Lords Sitting of 21 May 1947

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.
  SOUTH METROPOLITAN GAS BILL. [H.L.]
  Read 3a, and passed, and sent to the Commons.
  CHESHIRE AND LANCASHIRE COUNTY COUNCILS (RUNCORN- WIDNES BRIDGE, ETC.) BILL. [H.L.]
  Read 3a, and passed, and sent to the Commons.
  TOWN AND COUNTRY PLANNING BILL.
  Brought from the Commons; read 1a; and to be printed.
  NATIONAL HEALTH SERVICE (SCOTLAND) BILL.
  Returned from the Commons with the Amendments agreed to.
  TRAFALGAR ESTATES BILL.
  House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.

  INDIAN CASUALTIES.
  2.36 p.m.
  LORD LLOYD: My Lords, I beg to ask the question standing in my name on the Order Paper.
  [The question was as follows:
  To ask the Secretary of State for India whether he will state the number of casualties —analyzed by provinces—that has been occasioned in India by disturbances since November 18, 1946.]
  THE SECRETARY OF STATE FOR INDIA AND BURMA (THE EARL OF LISTOWEL): My Lords, with the noble Lord's permission, I will circulate with the OFFICIAL REPORT a statement giving the figures desired. These figures are only approximate, as it is impossible to collect accurate statistics at the moment. The statement gives a total, during the period in question, of 4,014 persons Wed and 3,616 injured.
  [Following is the statement referred to:

  Statement of casualties in disturbances in India,

  November 18, 1946, to May 18, 1947.

  Killed

  Injured

  Madras

  —

  13

  Bombay

  321

  1,119

  Bengal

  186

  965

  United Provinces

  17

  53

  Punjab

  3,024

  1,200

  Bihar

  7

  35

  Central Provinces

  2

  12

  Assam

  14

  —

  North West Frontier

  Province

  414

  150

  Delhi

  29

  69

  Totals

  4,014

  3,616

  LORD LLOYD: I thank the noble Earl for his reply. Arising out of it, would the noble Earl agree that the situation as regards civil disturbances in India, far from improving since the last statement of casualties was made and since the pronouncement by His Majesty's Government on February 20, has on the contrary deteriorated? And would the noble Earl also agree that this deterioration is not unconnected with that pronouncement made on February 20?
  THE EARL OF LISTOWEL: I do not feel that I am in a position to answer that question as it is entering into the realm of policy.
  THE EARL OF SELEORNE: Can the noble Earl say if in his opinion the situation is deteriorating?
  THE EARL OF LISTOWEL: I am sure your Lordships will agree that at this particular moment, when the Viceroy is here for discussions about the transfer of power in India, it would be extremely unwise to make any statement which might give rise to speculation or be interpreted in India in a way that the noble Earl himself would not desire.

  DISTURBANCES IN N.W. FRONTIER PROVINCE.
  2.42 p.m.
  LORD LLOYD: My Lords, I beg to ask the second question standing in my name on the Order Paper.
  [The question was as follows:
  To ask His Majesty's Government, whether they are able to make a statement on the disturbances reported during April from the North West Frontier Province stating casualties and the approximate value of property destroyed and indicating the immediate causes of the outbreaks.]
  THE EARL OF LISTOWEL: My Lords, the disturbances which took place in this Province, during April were a continuation of those which have occurred since the latter part of February, when the Provincial Moslem League started a campaign of civil disobedience against the Congress Ministry. While this campaign has in the main taken the form of peaceful processions and demonstrations, I regret to say that a number of cases of violence and destruction of property were reported during the month. These disturbances necessitated vigorous measures by the Provincial Government, including the reinforcement of the police by military forces. During the month 155 persons were killed and 117 injured. I regret it is not possible at present to give your Lordships even an approximate figure of the value of the property destroyed.
  LORD LLOYD: I am grateful to the noble Earl for his reply. Arising from it, can the noble Earl say how far these disturbances in the North West Frontier Province during the period in review have been either caused or aggravated by elements from without the border of that Province, and, in particular, whether there have been any cases of disturbing elements from beyond the Durant line?
  THE EARL OF LISTOWEL: If the noble Lord is referring to the tribes, I can assure him that the tribes have shown commendable restraint during the whole of this period. There has been some infiltration into the settled district on the part of a very small number of Waziristan tribes, but I can assure the noble Lord that they have not contributed to the disturbances to which he has referred.
  THE EARL OF SELBORNE: Can the noble Earl tell us whether there is any
  968
  ground for believing there is an infiltration of weapons into the disturbed area?
  THE EARL OF LISTOWEL: I would require notice of that question, but I shall be very glad to answer it if the noble Earl cares to put it on the Order Paper.

  CANADIAN WHEAT DELIVERIES.
  LORD DE L'ISLE AND DUDLEY: My Lords, I beg to ask the question which stands in my name on the Order Paper.
  [The question was as follows:
  To ask His Majesty's Government whether they will publish such annexures to the United Kingdom-Canada Wheat Agreement under Article 5, of that Agreement as specify the agreed monthly deliveries referred to by the Leader of the House on May 8, 1947. (Hansard, Vol. 146, No. 67, Col. 557.)]
  THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON): My Lords, there are no such annexures, but there have been discussions. The relevant provisions of the United Kingdom-Canada Wheat Agreement, a copy of which I am sending to the noble Lord, bearing on this question, are contained in Article 1 (d), which provides that the rate and place of the deliveries of wheat and flour shall be determined from time to time by mutual agreement. The rate of delivery of flour is governed by the production position of the Canadian mills, and the proportion they can make available for export during each month. I am sure the noble Lord will be glad to know that the quantity made available to date has been up to expectations, and I may tell him that the delivery expected for the present month of May is 350,000 tons. We anticipate that that will be made good, if not exceeded.
  LORD DE L'ISLE AND DUDLEY: While thanking the noble Viscount for his answer, may I remind him of the reply he gave to my noble friend Lord Woolton during the recent debate on food? The noble Lord, Lord Woolton, asked him whether the Government fixed the terms of contract and whether they were going to get so much month by month, because what was wanted was wheat—not price. The noble Viscount replied, "Of course it was, and we are getting it."
  VISCOUNT ADDISON: Certainly, that is what I said in my answer—that the amount per month is determined when we get the position decided at the beginning of the year. That is exactly what is happening.

  SUNDAY ENTERTAINMENTS ACT, 1932.
  BOROUGH OF SCUNTHORPE ORDER;
  URBAN DISTRICT OF BRIERLY HILL ORDER;
  RURAL DISTRICT OF WATFORD ORDER;
  COUNTY BOROUGH OF BOURNEMOUTH ORDER;
  COUNTY BOROUGH OF NORTHAMPTON ORDER;
  BOROUGH OF BARRY ORDER.
  LORD WALKDEN: My Lords, I beg to move that these Orders be approved.
  Moved, That the Orders made under the Act by the Secretary of State for the Home Department for extending section one of the Act to the said areas be approved.—(Lord Walkden.)
  On Question, Motion agreed to.

  TRANSPORT BILL.
  2.47 p.m.
  Debate resumed (according to Order) on the Motion for Second Reading moved yesterday by Lord Pakenham.
  THE MINISTER OF CIVIL AVIATION (LORD NATHAN): My Lords, those of your Lordships who were present during the debate yesterday will remember that it was a weighty and important discussion, commensurate with the importance of the subject and of the Bill which we have before us. I acknowledge the attitude of the noble Viscount, Lord Swinton, and I accept at its face value (as I know the noble Viscount intended us to accept) what he said as to this Bill being considered on all sides of the House in a spirit of mutual helpfulness and with a view ultimately to producing an Act which will carry out in the most effective way the project embodied in the Bill. If not agreed, the Bill is at least no longer a matter for discussion as a subject of principle in view of the fact that both the noble Viscount opposite and the noble Lord, Lord Beveridge, have indicated that neither Party will challenge the Second Reading of this Bill.
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  I wish to address myself to this subject in the spirit of the noble Viscount, Lord Swinton, and, in summary fashion, to deal with some precision with a number of the more important questions that were raised by him and by other speakers. Your Lordship, will realize that my noble friend the Leader of the House will be closing the debate, and there will be ample opportunity for discussions in Committee on many of the points which have been raised already and upon others which no doubt will arise. Happily, as I think, in the light of what we know will be the acceptance of the Second Reading of this Bill, we are able to discard references to the terminology of politics or ideology. We can settle down to the discussion of this Bill from the standpoint of a business proposal which should be regarded from business aspects, with a view to seeing what may best emerge within the framework of the Bill.
  It so happens that during a long period of years it has fallen to my lot to see, at close quarters, amalgamations, great and small, some of them of substantial importance, many of them not so important, but none of them, of course, so important or so great as the amalgamation (for that is what it is) projected in this Bill. I have watched many amalgamations at close quarters; I even had some hand in them. I have seen their conception, their incubation, their hatching and their growth as living organisms, and whenever I have had to consider the question of an amalgamation I have always put to myself certain questions as tests as to whether an amalgamation should proceed or not.
  Perhaps your Lordships would allow me to state quite shortly what seem to me to be the right question. They are: Is the idea underlying the scheme sound? Is the project fair? Will it work? I will now proceed to attempt shortly to answer those questions in relation to the scheme embodied in this Bill. First, is the idea sound? I think that one of the tests of the soundness of any scheme of amalgamation must be whether there is a common interest, whether these is to be found, in the various elements sought to be brought together, a community of interest. Is there a sufficient measure of homogeneity? Or, if they are not homogeneous, are the various elements such as can usefully be brought together into a single unified whole, and will that whole work better

  971
  than the separate elements taken individually?
  So far as transport is concerned, there has been a long history of amalgamation. After the 1914–1918 War, in 1921 there was an amalgamation of a vast number of railway systems into the four great railway systems of to-day. That was an amalgamation of homogeneous elements. I think that, on the whole, it must be said, in the event, that that amalgamation has been well justified. Then there was the London Passenger Transport Act of 1933, for which, in its ultimate form, the noble Viscount, Lord Swinton, was ministerially responsible. That was an amalgamation of concerns not homogeneous but all related to a specific region. That again, I think, in the light of events proved itself to be a success. So we have behind us certain precedents in this field which should encourage us to go forward.
  I noticed in the course of the discussion yesterday that the noble Lord, Lord Beveridge, supported this project especially in relation to the railways, but he was doubtful about the compulsory acquisition of road transport; while the noble Lord, Lord Brabazon, made it clear that in his judgment the incorporation of road transport into the scheme was an inescapable condition of a successful amalgamation. I will not—if the noble Lord will forgive me—develop the argument, but will adopt Lord Brabazon's arguments as my own in that regard. They seem to me unanswerable.
  LORD TEVIOT: Might I just interrupt the noble Lord, because I am a little fogged at the moment. Is the noble Lord trying to argue that amalgamation is identical with nationalization?
  LORD NATHAN: I shall develop that point. What I am putting to your Lordships at this moment, at this stage of my argument, is that, properly regarded, this is an amalgamation of businesses on the largest scale; that is all. I think that is a statement which is incontrovertible. As to the other aspect of it which I think the noble Lord has in mind, I shall, of course, come to that in a moment. On the question, therefore (the first question I put), as to whether the underlying idea is sound, I suggest to your Lordships that such practical experience as we have is encouraging and justifies us in going for-
  972
  ward with the larger scheme embodied in this Bill.
  Is it fair? When I ask, "Is it fair?", I mean, do the terms of this Bill effect substantial justice between the various parties who are concerned? Well, we shall have ample opportunities in Committee of discussing all the aspects of compensation, and I believe that my noble friend the Leader of the House, in his remarks concluding this debate, may have something to say on that score. But, for my own part, I propose at this juncture to say no more on the question of whether the suggested compensation does substantial justice than that, in the view of the Government, the terms are very fair.
  I come now to the question which seems to me of prime practical importance: Will it work? Let us consider, from the standpoint of a business amalgamation, exactly what this scheme looks like. The noble Viscount, Lord Portal, like others of your Lordships, has a very large experience in business, and he, with others who have been concerned in transactions of this kind (and there are many of your Lordships who have been so concerned) will agree with me that, when effecting an amalgamation, the first thing you do, or one of the first things you do, is to form an amalgamating organization to receive the elements that are to be amalgamated. If your Lordships will turn to Clause 2 of this Bill, you will find there what I will call the objects clause of a memorandum of association of a company newly formed to be the amalgamating concern. You will find in the first part of Clause 2 the specific objects of this particular organization now about to be brought into existence. In a later part of the same clause you will find those general and ancillary provisions which one would expect to find in the ordinary Memorandum of Association in the statutes, shall I call them, of an amalgamating company in the ordinary way of everyday business.
  But it is not only the Memorandum of Association and its objectives clause which is necessary as part of the machinery for bringing the amalgamating concern into existence. Something more than that is required—namely, a statement between the parties as to the objectives for which they are amalgamating. That, if I may

  973
  translate the machinery of a Bill into the practice of everyday business, will be found in Clause 3 of this Bill, which provides that the amalgamating concerns are coming together for the purpose of securing "an efficient, adequate, economical, and properly integrated system of public inland transport." Apart from the actual transfer of the properties which is dealt with under this Bill, to which the vesting date January 1 relates, and apart from the matters to which I have referred, that is practically all, one would expect to find in a business transaction amalgamating great concerns into one unit.
  But this Bill—because it is a Bill and not merely a business enterprise being dealt with in the ordinary way by agreement between parties—goes a good deal further. It provides that, in this particular case, where there are to be no shareholders of the company, and no organ within which in the ordinary way residual authority may be found, the public are to be able to have their voice heard. The Bill provides for the creation not only of a Central Consultative Committee but also local consultative committees, acting for both passenger users and goods transport, and designed to cover every part of the country; and the public have a right of application to those committees in order that their voice may be heard. If their voice is heard with sufficient clarity to influence the mind of the Central Consultative Committee, then that Committee are under an obligation so to report to the Minister. So the public comes in at that stage. The organ responsible for the deliberating upon and deciding of policy is the Commission to be nominated by the Minister, drawn from men of the particular kind of experience most suited for a body of men designated to lay down the policy and the principles of operation of an enterprise such as this on the very greatest scale.
  The Commission will be a body of men operating together as a unity; it will be—if I may draw a comparison with the past in another field—very much like Mr. Lloyd George's War Cabinet. The members will be ministers without portfolio, whose duty it will be to survey the whole scene and to take the large decisions on policy. That is the prime duty of this Commission. Its members will not actually run either the railways or the road transport, or any of the other services which are comprised in this Bill.
  974
  The whole right and power is concentrated in the Commission, but by the terms in this Bill they will delegate those powers to executives charged with the fulfilment of specific functions.
  VISCOUNT SIMON: Who will choose the executives?
  LORD NATHAN: I will come to that. It has been suggested that these executives, instead of being functional, should be regional. I believe that it is a misapprehension to suggest that the executives should be regional. These executives are really bodies of persons—although they are called executives—and their function, each executive as a unit within itself, is to perform certain specific duties, in the same way as a general manager performs certain specific duties under the general direction of a board, though not actually being a member of that board. The position of the executives is analagous to that of general managers charged with functional responsibilities. But at some stage in the process there will need to be a regional tie-up. That tie-up will be created by, and under the authority of, the various executives in the exercise of their functional responsibility.
  The noble and learned Viscount, Lord Simon, has asked nee who is to appoint the executives—these executives who are to exercise authority delegated to them by the Commission, and whose authority and responsibility derives wholly and exclusively from the Commission. Let me begin by saying that the members of the Transport Commission will be nominated by the Minister; and let me add to that that the executives will be nominated by the Minister after consultation with the Commission. But when the Minister has nominated the executives he is functus officio, so far as the executives are concerned. Perhaps the noble and learned Viscount would give me his attention, as this is important.
  VISCOUNT SIMON: I am following very closely.
  LORD NATHAN: When the Minister has nominated the executives he is functus officio, so far as the executives are concerned. He is in very much the same position in that regard as I, as Minister of Civil Aviation, am in relation to the appointment of directors of various airway corporations.
  VISCOUNT SIMON: I hope the noble Lord did not think I was not following, because I was following him very closely, but perhaps he would help me a little more. Let us suppose it was his desire to get rid of a member of the executive. Who would get rid of him?
  LORD NATHAN: The terms of appointment of the executive are designated by the Minister, as are the terms of the appointment of the Commission, when he appoints them. In the same way, when I appoint a Director of one of the Airway Corporations, I declare the terms of his appointment and the period for which he shall hold office.
  THE EARL OF DUDLEY: Would the noble Lord tell me where it is laid down that the Minister shall consult with the Commission before the executive is appointed?
  LORD NATHAN: If the noble Earl will raise that point during the Committee stage I shall be delighted, should it fall to my lot, to deal with it then.
  THE EARL or DUDLEY: Is it in the Bill now?
  LORD NATHAN: Certainly. I am stating nothing to the House which is not contained either in the text of the Bill itself or in the schedules annexed to the Bill. The noble Viscount, Lord Swinton, asked yesterday: "What is the plan?" He said, in effect: What is the big idea behind all this? What are the Commission going to do? What are the Government up to in this? Well, I can, I think, in half a dozen words, answer that very pertinent inquiry. I would say, putting it quite briefly, that there are two objectives involved in this matter; they are equally important but successive in point of time. The first is unification, and that is the precondition of the second, which is unified operation.
  A question of very great moment, raised by the noble Viscount, Lord Swinton, in his very important speech yesterday, was as to rates. There are millions of different kinds of rates prevailing at the present time. One of the first duties charged upon the Commission is to prepare, within a period of two years, a scheme of rates. When that is done, it will be submitted to the Transport Tribunal. The Transport Tribunal will then consider the rates comprised in that scheme, having first
  976
  given an opportunity to the public to come in and make representations to the Tribunal which will be taken into quasi-judicial consideration. My noble friend Lord Pakenham yesterday made a quotation from a distinguished source, describing our present rate system as being in the laboratory stage. Let me tell your Lordships that there has been no objection taken by any responsible body in the road or rail traffic world to the proposal put forward as to the manner in which, in the future, these rates should be ascertained and defined.
  The noble Lord, Lord Teviot, raised the question of nationalization as being opposed to a business amalgamation. I do not think they are in the least opposed. A business amalgamation is part, though not the whole, of a scheme of nationalization; it is indeed the linchpin of it. When the noble Lord, Lord Teviot, referred to nationalization I think what he really had in mind were these questions. How much interference from the Minister is there going, to be? Is there going to be any? And, if so, how much? Is there going to be any political interference? How much is the Minister actively to interest himself in these matters? I think that is a very important question, not only one of detail, but one of principle. I have already told your Lordships that the Minister has the right—which he will exercise—to appoint the members of the Commission and the members of the executives. He also has power to give, from time to time, general directions if in his opinion the national interest requires it. I believe I may say for him that that is a power he will exercise sparingly. Indeed, he must necessarily do so, because it is a power which can be exercised only when, in his view, the national interest requires it. My own Civil Aviation Act contains precisely the same provision, as indeed do the other nationalization Statutes. Those words: "Where in his opinion the national interest requires it," are very stringent words of limitation. They are not words of extension; they are words which limit the power of authority of the Minister. I myself, I think I may say, have in no wise exercised my powers, because of that very proper limitation upon the exercise of them.
  Let me give your Lordships a practical example of what I imagine to be the kind of case in which the Minister

  977
  would exercise that power of direction. The recent coal crisis might well be said—I speak without authority—to be a case in which he would be justified in considering it in the national interest that he should give the railways instructions to grant precedence and priority to the conveyance of coal. That is the sort of direction which I think he might properly give within the authority of the statutory provision. He has also a power to give directions to the Commission when a recommendation, which seems to him to be good, is made by the Central Consultative Committee. In other words, he has a power to ensure that the will of the public shall prevail if the Central Consultative Committee think that the case has been made out by the public. Apart from that, he has powers which call for very little comment. He is, for instance, entitled to direct the Commission to prepare schemes for this purpose or that.
  For instance the noble Viscount, Lord Swinton, referred to the question of docks. The Minister has the power to instruct the Commission to make a scheme as to the acquisition or otherwise of docks, but he has no power to say what is to be in the scheme. He has only the right to give the instruction that a scheme should be prepared. When he has done that he has no further voice as to the contents of that scheme; that is a matter for the Commission. Then of course he has the important power of nominating auditors and he is also the recipient, year by year, of an annual report from the Commission and of the accounts of the Commission, and he is under obligation to lay that report and those accounts before each House of Parliament.
  I think the noble Lord, Lord Teviot, will agree from what I have said—and I have tried to give accurately the general picture—that there is little opportunity for interference from politicians, whatever the political colour of the Minister may be, in the conduct of the Commission or in the carrying out of its high responsibilities; that no more authority is entrusted to the Minister than is necessary to ensure that Parliament shall be apprised from time to time; and that the Minister shall have a responsibility to Parliament so that Parliament, as the representatives or trustees of the owners, shall be entitled to have a voice and express an opinion from time to time. Let
  978
  me make it quite clear that the Minister has no right to interfere in the day-to-day management of the business, either of the Commission or of the executives. I know from my own experience—and after all I am the Minister responsible for the operation of the first of the socialized industries—that it is wholly practicable to exercise general supervision over the subject matter of a Ministry without in any way interfering with the day-to-day management.
  There are one or two questions of a particular kind to which I wish to refer, to which, indeed, it would be courteous to refer. I do not see the noble Lord, Lord Brabazon, who raised a point of interest and importance in regard to the powers of the Commission as regards manufacture. Here I will say only that I recognize that the point is one of importance. There is a general power contained in the Bill giving authority to manufacture for certain purposes, which again is restricted by a proviso. As the noble Lord, Lord Brabazon, pointed out yesterday, the Commission is empowered to carry on a manufacturing business when it has acquired an undertaking which has itself a manufacturing aspect. This will be found in Clause 2 of the Bill. I think it is a point which needs to be pursued. There is a difficult legal question involved, and it is a matter which might and should be discussed on the Committee stage.
  VISCOUNT SIMON: I thank the noble Lord for that suggestion, and appreciate that he does not wish to take more of the time of your Lordships' House than he need, but the fact that the noble Lord, Lord Brabazon, does not happen to be here surely is no reason why the noble Lord, Lord Nathan, should not inform the House in the briefest terms what is the position under the Bill, and what the Government intend it to be. There is no justification for postponing it, and I submit with respect that the noble Lord should inform your Lordships' House whether it is the Government's intention that there should be this power of manufacturing or not.
  LORD NATHAN: I am obliged to the noble Viscount. I feared I might detain your Lordships too Lang and strain your patience. If your Lordships will refer to Clause 2 on page 4 of the Bill they will find these words:

  979
  "(iii) Nothing shall be construed as authorising the construction or manufacture by the Commission of anything otherwise than for use for the purposes of their undertaking."
  VISCOUNT SIMON: The words are: "Nothing in this subsection …" That is not the same thing as saying: "Nothing in the Bill."
  LORD NATHAN: I apologize for not reading those words. The words in the subsection are:
  "Nothing in this subsection shall be construed as authorising the construction or manufacture by the Commission of anything otherwise than for use for the purposes of their undertaking."
  That is framed negatively. It is not for me to try to interpret it. The noble and learned Viscount, Lord Simon, is far better able to interpret a provision in a Statute than I am. But there is a proviso. On page 4, line 24, the noble Viscount will observe that
  "The Commission shall not by virtue of this subsection engage in the building of ships, except lighters, barges or like vessels of a gross tonnage not exceeding one hundred and seventy-five tons, or engage, otherwise than for the purposes of experiment or research, in the manufacture of chassis for road vehicles."
  It was chassis for road vehicles to which the noble Viscount, Lord Brabazon, referred in particular.
  So far it is perfectly clear. Then there is the subsection which gave rise to the difficulty felt by the noble Lord, Lord Brabazon—subsection (3), of Clause 2, a different subsection—which provides, in effect, that where the Commission acquire an undertaking
  "they may, subject to the provisions of this Act, carry on any activities, whether mentioned in subsection (I) of this section or not, which were theretofore carried on for the purposes of that undertaking …."
  What the noble Lord, Lord Brabazon, indicated was that he felt a difficulty because he thought that there was an inconsistency between the provisions to which I have referred. I believe that the view which may properly be taken is that—notwithstanding the prohibition contained earlier, to which I have referred—where an undertaking is acquired which itself has a manufacturing aspect, then that manufacture may be continued by that Commission.
  VISCOUNT SWINTON: My Lords, this is so vitally important that I am sure the noble Lord, who is explaining the matter
  980
  very courteously, will forgive me for interrupting him. There is, if I may say so with great respect, a complete inconsistency here. The subsection to which the noble Lord has just referred, subsection (2), says that the Government shall not manufacture chassis. Very well. But subsection (3) says that the Government may carry on any business which is acquired. Now this specific example does exist. The Commission is to acquire undertakings which at present, through their subsidiaries, do manufacture chassis. What is the good of saying on page 2 that the Government will not manufacture chassis and on page 3 that the Government will manufacture chassis? Which are the Government going to do?
  LORD NATHAN: I have looked into this point since it was raised by Lord Brabazon yesterday, and I appreciate the fact that there is something here to be explained. Wherever there is an inconsistency, either actual or implied, in a Bill, the House is entitled to an explanation.
  VISCOUNT SIMON: My Lords, may I, with great respect, ask the noble Lord if he will tell us what is the Government's intention? When we know what the Government's intention is, many of us will be pleased to help to put it into proper words. We want to know the Government's policy—that is the important matter.
  LORD NATHAN: I understand that my noble friend, the Leader of the House, intends to make certain observations on this aspect of the matter in his closing speech to-day, and in those circumstances it may be better that I should leave it at that. I realize that this is a matter which must be dealt with during the Committee stage. It does require to be clarified to the satisfaction of the House at large.
  The noble Viscount, Lord Portal, spoke yesterday out of the wealth of his vast experience, not only of business in general but of rail transport in particular, with which he and his forebears have been associated over so long a period of years. The noble Viscount knows well that any remarks that come from him on matters of this kind are received with the greatest respect by me, as indeed they are by your Lordships' House as a whole. He will, however, forgive me if I say that the points

  981
  he raised, while intrinsically important, are matters which would more suitably be dealt with, perhaps, during the Committee stage than in the course of a Second Reading debate. The value of the suggestions which he has made I in no wise underestimate, and, indeed, I shall be glad to deal with them when the Committee stage is reached.
  I have already detained your Lordships for longer than I had anticipated I should. There is only one other matter to which I would refer and that is the speech made yesterday by the noble Earl, Lord Elgin, with regard to Scotland. My right honourable friend the Minister of Transport has already in another place made a statement with regard to Scotland. In the opinion of His Majesty's Government, it would be wrong to have special statutory machinery written into the Bill in regard to Scotland, but the noble Earl will have observed that in this Bill, in contradistinction to the Civil Aviation Act, there is statutory provision for the creation of a Consultative Committee for Scotland. With respect to civil aviation, Scotland has an Advisory Council which has been established in pursuance of undertakings given to Parliament, though without statutory compulsion. Here there is a statutory compulsion to create, both in respect of passengers and of goods, consultative transport committees for Scotland. The view taken by the Government is that it is essential for the purposes of the Bill that transport in Great Britain should be unified, and I do not think that between the views of my right honourable friend and those of the Scottish Council for Development and Industry, there is any point of major difference in this matter.
  In all matters of operation and commercial contact there will be the maximum devolution of authority so as to avoid unnecessary delays and references to headquarters. It must be the object of the Commission, as it will plainly be its interest, to achieve the largest measure of devolution possible. If there were any half-heartedness about such a policy it would be within the Minister's powers to issue a general direction to the Commission on the subject. It will be generally agreed that it would be undesirable to dictate in detail to the Commission what their internal organization should be. My right honourable friend
  982
  is confident, however, that the Commission may be trusted to meet all legitimate requirements for covering a local organization in Scotland which will correspond with the needs and have regard to Scottish sentiments. That is all I have to say to your Lordships at this stage and I hope your Lordships will feel that I have spoken upon this subject in the same spirit of trying to keep your Lordships fully informed and to be as constructive and as explanatory as possible, as that which informed the speech of the noble Viscount, Lord Swinton, yesterday.
  3.38 p.m.
  LORD BALFOUR OF BURLEIGH: My Lords, I have bad the good fortune to be connected with one of the great main line companies far a number of years. As a railway director, therefore, I have to say to your Lordships to-day moriturus vos saluto. As a railway director I have had before me for many years the whole question of inland transport, and it is, therefore, rather as a student of transport as a whole that I wish to speak to your Lordships to-day than from the point of view of any sectional railway interest. It has indeed been a great privilege to have seen the inner workings of a great railway company, particularly during the strenuous days of the war, and nothing has struck me more than to vote the wonderfully good comradeship which exists through, out the railway service, from top to, bottom. I would only say that I, personally, would relinquish my seat on the board of the railway company with which I am connected, and, in particular, I would relinquish that prized possession, my railway pass, without regret, if I felt that the interests of the service and of the country would thereby be promoted.
  But, to me, the introduction of this Bill to-day, in to-day's circumstances, is a real tragedy. An immense opportunity lies before us now in the realm of trans port, and that opportunity is there at this particular time for two reasons which have nothing to do with the fortuitous circumstance of there being a Socialist Government in office to-day. The first of those two reasons is that there is now, I think for the first time, a general realization throughout the country that an efficient railway service is as necessary to this country in war as in peace. It is now

  983
  admitted, even by the most fanatical road haulier, that the railways must not be left to be murdered—tied and bound by statutory conditions—by the free and unrestricted competition of the road interests who can take the cream of the traffic without being under the same statutory restrictions. The second reason why today that great opportunity exists is that now, for the first time, the organization of the road transport industry is reaching a stage of development when it can treat and be treated as an entity. The tragedy of this Bill is not only that it will not produce an efficient transport service, but that it will bar the way against there ever being as efficient a transport service in this country as there should be.
  I propose at this point to diverge from the main thread of my argument to refer to the speech made by the noble Lord, Lord Walkden. I need not tell your Lordships with what pleasure I heard Lord Walkden refer in terms of affection o the L.N.E.R. That is not surprising. He was not altogether uncritical of the L.N.E.R., but I was glad to feel that, with all our faults, he loves us still. It is not surprising; he is an old Great Northern man and the son of an old Great Northern man. It happens that my father was a director of the Great Northern Railway, and I have the honour to sit upon the L.N.E.R. Board. That is a link between Lord Walkden and myself, and I dare say we could find other points of agreement. The noble Lord, Lord Walkden, would agree that the track between Doncaster and Peterborough is the finest railway track in the world. That is a stretch of track on which the world's steam record was broken as recently as 1938, when an L.N.E.R. train did 126 miles per hour over it. We may agree about the merits of our track, but I am afraid we cannot agree about nationalization. I am sorry, because I was charmed, as I am sure were your Lordships, with the speech the noble Lord, Lord Walkden, delivered yesterday afternoon. Lord Walkden has a patent sincerity and a robust optimism which endear him to your Lordships' House. These are qualities of which we cannot have too much in public life to-day.
  The noble Lord made great play with the Royal Commission of 1931. He quoted a great deal from that in favour
  984
  of co-ordination. He used the argument in favour of co-ordination in support of the argument for nationalization, but they are not the same thing. The noble Lord's argument runs: co-ordination is necessary, nationalization will give coordination, and therefore, nationalization is necessary. What I am interested in particularly, if I may leave the bones of the argument on co-ordination, is to find that on page 144 of this Report, when the question of nationalization was discussed and certain people were in favour, and certain against, the witnesses included Mr. Walkden of the Railway Clerks' Association, who was an advocate of nationalization. The following question was put to him:
  "I want to get at exactly what you propose. You propose that the railways should be nationalized under public control. Then you propose that all road transport which is of a public nature, road omnibuses or road coaches or lorries plying for hire, should all be nationalized?"
  And the answer was:
  "Yes, made one great public transport service."
  Now, that is what the noble Lord, Lord Walkden, believed in 1930, and I do not think I shall be doing the noble Lord an injustice if I say that he believed it in 1914, and I do not think I shall really be doing him an injustice if I say he believed in it ever since he learned to lisp the word "nationalization" at the knee of his father fifty or sixty years ago, because it was from that period that the demand for nationalization dates.
  LORD WALKDEN: It was ratified in my heart by every competent railway official under whom I worked. Nearly all were good Conservatives.
  LORD BALFOUR OF BURLEIGH: I do not give up hope of trying to convert the noble Lord yet. Why was there a demand for nationalization of railways fifty or sixty years ago? Because railways then had the monopoly of long-distance haulage—and I am not concerned to deny that monopoly is disadvantageous. The noble Lord, Lord Monkswell, last night said that the railways, having suffered from inertia for a number of years, suddenly turned over a new leaf, did everything they should have done, introduced wonderful new fast trains, third-class sleepers and so on, and my noble friend said he had never been able to understand why. I will tell him why.

  985
  It is because of the competition of roads that the railways woke up. That is the truth and I am not afraid of it. If that is so, organized road transport is now available once again to provide effective competition. This is the moment chosen by the Government to clamp upon trade and industry a vast monopoly, far more complete and destructive than anything ever presented by the railways. Surely to heaven that is to plumb the depths of human folly.
  May I resume the argument I wish to put before your Lordships on the Bill? To my mind this Bill has five major defects. The first is the establishment of separate executives for road, rail, docks and canals. This has already been referred to by the noble Viscount, Lord Swinton, who said it would confine the Minister within a straitjacket. I agree, for if transport facilities are to be properly integrated, operational organization must to some extent be regional. That is barred by the separate executives. I must admit I do not think the noble Lord, Lord Nathan, was convincing. He said there would be a regional tie-up. There is nothing about that in the Bill. Perhaps we shall hear more about it in Committee. Worse than the question of regional operation, which seems to be difficult, there is a question which the Bill entirely fails to recognize—the question of salesmanship of service. The Government in this Bill, seem to have no idea of the importance of the relationship of the seller of transport with his customer. If this vast monopoly is to be set up, the sales side must be treated as one, whether the article sold is transport by road, rail or water. There is no provision for that in the Bill. You would have expected to have a Sales Executive, if that is the sort of neat plan the Government proposes. This framework will have to be scrapped after a period of trial and error. It seems a pity, when preliminary inquiry could have allowed a proper framework to be put in the Bill.
  The second defect to which I wish to refer is that there is no indication of the principles on which charges are to be based. There are eight and a half pages in the Bill dealing with charges. I do not think I am being offensive when I say that they are verbiage. Yet, for traders, rates and charges are the crux of the matter. To leave them undefined is to treat Parliament with contempt. As
  986
  the noble Viscount, Lord Swinton, said, I this Bill is a ministerial manifesto of nationalization, ant the Government's belief in nationalization is sublime—as sublime as it is ridiculous. The proof of that, if proof were wanted, can be found in the second thoughts which the Government have had since the Bill was brought in.
  They came in with the single idea "nationalize and all will be well." Since then they have had second thoughts on "C" licences (a very big second thought), second thoughts on docks, second thoughts on payment for owners' waggons, second thoughts on payment to local authorities, and second thoughts on the whole of the enormous share transfer business. So it does not look as if they had thought much about the matter before they drafted the Bill. Perhaps they will have second thoughts while the Bill is in your Lordships' House—anyway, we will do our best to help them. The noble Lord, Lord Walkden, said that charges will be simple under nationalization. The argument of the noble Lord is that simplification of charges is needed and that under nationalization it will be easy; therefore nationalization is necessary, But one could simplify charges without nationalization; one has only to get Parliament in its wisdom to relieve the railways from the rates structure, and the Road and Rail Committee could provide the simple little handbook which Lord Walkden wants the trader to be able to put in his waistcoat pocket. It could be done quite well without nationalization.
  The third defect is that this Bill substitutes ownership for control. Ownership is harmful because it eliminates that important- ingredient in an efficient system, the ingredient of competition. The noble Lord, Lord Walkden, said the present system is magnificent: the whole thing is run by five men; and that that is what is going to happen under this Bill. I wish to Heaven it were. It is not control under this Bill; it is ownership. The noble Lord, Lord Walkden, is right—control is good. But if the noble Lord thinks that five men are going to run the transport industry after this Bill is passed, why on earth all this paraphernalia. of Commissions and executives? Competition is vital, and now we have the chance of it. We cannot secure a proper choice of service for the trader

  987
  without competition, and it would be largely a competition of service and not of rates. I will explain to the noble Lord, Lord Beveridge, what competition of service means. Competition of service means competition in such things as speed of delivery, safety in transit (both in passengers and non-breakage of goods), courtesy, and ready access for the customer to an official who can solve his problems.
  These were the sort of things in which the railways competed for years, mainly before the amalgamations. But to secure this competition we must retain, on the one hand, the railway organization and, on the other hand, the road organization, with the great safeguard of the "C" licences in between so that the trader will not be ground between the vested interests on the one side and the vested interests on the other side. In that set-up there are all the elements of the ideal system—now, for the first time, within our grasp—subject, of course, to over-all public control. I admit that at once. Nobody can deny the need for public control. A Transport Commission would see fair play in competition between road and rail, and would look after the national interest; in particular, it would see to the integration of the services in the fullest sense. But it is vital that this Com. mission should control and not own.
  By control one can centralize policy and delegate administration, and the whole system can be kept human and free from political pressure. Ownership will create a vast bureaucratic monopoly, completely centralized, and transport will be for sale in the spirit in which stamps are sold in the Post Office. One can queue up, and take them or leave them —unless one is lucky. Do not let the Government imagine that the omission of the "C" licences from the Bill will not produce a very different result from the retention of the "C" licences under a system of private enterprise publicly controlled. I will tell your Lordships what the result will be. The effect of this must be to produce an immense extension of the "C" licence system. Industrialists and traders will be driven to this by sheer self-protection, and by the desire to protect the interests of their customers. It will not be by any inherent wickedness, though I know the Govern-
  988
  ment think that if anything of that sort happens it is because people are wicked and anti-Government. It is just that once road and rail are amalgamated and become a monopoly, the trader is bound to prefer the independence which ownership of his own private transport will confer to complete dependence on the facilities which a distant and impersonal national executive can provide.
  What will happen is as sure as fate. The road-rail monopoly will not be able to compete on level terms with this huge "C" licence system, it will see loss of traffic and it will see terrific losses coming. Wages will still have to be paid, and political pressure by trade unions for higher wages and better conditions will do the rest. Inevitably, restriction of the "C" licence holders will be demanded and will be conceded in the interests of the Government monopoly. The noble Lord, Lord Gifford, referred yesterday to the octopus. The octopus will be unfettered, the organization huge, callous to public complaint, soulless and dead—as dead as the trade of the country which it exists to serve.
  Nor do I draw any comfort from the consultative committees. The consultative committees are all centralized and they work up to the centre. The noble Lord, Lord Nathan, said—in so many words—they must influence the mind of the Central Consultative Committee. What is wanted is lateral consultation and the views of the consumer all the way up. This Consultative Committee is not really going to help very much.
  Now I pass to the fourth of the defects to which I want to call attention; and this is the one to which, in some ways, I attach the greatest importance. In this Bill there is no provision whatever for anything equivalent to the work done by the board. The noble Lord, Lord Walkden, was contemptuous in his kindly way (he is always kind) of the work done by the boards. It may be that he really does not know. Anyhow, I forgive him freely, if only because I readily admit to your Lordships that among the shareholders them are sometimes sections who in the past have not fully realized the importance of the work done by the boards. Nevertheless, the boards of the main line railways perform a function that is essential to the efficiency of the service.

  989
  If I may, I will spend a minute in explaining what they do and how they work. The work is done by committees of directors dealing with such sub-divisions as works, stores, property, locomotives, finance, and so on. These committees consist of half a dozen directors, chosen partly for a knowledge of individual trades or industry, and partly on a geographical basis, which is important in a system covering a vast area. The chairman of each committee is in constant touch with his particular chief officer. In addition to the committees, the board—or our board, anyway—is divided into area sub-boards which meet in different parts of the country. These arrangements serve a double object. You have the knowledge of trade and industry brought to bear on central policy; and there are the immensely valuable geographical contacts with the whole system—especially with the junior officers—which come from the regular incursions of directors into distant parts of the system.
  Nothing could do more to keep the undertaking alive and preserve the human touch, both with staff and customers. In the London and North Eastern Railway the chain of organization runs from the board through the chief general manager, the divisional general managers, the area officers to the district officers; and human contact is just as important between the board and the district officer as it is between the district officer and the humblest railwayman under his command. In a business as vast even as the existing mainline railway companies these problems of organization and administration are crucial. I have been watching them for the last ten years and I have been aware of the immense difficulties inherent in an organization even so big as our own. I have never had the slightest doubt of the value of the part played by the boards and committees and. I know that our senior officers all feel the same. The committees are dealing with sums of money often running into millions. Every scheme is scrutinized in committee before it goes to the board. I know that that sieve of scrutiny is valuable and eliminates many weaknesses.
  One of our executives has told me that one of the most valuable functions those directors' committees perform is to keep officers, senior and junior, up to scratch. My Lords, you have to think of incentive. I greatly regret that more of your Lord-
  990
  ships did not hear the admirable and thoughtful speech delivered last night by my noble friend Lord Rochdale on the subject of incentive, and I would recommend your Lordships to read it. A man in an organization like this, whether officer or railwayman, works for his chief; he works for his immediate boss. Of course, he works for himself, but he works for the man above him, whom he sees and knows. Remote and highly centralized control kills keenness, efficiency and public spirit. You have got to keep your organization human.
  This question, is crucial, and I submit to your Lordships that the progressive decline which has taken place in the relations between the employers and employed is in direct relationship to the increase in the size of many organizations. I have not the slightest doubt that this is directly due to the increasing remoteness of the control. This view is confirmed by my own experience as chairman (as I have been for many years) of the committee of one of the railway superannuation funds. The committee consists of representatives of the men, of the officers and of the directors. I can assure your Lordships I have never had the smallest difficulty in convincing my colleagues on the men's side of my own sincerity and that of my director colleagues, and I believe that most of the difficulties between employers and employed in Industry today would be removed if direct contact between the top and bottom could be less occasional, so that both sides could be convinced of the personal sincerity of their opposite numbers. This is not an argument for a return to individual small units for that is impossible, but it is an argument for preserving, so far as may be, the entity of existing units, and an argument against this vast and centralized organization which is to be set up under this Bill.
  Consider what those nine men on these executives are to do. I will give your Lordships some figures. In the London and North Eastern Railway there are payments, authorized by directors, averaging 18,500 per month. Then there is an average of 83 contracts and 26 documents which have to be sealed. These figures have to be multiplied by four to cover the requirements of the four main line companies. This is not work which can be delegated to junior officials.

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  These nine men will be swamped—they must be—by office work from the very word "Go"; they will never be able to get out. There is one more defect to which I want to call attention, and that is the question of political control. The noble Lord, Lord Walkden, said that no one was concerned except the Minister, and so I had the curiosity to run through the Bill last night and jot down a few of the things which the Minister is going to do. I will mention them to your Lordships in a moment.
  Before I pass to the noble Lord, Lord Walkden, however, I would like to comment on something the noble Lord, Lord Nathan, said. I understood him to say that as Minister of Civil Aviation he appoints the boards, and that under this Bill there is a parallel between him and the Minister. Perhaps the noble Lord will correct me if I am wrong, but does the noble Lord also appoint the executives of the Aviation Corporations?
  LORD NATHAN: I do not appoint the executives. The boards are the executives.
  LORD BALFOUR OF BURLEIGH: I thank the noble Lord. The noble Lord does not appoint the executives. But under this Bill the Minister does.
  LORD NATHAN: Forgive me; the noble Lord did not follow me. In the case of the airways corporations, the boards whom I do appoint are the executives. They are the parallel to the executives under this Bill. The word "executives" is in a different sense. The general managers are not on the board. The general managers of the boards of the airways companies are appointed by these boards.
  LORD BALFOUR OF BURLEIGH: The noble Lord has not a Commission, of course. Let me tell your Lordships some of the things which the Minister does, and we will see if he really does not have anything to do with day-to-day control. He appoints the Commission. He appoints the executives. He appoints the Central Transport Consultative Committee. He has power to abolish any of the committees. He appoints the transport tribunal. He may give directions to the Commission on matters "affecting the national interest" —not as the noble Lord, Lord Nathan, said," where the national interest requires it." That is a very different thing.
  LORD NATHAN: I did not say that.
  LORD BALFOUR OF BURLEIGH: If the noble Lord will look in Hansard tomorrow, he will find he used this phrase (I made a note of it)— "where the national interest requires it ". That is not the point at all. In the Bill it says "anything that affects the national interest" —which may mean anything under the sun. The Commission must act on lines laid down by the Minister in framing organization or development involving substantial capital outlay. He may require the Commission to discontinue any activity or dispose of any part of their undertaking. He has to approve all coordination schemes for passenger transport and for grouping of harbours. He directs the Commission to prepare charges schemes for submission to the transport tribunal. He can require the tribunal to review those charges, and the tribunal is not allowed to do anything inconsistent with the directions given by the Minister to the Commission. The Minister may exempt the Commission from statutory provisions as respects undue preference. He may, and no doubt will, give the Commission specific direction regarding their accounts. His permission is necessary before they can borrow a penny piece. And he is going to talk to them, apparently, only once a year! It is going to be a long conversation! In other words, the Minister has power, not only in the inception of the scheme but for ever, to do what he likes—with one exception. The exception is that he is powerless, in the first instance at all events, to set up the proper framework within which alone the whole edifice can be made efficient.
  Just reflect for one moment what is going to happen on vesting day, January 1, 1948. Subject to the direction of the Minister the control of the whole field of policy and finance falls on the British Transport Commission. A huge central office will be needed for the task of reorganizing and co-ordinating transport. The organization of the British Transport Commission alone cannot be created in the time. But, in addition to the Commission, there are the executives. Excluding London Transport—a nucleus of which, I suppose, already exists, and obviously it will run on—and excluding the hotels executive, which can be postponed, there are to be three entirely new bodies set up

  993
  which cannot begin to function until they get the British Transport Commission scheme to work upon. Then what do they have to do? They have to split up the existing organization of the main line railways into rail, docks and waterways, and road transport. How can that produce anything but chaos, or near chaos? Urgent day-to-day administration will occupy the whole time of the executives —it must do—and even then they will not get through it. This re-organization is a far bigger job even than the administrative re-organization which took place after the amalgamations in 1923. Then, we know, it was ten years before the organizations emerged in anything like their final form. That is the first of two questions I want to put to the noble Lord in charge of the Bill: In how many years does he think the inland transport organization of this country will emerge in its final form? Does the noble Lord think it will be five years, fifteen years, or a generation?
  The second question is this—and I address it not to the noble Lord in charge of the Bill but to the noble Viscount the Leader of the House, because I think it is a very grave question: What will be the immediate effect on the transport of this country, on vesting date, of scrambling the whole existing administrative organization? Is there not some reason for anxiety? Is this the time to create this vast upheaval? Should we not rather concentrate on first things first? Should we not restore efficiency, and proceed stage by stage with the process which has already gone so far in the case of the railways and is now beginning to appear in the case of the roads—that is, the evolution of a public service?
  Then there is the whole question of civil service administration. I do not desire to develop that, but your Lordships know that the saturation point of good administration has already been reached and passed. Under this Bill huge numbers of additional civil servants will be required —the executives will all need big staffs, the Transport Commission will need big staffs, and the Minister will need even more staff. It is idle to think that the present railway staffs can be changed round and put into new jobs.
  LORD WALKDEN: There will be hundreds of clerks available when the railway clearing house is made unnecessary.
  LORD BALFOUR OF BURLEIGH: It may be that a few will be available in that way. If the noble Lord does not think there will be need for more clerks, will he answer this question: Since the Ministry of Transport took over control, has it swollen, or not? Of course it will swell; they will all swell; they will all blow themselves up. They must all have staffs to check one another—the Minister to check the Commission, the Commission to check the executives, and so on. Mr. Herbert Morrison said that nationalizers must prove their case. The case for nationalization has been held proven without inquiry, because the noble Lord, Lord Walkden, and thousands like him, have known for fifty years that nationalization was the cure for transport. I do not question the sincerity of the noble Lord or of the Government. What I ask the Government to do, even now, is to show that they are not the mere slaves of an idea. Let them withdraw the Bill; let them leave the field open for an examination of the fundamentals and the constructive cooperation of all concerned, for all will be very willing to contribute ideas. No time would be lost, on the Government's own showing, for it is going to take two years to frame the charges structure.
  The next few months are vital months. We are under the shadow of a coming economic crisis. I would, if I may, remind the House of the wise words uttered by the noble and learned Viscount, the Lord Chancellor, a few weeks ago on the Exchange Control Bill:
  "This, to my mind, is not a situation which lends itself to Party capital or Party repartee. We are all in this together, and all sections of the community have got to pull their weight and more than their weight … We shall get through all these matters by all of us pulling together. I am not trying to make Party capital out of what is a great national problem which our people will surely solve."
  I would like to apply those words to the present Bill, for they are as vitally true about transport as about exchange control.
  Like many other of your Lordships, I have correspondents abroad, on the other side of the Atlantic, in the Dominions and elsewhere, who are gravely concerned about the state of things in this country. There are not lacking those who think that they are witnessing the end of British power, the final decline of the greatest and most beneficent Empire the world has

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  ever seen. The troubles we have to face are real indeed—material shortages, deficient manpower. Gone is the notion of a production of wealth so vast that we have nothing to do but to divide it up. Once more we are face to face with a struggle for our very existence. Nothing is to be gained in this situation either by undue pessimism or easy optimism. When I have to answer my friends overseas about our prospects, I fall back upon the only solid foundation of which I know, and that is the quality of our people and the capacity which they have to rise to heights of achievement if only they are face to face with the truth.
  But we are suffering not only from material shortages. We are short of coal; we are short of dollars; and we are short of many things which we gave up gladly in war, in the confident hope that when peace came we should get them back again. But the greatest shortage to-day is not material, it is in the realm of the spirit, for it is lack of leadership; and without leadership we cannot pull together. When I ask the Government to withdraw this Bill and think again, and to fake advantage of all the willing cooperation which will be offered from every side if they will but ask for it, what I am asking for is evidence of leadership, which would itself do more than any other single thing to inspire confidence in the country and in the whole world that the qualities of our people will indeed be mobilized for that struggle for existence in which we are engaged.
  4.19 p.m.
  LORD REA: My Lords, only a week ago I felt myself impelled to break a silence of a number of years in your Lordships' House in order that I might raise my protest against a Bill to set up a Government monopoly instead of a well-conducted, prosperous and highly competitive trade bringing in considerable revenues from abroad. To-day I do not feel that I am entitled to take up so strong a position, because this Bill is not quite so gratuitous and uncalled for. I am free to confess that we agree with a good deal of it, and, therefore, as my noble friend Lord Beveridge said yesterday, we do not propose to take exception to the Second Reading of the Bill. But its huge bulk does call for the most critical examination, and a great deal closer and more
  996
  critical than was allowed to be given to it in another place.
  I am aware that this is not the moment to enter into those details of criticism, but there are certain underlying principles, some less obvious consequences which must follow from this Bill in the more distant future, which I believe it is the duty of your Lordships' House, as a revising House and one that takes a broader view than is possible in another place, to take into account and consider. I agree that the primary object of this Bill is to nationalize the railways, and that is neither revolutionary nor novel; indeed, it may surprise some of your Lordships to know that it has been under consideration, not only within the last few years but ever since the days of the Duke of Wellington and Sir Robert Peel, and it has, of course, been the Liberal policy for a considerable time.
  Since it seems to be the fashion this afternoon to ask for parental authority, perhaps I may be permitted to tell the House that an economist of some little repute in his time, one Russell Rea—to whom I do owe a considerable amount of filial respect—put forward a plea for the nationalization of the railways no less than forty years ago. But he did not do it on the lines put forward by this present Government. He did it because, on the whole, he thought there was a narrow margin of advantage. He was careful to point out—as perhaps the noble Lord, Lord Walkden, will know—that no spectacular results were to be expected either to the public or to the employee. Is there not evidence that nationalization, although it may be necessary or even desirable, does not produce spectacularly profitable results, as we can see from the experience of those nations on the Continent of Europe who have nationalized their railways? They have not found it particularly profitable, nor have the visitors who have had to use their railways found, as a rule, that they are the better conducted. I may be told that they are the reactionary Continental people and that this progressive Government, of course, is going to do much better. I may perhaps remind noble Lords opposite that Canada and Australia have had very much the same kind of experience.
  Therefore, I am neither enthusiastic about the prospects nor am I terrified of

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  the future. But I do see one or two real dangers ahead which have received less attention than they deserve. What does trouble me is the increasing and alarming proportion of the population which is going into Government employment. That is a very great change from what has hitherto been our habit. Hitherto, employers and employees have bargained with one another, with the State standing neutral to see fair play. But with the State as an employer, when disputes come—as indeed they must come—then, as I see it, danger arises, because either the employee or, more probably, the trade union behind him, is fighting not the employer but the community, and there is no third party in the State to act as conciliator. As I see it, the taxpayers—who, after all, are the vast majority—stand to be held to ransom, not only by the great trade unions but by a class of Members of Parliament who are going to be returned when the majority of the electors are State employees.
  We have had an example of that in the case of the miners. Let me hasten to admit that they have acted with the greatest restraint and sense of responsibility. But if the majority of the members of another place are going to be elected primarily to represent the interests of the employment in which people are engaged, then indeed I do see that there is danger of the community being held to ransom, and I do not see any safeguard against ever-increasing exactions from the employees through, first of all, their trade unions, and also through their Members of Parliament. More than that, what is even worse is how we are going to maintain our foreign trade under increasing labour costs, which will be based not on economic but political pressure. I know that in saying this I am looking some way ahead, and it applies to the general policy as well as to this Bill: But, as I have said, I believe it to be the function of your Lordships' House to see that the ultimate effect of what we are doing is not lost sight of.
  Coming down to details, there is one aspect of the Bill upon which I do wish to appeal to the Government, and that is the financial provisions. I could argue at length on the unfairness of the provisions made in the Bill. It is to be remembered that the Stock Exchange valuation
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  was lower because of the fear of what the Government was going to do, and a Stock Exchange valuation is clearly not a fair one, as is shown by the illustration of some South American deals. When those deals carne to be completed between the Government and the shareholders, the disparity between the Stock Exchange quotation and what the shareholders received was something very considerable indeed. I believe that in the case of the Argentine Railways it amounted to something like 20 per cent. I should also like to talk at length on the unfairness of the payments not in cash but in stock of an unknown interest return, because we have not yet been told what is to be the value of this stock. All we know is that although it is not quoted on the Stock Exchange, the Stock Exchange estimate already places the value at something under par.
  It has also to be remembered that when the transfer takes place there must be a great many sellers of the stock—people who want to transfer into something which will bring them an income nearer the annual return they had before, or trustees who are troubled over the position because they are not able—as I know to my cost—to meet the expectations of the people for whom they are responsible. There must be a large number of sellers on the Stock Exchange and, therefore, the value of the stock which is to be exchanged for railway shares is bound to fall. That seems to me to be most unfair. Of course, the obviously fair thing would be to set up an independent tribunal to look into these matters, but I understand there is not the least hope of the Government giving way on that point.
  Therefore I want to make a more modest suggestion, because there are hundreds of thousands of people, mostly people of small income, and also a considerable number of trustees, who are being placed in a very difficult position. They believed, whether rightly or wrongly, that they had a secure income; they now find that it is being painfully reduced, and there is no getting out of it. As I think the noble Lord, Lord Rusholme, said yesterday, that is indeed a hardship which should be inquired into. There is going to be a very widespread sense of grievance over a large part of the community. Therefore what I want to suggest to the Government is that not only in the interests

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  of the community, but for its own sake, they should try to start this great new experiment with the good will and not with the hostility of a large mass of the people.
  I would remind your Lordships that compulsory acquisition nearly always carried with it a bonus on the market rates, and the disturbance for which that bonus is supposed to be compensation is no greater than is occurring to the railway shareholders under this Bill. Therefore I would urge the Government to consider whether they can increase their offer to a higher percentage. I do not think it would do any serious harm to the finance of this Bill if they were to consider a 20 per cent. increase on the Stock Exchange value that they have laid down as the purchase price. If they are a little troubled as to whether it is possible, they might have a look at the £158,000,000 of profit that they made out of taking over the railways during the war period. I suggest that it would be a wise and statesmanlike act, and would give this Bill a much better chance in the future, if the Government were to be a little more generous in the terms they propose to give to the unfortunate shareholders.
  I now come to the road transport section, which is much more controversial. The noble Lord, Lord Beveridge, dealt fairly fully with many points yesterday, and no doubt they will be discussed in greater detail in Committee. I want to pass on to a later section which has not attracted the attention it deserves, but which has some very dangerous implications. The Bill, in vague terms, but very definitely, says that the Government may want to take over (and with this Government that means the Government will) the docks and harbours. It is quite true that a certain number of docks and harbours, like Southampton and the South Wales docks, already belong to the railways and will come over automatically. I cannot see that even that would be an advantage, because there is a great disadvantage in the railways owning the docks; between the two they can cut rates in competition, and no one will know what is happening if the docks and railways are under Government control. I cannot see that to bring the ports and harbours of this country under single control can bring any possible advantage.
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  I agree very largely with what the noble Lord, Lord Balfour of Burleigh, said, that there is a danger of too much concentration. I know of nobody who has any complaint to make about the administration of the Port of London Authority, or the Mersey Docks and Harbour Board, or the Clyde Trust, Who for years and even for generations have carried on their business quite satisfactorily to everybody. I am not sure that there is any national advantage to be gained in centralizing these to some extent competitive ports. I believe that there is here the same danger as in the Cotton Bill, of the Government taking over a trade which it must be remembered faces very keen competition. It is not always realized that the ports are in competition with foreign ports. It is true that Hamburg and Bremerhaven have gone, but Antwerp and Rotterdam are getting into work again. It was only the keenest competition that kept the trade of our British ports from foreign ports, and I do not see that competition is going to be any less in the future. The painful experience through which we went in the war and from which we are still suffering makes us fear that if the ports are put under bureaucratic control, as they were during the war, we cannot face the rivalry which we were only just able to meet in the period before the war.
  It is true that the Bill contains powers only to expropriate, but these are vital industrial undertakings, and it is our duty to look ahead to see what is likely to happen before it is too late. Unless there is some check on the megalomania which seems to afflict this Government, it may lead to Government control of yet another great competitive business which hitherto has brought to our shores a great share of the entrepôt business that was a large part of those invisible exports which we shall need in future even more urgently than in the past. That brings me back to the point I made at first that this threat of Government action, especially in trades subject to keen individual competition from abroad, alarms me even more than the present plans, which relate chiefly to home monopolies. I am not prepared to oppose the Second Reading of this Bill but I am troubled at the ever-increasing tendency of the Government and of the Party opposite to interfere with private business which exists on individual initiative, on prompt decisions, on the taking of risks—risks of loss as well as of

  1001
  profit—and I am firmly convinced that from the point we have reached to-clay the future prosperity of our country depends, not upon as much but upon as little nationalization and Government control as we can contrive.
  4.36 p.m
  LORD LUCAS OF CHILWORTH: My Lords, may I conform to the custom of your Lordships' House and disclose what might be thought to be a special interest. I cannot claim to have any financial interest in the road transport industry. For a large part of my industrial life, however, I have been connected with an industry closely allied to the transport industry of this country, and therefore I have been able to watch and study the transport industry at close hand. Both the transport industry and the industry with which I have been connected—the motor industry —have spent considerable sums of money and considerable effort, and are doing so at the present lime, to the benefit of the advertising columns of newspapers and of the poster stations of the country, in opposing this Bill. Noble Lords opposite may wonder, therefore, why I stand here this afternoon and support the Bill. I intend to say not only why I support the Bill, but why, in my view, it is necessary for the economic development of this country for the country's public transport to be brought under public control.
  I am not concerned to enter into such a delightful argument as has passed between the noble Lord, Lord Walkden, and the noble Lord, Lord Balfour of Burleigh, upon whether the transport system of this country in the past was efficient. But may I join with the noble Lord, Lord Balfour of Burleigh, in offering my sincere congratulations to the noble Lord, Lord Walkden, on his magnificent speech yesterday afternoon? And may I offer to the noble Lord, Lord Balfour of Burleigh, my congratulations upon an equally magnificent speech (from his point of view) this afternoon? I thought the noble Lord, Lord Balfour of Burleigh, put up a masterly case. I agreed with about one half of 1 per cent. of it, but that does not detract from my admiration. He hit hard and often, but not one of his blows ever slipped below the belt. When these two noble Lords start comparing the efficiency of transport, everything depends upon the yardstick of measurement that is used. I gather that the noble Lord, Lord Balfour
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  of Burleigh, was tempted to use the yardstick of a certain length of line between Doncaster and Peterborough, over which one of his trains ran at a speed of 120 miles an hour.
  LORD BALFOUR OF BURLEIGH: 126.
  LORD LUCAS OF CHILWORTH: I am much obliged to the noble Lord. I would not wish to deduct those two or three miles an hour. But I have it on competent authority that, during the twenty years before the war, the average speed of a British railway passenger train increased only by from thirteen to fifteen miles per hour, for the reasons which have been so well stated by my noble friend, Lord Walkden. I am also given to understand, from that same authoritative source, that the average speed of a goods train during that same period increased only by a quarter of a mile an hour, and ended up in 1938 by reaching not 126 miles an hour, but an average of exactly nine miles an hour. So, as I say, it all depends upon the yardstick of measurement you use. Would the noble Lord, Lord Balfour of Burleigh, say it is efficient that a goodly proportion of this nation's food—namely, fish—should leave the main fishing ports in this country in prime condition, and, through lack of refrigeration on the railways and delays in transit, become unfit for human consumption by the time it reaches distribution centres? Is that a yardstick of efficiency measurement?
  I am not concerned to argue with the noble Lord, Lord Beveridge, whether the road transport of the country was efficient or whether it paid its correct amount of revenue; but it is well to point out that the road transport of this country was taxed before the war to the tune of £90,000,000 a year, of which only £65,000,000 was used for road upkeep. Where the balance went is another sad and even more sordid story. But there is no argument on one point, and since this debate was opened so admirably by the noble Lord, Lord Pakenham, I have not heard any dissentient voice in your Lordships' House as to the soundness of the principle that there must be over-all planning of this country's transport. There has not been one dissentient voice. I have heard objection raised to the use of the word "integration," but it must be admitted that you will never get over-all

  1003
  planning, you will never get efficient coordination with a multiplicity of ownerships. That is impossible. So we come down to this: that we are driven to accept the principle of single ownership. I am free to admit that that could operate under private enterprise, and you could have a private monopoly. But with regard to one of the basic industries of this country —an industry that effects the lives of 47,000,000 people—is there any serious choice between private monopoly and public monopoly? Of course there is not.
  One of the most significant happenings in your Lordship's House since this debate started, has been that among the noble Lords sitting on the Opposition Benches the only one upon whom has rested the responsibility of being Minister of Transport found himself 90 per cent. in agreement with His Majesty's Government. He said, in effect, "You cannot go back." I think that he got to the heart of the problem. The only difference between Lord Brabazon of Tara and His Majesty's Government was that Lord Brabazon would prefer a public corporation on the lines of the Central Electricity Board, or the Port of London Authority, whereas His Majesty's Government have gone the whole way of nationalization. As I have said I think the noble Lord got to the heart of the problem, and with your Lordships' permission I would like to quote his exact words. He said that we could not go back, and that:
  "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."
  Those were the significant words in the noble Lord's speech. You cannot have, as a criterion for planning the transport of this country, whether one method shall be profit earning and another method not. You cannot have as a criterion whether road transport shall be penalized to make rail transport profitable, or vice versa.
  I submit that there is only one criterion that you can possibly have, and that is what combination of the whole of the methods of transport, whether they be rail, road or water, can be brought together and co-ordinated in the best interest of the country. The basic industrial costs of this country are at stake. You cannot plan your industries down to an out-moded transport system. Whatever the method is, you have always to progress your
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  transport system to meet the advancing demands of an expanding and progressive industrial economy.
  The noble Lord, Lord Balfour of Burleigh, asked if His Majesty's Government would tell him when finality will be reached. The answer is "never," because finality never is reached. The noble Lord said "Now is not the time." According to some, it never is the time to start anything! We shall never get efficiency of transport—which I am sure the noble Lord wants—and we shall never start getting efficiency until we have put this basic tool of industry into proper order. And in the last analysis transport is only a tool of industry.
  The noble Lord, Lord Gifford, if I may say so with respect, made a fundamental mistake, but one that is very easy to make, making a comparison between our proposed nationalized transport system and what has happened in other countries in the world where such systems have operated. In this country we have a particular and peculiar problem, because there is no other country like ours. This is the most highly industrialized country in the world. We have a network of relatively short distances between our fabricating factories. So the industrial efficiency of this country depends upon the cultivation of a door-to-door transport system. The excessive handling from road truck to rail truck, and from rail truck to road truck, is wasteful of that most precious thing we have to-day, manpower. And excessive handling calls for extra packing, and packing materials. We have to find what is the right answer and balance in this, and we have to see that our manpower usage is minimized to the greatest degree so that our costs can come down.
  I have spent my life in industry and have seen the waste, the wicked waste, of national resources by uncontrolled and unregulated competition. But, having said that, I am free to confess that I have also learned the value of the right kind of competition. I believe that in transport this has been found in this Bill by the very wise decision of His Majesty's Government to remove the restriction from the "C" licence transport before this Bill came to your Lordships' House. I make a very sharp distinction between transport that is carried on for hire and reward and the right of the individual to transport his own

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  goods if, in the circumstances of his business, it is cheaper and more efficient for him to do so. I believe the national transport service requires the competition of "C" licence transport as a yardstick to measure its efficiency. I do not share the apprehensions of the noble Lord, Lord Balfour of Burleigh, and those expressed yesterday by the noble Lord, Lord Beveridge, because it will mean that the number of "C" licence operators in future will be in direct ratio to the efficiency of the national transport service.
  LORD BALFOUR or BURLEIGH: That is why there will be so many of them.
  LORD LUCAS OF CHILWORTH: I cannot agree—with great respect. The reason why there are so many to-day is the ineptitude and inefficiency of both railway companies and road haulage operators.
  LORD BALFOUR OF BURLEIGH: The numbers are going up very quickly at the moment.
  LORD LUCAS OF CHILWORTH: I have at least this advantage over my noble friend; I can prove my case. His is only assumption. I know the growth of "C" licence transport and I know why it grows enormously—because of the relative inefficiency of all alternative forms of transport offered to industry. A great deal has been said about the absence in the Bill of a detailed rates structure. I have listened attentively to all these comments and I fail to appreciate their validity. Surely this is the prime job of the Transport Commission when the Commission has settled its policy. You cannot expect to have a detailed rates and charges structure put into this Bill. I read with great interest, and I hope with reasonable intelligence, the joint memorandum issued by the main line railway companies and the road haulage association last year. Rates and charges formed the main theme of that memorandum but, apart from vague generalities which could mean anything or nothing, no detailed attempt was made to set out charges. On this point, I do not see how you can expect to set out charges at the present time, in the middle of such a reorganization.
  I think it would be interesting if I quoted here how one part of this problem
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  was seen in the case of the Northern Ireland Transport Board, because the same problem arose, and the same arguments were advanced then, in connexion with the operations of "C" licence holders vis-à-vis the national system. As your Lordships' are well aware, two Committees of Inquiry were set up, one under the Chairmanship of His Honour, Judge Thompson, and the other under the late Sir William McClintock. In the Report of Sir William McClintock's Committee, one member of which was an eminent personality not unknown in the railway world, Sir Herbert Walker, when they were dealing with the pressure they had put upon them to restrict "C" licence transport holders, it was said:
  "This we are not prepared to recommend. Any such radical interference with the right of individual traders to provide their own transport for their own goods would not, in our opinion, be warranted, and would arouse bitter opposition. We realise that public transport may suffer from the fact that it is, and will continue to be, used as a convenient standby by traders who use their own transport for the bulk of their traffic; but the remedy for this, we suggest, lies in a grading of the rates so as to ensure that the charges made to those traders who only utilise the public transport services for such portion of their freights as they prefer not to carry themselves, shall be adequate and not subsidised by rates applying to the less awkward traffic. Incidentally, it is only by this course that rates really competitive with the traders' own transport costs can he offered for the more favourable traffic."
  That is one of the biggest problems the Commission will have to work out: how to offer competitive rates to the "C" licence operator. Point is made to all this by the present proposal to increase railway rates. The increase in rates proposed at this present moment is no solution to the railway problem. It will only be erecting another milestone on their way to the bankruptcy court. The essential problem we have to solve is how to get the railway rates down. I have very grave doubts as to whether the railway system in this country, organized as it is at the present time, and standing as an economic unit without a subsidy of one sort of another, will ever again be profit-bearing. It may well be that the railway system will have to be subsidized. I have no objection to that, so long as that subsidy is fair and above board, but I have strong objection to any indirect subsidy being found by increasing industry's basic costs.

  1007
  I agree with the noble Lord, Lord Brabazon, who said yesterday:
  "The railways do form a most important and valuable part of our life. But if they are to be preserved in this country, to preserve them is to co-ordinate them with road haulage."
  He went on to say:
  "—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."
  The railways of this country must be preserved. They are a national asset, they are strategically necessary, and nobody in their senses would say that they should not be preserved. But I beg that they shall be treated in that light, and that, if a subsidy is necessary, it shall rest firmly on the shoulders of the taxpayer, and not be found by artificial restrictions placed upon other methods of transport. Transport, to me, is a means and not an end. I am not interested in building up a huge profit-earning monopoly, I am only interested in building up the most efficient transport system, irrespective of any sectional interest, whether it be rail, road, water, or air. I believe the only possible way of doing this is by the provisions that are contained in this Bill.
  5.1 p.m.
  VISCOUNT FALMOUTH: My Lords, so much ground has been covered already in this debate that I will not detain your Lordships very long but there are one or two observations I should like to make in connexion with this most important Bill. First of all, the noble Lord, Lord Lucas, has said that the question of transport enters into the cost of every operation that goes on in the country to-day, whether we buy, whether we sell or whether it is the case of an individual going to his work day by day. Therefore, transport is one of the fundamental overheads of the country, and it is the duty of your Lordships' House to consider this matter in every possible aspect. All of us, in every part of the House, admit that there is a transport problem. In my grandfather's day they also had a problem when the coaches were driven off the roads by, the railways. Now the wheel has come round full circle, and we find the railways, in their turn, are being violently assailed by road transport.
  1008
  I have listened with great attention to the speeches made by the noble Lords on the opposite side, and, so far as I can understand it, the underlying idea of this Bill is that nationalization will solve the problem of transport. You might just as well say that the great housing programme is going to solve the housing question, or that food rationing is going to solve the food problem, as to say that the nationalization of transport is going to solve the transport problem. It is a much more difficult problem than that. The noble Lord who introduced the Bill made some observations as to the number of licences that were going to be taken over when this Bill became law. He mentioned that there were 20,000 "A" licence vehicles which would be taken over by the Transport Commission, and he also mentioned that there were 300,000 "C" licences, and that the railways had 10,000 vehicles of their own which would go over to the Commission with the railways.
  It is these 20,000 "A" licences which form the crux of the transport situation. It is not a very large number in comparison with the great number of "C" licences, but 20,000 vehicles are still sufficient, with their very heavy road mileage each week, to upset completely the rating arrangements between the railways and the transport system. I submit to your Lordships that there is a far simpler way of dealing with the transport problem than by this great, cumbersome Bill. I would submit that these 20,000 vehicles should be bought by the Government and handed over to a Transport Board. That Board should be an entirely independent body, and the Government could then knock the heads of the railways and the Transport Board together and make them solve the problem which faces us at the present moment. By that means one would save this very cumbersome transfer of railways from private ownership to public ownership, and avoid also the immense delay which we know is otherwise bound to take place. We have heard that it took at least five years before the present railway groups settled down. That delay would be avoided, and it would enable the change to go through smoothly, as it must go through if we are ever to be able to get this country properly functioning again.
  I have been rather impressed by the discussions that have gone on in the

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  House, and it seems to me that this is an ideological Bill. The members of the Party opposite have claimed for many years that their programme is the nationalization of all means of transport, production and exchange. This Bill is the result of the programme which they have preached for so many years, and now, regardless of the condition of the country, regardless of whether it is a suitable time to introduce such a change, we are having to carry it out. We have already had one great experiment in nationalization in the coal industry. I wonder whether your Lordships are really satisfied that the great expectations which were held out in regard to the coal experiment have been realized. We have all shivered before our empty fire grates this winter, factories have been closed because of the shortage of coal, coal has gone up in price and is not of the high quality it was before the introduction of the National Coal Board. Small wonder, then, that we are anxious when we see this second great attempt, this second leap in the dark at nationalization. We are very anxious to find out as much as we can and to try to discover whether this Bill is likely to solve the problem with which the country is faced at the present time.
  One method of attack on the railway systems of this country was developed largely by the noble Lord, Lord Walkden, who sought to prove that the railways were inefficient. He admitted that during the war the railways performed an extremely good job, but he went on to say that the excellence of that job was largely due to the fact that the Railway Executive was functioning. I want to make this point. The railways at the beginning of the war switched over to the transport of immense numbers of troops and quantities of munitions, almost at a day's notice, They carried these troops and munitions on lines which were not usually devoted to through traffic. Can one say that an organization which was able to do that at a moment's notice was inefficient?
  The railways gave 100,000 men to the Services, and yet they were able to carry on. They gave locomotives and rolling stock which were badly needed in this country, to meet the still greater demand from overseas, and yet they carried on. The tracks were blitzed night after night, and day after day the engineering gang
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  got down to it and maintained those tracks and kept the precious trains running. How can it possibly be said that a system like that was inefficient when handed over to the Railway Executive? If ever we had an example of a really efficient organization, judged by the severe test to which it was put during the war, it was the railway organization. We must admit that in 1939 the railway organization was a highly efficient one indeed.
  There is another aspect of this matter which has been raised in different quarters. The railways have been attacked fur various reasons one of which is (so it has been said) that the stations are old and out of date. A good deal of play was made of that in another place. We must admit that some of the stations (perhaps a good many of them) are not modern stations. But I am quite sure that every traveller and trader would infinitely prefer money to be spent on rolling stock, signals and permanent way than on spectacular stations. One has to go to the "dictator" countries to see really spectacular stations. I have a book on Italian railway development in recent years, and it is full of the wonderful stations put up by Mussolini. The object of the dictators was to persuade their dupes that something was going on. They persuaded them so to believe by means of a magnificent facade. But when one got behind that facade one found the whole thing absolutely rotten, out of date and in, efficient. I have nothing to do with the railways, but I am quite certain that the railways service in this country before the war, for the purposes of a small, highly-industralized country such as this, was as efficient as any to be found anywhere in the world.
  When one was on the Continent one was sometimes impressed with the magnificent trains de luxe in which one was swished across Europe at a high speed for five hundred or six hundred miles. One was apt to forget that in Europe the general train service of the countries through which one was passing was absolutely rotten compared with the service found in this country. In the third-class carriages on the secondary services one never found anything but hard seats. I do not suppose that they are now any different, The track is bad, the rolling stock poor and the trains do not seem

  1011
  to run to time. The same is largely true of the United States. There you have splendid world-famous trains running between great centres, but on the whole, the general level of the secondary service is nothing compared with that to be found in this country. Therefore I feel that it is unfair (because it is taking credit from people who have really built up a first-rate organization) to try to pretend that the railways are an inefficient organization.
  Of course, they are now battered after the war. They have had great losses and great destruction. But, as we heard from the noble Viscount, Lord Portal, it is not the will that prevents the companies putting those things right; it is the fact that materials and labour are not available. How can any great new board do anything better than is being done at the present moment? How can you persuade the public that by putting a new board in you will get a great amount of new rolling stock, new tracks and new stations? We all know perfectly well that that would be impossible at the present time. You are persuading the public to believe that something can be done which cannot possibly be done. For that reason, I say that this attack on the efficiency of the railways is a dangerous method of dealing with the problem.
  I should like to say how much I appreciated what the noble Viscount, Lord Swinton, said about the canals being tagged on to docks. I happen to be a member of a canal board. The function of canals is entirely different from that of docks. Goods are taken out of a boat, put on a lorry, a railway truck or a barge, and from that moment the goods become part of the inland transport system of the country. The canals are far more closely associated with the railway system than with any other form of transport. The noble Lord, Lord Walkden, suggested that there might be a big development in canal traffic. The engineering problems in this country in connexion with canals are vast. As your Lordships know, this country, for its size, is extremely undulating. I see no hope for a big development in canal traffic. You might spend vast sums of money on huge locks, in driving tunnels, and so forth, but even then the delay, let alone the cost, in operating those locks and in
  1012
  overcoming the difficulties would not give canal traffic a chance compared with road and rail traffic.
  There is just one matter to which I feel I should draw the attention of the House and that is the position under this Bill of the River Lea. As your Lordships know, the River Lea is one of the great sources of water supply for London. It supplies all the water for the East End. The Thames supplies water chiefly to the West End and Central London. The River Thames has quite properly been cut out from the Bill. The River Lea has a public body in charge of it—a body similar to the Thames Conservancy Board. It is a non-profit making body. I would submit to your Lordships that there is no case whatever for treating those two bodies separately. The proposal set out in the Bill will make the work of the Lea Conservancy Board extremely expensive. It splits the body into two parts and makes each part responsible to a different Minister. I, for one, cannot see how the Lea Conservancy Board can possibly work under the provisions contained in this Bill.
  Over the whole of this Bill hangs what I might call the curse of bigness. It almost seems to have been set up for its own bigness. There is nothing more barren, in my opinion, than pure bigness and nothing else. We know what happens in these great and bloated Government Departments. We know how absolutely impossible it is for any individual to get an answer to a question. The whole machine is cluttered up with administration. The individuals themselves are able and hard-working; it is the machinery that is clogged, and it is the machine that prevents us, for weeks and weeks, from getting an answer to the most simple question. Here we are being asked to set up a great cumbersome machine, similar to one of these enormous Departments, to run the transport system of this country. Could anything be more unsuitable or more foolish, in view of the experience we have had, than for us to adopt such a system? A great monopoly like this has great difficulty in dealing with questions of its own efficiency. When you have a huge monopoly you can have no yardstick by which to measure the efficiency of your operation. I understand that in Russia, where they have these large monopolies, that is one of the chief difficulties with which they are

  1013
  faced—to attempt to find a yardstick to discover how the undertaking is operating. When you have a monopoly embracing the whole of transport, I, for one, cannot see how you are going to get a yardstick to prove the efficiency of your organization.
  Another difficulty of these very large organizations is that of the appointment of the senior staff. It is all very well when an industry is young. When the organization has been established you can then find capable people who have been trained in all branches and bring them in from outside. But once you get a huge organization such as this functioning, the members of the different departments are so engrossed in their various sections that it is quite impossible to find the type of men you want to take on the biggest executive position. This is a difficulty which has been found in American organizations, where frequently they have to take in people from outside, because they have the varied experience which the people in charge of the great centralized departments do not have. I feel that this Bill is a great mistake. Just at this moment, when we want to get the country on its feet as quickly as possible, we are plunged into this very cumbersome and difficult piece of machinery. In my view, what we want is to enable the country to get going quickly, and to delay it by this measure can only bring disaster and frustration to our already hard-pressed people.
  5.21 p.m.
  THE EARL OF AIRLIE: My Lords, I do not propose to detain your Lordships for more than a few moments. Quite a lot of people are doubtful of the wisdom of this move of the nationalization of the transport of the country. Some are quite sure that they are right, and others are still thinking. But there is no doubt, in my mind, that there is a large number, not only in your Lordships' House but throughout the country, who are convinced, as the noble Lord, Lord Balfour of Burleigh, said, that this is not the moment to do it; that it is not the moment to try and experiment, and that we should have waited until the country was on its legs again.
  In listening to the noble Lord, Lord Lucas of Chilworth, one could not help admitting his obvious sincerity when he said that what we wanted was the best transport we could have in the country. We all want that, but we want to make
  1014
  sure that we are going to get it. And one cannot but feel somewhat unhappy when one recalls what has happened in another place—that in a measure of such great importance as this a great deal of the consideration was cut out, and many of the Amendments were not even looked at. To my mind—and I am sure many of your Lordships agree with me—that is not freedom or democracy. It is true that this has happened; it is equally true that your Lordships have decided that this Bill is to have a Second Reading, and therefore there is no point in pursuing the arguments in regal d to the merits or demerits of nationalization.
  There are, however, two points which I would briefly like, to emphasize, as I think they will affect my own country, Scotland. Dealing with the railways first, I must say that I have no technical knowledge. I speak purely as a consumer. I have not even a brass badge, and I am not on any of the boards. I speak as one who has travelled considerably, not only as I do now, but during the war when I used to average anything from 1,500 to 2,000 miles a week. I may claim that I have a good cross-sectional knowledge of the railways of this country. Nobody can give me points in admiration for the work done by the railways during the war; nor could one do anything else but offer heartiest congratulations to the railway workers for the work which they carried out during last winter. Those who know what it means to keep points clear at a junction in a blizzard will appreciate what they had to go through.
  If you really want an argument against the amalgamation of railways, at any rate under one head, of one executive, you must take the instance of the London Midland and Scottish Railway. I have travelled on that railway ever since I was born, fifty-four years ago, and I know it well. I know the personnel, and I have nothing but the greatest admiration for them. But there is no question that there is an example of a railway which is suffering hopelessly from being too large. I think all the staff know it, and I believe even that great man, Lord Stamp, when he was Chairman of the Company, knew it, too. I suggest that your Lordships take that as an example of a concern of that size, and ask yourselves: What is to happen to us when all the railways are put under one executive head?

  1015
  We all know that it was necessary in the war. It was absolutely vital then that we should get troops, stores, and materials, and that they should be conveyed to a certain place at a certain time. But I suggest the point has never been made that the ordinary consumer, at that time, just did not count. He could not; it was quite right that he should not. He was just like the poor "tinker's cuss" of the Minister of Fuel and Power; he did not count at all. But it is a very different thing in peace-time. He received short shrift at that time, and nobody complained. But I am afraid he is to get short shrift again. There is a great deal of difference between getting stores and materials to a certain place in a certain time and dealing with trade subjects and the private consumer.
  So far as the docks and ports are concerned, I had meant to say a word, but I understand that the noble and learned Viscount, Lord Simon, who is much better qualified than I, is to deal with this matter later. I would, however, like to say this. If Government trading is any criterion, I do not hold out much hope of success in regard to the helping of trade if the Government take over the docks and ports. More than ever now are they essential from the point of view of our export trade. Once again that is not a service to interfere with now. Leave them well alone until the country has become more normal. But the chief nigger in the wood pile, if I may use that expression, especially as it affects Scotland, is the taking over of the road transport. The noble Lord, Lord Nathan, spoke of it as being a business proposition, and one of his questions was: Will it work? I do not think it can work in Scotland, owing to the distances. That is one of the great difficulties in Scotland all the way through.
  This is an industry which, above all, needs decentralization. It lives by quick decisions and it must have them. Big concerns will tell you that they give almost carte blanche to their district and sub-managers to carry out the work as they see fit. They find that is necessary and they are bound to do it. In other words, the district and sub-managers act. Then they render an account of their stewardship, and you can bet your bottom dollar that if it is not good they get the
  1016
  sack. Will that happen under this régime? Add to the present difficulties through which this country is passing the nightmare of reference to London and you get complete and absolute chaos.
  The noble Lord, Lord Nathan, has stressed the point that we are to get freedom—I think he said almost complete freedom—of action. And he stressed the fact that once again we are going to get these consultative committees which I think differ slightly from the airways advisory boards. I do not think I am speaking too strongly if I say: "We don't want your blooming consultative committees; they are no good to us; they do not help us one whit. What we want is a freedom to make decisions where they are necessary in the interests of business." I would suggest that His Majesty's Government should carefully consider the recommendation by the Scottish Council (Development and Industry) where they recommend,
  "that there should be appointed a Transport Board for Scotland composed of persons of appropriate knowledge and experience which, while responsible to the British Transport Commission and under its over-riding authority on matters of general policy and capital expenditure, would be directly responsible for the working of all transport and ancillary services in Scotland covered by the Transport Bill."
  That is the only way in which we can hope to have any success.
  The other point I wish to raise is this question of the mileage limits. There again, there is the question of distance in Scotland, and really the 25-mile limit is of no use; nor, equally, is the 40-mile limit. What we want is something like 6o miles in place of the 25 miles, and 120 miles in place of 40 miles. In Scotland there are large de-populated areas of country, interspersed with lochs and all sorts of country which you cannot pass; the whole problem is entirely different. You must evolve a scheme which will fit the country, because this scheme will not work there. I do not want your Lordships to think that I am on this Scottish nationalism "stunt" again, because I am not. I am merely pleading for something which we really need in Scotland, and something about which we know. If His Majesty's Government continue to carry on their plans of nationalization, so far as Scotland is concerned they will run us into serious trouble—and themselves also.

  1017
  I can promise that if they continue trying to nationalize us they will get the thick end of the dirk.
  LORD AMMON: My Lords, I think this would be a convenient moment to adjourn for the Royal Commission.
  House adjourned during pleasure.
  House resumed.

  ROYAL COMMISSION.
  5.42 p.m.
  The following Bills received the Royal Assent:

  Cotton (Centralised Buying),

  National Health (Scotland),

  Cotton industry War Memorial Trust.

  House adjourned during pleasure.
  House resumed.

  TRANSPORT BILL.
  5.48 p.m.
  LORD DUKESTON: My Lords, we have listened to a very interesting and informative Second Reading debate, and one thing that has surprised me has been the area of agreement. Most noble Lords who spoke from the other side appear to have taken the view that things as they are cannot he allowed to go on; that there must be some form of co-ordination, and that the competitive element between rail and road transport should be brought under control, otherwise the railways are bound to diminish in their influence so far as long road hauls are concerned. That, I think, concedes to the purpose of the Bill its main basic principle. We who believe that the form of co-ordination suggested cannot be effective short of nationalization support the Bill in the belief that, unless we get a completely integrated transport system, we shall at best delay economic recovery for a considerable time. And it may well be that we shall spend many unnecessary years because of the limitations imposed on our economic revival by a transport system which is generally recognized as wasteful in its competition and likely to prove economically ruinous so far as the railway systems of the country are concerned.
  1018
  Much stress has been laid upon wartime experience, and I think an impression has been created that but for the war the railways might have rehabilitated themselves, brought their rolling stock and permanent ways up to a relatively high degree of efficiency, and in that way have warded off what to some noble Lords appears to be the quite unnecessary evil of nationalization. I have taken some little trouble to get out one or two figures regarding the position in the immediate pre-war years. These by no means bear out the contention that things were going relatively well up the outbreak of war, after which time the rolling stock, permanent way and everything else suffered under great strain for a period during which, owing to that calamity, the necessary repair and maintenance could not be provided.
  I am informed that the passenger train receipts in 1924 amounted to £95,000,000, and that that figure had fallen by 1937 to £75,000,000. In the case of goods train receipts, in 1924 the figure was £106,000,000, and that had fallen by 1937 to £95,000,000. I think, therefore, that the trend in the immediate pre-war years was obvious in the matter of competition for long distance haulage between the railways and the mad hauliers, and it was clear that in that competition the railways were fighting a losing battle. If one looks back one can recall a time when canals got into a similar position. I can remember railway companies becoming interested financially in the inland waterways of the country, and whilst I do not say that it was consequent upon that interest that, over very large areas of the country, those waterways fell into disuse, the facts are there to be seen by anyone who travels about the country. Many of the waterways that might have served a very useful purpose, particularly during the war years, are so silted up, and the towing paths have fallen into such a state of disrepair, that it has become quite impossible to use them at all.
  Now it is a remarkable coincidence that the railway companies pursued the same policy with the developing road transport, and to-day, I understand, they have interests in—if they do not control—anything up to 5o per cent. of road transport. I am limiting that statement, of course, to long-distance haulage, which is the real

  1019
  competitive factor, and whilst my percentage may be one or two points out, generally speaking I think it is correct. I do not know whether that coincidence means that without the Government intervening and attempting to bring order out of chaos we might have seen the railways degenerating, I do not say to the extent that canals have degenerated but at least to something proportionate. Another figure given to me by people whom I regard as fairly competent puts the transport cost in relation to the over-all expenditure of the country as high as one-fifteenth. I think that figure reveals how basically important this internal transport system of our country is to every phase of our economic life. Unless we are going to put transport right, unless we are going to prevent the continuation of this wasteful competition, then I believe that, at best, we are bound to delay that rehabilitation which each and every one of us wants to see effected in as short a space of time as possible.
  Much has been said about ownership and control. We have debated the theory as to whether or not this over-all integration of the transport system can be effected better while it is left under private ownership or when it is put under State ownership, and we seem to have discussed that very largely from the investors' point of view. Not too much has been said about the interest of the people who invest their lives in our transport system. It is just as well, I think, that we should look at that interest. Figures that have been supplied to me are as follows. If we take the railways, including hotels, I understand that the pre-war total of employees was somewhere in the region of 600,000. For docks, harbours, and rivers, the total number of employees was 125,000. The corresponding figure for public services was 245,000, and for private haulage the over-all figure was 240,000. I shall not include the figures relating to "C" licences because I think that is outside our discussion. I believe the over-all figure, the inclusive figure, for the transport industry of the country approximates to 2,000,000 employees. It can be said with a large measure of truth that so far as the opinion of those people is concerned it is overwhelmingly in favour of the nationalization of the industry. I think, too, that some regard should be paid to security of tenure and to the standard of
  1020
  life of the people who are employed in those great industries. At least as much regard should be paid to that side of these industries, I hold, as is accorded to what appears to me to be almost an obsession in the minds of some noble Lords—they seem to think that the only interest to be considered is the ownership interest, which I do not hesitate to call solely and simply a vested interest.
  I was very much interested by the speech of the noble Lord, Lord Balfour of Burleigh. He rather deplored the development of large undertakings, the loss of personal contact between employer and employee. It is a remarkable fact that in industry in the last quarter of a century the tendency has been all in the direction of the development of absentee ownership and of the relegation of managerial obligation to specialists who are not necessarily owners and who are, in fact, very largely employees, receiving their direction from someone far distant and removed from any direct responsibility. In fact, personal contact has grown to be the exception rather than the rule. I fail to see why those personal contacts should not be developed and improved under public ownership just as they can be built up and maintained under any form of private ownership. But it is the fact that that element has been neglected, and the actual control of policy-making in industry has grown more and more remote from those who invest their lives.
  I think it is no use bewailing that divorce. We should apply our minds to seeing whether in future years these personal contacts can be developed and made quite as effective as they used to be under the old owner-manager relationship, in which the man at the top knew each and every one of his employees and regarded him almost as part of the family. I had the pleasure some months ago of addressing what I believe was the first national conference of the Personnel Managers Association, and I was agreeably surprised. It does seem that in these immediate post-war years we are waking to the fact that the most essential element in any industry, transport or other, is the human factor. I could draw some rather brutal pictures of personal experiences in industry in which the human factor did not seem to matter at all.

  1021
  The noble Lord, Lord Walkden, will be interested to know that there was a time when I worked for a railway company, but I did. not stay with them very long. I worked for 19s. a week. We were paid on a Monday night, and such were the conditions that I well remember that the gang if worked with, when the whistle blew at 12 o'clock on Saturday, adjourned to the bankside or into some railway waggon, pooled their money and played cards, so that the two who were fortunate enough to win had a good Saturday night and the rest went home to bed. I believe we are developing away from that kind of thing and I hope that in all these nationalized, or shall I say nationally controlled, industries some provision will be made for the care of the human element. We have gone a long way in the provision of welfare. We have done a great deal to provide reasonable amenities, and so far as experience has gone up to now that has proved to be a very profitable investment. But it must be understood that we are only in the beginnings of that experiment.
  There have been sufficient inquiries and reports into this problem of an internal transport system to permit of no further delay. That there is a conflict of opinion is beyond dispute. We may regard it as being a conflict of ideologies, but, however it is put, the fact remains that all those who have sat down and given any serious thought to this matter have concluded that we must limit the competitive element if we are to develop an efficient internal transport system. So much is common ground, and it does appear to me that whilst there may be disagreements here and there, when we reach Committee stage there might be a pooling of ideas to see how far this Bill can be amended. I welcome the agreement from both sides of the Opposition—if I may put it in that way—to approve a Second Reading, to give an opportunity of looking at the Bill in more minute detail and to settle down to making it a first-class working job.
  I would like to reply to a rather jocular remark made by the noble Viscount, Lord Swinton, yesterday. He put a question as to whether a final arbiter as to the degree of co-ordination would be the T.U.C. I can assure him that he can sleep in his bed to-night. The T.U.C. knows the limits of its obligations. It has no desire to intrude itself on our democratic parliamentary system. It is a very fine body.
  1022
  It has a great deal of experience of the work of co-ordination, and I doubt if there exists in any other country a body which can bring together at a focal point the opinion of 7,000,000 organized workers. I should have thought it was known by everybody that the T.C.C. has not hesitated to give the bet refit of its advice to Governments of any kind, whoever they may be. It is one of its claims that, regardless of the colour of the Government, the T.U.C. will always be available to give whatever advice it can, arising out of the breadth of its industrial experience.
  I thought I had better assure the noble Viscount the Acting Leader of the Opposition that lie need n be afraid that the T.U.C. would usurp the functions of members of your Lordships' House or the responsibilities of members of another place. I am not sure which of your Lordships said that in the passing of this Bill we should witness parliamentary and political pressure being put on the controlling authority to concede wage increases, and so on. I give to him the same assurance as to the noble Viscount. The trade unions will never sacrifice their executive autonomy to politicians—I am pleased to be able to say that. I think it would be lamentable if we brought into parliamentary debate the detailed regulations of that very intricate problem which so many people think they can blue print and plan for us.
  6.9 p.m.
  THE EARL OF SELKIRK: My Lords, I welcome the statement of the noble Lord, Lord Dukeston, of his belief in the relations between man and man in industry. Possibly no element in this Bill causes us greater anxiety. Under the Bill it will be man against rule. It is these rules which will constitute one of the greatest difficulties in operating the whole of this Bill. The noble Lord raised one of the reasons frequently given for bringing this Bill into operation. He said it was due to competition with the railways. Let us remember what that means. It has been called "creaming the traffic." The noble Lord, Lord Walkden, talked about "piratical hauliers." Let us see who is getting the benefit from these "pirates" and the cream of the traffic which they are drawing. It is the members of general public who to-day are getting the cheapest fares they can expect to get.

  1023
  What I am concerned about is that here we are building up a pure monopoly. Where does the member of the general public stand when he is faced with a complete and absolute monopoly? We have slipped into the word "monopoly" without any real justification of what it means, or why it is necessary. The noble Lord, Lord Pakenham, I regret to say, slipped into this word straight away from "integration." There is a very big step between integration and monopoly which could be filled logically, and which the noble Lord is quite able to do. I am sorry he did not give us the logical reason which made the step necessary. I agree entirely with the noble Lord, Lord Beveridge, when he said that monopoly, either private or public, should not form any part of the State, though I believe, with noble Lords opposite, that if there is to be a monopoly it should be a public monopoly.
  What safeguards are the consuming public to have against this monopoly? I want to give an illustration to emphasize why a safeguard is necessary, and I will take the bus fare from my home to Glasgow and compare it with the railway fare. The bus fare is 2s. and the railway fare is 5s. 3d. That is the measure, of the interest which the general public have in the passing of this Bill. It is commonly stated that the intention is, to pool receipts. The benefit of the alternative fares—which work out in my case at 15s. a week against 35s. a week—is considerable. What assurance, if any, is offered in this Bill that the public will continue to receive the advantages they have had in the past? After all, up to now, if anyone did not want to go by one means of transport he could always choose an alternative. In future there will be no alternative unless the Commission decides to provide it.
  What is the proposal that is made? The proposal is that there should be a tribunal to decide rates. What can that tribunal do? It can take the rates the Commission offers or it can refuse them, but what yardstick, as the noble Viscount, Lord Falmouth, said, can they take in the future? They can take none, and under Clause 76, they may leave it to the Commission to set the rates. I am afraid I found extremely little satisfaction in the Rates Tribunal for pro-
  1024
  viding or insuring that the minimum rates which stand at the present time will continue. We find there is a second method to protect the consumers, and that is the consultative committee. That point was adequately dealt with by the noble Earl, Lord Airlie, but I find it is even weaker than he suggested.
  In the first place, the Minister may abolish the consultative committee at any time. In the second place, the consultative committee have no power to ask for information; and it is no use tackling a subject unless you can compile the necessary information upon which judgment can be formed. It is suggested that the consultative committee should meet twice a year and that the recommendations should then go up to the Central Tribunal. If one wants to complain about the timing or the cost of a bus service in Inverness it has to go to Edinburgh where an appeal is delivered to the consultative committee; it then goes to London, and is laid before the Minister and the Traffic Commission. It then has to go back to Edinburgh, and up to Inverness. This is a ridiculous and impossible proposition.
  Finally, I come to the third resort which the public have—the great court of Parliament. Parliament is essentially unsuitable for dealing with the question of railway rates. It is a case of de minimis non curat lex. It is far too small a matter for Parliament to deal with. What it may do is to remove the Minister of Transport but that, in itself, will not make a good transport system. A cardinal difference has taken place with the passing of this Act. No longer is the Minister of Transport in a judicial position between the consumer and the operator. He will be solely on the side of the operator, and if there is a complaint between one and the other he will invariably come down on the side of the operator. If I were to criticize civil aviation, as I shall do in a minute, you would find that the noble Lord, Lord Nathan, would be on the defensive. If one were to criticize coal one would find the Minister in charge of fuel and power would be the same.
  I would suggest that the first essential is to provide some fourth power in the State which will safeguard the consumer in the administrative function of the executive. We have frequently before now had to curb the executive in this

  1025
  country. If one goes back, the Great Charter was nothing more or less than a curb on the executive, and it established a judiciary system in this country by which no man could be convicted without due course of law. We want a fourth estate in this country to secure that the executive conduct the administrative affairs efficiently. No man is a good judge in his own case, and the Minister must necessarily be judging his own affair. If I may quote our national poet:
  "Where self the wavering balance shakes,
  'Tis rarely right adjusted."
  I feel we have a great duty to ensure in this Act, if it is necessary for the executive to have these great powers, that there is some adequate and proper check to enable the consumer to see that his interests are properly looked after. We have had that up to now through the Traffic Commissioners. They may not have been strong enough, though they have been fairly strong, but they could have been made stronger. But the consumer to-day is entirely at the mercy of the monopoly which has been set up. It is the duty of His Majesty's Government to see that the public is adequately protected.
  We have been told that the small operator should have a fair field for operation. I think it is quite clear that the terms of the Bill make it very difficult to know exactly what is his field. The terms of the forty miles and the twenty-five miles are not in themselves clear to understand. Nearly all these matters are more difficult to interpret afterwards than before. It is of the utmost importance that the field in which the small operator can work should be as clear as possible. During discussions on the Civil Aviation Act we were told frequently from the Government Bench that charter was free for all. We know that the price of freedom is eternal vigilance, but the price of free charter is 5 per cent. to British European Airways. The Act cannot be satisfactorily interpreted, so anybody who wants to be free to operate a charter service pays 5 per cent. to avoid argument. That is the situation which exists at the present time, and the same thing will happen to the small operator if the law is laid down without absolute clarity on this subject.
  I would like to say one word about the local authorities, because it is in that field, it seems to me, that the real mask of the Government has fallen off. It is not a
  1026
  Bill for public control; it is a Bill to bring in central caucus control, It is nothing more than that, because public control already exists and is not to be allowed to continue. At the present dime £17,000,000 in assets are being taken over from the corporations in Scot land for £2,250,000. I have not totalled up the reserves, but it will mean that about £21,000,000 of assets are being taken over for £2,250,000. Whilst that is public money, it reduces the independence of local authorities. Whit is the use of being economical in the expenditure of money if every time you save up reserves they are taken away? The spendthrift local authority would be at a much greater advantage, for their liabilities would be removed.
  What is even more important is that the autonomy of the local authority is removed. You are placing a system of transport under a control that is far removed and the local autonomy to develop as it wants is lost for ever. Can the noble Lord really suggest that the halfpenny a mile charge in the Glasgow trams can ever be improved? The only way in which this charge can move is upwards. There is no chance of a better and cheaper service being provided by this centralized caucus. Yet the intention of the Bill is to take away the control which exists at the present time. It is absolutely ludicrous to suggest that it is necessary for the road transport executive to run the Glasgow trams as it would be ludicrous to suggest that the London Passenger Transport Board should be run from Edinburgh. Yet that more or less is now what is being suggested. There is no excuse for it. There is no profit-motive behind the running of the Glasgow trams. They are run by a public body.
  If I may, I will now say a word or two about Scotland, because in that sphere there are one or two questions which I want to ask. We have had a number of promises from the noble Lord, Lord Walkden, with regard to consultative committees. I am bound to say that I should be very happy if they were abolished. I can see no useful purpose of any sort being served by a consultative committee. What I should have liked is what I have urged on previous occasions—a resident, executive, responsible management. You must have men on the spot who can carry out the task. If you do not, you will strangle development and prevent the best use being made of the facilities which exist.

  1027
  Has any consideration at all been given to the special requirements of Scotland? The noble Earl, Lord Airlie, mentioned some of them. Has this plan been developed in a Whitehall office, and particularly in regard to the 25-mile radius for road hauliers? Has anything been considered? Has it been considered that Dunoon is five miles from Greenock but a road journey of 150 miles? Has it been considered that some of the lochs are more than twenty-five miles long while only two or three miles wide? Have those points been considered? Can the noble Viscount the Leader of the House tell us that those points have been examined, weighed, and considered with understanding?
  This matter has been considered in Scotland, as the noble Earl, Lord Airlie, said, by the Scottish Council of Industry and Development. I should like to tell your Lordships what that Council consists of. It represents all branches of effective political opinion, and includes representation from the Convention of Royal Burghs, from all local authorities in Scotland, from the Scottish Trades Union Congress (I am sure the noble Lord, Lord Dukeston, will be interested in that), from the Scottish Chambers of Commerce, trades associations, co-operative associations, and trades councils. The members of the Council represent all shades of opinion and are entirely indifferent to questions of nationalization or non-nationalization. What they are interested in, and what they understand, are the requirements of the country.
  How can anyone living in London say he understands the requirements of the country such a long distance away? Those men whom I have mentioned are the men who do understand such requirements. They have no political opinion that they express. They are perfectly clear—and have taken advice on it—that a transport board can be formed for Scotland, convened of persons with proper knowledge and experience. This board would be responsible to the Commission in London and could be integrated with it and with the executive committees. The noble Lord, Lord Nathan, said this was a business proposition. If he went to Scotland and consulted anyone, he would not regard it as a business proposition to be run by an executive centred in London, responsible for road,
  1028
  rail, and hotels. If he does not believe that, I ask him to consult anyone of business experience in Glasgow or Edinburgh and to find out his reactions. I think they would be as clear as crystal.
  If I may, I will try to give one or two examples from the sphere of civil aviation. The noble Lord, the Minister of Civil Aviation, is present. There are many parallels between civil aviation and this proposal. I think it is fair—if it be not irrelevant—to try to give a picture of what has happened. I will take as my first example the question of foreign air services. Your Lordships may remember that under the Bermuda agreement the intention was that the services should be run, roughly, on a fifty-fifty basis: that is to say, fifty by the domestic companies and fifty by foreign companies. We find that in Ireland and Holland—two countries extensively used by foreign operators—the international services are between 65 and 70 per cent. domestic—that is to say, Dutch or Irish—and 30 per cent. foreign, whereas, after all the promises we have had, in Scotland 95 per cent. of the international services are operated by foreign companies and 5 per cent. by British. If that is not starving the natural ability of the country, I do not know what is.
  It means that the corporations in London have no interest in developing the national trade and resources of the country. I will give your Lordships another example, with regard to the supply of aircraft. We have had recently a service in which aircraft ten years old in design are being replaced by aircraft twenty years old in design. The Dakota is being removed and its place being taken by the old J.U. 52, that famous parachute-dropping aeroplane which we all read about during the war, and which I personally flew twenty years ago. That is what is happening under this central caucus. Would they have that aeroplane appearing in London? No. They would be ashamed to have it come down to London. But it is good enough for Scotland. I could give many other examples. I have mentioned those two points. We are being forced into a caucus which is not proved. It is an economic experiment which has no precedent in industrial history. There are no safeguards for the individual. Sociologically, evolution has shown us consistently that great organizations are too complicated, too difficult to

  1029
  continue and cannot adapt themselves to new circumstances. They die and become extinct. It remains to be seen whether what I might call one of the outstanding failures will die or not.
  Finally, I would say that this is morally unjustified, because it reduces personal responsibility; and personal responsibility is vital. We in this House have a great responsibility to ensure that the rights of the consumer are adequately preserved, so that the individual may go about his lawful affairs with the services which are provided by this monopoly.
  6.26 p.m.
  VISCOUNT LONG: My Lords, I make no apology for rising at this rather late hour to intervene in what has, I suppose, been a momentous debate upon what is to the country a most vital matter—that of nationalization of transport. In opening the debate this afternoon, the noble Lord, Lord Nathan, said he had asked himself if the project was fair. It is my duty, on behalf of the many thousands of ex-Service men in the road transport industry, to endeavour to warn your Lordships of the unfairness of the Bill as it stands at present. In order to do this, may I for a few brief moments give your Lordships the background of this great industry of road transport with which—I must admit at once to your Lordships—I have had the privilege of being personally connected for sixteen years?
  The men responsible for this industry were non-commissioned officers—corporals and privates—who had saved up their money in the First World War, and who as pioneers bought vehicles—many of them with solid tyres. They took a chance. The spirit of adventure was still allowed, and not controlled as it is today. Did the men give service to the country? I venture to suggest to your Lordships that they have given to the country not only a service, but a very remarkable and efficient service; and that without that service it might well be that we should not be sitting here now. Because of the shortage of railway trucks, and so on, during the war, road transport was able to step into the breach and save our munitions at a critical moment. Without them we might not be here.
  These men put their all into a business. They built it up. It is perfectly true to say that in 1938 the railways found that the competition of road transport was
  1030
  militating against them. But I am equally glad to be able to tell your Lordships that it was my proud privilege to take the lead in instigating the joint conference of road and rail. I took the chair at the first meeting that took place, with Lord Stamp and Sir Ralph Wedgwood, and from that meeting was started the Road and Rail Conference.
  I want to refer now to this question of unfairness. Let us take the case of an operator who has built up in twenty-seven years a business which brings him in an income of £1,700 a year, who helped to fight for his country in the First World War, and whose sons were killed in the last World War. Under this Bill his business will he taken over (he has only seven vehicles and it therefore falls within the scope of the Bill) and he will receive 21 per cent. on the capital in all that will be paid for goodwill and vehicles—namely, £240 a year, as against£1,7,700 a year. Where is the fairness in that? This is not an exceptional case, as the Minister said in another place the other day. I have in my file over 300 of such cases, and I have taken great trouble to investigate them all. I am giving just this one instance, although I could give many others. Can that possibly he fair to an ex-Serviceman who fought in the First World War, and whose sons were killed in the Second World War? I cannot believe that His Majesty's Government— who, after all, have been telling us and the whole country how they are on the side of the working people, and want justice for them—will not, from this moment, before the Bill goes into Committee, see that justice is done to these men, and that they get their proper due if and when their businesses are taken over.
  Turning from that, I want to make one other point. This Bill is really a most curious Bill of contradictions. I notice that the noble Lord who introduced it this afternoon found it difficult to explain. There is one contradiction which I do not really understand. Take the case of furniture. The Government will come into possession, through the railways, of the largest furniture removal company in the country—namely, Pickford's. In view of the fact that they will be Government owned, they will be able to carry furniture from "A" to "B," and will not have to bother about bringing furniture back.

  1031
  Under the Government scheme they may bring back any goods they like. Accordingly there is no difficulty in finding goods, nor is there difficulty in getting rates. But the ordinary furniture remover will be able to carry only furniture from "A" to "B," and must bring furniture back from "B" to "A." He will therefore be handicapped at once by this octopus.
  I beg His Majesty's Government, in fairness, to think these questions over, because they are at the bottom of our make-up as Englishmen. They are not just small incidents in life, but are part of our life. I do trust, therefore, that when we come to the Committee stage that point will be taken into consideration, out of sheer justice. Lastly, I would like to correct, at any rate, from my own point of view, one point which has been made. I have travelled the country, north, south, east and west, and I have spoken at many Chambers of Commerce and of Trade. Unlike the noble Lord, Lord Lucas, who says that our system of transport is inefficient, I have yet to find a single trader—
  LORD LUCAS OF CHILWORTH: If the noble Lord will forgive my interrupting, I never said anything of the kind. I know he would not wish to misquote me. I said that I was not going to enter into argument as to whether it was inefficient.
  VISCOUNT LONG: I am glad the noble Lord did not say our transport is inefficient, because it would be a curious statement. I can state that the Chambers of Trade and the Chambers of Commerce are unanimously against this Bill, which would seem to show very clearly that a most efficient form of transport has been established throughout this country, despite our difficulties. Time is getting on. I had a good deal more that I would have liked to place before your Lordships this evening, but I will just say that, in my opinion, the Bill is still completely illogical—there are all these anomalies in it; nothing is clear—and from my experience of transport over fifty years, if this measure goes through in its present form the chaos will be so appalling that we shall be put back not just two years but a quarter of a century.
  6.35 p.m.
  VISCOUNT SIMON: My Lords, we are now reaching the closing stage of this
  1032
  long and important debate, and before the noble Viscount, the Leader of the House, makes the final reply for His Majesty's Government I hope I may be permitted, with due regard to the lateness of the hour, to attempt to gather together some of the main considerations which have been urged, and to put to the noble Viscount, if I may, one or two questions which are not intended in any way to be traps but which indicate areas of the Bill about which we would be glad to have his explanation. We can begin, I am quite sure, from a common point of view, very well expressed, if I may presume to say so, by the noble Lord, Lord Dukeston, at the beginning of his speech. Nobody can doubt that the proper arrangements for inland transport in this country are matters of the greatest possible importance to the whole community. We need not take any Party sides about that. I suppose it will be agreed that in testing whether a plan is good or bad, opportune or ill-timed, one may put the question: Does the plan, so far as goods are concerned, provide the trader with a cheap and efficient service? We all know that an inefficient service, or a service that is unnecessarily expensive, strikes at the very root of the project that we are all trying to improve at this time.
  The first point I want to make about the Bill, on behalf of those of my friends who agree with me, is this—and I put the question directly to the noble Viscount, Lord Addison: Is the timing of this Bill wise? Let us consider. We are admittedly at this moment in the most serious of economic difficulties. We are adjured to increase production, and are told, no doubt quite truly, that every day counts. We are begged to do everything we can to increase exports and increase them now. We are warned that we are under the shadow of possibly even greater economic and financial difficulties. I put the point that was implicit in that most moving speech and fine argument, as I thought, of my noble friend Lord Balfour of Burleigh. Is it really wise in that situation to bring forward and push through this immensely important measure? It is not as though the carrying of this measure into law were going to change the situation in a twinkling of an eye. If at some early date we have again some members of your Lordships' House sitting in

  1033
  their full robes as a Royal Commission, conveying the Royal Assent to this measure, it will not transform that situation. The Bill itself is to begin to operate on a fixed date—January 1 next year—but the benefit, if there be benefit in the Bill, and the improvements, if there be improvements, which you think it will produce, are, I should think, admittedly matters of very slow growth. I would ask the noble Viscount, the Leader of the House, as the principal spokesman of the Government here, what indeed the noble Lord, Lord Balfour of Burleigh, asked him: In how many years, or in about how many years, is it really expected that the new system— which you believe will be so beneficial— will be in approximately complete working order? It is a perfectly reasonable question, and it is one which I feel sure the noble Viscount will not mind being asked.
  Just see what it is we have to-day. We have a Bill which, if I may say so, has obviously been put together in haste. I am told that there were 280 Amendments to this Bill put down by His Majesty's Government in another place since it was introduced, and a large number of them were carried under a closure which even prevented their being explained or justified. No inquiry, such as serious-minded people suggested—although I agree that there have been inquiries on some of the aspects of this matter before—has been held which went to the issue as to whether this was the time when this could be safely done. We have here a practically blank clause providing far the ascertaining and ultimate setting up of a new system of scale of rates. Yet, as I read it, there was a ministerial declaration in another place about that. "Why, bless me," said the spokesman, "I have hardly begun to think yet how that subject should be handled." I may point out that in the Bill of 1921, which my noble friend will remember, there were a whole set of clauses which carefully provided for the principles upon which the new scale and system of rates was to be built. As I will point out in a few minutes, the present topic is a far more difficult one than that, because to get a scale of rates which is going to do what is necessary, both for the man who uses the railway and for the man who uses the road, will be a very serious question indeed, and one upon which I think parliamentary opinion on
  1034
  the principles would naturally have been required.
  That is the nature the Bill. But it is a Bill which, by Clause 12, comes into force on January 1 next, and I would ask the House at this final stage just to consider the extreme recklessness, as it seems to me, with which we are invited to enact that the first day of January, 1918, without qualification or mode of escape, is to be the day on which there is to vest this whole mass of undertakings in the bodies of persons specified, which includes the Commission of these five wise men. Anybody who heard or read the speech of the noble Lord, Lord Rochdale, made late in the debate yesterday will be immensely impressed by the list of things that have to be done. I do not know whether it was possible for the noble Viscount, the Leader of the House, to be present at that moment—and I do not blame him if he was not—but I wish he had the time to read the paragraph in yesterday's Hansard at Column 951. There the noble Lord points out the host of things that have to be done, and in good order, by that fixed date.
  Any noble Lord who has had any parliamentary experience has known many Bills in which the vesting date is not fixed by the calendar date mentioned in the Bill but is a date which is to be prescribed by Order in Council, which means that the Government has control over the date, or it is a date which may be indicated in the first instance, but with the provision that the Minister may postpone it if he finds it necessary. But here I find a feature which is very novel and, as it seems to me, having regard to the vast operation to be performed, amazingly reckless—namely, that this thing shall happen on January 1 of next year, whatever be the circumstances at that time and whether you are ready for it to happen or not. As the noble Lord, Lord Balfour of Burleigh, pointed out, on that day the directors, according to the Bill, walk out. He gave an account, which I think was very instructive for many of us, as to what indeed is the part they play in railway managements. Here you have a Bill which provides that this Commission is to be appointed, and that these five or six executives are, be it observed, to be chosen by the Minister. They are to be ready to carry out the day-to-day management of this vast variety of undertakings,

  1035
  and we are invited to commit ourselves to the proposition: "Let us have a fixed date, and January 1 next year will be the time we may safely choose."
  I should have thought that by this time His Majesty's Government would have learned some of the dangers of fixing dates when they do not know what is going to happen in the interval. I should have thought that their Indian policy in that respect would have given them a warning that there is a certain wisdom in securing a little latitude. But that is not so here, and therefore we are to go in for what many people must feel is the biggest gamble at the most anxious time—at a moment only seven months hence—however far you may find yourselves then from being ready to take over and manage this immense combination of undertakings. That is the first point, and I wish to put this to the noble Viscount: Can you really justify a date so early for this immense transformation? What are you going to do if things are not ready? Have you thought that out? Would it not be wiser to provide against that danger? Surely this new Commission cannot be willing to take over responsibility until it is satisfied and prepared to certify that the new machinery over which it will preside is sufficiently arranged to give a prospect of working smoothly. You cannot move officials and men of different grades from one service to another service as though they were so many cattle. Every single contract that you have has to be remade, and in some cases negotiated.
  I do not want to spend further time on this point, but I do most earnestly beg that the noble Viscount, the Leader of the House, will, on looking at it, be good enough to give us his views on the matter. I invite him to justify, if he can—though I am endeavouring to speak with moderation, and not to pronounce final judgment without hearing him—that feature in this very important Bill.
  There is a second point I wish to make, and I want to raise one or two questions about the scope of the transfer. Primarily, of course, the acquisition is of railway and canal undertakings and of certain undertakings for the transport of goods by road haulage. There is much more that lies behind, but those are the primary things. As regards the railways, there are many people who say, as I
  1036
  heard the noble Lord, Lord Beveridge, say yesterday, "Well, the railways, after all, are a national monopoly, and that is sufficient reason for putting them in public hands." I have great respect for that argument; it is one which, in its proper place, I frequently urged with complete conviction, and I do not try to change my argument according to the circumstances. But I would ask this question, which the noble Lord, Lord Beveridge also put. Is road transport also a national monopoly? Of course it is not.
  It is ridiculous to treat road transport as though in the nature of things it were something which was monopolized by a single proprietor or undertaker. And the reason why in this Bill—not content with taking over the railways—you want to take over, to the extent proposed and for the exclusive use of the Government, transport by road, is that you dare not take over the railways without controlling both. According to you that proves that you should nationalize both. It is a possible view that it might be a reason for nationalizing neither. The truth is that a nationalized system such as the nationalized railway system is a very delicate plant. It brooks no rival near the throne. It is quite true that in view of the development of road transport to-day, the great development of the internal combustion engine, the great improvement in road tyres, and so on, there is here a terrible rival to the railways. But when you have acquired both, what is it you are really going to do with road transport? Are you going to encourage it or to discourage it? No wonder you do not say any more in this Bill than you have done about your scale of charges. I would like to ask the noble Viscount if he thinks this is a matter which he can properly answer.
  When this Bill hands over to the Government the property in the railway undertakings and in this great mass of road undertakings, will it not be necessary to have scales of charges which will endeavour to restrict road transport? There was a time in my life, if I may make reference to it, when I knew a little about railway rates and charges. I had a good deal to do with them in my old days at the Bar, and I might have passed an examination in the more elementary principles—provided that the noble Lord,

  1037
  Lord Walkden, was merciful in examining me. This idea of charges for road transport seems to involve a perfectly different conception. Is it not the case that what you will need to do is not What you do with the railways, to fix maximum charges above which you must not go, but that you will have to fix for the roads minimum charges and provide that nobody shall charge less? That is a good look-out for the British trader. That must be a great encouragement to the man who wants to get cheap transport. And if you do not do that, how are you going to make what you hope to make out of the railway portion of your system?
  I notice that there is a provision in the Bill that the customer is still to have the right to choose by which route he would prefer to go, road or rail. Yes; but there is a slight qualification. If your Lordships will look at the Bill you will see that he has only to have that choice if the Commission provides both rail and road method. It will not be much comfort to a man to say, "You have your choice, but unfortunately there is only one way to go." Undoubtedly, the scientific management, such as only a Minister of Transport and his colleagues can secure, will make, an effort to provide what it can. But will that not have the result of shutting up a number of railways and, for all I know, prohibiting a certain amount of road transport into the bargain?
  If that had been explained early, instead of being left to be devised by the Commission and submitted to the Transport Tribunal—and then in some cases put back on to the Commission, a very curious feature—and if it had been known and appreciated by the traders whom in this Bill we are endeavouring to please, it would have made a rather surprising disclosure. I agree with a phrase which I think fell from the noble Lord, Lord Nathan, that if you take over the railways the taking over or control of road transport would be an inescapable consequence. Otherwise, the railways in many cases would be run out before they had begun to score. But the consequences are serious, because it really means that, as the noble Viscount, Lord Long, said, you are in fact curtailing and confining road transport in a way that a great many people would not approve.
  1038
  I will not repeat the argument which the noble Lord, Lord Beveridge, used with such effect to show that the proposals of this Bill in respect of road transport would impose a new set of restrictions on the freedom of the use of the roads. It seems to me that that is so. I therefore ask the question: Is not the real truth about what you are doing in this aspect of the Bill that it is an endeavour to restrict road transport in the interests of Government railways and to impose on road transport not a schedule of maximum charges but a series of provisions which will secure that the road transport people shall not carry for less than the amount which you lay down? And that would he Very curious.
  Whether or not we shall achieve that ambition of my always cheery and optimistic friend, Lord Walkden, so that every trader in the country, if he wants to know what he has to pay to the Government transport services, will merely fish out of his waistcoat pocket a little book and look it up, I do not know. If that is going to be made possible, I hope that the Government transport services will also take in hand Bradshaw. Why should Bradshaw consist of anything more than a pamphlet of more. than four pages? I feel convinced that those who are so attached to the principles of nationalization will say: "It is quite simple and it can all be put down on two sides of a half sheet of notepaper." Well, we shall see. That is not the effect which the postal guide makes upon me at present, but perhaps that is owing to some defect in the postal service.
  Let me call attention to one other thing in connexion with the road transport business which greatly surprises me. It has been decided by the Government, according to this Bill, that they are not to take over all road transport. As one sees from reading Clause 39, on page 48, there is to be excluded those road transport undertakings which can show that they are not what are called "ordinary long distance carriage" undertakings. If any of your Lordships still retain a slight glimmering of interest in the sort of problems which, as schoolboys, you were invited to study in the Second Book of Euclid, or the simpler curves in conic sections, let me invite you to look at subsection (2) of Clause 39 on page 48. Here it cannot be said there is no pro-

  1039
  vision as to detail. The subsection reads:
  "In this Part of this Act, the expression 'ordinary long distance carriage' means, in relation to an undertaking, the carriage of goods by the person carrying on the undertaking for a distance of forty miles or upwards in one goods vehicle or a succession of goods vehicles, in such circumstances that the vehicle, or, as the case may be, one or more of the vehicles is, at some time during the carriage, more than twenty-five miles from its operating centre."
  Then there are a series of exceptions about furniture removals and other things. I still retain an interest in such mathematics as I was ever able to command, and I have tried to school myself to understand this. It seems to me that you first find the operating centre—Liverpool, Manchester, Birmingham, London, or wherever it may be. You then, as Euclid would say, "describe" round that centre, with a pair of compasses, a circle with a radius of 25 miles. I think we can all do that. You will escape being described as an "ordinary long distance carriage" concern (and will, therefore, avoid being expropriated by the Government) if your predominant occupation consists in carrying goods—I suppose that means the same parcel of goods—a distance of not more than 40 miles inside that privileged circle.
  As the circle has a radius of 25 miles, its diameter, of course, is 5o miles; so you cannot go from one side of it to the other, because that is more than forty miles. Very odd results appear to me to follow. Take for instance the relation of Manchester and Liverpool. I think the best road between them is 38 miles long. If you have your operating centre in Liverpool, beware of going to Manchester, because that is more than 25 miles; and, in the same way, if you have your operating centre in Manchester, beware of going to Liverpool! The best thing is to have your operating centre at a place like St. Helens or Warrington, because if you describe a circle of 25 miles radius from there, it goes through both Liverpool and Manchester. It is true that you must be very careful. If you have a job to do from Liverpool you must run in empty. Do not take any risk of carrying goods for too great a distance—that is a crime. You may go as far as you like within the circle so long as you do not carry goods.
  1040
  This, we are to understand, has got rid of what some of your Lordships have described as "useless competition." You may drive to your heart's content and burn up petrol for nothing, but when it comes to carrying anything, then for heaven's sake do not carry it for more than 40 miles. I have been led to speculate on how this will work out. A noble Earl who spoke a short while ago gave an illustration from Scotland. I will take another case. Let us suppose that the operating centre of my particular concern is Dover. If I take my pair of compasses, stick one end into Dover and describe a circle of 25 miles radius, it will include Calais. Therefore, I have the permission of the Government, without any risk of being expropriated, to drive my vehicle with a load upon it (that is to say if I know how to do it; I suppose for the purpose it would be as well to acquire a "Dukw", or at any rate some sort of vehicle capable of crossing the Channel) as far as Calais. On the other hand, I am not allowed to go the other way for more than 25 miles. I must say that I think it would be a considerable improvement in this doubtless ingenious formula if you were to provide that if the operating centre was within so many miles of the sea then at any rate you might have a larger circle to describe. That, I agree, is a detail but it is one that shows that when we come to the Bill in detail there will be a good deal to consider.
  LORD BEVERIDGE: Will the noble Viscount forgive me for interrupting, and allow me to suggest that the puzzle, as it seems to me, is even harder and more amusing than he thinks? I venture to say that even he has the answer wrong! This subsection which relates to 25 miles and 40 miles says that it is "ordinary long distance" if you travel more than 40 miles and are, at some point, more than 25 miles from your operating centre. I think that means that if you put I the operating centre at St. Helens you can travel more than 40 miles, provided you are never more than 25 miles from St. Helens. I believe that that is so.
  VISCOUNT SIMON: It gets "curiouser and curiouser"! I do not want to spend time on it now, though I agree that this is a very appropriate excursus to the proposition of Euclid which I was expounding. Another thing, let us consider the

  1041
  Government's proposal to exclude holders of "C" licences, as they have done in the course of the debate elsewhere, though it is very easy to attach too much importance to that. If the Government are going to acquire the long distance undertakings, the long distance undertaking is able to go not only long distance but short distance too, and therefore it is, by this fact, set up as a rival to the "C" licence, and that will be the end of it. What charges they will make in order so far as possible to get goods in their own Government waggons remains to be seen. The truth is that all this part of the Bill seems to be—and I have studied it with great care—in a most vague condition. It would have been very much better if there had been more consideration given to it and maybe an inquiry held to find out what would be the best thing to do. The railway and road haulage companies have between them produced a plan; that is what the Rail-Road Agreement means. Whether it is good or not, I am not expert enough to know. At least it goes to show that we must consider whether we require nationalization to get over these difficulties. I am by no means convinced we do.
  I hope the noble Lord who is to reply will be good enough to give us a short explanation of a point that is rather a worry to some of us and upon which Lord Nathan was good enough to touch earlier in the day. It is whether, under this Bill, the Government monopoly, when it is set up, is a monopoly which will extend the right to manufacturers of making chassis, not merely for a particular Government undertaking, but generally. That is a matter of very great importance. If we give consideration to that part of the Bill to which the noble Lord, Lord Nathan, referred, we see that from beginning to end there is nothing in the subsection which authorizes the general manufacture of chassis. But it does riot arise in that way; it arises because in exercising the rights of acquisition under this Bill the Government will acquire enterprises which themselves own, or own all the shares in, a chassis company which sells to anybody and sells for export. The question is: Is the Government going to go in for that business or not? The only further contribution I can make at the moment is that in Hansard on December 16, 190, Column 1662, the
  1042
  Minister of Transport, Mr. Barnes, said: "The Commission will not be able to manufacture chassis for road vehicles." I want to know whether or not that statement may be taken as a correct assurance.
  I would like to turn to another point which hardly received the attention it deserved. It has to do with ports. A most serious question arises here. Broadly speaking, and taking the main ones, there are two main classes of ports. There are ports like Liverpool, Glasgow, or the Port of London, which are public trusts. They are not conducted for profit. They operate on the spot. The people who manage and constitute the trust are chosen under Statute for the purpose of representing interests who really have to be considered, and I do not think anybody will deny that those ports are most admirably managed. Is the Government monopoly going to lay its hand on these public trusts? There is provision in the Bill for drawing up a scheme which may have that result. I submit to your Lordships that it would he a grave mistake for this Bill to contain a clause to do that at the present time. There is no reason for it. There is the greatest advantage in having local administration in each of these great ports; in the event of trouble, the people who are managing go and see for themselves what is the matter. Conditions at one port differ immensely from another. In London there is a lighterage system. In other ports there is some other feature which is quite special to them. I suppose in Liverpool that feature is in handling cargoes—not carrying out the whole of the cargo. There are hundreds of technical, local, special differences which are solved in an excellent way by these port trusts. The Bill ought not to contain any provision which would allow them to pass to the general Government monopole.
  The other class of ports is the railway ports, like Hull, a port of the L.N.E.R., or the Welsh ports belonging to the G.W.R., or Southampton. They will under this Bill, I suppose, automatically pass to the Commission because they are at present, as it were, at the far end of the railways; but I submit it would be very doubtful whether that situation ought to continue. It seems to me it should be considered whether these ports should not themselves be provided with a proper local trust and managed in a similar

  1043
  fashion. I cannot imagine anything less desirable than that you should seek to create a monopoly in the service of the ports of this country. It is a matter of great importance to shippers and others concerned that there should be real rivalry. When, the other day, the "Queen Elizabeth" happened to run on a sand bank on her way to Southampton, I am sure the hearts of the Mersey Docks and Harbour Board were not very grievously wrung. This rivalry between port and port is a good thing, and I suggest that that ought not to be allowed to be interfered with in the Bill.
  One other problem which the noble Viscount who is to reply may solve for me is illustrative of a great many more. It is the case of Thomas Cook and Son. As it happens, the shares—all the shares, I think—are owned by the railway companies. They were asked to take them over when Thomas Cook and Son were in a bad way because of foreign travel having been stopped during the war. The result is that, under this Bill as it stands, the Government are acquiring the enterprise of Thomas Cook and Son. Are they going to keep it? Thomas Cook and Son and similar institutions are admirable organizations to which the British citizens may go and find out which is the best hotel in a foreign town—or which is the cheapest, which is not the same thing. You will get everything arranged for you with the greatest courtesy and personal consideration. Another thing they will get for you is that invaluable £75 sterling, and keep you out of the clutches of Mr. Intrator. Are the Government going to do all this in future, either themselves or through an agent? I cannot conceive it. What on earth have they to do with inland transport? It is next door to accident that the Government acquire Thomas Cook and Son, and I should have thought the proper position was this: that when the Government monopoly acquires something because a considerable part of the enterprise is within the scope of inland transport, they should within a limited time sell, by offer to the public, those other parts which have nothing to do with inland transport.
  An instance which is an immediate analogy and well known to many people is that when a railway company obtains power from Parliament to secure additional land (in some cases without getting
  1044
  special powers because the company already has them) the railway company is bound to sell the land it does not use for the purpose of its undertakings That has been part of the law for one hundred years, and it is so to-day. The land has to be offered first of all to the adjoining owner, and after that it may be offered to others. I do not want to make fun about this, or to waste time, but is it a case that the Government intend, in the case of Thomas Cook and Son, to retain the travel agency business? Is there to be an office in the Avenue de l'Opera still carrying the name of Thomas Cook and Son, but only because that is a disguise for the agent of the Minister of Transport? It seems to me to be quite a ridiculous idea.
  I submit that when it is carefully examined this Bill is not one which is really worthy of the immense problems with which it professes to deal. Once we get rid of our prejudices (which I know is a difficult thing for anybody to do), what reason is there for thinking that we should produce a more efficient transport system for industry by abolishing every vestige of competition, by expropriating the present proprietors at a price which is not fixed by an impartial tribunal, by imposing what is really a bureaucratic State monopoly (which must tend to put an end to enterprise) and by giving an almost unlimited power to the Minister of Transport, as Lord Balfour of Burleigh showed very clearly this afternoon, for a superhuman task? Where is the justification for doing this at a time when all of us, without distinction of opinion or party, want to throw all our energies into improving our production and increasing our exports?
  If this Bill, on getting the Royal Assent in a couple of months' time, would do that, there would be a great deal to be said for it. Nothing of the kind will happen. I will undertake to say that it will be the best part of a generation before this Bill is really in effective working order, just as it took seven years for the Act of 1891—a similar Act—to come into force. I suggest that the moment chosen for starting this upheaval is a moment when a false step may land a leading industry into a most deplorable bog, and that this immense interference with some of the most complicated arrangements which can be made will produce, or threatens to produce, an unparalleled complication. I will end, if I may, by

  1045
  following the elegant phrase of the noble Viscount on the Woolsack (which has already been quoted in this debate at a time when he was not here) and submit that this Bill is "ill-conceived, ill-considered, and half-baked."
  7.26 p.m.
  VISCOUNT ADDISON: My Lords, we have had a discussion on this Bill which has varied from the entirely critical, through the helpful Committee points discussion, to the thoroughly entertaining—a description which can be applied to some parts of the speech which the noble Viscount has just made to us. It had not occurred to me to ask whether the railway companies would dispense with Messrs. Thomas Cook & Son and Dean & Dawson's, but that suggests to me another question. Why did the railway companies acquire them? I take it that the railway companies went out of their way to obtain those businesses because they found it was advantageous to do so.
  VISCOUNT SWINTON: They were actually pressed to do so by the Bank of England.
  VISCOUNT ADDISON: I am trying to answer the noble Viscount, Lord Simon. It is a perfectly legitimate speculation for an ordinary person to make—that the companies acquired those businesses because they felt it was worth their while.
  VISCOUNT PORTAL: We were asked to do so.
  VISCOUNT ADDISON: Very well.
  VISCOUNT PORTAL: Then you should allow that.
  VISCOUNT ADDISON: That only makes my case all the stronger. The railway companies acquired these undertakings, and I have no doubt it was advantageous for them to own them. So far as the Government is concerned, I should imagine that when the Transport Commision deal with this matter they will take the view that if it is worth their while to retain these companies they will do so. I should think that would be a very sensible thing for them to do.
  THE EARL OF DUDLEY: Is that included in the Labour Party manifesto?
  VISCOUNT ADDISON: Would the noble Lord let me continue my speech? I did not interrupt the noble Lord once, and I
  1046
  must crave the same indulgence from him. I was going to say, in answer to a particular aside of the noble Viscount, Lord Simon, that I have no doubt at all that if the Commission think it worth while, or if the Railway Executive think it worth while, to retain this concern, they will retain it, and there is every reason why they should. In the Bill there are powers for them to do so. If it was not worth their while to keep it they can get rid of it. I think that is a sufficient answer for the moment to that point. I hope that this Commission will take a more enlightened view than has been taken in the past of the desirability of providing accommodation for visitors to this country. We have been very backward in times past in organized provision of accommodation and in encouraging tourists and visitors. Here and there enterprising people have made provision, but it is a serious reflection upon our railway companies, and upon the administration of past years that they have been exceedingly backward and have not set out to attract and cater for tourists. I sincerely hope that this Commission, when it starts work, will do better than the railway companies have done in that respect.
  I think we can all agree that in the main the discussion of the past two days has not really challenged the main purpose of the Bill. The noble Viscount, with his accustomed skill, made out a very strong case that the time was not appropriate, but, or the whole, I think it is fair to say that die main case for the Bill has not been challenged, and it is just as well it has not been because the case for this kind of action is unanswerable. This process has been developing for the last two generations. As one of my noble friends said, when Sir Eric Geddes in 1921 brought about his amalgamation there were then about 200 separate railway concerns. By his Bill, 120 of them were amalgamated into four. I have no doubt it was quite inevitable that the process of consolidation should go forward. It was necessary that it should.
  I did not find myself in agreement with the noble Lord, Lord Balfour of Burleigh in his reflection as to the past achievements of British railway companies. I have never been privileged to possess, that useful little object—a railway pass—which railway directors sometimes carry

  1047
  about in their pockets. But on many occasions I have travelled with immense discomfort on a number of our railways. There is great room for improvement. If anybody doubts it, I would advise him to take a few journeys from Liverpool Street. I am not quite sure if that station is not run by the concern presided over by the noble Lord, Lord Balfour of Burleigh. As a matter of fact, I have here a quotation from Sir Eric Geddes (I will not trouble your Lordships by giving it) which is extremely appropriate to the point I am now making—that increasing consolidation is necessary.
  So long ago as 1919 (I was a member of the Government at the time) it was decided that there should be nationalization of the railways. I well remember that Mr. Churchill in a speech said so. We decided on it, and I can well remember it being so decided. I would have said that the development of events since then has now made that necessity more urgent than ever. The noble Lord, Lord Balfour of Burleigh (and to some extent the noble and learned Viscount, Lord Simon) raised the question of why it was necessary to bring in the long-distance road haulage. I think that was the general case of the noble Lord, Lord Balfour of Burleigh. I think it was well answered yesterday by the noble Lord, Lord Brabazon, and it has been well answered by other noble Lords. It was absolutely essential for long-distance road haulage to be brought into the same scheme of transport. That is why the railway companies themselves—at great expense, no doubt, but quite rightly—have acquired haulage firms. I believe that Carter Paterson and Pick-ford's have been acquired by the railway companies. Why did the railway companies acquire them? They acquired them because it was the sensible thing to do—to harmonize road haulage with rail haulage.
  This present proposal means only that that process will be carried out more completely and more logically than it has been by the haphazard methods which have hitherto been adopted. After all, do not let us exaggerate this. I have the figures here. Apparently, under this scheme there will be about 20,000 "A" and "B" licensed vehicles brought into the scheme. I will come to the ingenious piece of Euclid with which the noble and learned Viscount, Lord Simon, was enter-
  1048
  taining us a few minutes agc. There will be, within that circle he described, in one form or another, 100,000 "A" and "B" licence vehicles which will not be taken in; so that only something like one-sixth (so far as the number of vehicles are concerned) of the long-distance road haulage people will be incorporated in the scheme.
  The noble and learned Viscount greatly entertained us by a calculation which he made arising out of the figures in the clause to which he referred. His calculation was accurate and ingenious. But it would have applied in an equal way, whatever mileage had been taken. If 50, 60 or 70 miles had been taken, one could have arrived at the same conclusion. Therefore, whatever the figure, it can be exposed to the same kind of criticism and, by taking the kind of case which the noble and learned Viscount took with his accustomed skill, it can be made to look equally absurd. But you must have a figure somewhere. If you are going to have a limit, you must set the limit. This is the limit we propose. When you get to that limit you can argue about it. We shall discuss that when we come to the Committee stage.
  I should like to say one thing about the noble Viscount's reference to the Second Book of Euclid. There may be some points in his criticism about a man with his base on the sea. That man is quite clearly restricted. That is perhaps a point which we can argue later.
  A NOBLE LORD: In Scotland.
  THE EARL OF SELKIRK: The Mull of Kintyre.
  VISCOUNT ADDISON: One illustration will do. We can discuss the merits of the proposal when we come to the Committee stage. I have other notes about the apologia provita sua which the noble Lord, Lord Balfour of Burleigh, addressed to us; and quite frankly, if I may say so, I think that was out of time. It is clearly necessary that this thing should be done, and it must be done fairly and properly. That brings me to the point which the noble and learned Viscount, Lord Simon, raised—the question of the time of the Bill. He and I have been in politics for a long time, and if he is frank with himself I am sure he will agree that he has never heard of a measure of this kind, or of any similar kind, with regard to which

  1049
  it was not said that the time was not appropriate. We have heard that many times.
  VISCOUNT SIMON: And it may be true sometimes.
  VISCOUNT ADDISON: Yes, certainly it may be. Nevertheless, it is a familiar objection. Let us look at it for a moment. I think that the noble Viscount's case—which is a very strong case—has to be considered. During the war, to take a simple illustration, everybody knows the prodigious economies which arose from the pooling of waggons. My noble friend Lord Walkden yesterday, in this and other respects, dealt with that with great force. I well remember during the last war—when, I think, Sir Eric Geddes and Sir Ernest Moore were in charge of this matter—the immense economies which were immediately made from the pooling of waggons. And I recall the grim and terrible illustrations which we had of the wasteful management which the railway companies had tolerated up to that time, through waggons standing empty. Great economies were made.
  The noble Viscount puts the position quite clearly. He asks: Will the advantages that we anticipate from this proposal come rapidly? That is a proper question. I do not think they will. It will take considerable time to get going this huge enterprise and to reap all the advantages that will accrue from it if the whole thing is properly harmonized. What do I infer from that? That is no reason for postponing it; it is a reason for going on with it. That is how I look at it. And if we can do anything, in this time of economic crisis, to help the traders of the country, or to bring into existence a better system of transport, the sooner we set about it the better. I think, taking the long view, that this is the right thing to do.
  The noble Lord made some very cogent comments on the question of the vesting date, but there are others, of a contrary kind and of a very serious character, of which he did not take account. There is nothing worse than uncertainty, I should have thought, in a matter of this kind. We have in this House—there are listening to rue now—some of the most eminent and highly respected men in this country, and I am sure they would know that well enough if matters requiring decision or negotiation were put to their boards. For
  1050
  example, suppose industrial questions came up, which required the conclusion of agreements or long-standing arrangements. What will be the position with them after this Bill is passed, before the vesting day, whenever it is? It must be one of almost paralyzing uncertainty. They want to know. They will say: "I cannot enter into this arrangement. I may not be here," or "I shall not be here," as the case may be. The one thing that I am quite sure is essential is certainty.
  With regard to many things that will have to be done, it is clear that, so far as the formal vesting day is concerned, the earlier we can make that the better. But, for all that, when we refer to what the noble Lord, Lord Rochdale, said in his speech as to the number of things that will have to be done before the vesting day, I am sorry to say the noble Lord had it all wrong. He said the scheme for the delegation of authority for road haulage, passenger transport, and all the rest of it, has to be completed before the vesting day. All these thinks do not have to be done before the vesting day. They will be the business of the Commission and the various organizations that are used.
  LORD ROCHDALE: If I may interrupt the noble Viscount for one moment, I hope he will realize that in giving the list of schemes to which he is now referring I had no intention of suggesting that they had to be completed by January 1, but rather that the railways and canals had to be taken over by January 1, and as well as running those in the early days the Commission would have to continue with the preparation of all these schemes.
  VISCOUNT ADDISON: The point I am discussing is the actual vesting date, and, as all those of us who were behind the scenes in the First World War, and certainly in the late war, know, these dislocations did not occur when we passed from the peace-time system to the system of war control. Nobody knows it better than the noble Viscount Lord Simon. I do not apprehend that there will be any of these catastrophic dislocations which the noble Lord seemed to have in mind. I shall refer to some of the points mentioned by the noble and learned Viscount, Lord Simon, as I go on, but as it is in front of me I will take his point in regard to the docks. As he knows, we refer to "Trade Harbours" in the Bill.
  VISCOUNT SIMON: I meant that, of course.
  VISCOUNT ADDISON: Let us look at the position here. The railway companies already control something like 100 docks. They control these docks, and have developed their control of these docks because it is useful for the purposes of the railway organization—for drawing transport, and so on. The railway concerns are, in fact, the largest dock owners in the country. The noble and learned Viscount said something about Southampton which I did not quite understand. Somehow or other he ingeniously linked it with the delay of the "Queen Elizabeth" the other day outside Southampton. But I do not think Liverpool is owned by the railway companies.
  VISCOUNT SIMON: Of course it is not.
  VISCOUNT ADDISON: The noble Viscount says it is not.
  VISCOUNT SIMON: My reference to the "Queen Elizabeth" was, of course, only a joke.
  VISCOUNT ADDISON: I know, and I am going to make another joke. The joke I am going to make is that the other day the "Mauretania" was delayed three days outside Liverpool. But, quite frankly, I do not think that either of these incidents has much to do with this Bill.
  VISCOUNT SIMON: It shows the value of rivalry in ports.
  VISCOUNT ADDISON: The noble and learned Viscount made a strong point, and quite rightly, about the dock trusts, and so on. I do not anticipate that what the noble Viscount suggests will happen, or is likely to happen. If your Lordships look at Clause 65, at the top of page 8o, it says there:
  "The Commission may, with a view to securing the efficient and economical development, maintenance or management … prepare, in consultation with the persons theretofore carrying on harbour undertakings in or in connection with the harbour or group of harbours … "—
  and so on. First, it is to be in consultation with the people who are now carrying on the harbour; and if it is an efficient trust I cannot imagine that anybody in his senses would wish to disturb it. I am quite sure that in that event there will be no such disturbance. That is the first thing. But if noble Lords refer to subsection 7 of the same clause, on Page 82, they will there see that if there are objections to any scheme that is worked out in connexion
  1052
  with these ports, those objections have to come before Parliament. I think that point is well safeguarded. Frankly, I think it is a misapprehension to suppose that anything but the fullest use will be made of any responsible, competent trust. I am quite sure that everyone experienced in railway management knows very well that there are great gains to be derived from the better organization and coordination of the docks. That is what is meant by the proposal, and it seems to me to be a very necessary provision. I agree that it should not be misused.
  Some criticism was made by the noble Viscount, Lord Swinton. There was a very charming part of his speech in which he resurrected our history of the South Sea Bubble, and he said it was described there as "a scheme hereafter to be revealed." He used those words, and I agree they are entirely appropriate. You do not put schemes in an Act of Parliament; that is not what an Act of Parliament is for. What you do is to instruct people to prepare a scheme—if it is required—for certain purposes. That is what is done here. It would be entirely unreasonable—in fact, It would be impossible—to put schemes into an Act of Parliament. To be quite frank, I do not think the noble Viscount's complaint of indefiniteness which the noble Viscount complained is justified.
  Many of the schemes may possibly be drawn up hereafter. I do not think that any serious person would contend that there is not room for immense improvement in many of our road passenger services. I live in a little place thirty miles from London, and the bus habitually leaves the station five minutes before the train. It does not seem to me a very sensible arrangement, but of course the bus is run by a separate organization. I cannot imagine any rational person who had control of the time table of that area not ensuring that the bus waited until the train came in. That is not very farfetched; that kind of absurdity happens in hundreds of places, and there is no doubt at all that there is great room for improvement. Your Lordships will notice it says that the Commission in this respect may prepare a scheme
  "being a scheme devised for the purpose of promoting or facilitating the promotion of the co-ordination of the passenger transport services serving the area, whether by road or rail …."
  Now I cannot imagine a more sensible instruction to a body of persons than that,

  1053
  and it is completely definite. There is no indefiniteness about it, and I am sure that many people living in our towns and country areas will welcome the appointment of such a body of persons who will look into their grievances and see that they get a better service. I do not really think that the complaint of the noble Viscount is very justifiable. After all, this is an Act of Parliament, and it is not a detailed scheme—that is not what is put into Bills. This is policy. You appoint a body of persons to do certain things, and you instruct them what they are to do. You do not put details of their achievements in the Bill. Quite fairly, I do not think there is ground for complaint there.
  Another point which one noble Lord made and which we can discuss in detail in Committee was in regard to the mode of appointment of the executives. The noble Lord made a very important point there, and he also mentioned the character of the Minister's directions. Those are really Committee points, although they are admittedly important. One complaint the noble Lord made was that there was the possibility of the Minister interfering with the management. Now I have looked at the Bill, and spent a long time on it, to see if I could find out what the noble Lord was complaining about. At the bottom of page 7 it is stated that the executive shall exercise such functions as are delegated to them by the Commission. Then on page 8, subsection (9) (a) says, with regard to such delegated functions:
  "Any rights, powers and liabilities of the Commission shall be treated as rights, powers and liabilities of the Executive, and the Executive only;
  (b) the Executive shall, to the exclusion of the Commission, be treated as the employer of any officers or servants of the Commission …"
  It seems to me that that puts the executives in an extremely strong and independent position. They will be given their job of work to do under the scheme, and they are thereby insured against interference. If the noble Viscount can suggest anything which will make their position stronger or clearer, I am quite sure we would be glad to consider it.
  VISCOUNT SWINTON: I am very much obliged to the noble Viscount. I will certainly accept that invitation and put down the necessary Amendments on Committee to make sure that the Minister
  1054
  does not interfere at all with any form of management.
  VISCOUNT ADDISON: I am sorry to be so long, but there is one other point I must deal with, and that is the point raised by the noble Viscount with regard to rates. Here again—and I speak with bated breath in the presence of so experienced a lawyer in these matters—
  VISCOUNT SIMON: I have forgotten it all.
  VISCOUNT ADDISON: What is the procedure? The procedure under Clause 77 is that the Commission will in due course submit a draft of the charges scheme to the Transport Tribunal. We have not imitated the example of the Act of 1921, and I think we were very right in not doing so. The Act of 1921 gave rise to a hopeless medley of different species of charges, and I am quite sure it was not the right way to approach this business. The procedure here—and I agree it is not in detail and, with great respect to the noble Viscount, you could not put the detail in the Bill—is that the Commission submit their scheme and it goes to the Tribunal. Now what does the Tribunal do? The Tribunal, of course, has to advertise the scheme and it hears people who have any objections or criticisms, and so on. Then in subsection (3) at the bottom of page 90 it says:
  "As soon as may be after the time for lodging objections and representations has elapsed the tribunal shall hold a public inquiry."
  Then at the end it says:
  "… and may then either refuse to confirm the scheme or may confirm it with such alterations, if any, as they think fit."
  In other words, the absolute independence of the Tribunal is completely assured, and it is not to be interfered with by the Minister at all. Quite frankly, knowing what little I do of the tremendous confusion, overlapping, difficulty and absence of principle as between road and rail that has arisen in the different rates during the past twenty years, I a in quite sure that this method of approach will in the end give rise to a much more satisfactory system and be much more coherent.
  VISCOUNT SIMON: I do not want to be misunderstood about this, as I evidently have been. I myself take the view that apart perhaps from indicating some principles, it is perfectly right to leave this matter as it is in the Bill. As has just been explained, I think it would be quite impossible to put all the details in an Act of

  1055
  Parliament. The actual question I asked was whether the Government did not contemplate that there would have to be the imposition of minimum rates below which nobody would be allowed to carry. Perhaps it is not proper to ask that question now, and if so, please forgive me.
  VISCOUNT ADDISON: I thank the noble Viscount very much for his general acquiescence with the statement of principle. As to his second point, I am afraid I would require notice of the question. I will ask my noble friend what he has to say about it, and later on I will certainly give an answer, but at the moment I confess I cannot go beyond what is in the Bill. There is one final point to which I must reply, and that is with regard to manufacture. Subsection (2) on page 3 dealing with the powers of the Commission says:
  "… the powers conferred by subsection (1) of this section shall include power—
  (a) to construct, manufacture"
  and so on. The noble Viscount quite properly pointed out that sub-paragraph (iii) at the bottom of page 4 says:
  "nothing in this subsection shall be construed as authorising the construction or manufacture by the Commission of anything otherwise than for use for the purposes of their undertaking."
  That relates only to that subsection, as the noble Viscount quite properly pointed out.
  It is true that in subsection (3), at the top of page 5, it says:
  "Where, whether by agreement or otherwise, the Commission acquire the whole or any part of any undertaking of any other person, they may, subject to the provisions of this Act, carry on any activities …"
  It is quite true that the Commission might acquire an undertaking which, as part of its activities, was making goods of some kind. And my right honourable friend assured another place several times as to the general purpose of the proposal. It is not the intention of the Minister to do other than manufacture for the purposes of the undertaking, even under that provision. He told me that I could assure the noble Viscount that it is not his intention to manufacture for sale.
  LORD SWINTON: That covers subparagraphs (i) and (ii) as well as subparagraph (iii).
  VISCOUNT SIMON: It would be better to put it in the Bill, to make it quite clear.
  VISCOUNT ADDISON: I do not object to that. My right honourable friend has authorized me to say that he would be willing to accept the proposition that he would not be manufacturing to sell. He is entirely wishful to act bona fide within the intentions mentioned, and not to manufacture except for the purpose of the undertaking. I have no doubt that we can arrive at an accommodation when we come to the Committee stage. I think I have answered, as well as I could at any rate, the points raised in the discussion, and I hope your Lordships' House will be willing to give the Bill a Second Reading.
  On Question, Bill read 2a, and committed to a Committee of the Whole House.

  CERTIFICATE FROM EXAMINERS.
  The LORD CHANCELLOR The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the Standing Orders applicable to the following Bill have not been complied with:
  WELLINGTON MUSEUM. [H.L.]
  The same was ordered to lie on the Table.
  WELLINGTON MUSEUM BILL.
  Examiners' Certificate of non-compliance with the Standing Orders: Referred to the Standing Orders Committee on Tuesday, June 3 next.
  CITY OF LONDON (TITHES) BILL. [H.L.]
  The King's Consent signified and Bill reported from the Select Committee with Amendments.