TRANSPORT BILL. (Hansard, 21 May 1947)

HL Deb 21 May 1947 vol 147 cc969-1017 969

§ 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.
970 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.

975

§ 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. 991 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.

992

§ 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.

994

§ 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 995 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 997 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 998 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 999 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.
1000 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 1002 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 1004 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 1005 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 1006 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 1009 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 1010 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.