certainly not so expert as is the noble Lord, Lord Walkden, in these matters—but I wish to refer to the Railways Act, 1921, which involved the grouping together of a large number of companies. It is well known that this amalgamation caused a great deal of administrative upheaval, and it was many years before the present four railway groups settled down and became well established. Surely it would be a calamity at the present time to disrupt this organization which will take years to re-establish, and for very doubtful economies. In fact, it has been found from experience that the present units are as large as can be managed from a central organization. Yet this Bill sets out to establish a Commission to run not only an amalgamation of all the four railway companies but road services and ports and harbours as well. To make such a change as is contemplated in the Bill will involve immense administrative and financial dislocation at a time when the country is already in a weakened condition, will seriously obstruct and delay the work of restoration and improvement, and will have an adverse effect on the industrial life of this country.
A comprehensive alternative plan to nationalization was negotiated between the railways and road haulage interests, which we all know as the Road-Rail Agreement. It has been argued by those who favour nationalization that the Road-Rail Agreement would set up a private monopoly which would maintain in being at the expense of the consumer the less efficient forms of transport. This is quite untrue, and a charges scheme or rates structure had been prepared which permitted competition between road and rail and—what is very important—gave full freedom of choice between the two methods of transport. I particularly wish to emphasize that point. This Transport Bill can have no such safeguard for the trader. This huge State monopoly will be able to manipulate rates and charges of road and rail so that the freedom of the trader will disappear.
944 It is true that the restrictions originally placed on the traders' own vehicles have now been taken out of the Bill, but there are many small traders who cannot afford to run their own vehicles and who will have to depend on State transport. No huge Government concern ever will organize the personal, prompt and intimate service given by the independent haulier. Many great trading concerns have been built up largely by efficient delivery service, which they have been able to offer their customers over a large area. Under nationalization these customers will have to be content with a service provided by the State, which will, perforce, be unable to give any advantage to one trader over another and therefore, by the nature of things, the delivery service will have to be of a lower standard than that to which customers have been accustomed.
The Bill will have a grave effect on road haulage undertakings. Very few of the 60,000 "A" and "B" operators can be classed as large concerns; the opposite is the case. The majority are local men who, by hard work and thrift, have built up a business of their own and owning from two to three lorries apiece. Many of them are ex-Service men of the First World War. It is these men whose livelihood is threatened with extinction by this ill-considered Bill. It is true they are offered compensation, but that does not replace a lifetime's work, and a very large number of them are men of an age at which it is difficult for them to start a new job in life.
What are the arguments in favour of nationalization of road haulage, and from what section do they come from? Certainly not from the lorry drivers themselves, or from the operators or industry generally. The Royal Commission which sat in 1921, and which was mentioned by the noble Lord, Lord Walkden, on page 45 of their Report concluded:The aim should be to harmonize and coordinate new and older forms of transport kith the object of obtaining from each the greatest advantage.There is nothing about nationalization there. The arguments for nationalization are really based on a Report of the Trades Union Congress who in 1945 issued their Report, known as The Public Operation of Transport, in which they claim that "improvement in operation" was 945 achieved during the war by the transport industry whilst under Government control by—as they say—" the co-ordination of the various transport services." This claim, as already mentioned by the noble Viscount, Lord Swinton, is blown sky-high by the Report on Road Haulage presented to Parliament by the Select Committee on National Expenditure, in which all Parties were represented and which included the noble Lord, Lord Ammon. On page 11 under paragraph 4, the Report says:The trends of the figures here produced show that the general railway expenses and freight charges have in some cases been nearly doubled since the inception of the organization.Again, we have on page 12:So much time is taken up with the filling in of forms required by the Ministries before a vehicle can set out on a journey that marked delay in starting the day's work is occasioned.If this was the effect of Government control during the war—which control was begun not because the industry was inefficient but because of the need of saving tyres and petrol—how much worse will be the effect during peace when the war incentive for co-operation has passed? If we examine the case of the nationalization of the railways, some important facts come to light. It is true that many people have been indifferent to, or even prepared to accept, the nationalization of the railways—which in normal circumstances they would not have done. I think there has been a great deal of misunderstanding and misconception about the state of the railways, and it has led to a feeling that all is not well with them and that perhaps, after all, nationalization might do no harm and might do good.
If we look a little closer at the picture, and get down, to the real facts of the position, they are not hard to find. During the war years all maintenance work usually carried on by the railways in peace-time had to be suspended, except in very vital and urgent cases, and a great deal of leeway has to be made up. Trains are late, carriages are crowded and stations are in a poor condition, which has led people to believe that the railways are mismanaged and lack enterprise. The facts are that when the country was producing large quantities of coal the railways were supplied with a standard quality of high grade, but now the railways are forced to accept very poor quality and it 946 is difficult to keep engines steamed and at the right speed. When so much work of restoration and maintenance has to be done, surely this is not the time to experiment with State ownership of railways. They carried out a first-class job during the war, and in very grave and difficult circumstances, and I cannot help feeling that if they are permitted to carry out their plans without hindrance the country will have one of the finest rail transport systems in the world. The railways have, in fact, prepared plans for large scale development and have set aside the large sum of £120,000,000 to spend on deferred maintenance.
State ownership in other parts of the world, as many of your Lordships know, has never been a success; nor has it produced a service approaching the efficiency of the British railways. Furthermore these railways are frequently financially unsound. It is only necessary to look at America's own brief but costly experiment of Government - controlled railways. American railways were under complete Government control for twenty-six months during the years 1918 and 1920 and cost the American taxpayer £500,000 a day until they were handed back to private enterprise. The noble Viscount, Lord Swinton, mentioned the centralization of transport in Germany, and I would emphasize that this centralization had a very detrimental effect on the industrial life of Germany and contributed in no small measure to the defeat of that country.
I can see nothing in this Bill which would in any way increase the efficiency of our transport system but, on the contrary, it may well have a disturbing effect on industry and lead to an increase in rates generally. I have little doubt that if the Road-Rail Agreement were put into force, instead of nationalization as proposed under this Bill, the country would have a well-balanced and co-ordinated transport system which would have met the full needs of trade and industry. Instead, the country will be saddled with a top-heavy organization—in fact a State monopoly—controlled by five Commissioners (or five Commissars, you may call them) at the centre who are to be responsible not only for road and rail transport but for the commercial ports and harbours, and for services within these ports—a truly impossible task for five 947 men, however experienced and capable they may be. Transport will be enveloped in the tentacles of bureaucratic control and the whole industrial life of the country will be slowed down and strangled in a web of controls, forms and red tape.
I am convinced that if this Bill goes on to the Statute Book in its present form it will be a disaster to our national recovery. and there is no justification whatever for interference with our present efficient transport system. I do not think it can be emphasized too strongly that not one single industry or trading organization have given their support to this Bill. On the contrary, they have protested in the strongest possible manner. And yet His Majesty's Government intend to proceed with the Bill, against the advice of all the trading interests of the country and at a time when it is of the utmost importance that our export industries should not suffer disturbance or increase in transport costs. It is, therefore, of the greatest importance that your Lordships should give the fullest consideration to this Bill on the Committee stage so that trade, industry, and the public will be fully protected.
§ 6.50 p.m.
THE EARL OF ELGIN AND KINCARDINE
My Lords, at this late hour I shall not detain you for more than a few minutes, but, following on what the noble Lord who has just sat down has said, I feel that a few words ought to be said in response to the criticism which has been levelled at the railways by those in high places. Even the noble Lord, Lord Walkden, who spoke with intimate knowledge and with great consideration, was not entirely free from that criticism. To support what the noble Lord, Lord Teynham, has said, I will give a personal illustration of efficiency and comfort on the railways. Of the last eight nights, I have spent five nights in a train, and on those five occasions I have not been more than ten minutes late at my destination. That, I think, is a tribute to the efficiency and punctuality of our main line railways.
But the point which I particularly want to make to-night is rather a different one. The noble Lord, Lord Walkden, covered a very wide field in his comprehensive speech, and I am sure we must all have appreciated the advice he gave us with 948 such intimate knowledge from his personal experience. He even entertained us by including in that advice a tip for an investment. But I will not try to follow him in that wide field, though we must all of us have appreciated his extreme optimism. He said: "Give us this Bill and we cure all your ills." I feel that some of us do not quite share that optimism. We feel that the task of setting up the new machinery for taking over all these vast enterprises is not quite so simple as the noble Lord thinks, and that at least it may be queried whether the adoption of a new method of control at this period is exactly the way to cure all those evils, some of them exaggerated and some of them supposed.
The noble Lord stressed the advantage to be gained by the common user of railway waggons which was proved during the war. That is perfectly true, but how is that taken advantage of under the Bill with regard to road transport? The noble Lord, Lord Beveridge, pointed out earlier in the debate that the main effect on road transport would be to introduce a system whereby a great many lorries would come back empty because they were unable to get a return load. That is not taking advantage of common user and utilizing transport to its full advantage. The very reverse is the fact. In Scotland there is anxiety both in regard to this particular aspect, and with regard to the general system of control which will be established under the Bill. In the first place, our distances in Scotland are such as to make it impossible for the operator to work under the small radius permitted, and a very much larger limit will be necessary to make the system of road haulage in Scotland feasible and possible.
For instance, even in the industrial belt of Scotland, the cities of Edinburgh and Glasgow are so situated that a lorry cannot operate from one to the other. In order to get road transport, it would be necessary to set up a business in Falkirk, or somewhere in the middle of Scotland, and operate from the centre. You could then operate by road both to Edinburgh and Glasgow, but in order to get goods from Edinburgh to Glasgow it would mean running from Falkirk to Edinburgh for the first run, and coming back empty from the other end. I give that as a practical illustration of the difficulties created by this limitation of user. 949 Of course, this difficulty is enormously exaggerated when we deal with the Highlands and the north west of Scotland.
Another point is this. Owing to the amalgamation of the Scottish Railways with their English partners, we have had some experience of the transfer of management from Scotland to London, and, although the Railway Companies have had local Boards, there has not been the same independence of action or the same instant dealing as was possible under the older arrangement. There has been this reference to London and waiting for an answer. if the whole of the transport—roach rail and water—is to be concentrated in London, what chaos there will be in Scotland… Prompt decisions are required, particularly with regard to road transport, and if any request for road transport in Aberdeen, Inverness, Dingwall, or wherever it may be, has to be referred to London in order to get permission to do something or other, it will he impossible to carry on. So we press very strongly in Scotland for a strong representative Committee.
The noble Lord, Lord Walkden, spoke about a consultative committee, which may be set up in Scotland. We want something with more responsibility than that, something which can operate on its own, subject, of course, to the general direction of the Commission in London. But we do not want to be eternally referring matters to London, or to get long distance Whitehall control strangling in every direction the local need for transport of any of these kinds. This will be a point which, no doubt, will come up in the Committee stage, and we shall press very strongly from Scotland for something in the nature of a special committee, composed of persons of appropriate knowledge, which would work on the general lines which I have indicated. I do not wish to detain your Lordships any further, but I do press that Scotland has a need for special consideration under this Bill.
§ 7.0 p.m.
My Lords, the very fact that so much interest has been taken throughout the country in this Bill is sufficient evidence that the transport of this country is of vital importance to everyone, more so than in any other country of which we can think. One could develop that argument much further, but at this late hour I will refrain from doing 950 so. Indeed we have recently, during the early months of this year, had a very good object lesson in the effect of snow, frost and floods on our transport, to show us how absolutely dependent on transport every one of us is in our normal activities. That being so, and at a time when everything possible should be done to avoid interfering with the revival after the war of our industries, is it not strange, not that we are embarking on a great scheme of reorganization of our transport—that might well be the natural corollary of the revival of our industry—but that we art being asked to do so virtually in the dark?
I am not one to oppose change, or even drastic change if the need for such is clearly proved, and indeed there is obviously great scope for continuing the further improvement of our transport system, a fact which I believe the leaders of that industry would be the first to admit, particularly bearing in mind the wearing—and I use that word literally—effect of the years war. But if we are to have change, then certain things are essential. Either the changes must be gradual, so as not to interfere with the steady day-to-day running of the system, or, if the changes are drastic, then they must be planned in sufficient detail beforehand so that we may all know exactly where we are going and what we are being asked to approve. That may mean a measure of compromise between the protagonists of nationalization, on the one hand, and those of private enterprise on the other, if we are to have a scheme which can carry with it the real support of the vast majority of the country, which I submit is of paramount importance if any scheme is really going to work. That is where, to my mind, the Bill falls so far short.
We are given no indication in detail of how this Bill will work; and we do know (and there is no shadow of doubt about it) that in industry, and in the transport industry itself, there are very serious misgivings, quite apart from any considerations of compensation. The Bill goes out of its way to tell us that it hopes to provide a better and an integrated transport system. I personally would not disagree, with either of those hopes—I do not suppose any of your Lordships would. Indeed, experience has shown us, both in war and in peace, 951 that all forms of transport have their proper place, and none must be allowed to be squeezed out as the result of unfair competition arising out of an artificial set of circumstances. But how those two desirable objects—the provision of a better transport system and the proper co-ordination and integration of the various forms of transport—are to be attained, we are not really told.
All we know is that on January 1, 1948, an as yet unknown and untried Commission is to have transferred to it the gigantic task, first of all, of taking over immediate responsibility for the running of our railways and canals, and, secondly and at the same time, of preparing a whole host of schemes—schemes for the delegation of authority to the executives; for the taking over of long-distance road haulage; for area passenger transport; for harbours; for co-ordination of working with coastal shipping; charges schemes, and so on. All those schemes have to be prepared within the integrated plan which again the Commission itself has to prepare. Whoever the members of this great Commission are to be, if only for the time clement involved—and it is to my mind primarily the time element—I believe this Herculean task is alike unfair not only to those members but also to the using public including, of course, the industry.
I know it is extraordinarily easy to stand here and do nothing but criticize, and therefore I should like just to indicate the alternative that I would have liked to see in place of this Bill. For my own part, I would have liked to see a Bill—a quite simple measure—setting up a Commission of men experienced in the transport world, irrespective of political views, with their task in clearly defined successive steps, the first of which would be to prepare a practical blue print for British transport, a blue print that they themselves would be prepared to put into operation. They should prepare it in sufficient detail so that Parliament could see, when asked to discuss it, exactly what it was being committed to. Personally, I would have supported such a measure for three main reasons. First, I believe that such a procedure would be looked upon as a logical approach to this great national problem, and therefore would carry with it much greater confidence than the present Bill.
952 Secondly, I am confident that during the interim years before this or any other scheme can possibly get on its feet, years which are bound to be critical in the economic revival of this country, the transport industry would not be subject to the inertia which I am afraid under the present proposals is inevitable owing to the industry being undermined by dissention and uncertainty as to its future. Thirdly, it would, I believe, have given much greater hope to those who feel that, as individuals, they have something of value to contribute to British transport, that they would have an opportunity not merely as cogs in a machine but as individuals, each in the sphere which suited him best, of doing something for the country as a whole.
I know, of course, that the Bill will go through, and it is up to us to see what we can do to improve it. Therefore, as briefly as I can, I will just mention one or two factors in the Bill as it now stands. First of all, one or two words about the executives. The Minister seems to have pinned his faith on a functional as opposed to a regional organization. He may be right. But how has he arrived at this conclusion? For my own part, I should have thought that, just as the Bill indicates in Part IV an area or regional organization for the passenger transport service, it might have been equally advisable for the road haulage of goods service to have some regional organization. Again—and this point has already been mentioned by one or two noble Lords—there is the proposed amalgamation of the docks and canals. Is this necessarily the most satisfactory arrangement? Personally I doubt it very much. I realize that the Minister has powers under the Bill to alter the number of executives by Order, as a result, presumably, of the experience that may be gained. Why not have given the Commission a free hand, in the first place, thereby saving any needless dislocation if these executives have to he changed later on, when further experience has been gained?
I will now say a word or two about road haulage. The noble Lord, Lord Pakenham, mentioned a figure of 20,000 road haulage vehicles to be taken over, apart from the 10,000 or 11,000 which would also be taken over as belonging to the railways. Personally, I think that that figure is inclined to be an understatement, and for this reason: I feel it 953 does not take full account of the borderline firms, and it does not, perhaps, take quite into account those firms that may be partially taken over. But, be that as it may, the point that I think he was implying was that it was a relatively small figure compared with the 100,000 "A" and "B" licensed vehicles and the 380,000 "C" licensed vehicles which were not being taken over.
But if we accept this figure of 20,000—supposing they were allowed to continue to operate under private enterprise—would they really constitute such a menace to the railways by their competition? I doubt that very much, especially when one bears in mind that by far the greater number of firms in that 20,000 are owned by the little man—the man with only a few vehicles. The noble Lord, Lord Pakenham, mentioned this fact when he said the 20,000 vehicles were distributed among some 2,000 firms. It is the intimate, personal attention to their clients which these small firms can give that makes them such an immensely valuable feature of our whole transport system, and makes them, complementary rather than competitive to the more staple railway services.
It may be argued that the "A" and "B" licensed firms, who are being left out of the scheme and are allowed to operate within the twenty-five mile limit, will provide that intimate; personal service. I personally do not think that can be so, at any rate, as the Bill stands at present. The twenty-five mile limit is admittedly a perfectly arbitrary one, and if we like to be generous and concede the fact that its inclusion at all is not merely a sop to the "A" and "B" licence holders, but a genuine attempt to provide the best form of service to purely local traffic, then we have only to look at our great industrial centres—the Clyde, Lancashire, the Midlands, and even London—to realize that twenty-five miles is totally inadequate. Nor do I think the point is answered by the exclusion of the "C" licence holders, valuable and timely as that concession has been. I, for my part, would have liked to see long-distance road haulage removed from the Bill, at any rate, as a monopoly of the Commission. I want to emphasize that point, "as a monopoly of the Commission," because by suggesting that I should not object to the 11,000 already belonging to the railways remaining under the Com 954 mission. That would, I think, defeat the argument that has been put up by Government spokesmen, that if you remove road haulage from the Bill you are constituting a monopoly of private enterprise.
A large concern like the Commission must inevitably work to rules and regulations; if it did not, there would be chaos. But, conversely, that implies that it is less adaptable and less flexible, which, to my mind, is the very essence of the existence of these small road haulage men who are being taken out of their private business. When, some time last year, we discussed in your Lordships' House the nationalization of civil aviation—a measure which for various reasons I did not oppose—there was there, within the limits of international agreement, an opportunity for direct competition with the many air service firms and companies of other countries. But here in this Bill there is no competition whatever; there is no yardstick of efficiency. What is more, there is not the equivalent in this Bill of the air charter companies which were in the Civil Aviation Bill—which equivalent, if there is one in the road haulage world, is surely the small long-distance road haulier.
I realize, of course, that if private long-distance road haulage is to be allowed to continue, a fair competitive basis as between them and the railways is necessary. But a great deal of work has already been done on that. The noble Lord, Lord Pakenham, mentioned the Road-Rail Agreement, and I feel sure that that could be put into satisfactory operation. Again, the licensing authorities work quite satisfactorily now, and have adequate existing powers to maintain the proper balance between the facilities provided by the railways or the roads as changing circumstances might demand. In every walk of life I maintain that the individual requires some form of incentive. I do not merely refer to financial incentive, although I must admit that probably—whether we like it or not—that has the greatest appeal to people to-day. But there are other forms of incentive. There is the incentive that a craftsman, has when he takes pride in something which he is creating; there is the incentive that comes as the result of fear, as in war when one's home may be in danger.
And there are yet other forms of incentive. There is the incentive of the 955 desire for security, even in the placid employment of some State-owned corporation. I would emphasize that there should, whenever possible, be opportunities for the type of incentive that most suits the individual, and in the form that appeals to the particular individual. I realize that in this respect there must be certain restrictions, but in this Bill, which is, of course, creating a State monopoly, opportunities for incentive are, to my mind, needlessly restricted, and restricted to the detriment of the transport system of this country.
In conclusion I would like to recapitulate the two points on which mainly I base my objection to this Bill. First, I am convinced—and this point introduces a recognition of the importance of the human element in all these affairs—that the needless restrictions on incentive will mean that, at a time when we are being exhorted from all around us to do everything we can to produce if we are not to perish, we shall not be exploiting to the utmost all the available experience in the transport industry that we require in order that industry may have the best form of transport to serve its need. Secondly, in framing this Bill, far too little notice has been taken, when one comes to the mass of planning that the Bill will inevitably set in motion, of the absolutely inescapable factor—the time factor.
§ 7.20 p.m.
My Lords, in speaking to your Lordships on this Bill I should, I think, declare myself as interested in one of the railway companies. I think of the Bill as having for its object not the elaborately phrased sentence which has been heard more than once, about integration, co-ordination, and so on, but simply as trying to find machinery whereby the trade and industry of this country can be provided with transport which is easily managed, where it wants it and at its cheapest. That, to my mind, is the important thing about this Bill. I was rather glad to hear the noble Lord who introduced this Bill explain his preference for nationalization, not as a political theory founded without any practical basis, but on the fact that he feared private monopoly much more than he did a public monopoly. The Road-Rail Agreement 956 which has been mentioned would not be described as a private monopoly, and it is on that point that I think the case might well be argued. One has heard it said that in matters of this sort it is up to the nationalizers to prove their case and if a case is proved there is no doubt that the logic of it must persuade all those who are concerned in the matter.
Might I indicate very simply the principal feature of the Road-Rail Agreement, and perhaps ask the noble Lord at the end of this debate if we could have a little more explanation as to why this method of working is considered to be a private monopoly? I think "private monopoly" means the control of the supply of any commodity by one group of people linked together either financially or operationally. The proposals which the railway companies and the road transport organizations have put forward are no such thing. They envisage a modern re-arrangement of the rates structure, a re-arrangement according to uniform classifications in order to allow for different methods of carriage and different lengths of haul, so as to have the effect of offering to the trader reasonable terms for either method of transport but, at the same time, an inducement to use the most economical and the most efficient form of transport for the kind of goods and the distance of haul that he has in mind.
That makes it possible, on the one hand, for the companies to adapt themselves to certain classes of carriage; on the other hand, it makes it possible to carry the really important basic materials of this country—such as iron ore, coal and all materials which have to be moved in large quantities—at rates which are more favourable to those basic industries. That is the important thing. Transport is one of the things which comes into the products of industry, starting from coal, steel, engineering and structural products of all kinds, and it must come in more than once in the process of manufacture. It is vital that at the very beginning, where it affects the primary operations of engineering and other industries, the cost should be kept to a minimum.
Under this Road-Rail Agreement there was to some extent a realization of the necessity for getting over the difficulty of the cost of maintenance of tracks by the railways, as opposed to the cost of maintenance of the roads, being not met 957 entirely by the transport users but being met out of rates, and so on. That was recognized as a great difficulty, and there were suggestions for getting over it. Another important point —and this again is important in considering these proposals—was the assumption by both parties of the responsibility for carrying any traffic—whether by road vehicles or rail vehicles capable of travelling. That is the obligation which is not at present laid upon road transport by law, but which is laid upon railways by law. If both authorities were to accept that same obligation it would make it very much easier for the railways to obtain a better share of the remunerative traffic. I do not think that that is a monopoly.
Furthermore, the proposals of the railway companies—as some of your Lordships have said—include the expenditure of a good deal of money. There was a lot of money which was not spent during the war which is due to be spent on maintenance and deferred repairs. Further than that: provided this difficulty of charging is overcome—and I suppose it can be overcome in the way I have attempted to describe—is there any reason why the railways should not be able to finance themselves and raise the money? The fact that in the past legislation has prevented them from earning the return they could on the money, does not necessarily mean that if those legislative impediments were removed they would not have the credit with which they would be able to finance themselves.
What are we to have, under this Bill, as an alternative? One must not dismiss the alternative without considering whether it has not something better than the present system to offer. The solution seems to me to be a highly concentrated administrative system, central ownership, central control, central finance and ministerial interference at every point. I do not think that is a solution which in itself is going to help us, nor do I think it necessary that such a centralized and over-organized system is necessarily a concomitant of nationalization. One can well imagine that it could have been worked out, and could have been put into the Bill; but it has not.
The Transport Commission is to consist of five people, and it is to have a tremendous list of duties. The noble Lord who has just sat down quoted them all— 958 the work they will lave to do and be responsible for, and the schemes they will have to carry out. They will have to be in a position to run the whole thing by the end of this year, and it seems to me doubtful whether that is possible.
On the top of that, the Minister is in the position of revising all these points after the Commission itself has decided them. Supposing one could imagine that there was a nationalization proposal which meant the acquiring of the interest in the property of all these companies, without it having to be in the framework of a team of this kind: if one could imagine any group of individuals who would take on this responsibility, you would think that amongst themselves they could operate the business which they had acquired. But I do not believe they would do it on the principle which is here laid down. I feel that they would say to themselves: "Here is a large undertaking and some of the administrative units are already too big." I quarrel with the noble Lord, Lord Brabazon, who said that the only people who thought that railways should not be amalgamated were—as I think he put it—reactionary directors. And perhaps I am one! But immediately he rather tended to contradict that by saying that the L.M.S. was a little too big; so I do not think it is a very serious matter.
I think it has now become clear that railway organizations are at least as big as one small group of men can efficiently run and look after. I think there is also a case for cutting off Scotland and letting them have their own railway system. That is arguable, but it is rather an outlet for the nationalist feeling of the Scots. I believe that it will be found to be extremely difficult administratively to run all the railways as one unit. There will be a great deal of difficulty if you think of the other executive running the road transport. At what point in the system do the road and rail systems meet in administration, in working out timetables and so on? The Government must have considered a system whereby the whole of the two transport arrangements have to be decentralized, combined together locally, and 959 built up together from the top to the bottom.
It seems to me that this system starts from the top—the Minister and a Transport Commission—then it goes down to five executives; and then there is nothing. To start with, of course, there will be the framework of the managerial staff in the administration of the present companies. But there is nothing to show what the railway executives are going to do with them and how they are going to make them work. That is the most important part of the Bill: national or private ownership; organization and management, to make the thing run efficiently as a practical and useful scheme.
I should like to say something in answer to what the noble Lord, Lord Walkden, said about the benefits of the war-time railway system, the pool of common receipts, and the waggon arrangements. I would remind the noble Lord that the control agreement is still in operation. He even said that if this Bill were not accepted the benefits of war-time working would disappear. They certainly would not, as there is abundant evidence to prove. Furthermore, the plans which the railways as an alternative could produce and are producing have dealt with this question of an arrangement for the pooling of the receipts and the avoidance of a good deal of unnecessary clearing-house work. I hope this Bill will not be pushed through without the very careful thought that it really deserves to have. I doubt whether the measure could be sufficiently amended in the directions I have tried to indicate to make it provide a really good way of running the transport system of the country. The Bill seems to have the inherent weakness of over-centralization and the dangers which come therefrom. I hope that the Government, when they are discussing the progress of the Bill through this House, will seriously consider how they can alter it so as to make the system one that can really be worked.
§ 7.32 p.m.
My Lords, what I wish to say is entirely non-political in its character. When the first public railway was opened, in 1825, it was a break with the past at least as big as the beginning of regular air travel a century later; and, as was the case with aeroplanes in their turn, primitive railways were full 960 of technical defects. These were energetically tackled and largely eliminated during the next twenty-five years. Meanwhile, railway managers were becoming aware of the fact that railways were so vastly superior to any other form of inland transport that competition with them was impossible, and that all they needed to secure for themselves an untroubled life was to agree together to go very slow in the matter of technical progress. It was, of course, not possible to do absolutely nothing in a vital public service like the railways, and little spurts of energy were made from time to time; but right up to about 1930 the railways displayed the same sort of inertia regarding technical progress as is usually, and I think with justice, attributed to Government Departments. Certainly between 1850 and 1930 progress was not up to reasonable requirements. The railways were always kept in good physical condition but technical improvements were very slow in gaining acceptance.
Then, round about 1930, there came a complete change. Important improvements rapidly followed one another. I do not know what the reason was, but of the fact there can be no doubt. The improvements included first and foremost almost a revolution in signalling, in consequence of which the number of signalmen was greatly reduced and the capacity of the lines at the same time greatly increased. Goods traffic was modernized by accelerating the trains, by the introduction of the container system, and by rail head distribution. Longer rail lengths were laid, and better arrangements made for measuring and correcting inequalities and improving the layout of curves. The efficiency of the steam locomotive, as measured by the horse power per ton of coal, was almost doubled. Third-class sleeping carriages and greatly accelerated long distance trains were introduced. In fact the railways turned over a completely new leaf.
In addition to all this and, as it turned out, most important of all from a national point of view, the railways, though earning very poor dividends, continued to spend freely in keeping their roads and rolling stock in first-class condition. The consequence was that when war came the preparations which the railways had made, both for working the traffic and for rapidly repairing damage due to enemy action, were so complete that they were 961 able to meet every demand of the Forces. The railways—privately owned—were far better prepared for war than were the Government Departments controlled by Parliament. If the railways at that time had been controlled by a Government Department they would presumably have been no better prepared for war than were all the other Government Departments, in which case it is not too much to say that the war would probably have been lost.
I need hardly comment on the passionate advocacy of totalitarianism of the noble Lord, Lord Walkden. We have heard that many times before. As for the railways' economic decline, the noble Lord entirely ignored the fact that inflation has increased the expenses of the railways far more than higher rates and charges have increased, their receipts. He spoke of the electrification of railways, but I fear he was not comparing like with like. He seemed to envisage the electrification of the whole of the railways of this country. So far as I know, the latest electrification on the Southern Railway cost £50,000 a mile, and I suppose that that expenditure would be at least double now. For the whole 20,000 miles of railway in the Kingdom it seems to me a staggering proposal.
I must say a word about the road competition which occupies such a very big place in the discussion, about railway nationalization. I have never been able to find out how important that competition is. What is wanted is an estimate of how much the existence of road competition reduces the net earnings of the railways. I know of no published statistics that throw light on the subject. The Ministry of Transport must have formed some estimate, but I have never succeeded in getting any figures. It is obviously not an easy matter to decide. Road services, many of which are worked by the railways themselves, have no doubt brought into existence a good deal of completely new traffic. There has always been some road traffic that has not used the railways at all. I have always suspected that the whole matter was a case of much ado about very little. I am not much impressed by the railways' complaints about track costs. If road traffic really gets an unfair advantage in this way the obvious remedy is to increase the cost of road vehicles' licences. Railways have to pay for their own tracks, but the 962 economy which the ownership of these tracks produces is enormous. Three men can work a train carrying a paying load of 500 tons, for which 100 vehicles and 100 drivers would be required if moved by road.
With regard to compensation, it must be remembered that, if this Bill passes, the railways will be taken over not only as a going concern, but as an essential part of the very existence of the country. To pretend, as certain politicians have done, that the railways have only a scrap value is absurd. It is true that after the greatest war in history they are in need of extensive repair, but the reason repairs are not proceeding as quickly as is desirable is exactly the same as the reason for the failure of the building programme and much else—lack of raw materials and manpower. It has nothing to do with nationalization. Enormous sums are due to the railways from the Government who are unable to find these sums. The replacement value of the railways is the only fair basis of compensation. Railways are, and are likely to remain, a vital part of the national equipment.
I have endeavoured to give your Lordships a perfectly fair picture of the situation as it appears to me after a lifetime's study. From time to time, in this House, I have criticized severely defects of the privately-owned railways—usually exactly those defects that might have been expected in State-owned lines. Now that, at last, the privately-owned lines have recognized their mistakes and reformed themselves, it appears to me that it would be unpardonable to hand them over to a Government Department whose besetting sin is exactly that complacency and inertia from which the railways have now emerged.
§ LORD AMMON
My Lords, on behalf of my noble friend, Lord Nathan, I beg to move that this debate be now adjourned.
§ Moved, That the debate be now adjourned.—(Lord Ammon.)
§ On Question, Motion agreed to, and debate adjourned accordingly.