HL Deb 13 February 1951 vol 170 cc274-97

2.49 p.m.

Order of the Day for the Third Reading read.


My Lords, in moving the Third Reading of this Bill, I should like once again to repeat my remarks made during the Second Reading, when I endeavoured to make clear to your Lordships that the Bill was not introduced as an attempt to overturn the basis of the Transport Act but, on the contrary, to amend it and make it a more reason-able and workable measure. I do not think anyone can say that this measure is working effectively at the present time. I suggest that the noble Lord who has replied on behalf of His Majesty's Government during the various stages of the Bill has taken a very narrow view, in spite of the number of Amendments which have been introduced from this side of the House in support of the interests of the Transport Commission and to meet objections raised by the noble Lord himself. It has even been suggested that this Bill would cripple the operations of the Transport Commission. How can it possibly have that effect when the road haulage assets of the Transport Commission amount to barely 5 per cent. of the total assets?

The main argument put forward by His Majesty's Government for the rejection of the Bill appears to be that they have purchased for a sum of £70,000,000 a monopoly of long-distance road haulage, and that if the present short-distance area of twenty-five miles is extended the greater part of this sum would be lost to the taxpayer. I would ask your Lordships to look at that argument a little more closely. In the first place, it is not true to say that the Transport Commission have purchased a monopoly. The fact is that the Commission have purchased a number of businesses on the basis of profits earned under highly competitive commercial conditions, and the greater part of the purchase price has been paid on account of tangible assets such as vehicles, premises, plant, et cetera. Only a comparatively small part of that sum; and certainly nothing like £70,000,000, can in fact be compensation for cessation of business.

On October 31 last year, the Minister of Transport indicated that a provisional ascertainment in respect of undertakings compulsorily acquired amounted to some £25,000,000, and obviously very much less than that figure must represent compensation for cessation of business—in fact, probably less than £10,000,000. As the Bill proposes only to extend the radius of independent hauliers from twenty-five to sixty miles, and the Commission itself has acquired a large interest in the short-distance haulage area, the proportion of the figure of £10,000,000 which might represent a loss to the taxpayer must be very small indeed. The figure of £70,000,000 has no relation whatever to the real position. In fact, I would say that the loss to the taxpayer, if any, would be more than compensated by the acceptance of this amending Bill, which would have the effect of ensuring an efficient service to the taxpayer which he is not getting at the present time, and might well obviate the necessity, in many cases, of his running his own vehicles under a "C" licence. Moreover, the unfortunate taxpayer, who is now supposed to own the nationalised transport industry, will no doubt in due course be called upon to pay for its losses. I need hardly remind your Lordships that the losses incurred by the Transport Commission are prodigious. The Commission have taken over well-known firms with historical names in the road haulage industr— firms which in the past have made large profits under private enterprise. But what do we find now? Losses are mounting day by day, and during the last accounting period appear to have risen to something over £1,000,000—over £1,000,000 lost on road transport. It is almost unbelievable that such an organisation could lose so much money in so short a time since the nationalisation of this great industry.

I do not wish to weary your Lordships to-day with references to the various clauses in the Bill, but I would again point out that the Bill was introduced largely to provide that competition between the nationalised industry and privately-owned haulage companies should be on a fair basis. The Commission has acquired a substantial interest in short-distance road haulage—far more than was anticipated when the original Act was passed. The Commission has shown no willingness to leave the short-distance traffic to the independent haulier, and, in fact, I would say is attempting to bring about a monopoly in that field. The Road Haulage and Railway Executives are constantly opposing applications by hauliers for renewal of licences, and they have even issued to their local officials a policy statement, a copy of which I have in my hand. This policy statement is an indication to their local officials of the procedure to be adopted in opposing such applications for licences. Now what does this document say which has been issued to road haulage officials? It says, in one case, that applications for "A" and "B" licences within the present permitted area of twenty-five miles are to be opposed by the Road Haulage Executive when, in the words of the document: competition for short-distance work is likely to be intensified by diversion of vehicles in consequence of permit refusals by the Road Haulage Executive I say that that instruction is contrary to the whole spirit of the Transport Act, 1947, and also contrary to the spirit of the declarations made by the various responsible Ministers concerned.

Not only are the Transport Commission revoking original permits, but, as we see from this document, when the unfortunate road haulier is thereby circumscribed by the present permitted short-distance area, his licences are to be opposed by the transport colossus. Do His Majesty's Government really think that this is justice? The noble and learned Viscount on the Woolsack used these words during the passage of the principal Act: Surely there is no reason why the Commission should butt in and try to run these people off he road. I maintain that that is exactly what the Transport Commission are trying to do now. I should like to mention for a few minutes one other point which was raised by His Majesty's Government during the earlier proceedings on this Bill. The noble Lord who replied for His Majesty's Government on the Second Reading and other stages of the Bill said that if the short-distance area were extended, operators with no stake in long-distance haulage would be able to march in and grab the traffic, free, gratis and for nothing. The answer to that is quite simple. The fact is that they would not be able to do it because all operators are limited by the provisions of the Road and Rail Traffic Act, 1933, under which their licences have to be obtained, and they have to provide proof of need for their services. This Bill does not in any way attempt to interfere with the impartial authority of the licensing authority to judge this matter. I conclude by saying that the distance of sixty miles has been chosen and set down in this amending Bill largely to meet the position of hauliers in coastal areas, who obviously have their areas of operation cut by half, and also to cover what has been considered in the industry as a reasonable day's short-distance work in carrying goods between two towns in almost any part of the country. I beg to move.

Moved, That the Bill be now read 3a.— (Lord Teynham.)

2.58 p.m.


My Lords, the great argument of the Parliamentary Secretary on the Second Reading of this Bill—I did not have the pleasure of listening to him, but I read his remarks with care— appeared to be the one, that he had paid, or was going to pay, £70,000,000 for a so-called monopoly, and if the Bill passed that money would be thrown "down the drain." I do not think that that is by any means the whole story, and it would be a pity if the argument were repeated in another place without being exposed. The £70,000,000 is composed of two different parts. There is the amount paid for goodwill, based on two to five years' purchase of profits, and there is the balance paid out for tangible assets. The split is not known, but I hear on good authority that I should not be far wrong in suggesting that £15,000,000 to £20,000,000 out of the £70,000,000 represents the amount attributable to goodwill. This has been based on profits which formerly were of the order of £5,000,000 or £6,000,000 a year. But now there arc no profits and there is no goodwill: if the profits have gone, so has the goodwill gone. I estimate that in 1950, excluding Pickord's, the State read-haulage undertaking was operated at a loss; the profit item on which goodwill was based has gone, and therefore the goodwill has gone. Accordingly, £15,000,000 to £20,000,000 out of the £70,000,000 has already been lost, and that is in spite of a better climate for profit-making than before. The undertakings which previously were operating in fierce competition with each other are now, most of them, in the one hand or the other of the State. Internal competition has been to a large extent eliminated.

Moreover, these results have not come about from offering better services. The services are notoriously worse than before; the increased demand for "C" licences is surely a proof of that. There has been increased empty running, increased standing time, waste of petrol and waste of man-hours, on a scale which has probably never been seen in this country before. In fact, with those items, taken together with the loss of goodwill, I think I should not be exaggerating if I said that State road haulage has lost the community more than the ground-nut scheme lost. The Parliamentary Secretary may argue that, given time, he will recoup these losses, but he will do so only by squeezing the community: in other words, by taking it out of one pocket and putting it into the other so that no one will be better off. He may delude himself that these are only teething troubles and that things will get better in time, but if he does, I think he will be ignoring one fundamental fact, and that is that the decline in profit is the measure of the difference of the service which men are able to give to a large State undertaking and the service they were able to give to the small and more personal road operators before nationalisation. The more the regulations, the less flexible the service—and for road haulage it is flexibility that the consumer requires.

This is an excellent Bill, but it is only a start. It brings up the old problem which we have never yet solved—the roadrail problem. We must have rail-ways, and the more we use them the cheaper they are to run; but the trouble is that rail cannot provide the door-to-door facilities which convenience demands. Moreover, as at present run, the railways are incapable of providing a safe and certain carriage of merchandise to the consumer; and speed, convenience and certainty are very often more important than price. For instance, when somebody has to send goods to catch a ship at the docks, speed and certainty are more important than price. Or perhaps component parts have to be sent to a mass production assembly to take their place on the right day in that assembly; and again, speed and certainty are more important than price. A further trouble is that technically, for various reasons, road haulage is likely to be able to improve its methods at a faster pace than can the railways—so that the road has the advantage in all ways. It certainly has speed, certainty, convenience and price.

We must face this problem sooner or later: and the Transport Act has certainly not produced any solution. I submit that we must have efficiency, and if necessary we must cut our losses on State road haulage and sell the assets to anybody who will buy them. Then we must devise a system whereby we can have free competition between road and rail, but placing some handicap on the road; and that handicap, instead of being a mileage handicap, ought to be a money handicap. Speed, convenience and certainty are often just as important to the sender of merchandise for long distances as they are to the man who sends merchandise for short distances. Any mileage solution begs this particular question. There are various methods of handicapping, and I will not go into them. Such a method as I have suggested would provide the public with a choice, and both road and rail would have an incentive to increase efficiency in order to take away traffic from each other. Moreover, it would provide rail with a set-off to their many onerous obligations as common carriers, their obligations to provide mineral carriage at reasonable rates, to provide unremunerative services, and so on. The sender of goods by road, in fact, would be paying a contribution for the privilege and convenience of having a railway system at his beck and call to which he could look in case of emergency.

The only other system which will provide free competition between the two is a régime of perpetual subsidy for the rail in one form or another after the various methods have been put forward. I submit that we must have a rail system, we must have road haulage and we must have "C" licences—though in the aggregate the community must pay the bill. Taking all these factors into consideration, and remembering that speed, convenience and certainty are not always assessable in money terms, I believe that the system I have outlined is the cheapest one for the community. I am certain that the present one is not the cheapest. Many of its inconveniences are impossible to measure in money; it is impossible to say how much we are paying for this experiment in socialisation, though there is no doubt that it is a large sum.

3.9 p.m.


My Lords, it has always been a feature in this country that the number of small businesses which, in almost every activity, have formed what I might call the matrix within the larger concerns have been able to develop and for the most part avoid the inefficiency of monopoly. It has been a situation that has encouraged the individual to seek responsibility and to do his best to get the customers to believe that it is what they want that comes first, and not what some remote official thinks is good enough for them. That, I know, is so in industry, and I believe it to be so in many other walks of life. Certainly, it is so in the case of transport. Unless we are constantly on guard to preserve the small man and to see that he has real opportunities and encouragement, we shall lose him as an essential part of our economy and, with his loss, we shall not merely lose what I think is the only spur to efficiency which can be effective against our large nationalised monopolies, but also be condoning the growth among our customers of that cancer of being prepared to put up with the mediocre. All we have tried to do in this Bill which my noble friend has taken so skilfully through your Lordships' House is, as he has said, not to undermine the British Transport Commission, but to make certain that the independent haulier within the radius of short haulage permitted to him may have the chance of competing under really fair and impartial conditions, with the chance of being able to make a decent living. Perhaps even more important, we want the users of transport to have available, at any rate for local work, that personal attention which both my noble friends before me have mentioned, which is so much easier for the small firm to offer and which in turn can be used as a yardstick against which the nationalised service, both on long and short haulage, can be assessed.

Thus, in Clause 1 we have widened the radius within which the independent haulier can operate without permit, in order to ensure that he gets a reasonable turnover, despite the growth within that limit of the British Transport Commission. Next, and even more important, in other clauses (in particular Clauses 2 and 4) we have sought to ensure that within the radius which it was surely intended should remain substantially the preserve of the independent operators, the British Transport Commission should be allowed to operate only under a licence issued by an impartial licensing authority. It may have come as a surprise to some of us that, despite all that was said when the 1947 Act was passing through Parliament, to the effect that there was no intention that the Commission should interfere with the legitimate trade of the in-dependent haulier within this twenty-five mile limit or to squeeze him out of business, yet that is what in point of fact has been happening, causing much concern and no little resentment at what is regarded by many as an act of bad faith. For myself, I am not questioning the good faith of noble Lords opposite who supported the original 1947 Bill, but what I do say is that, having set up this great Commission, it was inevitable that it should develop in the way that it has done and that, as the law now stands, the promoters should be virtually powerless to stop it.

Turning from those points, I should like to deal with one mentioned by my noble friend Lord Teynham. It ties closely to what I have just said. I want to refer to the emphasis which the noble Lord, Lord Lucas, during the Second Reading debate, appeared to place on the purchase of a monopoly by the Commission. I must admit that, listening to his speech, I was somewhat perplexed on that point, and, whilst I would not for one moment suggest that he intended to mislead, I feel that his remarks could convey a very different meaning from that which I believe to be real. I think it is generally agreed that in passing the 1947 Act Parliament intended that the Transport Commission, apart from the excluded traffics and the machinery of permits, should have what one may call virtually a monopoly for long-distance road haulage. That I am prepared to accept. But when a private individual wants to acquire a monopoly in anything or, to use the noble-Lord's own words, to buy out competition, it is well known that that individual has usually, in the last resort, when the present and existing owners are unwilling sellers, to pay very steeply indeed for it. That was certainly the impression that I gained from what the noble Lord, Lord Lucas, said with regard to the acquisition of the independent road-haulage undertakings. We all know that, in the case of those acquired compulsorily, the price paid was anything but steep.

If I may, I should like to remind your Lordships what that basis was. It is clearly set down in the Act in Section 47. Property, other than vehicles, was to be bought out at the ruling open market values, assuming that the Act had not been passed. Vehicles were to be purchased on their written down value according to their age and based on the cost of a new vehicle at the time of transfer. No cash was to be taken over. As regards cessation of business, two to five years' net average annual profits, which were defined in the Act in Appendix IX, were to be paid. Something was to be paid for severence according to the increased burden over five years on the part that was left. Here, I do not entirely agree with my noble friend who has just spoken: nothing was to be paid for goodwill. No one could regard those terms as in any way monopoly or inflated prices, and one therefore might easily conclude that the noble Lord, Lord Lucas, was referring to the payment for those other undertakings which had been previously acquired voluntarily by negotiations before the date when the others were taken over compulsorily. Here, again, that does not seem to be the case.

I would remind your Lordships that on January 24, 1949, in another place there was a Question asking for an assurance that: no more compensation will be given where they [the undertakings] are acquired by negotiation than would be payable if they were compulsorily acquired under the Act. The Minister, in replying, whilst admitting that complete accuracy could not be determined if a business was acquired by voluntary agreement as against the process of arbitration which could be invoked, went on to say: But, nevertheless, as a general principle I can give the honourable Member that assurance. In other words, the whole of the £70,000,000 to which the noble Lord referred in his Second Reading speech was expended on acquiring undertakings either voluntarily or by compulsion on a similar basis. In passing, I should like to know how that £70,000,000 can be analysed under the various headings that I mentioned a few moments ago. I think it would make very interesting reading. I have laboured this point in order to try to deflate the impression that I, at any rate, certainly gained from the noble Lord's speech, that in order to secure to the British Transport Commission a monopoly they had paid monopoly or inflated prices out of the taxpayers' money. The impression I gained, further, was that it was therefore improper of your Lordships to attempt in this Bill to extend the scope of the independent haulier into the private and dearly-bought preserves of the British Transport Commission. I am as jealous of the taxpayers' money as anyone, but if my analysis of the position is a correct one, then I think that picture was an entirely false one.

For want of any counter proposals from noble Lords opposite, I come back to where I started—namely, that all this Bill seeks to do is, if I may use a phrase which I think is in favour these days, to give fair shares as between independent hauliers and the British Transport Commission, and, by so doing, to safeguard the taxpayers' money by keeping the Transport Commission up to the mark.

3.21 p.m.


My Lords, I should like to support this Bill on Third Reading, and I want to follow up particularly what the noble Lord, Lord Rochdale, said about small businesses. The strength of the road haulage industry in this country was built up on small businesses, mainly, of course, concerned with short-distance haulage. Perhaps some noble Lords do not realise how many small businesses there were, some with their vehicles moving about the roads under the names of very big industrial concerns, vehicles belonging to small transport contractors doing permanent contract work for perhaps a steel works or a big chain store, or something of that sort. Many big industrialists realised that they could place their transport in the hands of a small operator who knew his business and could carry out the work more economically than could the industrialist himself. These industrialists are finding that they cannot get this work done by the British Transport Commission, and therefore they are having, reluctantly perhaps, to operate more vehicles under "C" licences.

I think it is essential that there should be allowed to exist a backbone of private hauliers to carry on their businesses under reasonable conditions, and in my view such a reasonable condition would be the sixty miles radius suggested in this Bill. The weakness of the Transport Commission lies in its inability to cope with the unusual request. The Commission can cope with long-distance haulage, which I think should rightly be left to it, but when it comes to an unusual request, tremendous anomalies arise. I heard of an instance the other day when the chief executive of a passenger road undertaking wanted some tunes brought down for the staff cricket ground and bowling green. He applied to the Transport Commission, heard nothing for several days, and eventually received a form on which was a request to give the average weight and dimensions of each turf. Finally, at great expense he had to send one of his own vehicles to get those turves. There was also a case which involved the moving of a piece of heavy machinery. Naturally, that is a tricky job, because nobody knows how it is going to turn out. Previously one could get three or four quotations, which often varied tremendously. Now one has to go to the Transport Commission, which naturally wants to cover itself against loss, and one is sometimes given what is probably an inflated price. I heard of a case the other day, where £1,000 was quoted by the Commission for the unusual job of moving a heavy locomotive. Finally, after some difficulty, the person concerned obtained the services of a private contractor who was still in business, who did not possess the appropriate vehicle but was able to adapt one to the particular job, and the cost was £300.

Another instance I can quote is that of an Australian friend of mine who wanted two trunks taken to a ship sailing for Australia. He was told to get on to a certain depôt of the Road Haulage Executive. He was put in touch with five different people, and even then he did not get an answer; he was told to write in. By then it was too close to sailing time and he had to obtain a Daimler hire car and take the trunks down himself.

It is little odd jobs such as those which I think must be done by the small road transport contractor. When a telephone call comes in about some small, specialised job, there must be available somebody who can think quickly and give an answer. He may give a wrong answer and lose on the job; but that is his funeral—he is prepared to take that business risk. On the other hand, he may make quite a good profit on a job efficiently carried out. He is prepared to take risks and does so because it is part of his job. Once upon a time one was given an immediate answer as to price and date of delivery in regard to a little transport job but not now. Therefore I support this Bill, in particular with regard to the sixty miles radius and also the impartial licensing authority. I think it is essential to have a yardstick and some competition so that the Commission can look to its own laurels and do better next time as regards price, speed and service to the customer.

3.27 p.m.

Viscount LONG

My Lords, I rise to say only a few words in support of the Bill which is before your Lordships this afternoon. The noble Lord, Lord Teynham, who moved the Third Reading, referred to licences. I remember asking the noble and learned Viscount on the Woolsack a question in 1947, and I quoted certain cases where goods were not being delivered to their destination either in proper order or on the date expected. At that time the noble and learned Viscount gave me an assurance that those goods would be properly delivered. I want to give one reason why not only I but also thousands of small operators who are unable to make their voices heard in Parliament support this Bill—namely, that at the present moment chaos exists. I will quote one case to your Lordships to prove my statement. Some goods were dispatched to me from London on December 8; on December 23 they had not arrived. I telephoned to London and was informed that they had left by road on December 8. They were taken to Bristol and, having arrived there by road, were unloaded and came back on exactly the same route by rail, arriving one day before Christmas. Of course the whole case was; ruined and I have claimed for it. Needless to say, the public are now having to pay for that, and there is no answer to it.

Every customer in the country is complaining. In the West of England, in Bristol and in Birmingham there is not a single customer who is getting the service he had from the small operators before the Act came into operation. I well remember that during the passage of the principal Act noble Lords opposite kept reiterating that only 40,000 vehicles would be affected. I am sure the noble Viscount the Leader of the House did not mean to lead any of your Lordships astray over that matter. I also remember saying that if that Bill went through it would affect not only long-distance operators, but the vast majority of the small operators as well. That is exactly what has happened—and they have been affected under duress. I should have thought that His Majesty's Government would welcome this Bill. In my view, it is the only thing that might save them at the next General Election. They would be able, at any rate, to make one good point: that they had reconsidered the position of the small men, including that of many ex-soldiers of the First World War, whose reward, probably, is going to be that they will now be robbed by the Commission of their rightful dues. That is all I wish to say in support of this Bill. I trust that His Majesty's Government will at long last take a commonsense view of the matter and give this measure their support.

3.30 p.m.


My Lords, I desire to intervene for a very few moments only, for I think your Lordships want to come on a decision on this Bill about which a good deal has already been said. It may not surprise your Lordships if I ask you to direct your attention for a moment north of the Border, and to consider one or two of the special troubles which affect Scotland under the parent Act. There is a good deal of criticism of the working of the parent Act in Scotland, in particular because of its lack of flexibility. One must remember that Scotland is a country of wide open spaces with a considerable concentration of population in a relatively small number of towns and cities. I draw attention to the fact that in Scotland our economy depends to a great extent on our ports. As five examples, I quote Glasgow, Leith, Grangemouth, Aberdeen and Dundee. Under the principal Act anything which is brought by shippers to these docks from outside the radius of twenty-five miles is within the purview of the Commission, except for the specially excepted traffic. If this Bill were accepted, that radius where the independent haulier could compete would be enlarged to sixty miles. I agree that that is another arbitrary figure, but it is one which would provide considerable easement for shippers in Scotland using those docks. On these grounds I urge consideration of this amending Bill. I believe that if it were accepted a great deal of the criticism would be silenced, for I am sure it would be greatly appreciated if it were made possible for shippers to have the advantage of the speed, certainty and convenience which would follow from the extension of the radius to sixty miles.

On the last occasion when this matter was debated I pointed out that our two greatest centres, Glasgow and Edinburgh, are some fifty miles apart; that is to say, they are outside the present limit. But they would be inside the radius provided in this Bill. We hear much in these days about covenants and demands for a greater degree of devolution. Such requests can arise in consequence of neglect of special geographical features and considerations when legislation is being framed. I suggest that this Bill, if accepted, would do much to ameliorate conditions which at present are causing discontent.

3.35 p.m.


My Lords, I will add just a few words to what has been said before the House passes to a Division if, in fact, we are to divide upon this Bill. I do not think it can be denied that as this Bill has proceeded evidence has accumulated as to its reasonableness alike in the public interest and in justice to road hauliers. No attempt has been made at any stage of the Bill's progress to rebut the evidence which was produced on Second Reading—as indeed at other stages—of inconvenience, delay, damage to goods and increased cost to user. I can assure my noble friend, Viscount Long, that the damage is not confined to liquid assets—I gather, from what he said, that in the instance to which he referred it was "a case" that suffered. The word "case" there, I assume, was used in the way in which Quiller-Couch said "case" ought to be used. Even the most solid things which might be thought to be almost unbreakable seem to be damaged by these people.

There is a feeling in the country—a feeling which is growing by leaps and bounds—that nationalisation has meant less efficiency and higher prices. Road transport is no exception. I have been trying to extract from the Transport Commission's accounts some financial results of road transport. I have been-doing this in view of the homily which was addressed to me by the noble Lord, Lord Lucas of Chilworth, on the last occasion when we discussed this subject. I gather that we are not to hear one from him to-day. My endeavour has been to extract something which would show the true inwardness of the finances of this business. The task has not proved an easy one. I must say I do not think that these accounts are a model; I do not think they can be cited as an example of what I think we all agreed should be done in public companies and what indeed they are now compelled to do under the Act—that is, to show how the different entities of the mammoth monopoly are faring.

Your Lordships will remember it has always been alleged—indeed, this was the case for nationalisation—that the bigger the nationalised industry grows, the more that is absorbed into the whole, the greater the economies, the lower the cost, the greater the profit to the State or the taxpayer and the greater the benefit to the consumer. That, indeed, is the whole case for nationalisation. And it is a case which is still made, though perhaps not in such limpid terms as formerly but in rather more limping terms by noble Lords opposite—at any rate during week-ends, if not in this House. Now how has this simple principle been applied in the case of road transport? I have extracted these figures, In 1948, the Transport Commission had acquired 8,000 vehicles. Their gross receipts were £14,342,000, and their working expenses were £13,211,000; therefore, their net receipts were—it is a simple sum which even I can do— £1,131,000. By 1949, the Commission, by hook or by crook, by agreement or by compulsion, had acquired 35,000 vehicles. Now one would naturally expect that the costs would have gone up—that is all right—but one would also expect that great economies would have been made and that the profit margin would have been considerably increased. What has, in fact, happened? The gross receipts went up to £38,850,000; the working expenses rose to £37,419,000. But the net receipts have increased only from £1,131,000 to £1,432,000. There has been barely any increase at all and, of course, if you take it proportionately there has been a great reduction in the ratio of receipts. That shows that the bigger the industry has grown the less profitable it has been. When you take into account interest on stock, administration charges and depreciation, I do not think that even the noble Lord would be able to show anything but a deficit and not a profit.

It will be said: "Of course, a profit was not made; the profit motive is an undesirable thing and it was quite right that this business should make losses because it rendered much better service at much less cost to the user." But, of course, nothing could be further from the truth. Charges have steadily gone up. I know it may be said that the independents have raised their charges. Of course, they have had to do so. Everyone has had to do so for everything has gone up, except the cost of living index figure, whatever that may mean. When nine-pence was imposed in extra taxation on petrol and tyres became more expensive, that naturally put up the cost of transport, and there had to be some increase in charges.

I make the noble Viscount the Leader of the House a present of this fact: if a mathematical calculation is made, I think-it is broadly true to say that the charges of both the Transport Commission and of the independent hauliers have gone up by 17½ per cent. But that is not a true comparison in the least, because they did not start level. What happened in the past was that the independent hauliers had a variety of rates. As a noble Lord said to-day, when a man wanted business done, he obtained the best quotation he could, and he was able to get a quotation from a number of people who knew their business and were in keen competition. The result was that the rates varied a good deal, and, generally speaking, were much lower than the basic from which the Transport Commission started. We do not get a quotation of that sort to-day from the Government monopoly. On the contrary, when the Government monopoly took over these businesses and found that the rate on this or that class of business was fairly low, or, say, the rate from Sheffield to London was lower than the rate from Birmingham to London, they raised all the rates below the higher rate to a nice, good, high basic level, so that no one could start from the lower basic rate. If 7½per cent. is added to that, the increased charge to the user, who is the unfortunate person who has to pay, is a good deal higher in the case of the Commission than it is in the case of the individual operators.


My Lords, I am sorry to interrupt the noble Viscount, but does he defend the system which was in operation among private hauliers? A trader would get a quotation of, say, £1 a ton from London to Birmingham, and then would go to another road haulage firm and say, "I have had a quotation of £1 a ton; will you do it for 15s.?" Then he went on until he brought it down to 7s. 6d. a ton. Does the noble Viscount defend that system?


What is wrong about that? I really do not see that there is anything wrong in it. I do not know how the noble Lord conducts his business. I understand he has been successful, but that was not by always accepting the most expensive offer that was made. Is it too outrageous if I go to a tailor and ask him how much he will take to make a suit of clothes, and when he says £50, I then go to Moss Bros, or somebody else and say, "I have been quoted £50 by the tailor to the Labour Party in Savile Row; can you give me a lower quotation?" and when he gives me a lower quotation I buy the suit at the lower price? Are we in Cloud-Cuckoo Land? Why on earth should we not take advantage of a lower offer? I know this is all contrary to the ethics of the Transport Commission. They believe it is outrageous that anybody should quote a lower price than they do. They are going to make jolly certain that nobody is going to quote a lower price than they do. The noble Lord nods his head. I will tell you how they do it: by saying to that man, "If you underquote us, we will not allow your licence to continue and we will put you out of business."


The railway companies have that problem to face, and I was speaking just now as a practical railwayman who had to face it for ten years.


The noble Lord does not seem to have faced it very successfully. The railway deficit has gone on and on. Does the noble Lord, as a practical transport man, think that the answer to efficient and profitable transport is always to be putting up charges, irrespective of the service given? I do not know whether the noble Lord is a member of one of these boards. Is the noble Lord a member of any board?




Well, there is always a chance. I see vacancies occurring, even among the generals; they are due sometimes to self-inflicted wounds, but sometimes there are more involuntary casualties. But the vacancies go on occurring, and if the noble Lord continues to advocate with such courage and persistence the loss motive which he has presented to us to-day, then I think he is well in the running for a very good job.

Of course we cannot get this decent service to-day. Not hundreds, but thousands of firms who hitherto have been perfectly well served by the independent hauliers, find that even at a high quotation they cannot get the service they need for the conduct of their businesses, and have been driven, in many instances entirely against their will, to buy lorries of their own. In this way the number of "C" licences has gone up to an almost astronomical figure. That would be bad at any time, but it is particularly bad to-day when, with the rearmament programme upon us, the production of the vehicle industry for domestic use must be reduced. This is the last time at which to force people to buy lorries for their own businesses. This is the time when the individual haulier should be encouraged to give the best service he can. But, as with all nationalised industries, undeterred by any financial consideration, the appetite grows with eating. More and more permits are arbitrarily cancelled. Competition is being stifled.

What has been the main complaint in the past against monopoly in private enterprise?—the monopoly practice of stifling all competition and raising prices, which no one on this side of the House has ever defended. Everybody agrees that where that occurs there should be a tribunal which can report upon it, so that it may be stopped. I think that is exactly what the Road Transport Commission are doing to-day. The noble and learned Viscount on the Woolsack asked us why we should be afraid that the Commission would "butt in" on the business of the short distance hauliers. To-day they are cancelling permits, right and left; they are imposing arbitrary conditions upon the hauliers—and they are making no secret of this. I have here the amazing directive already quoted by my noble friend, which has been circulated throughout this monopoly undertaking. It is headed, "General Policy for Opposition to 'A' and 'B' Licences." It seems that the Commission believe that the best form of defence is; attack. I do not know how good the Government are about that in the military sense, but they are certainly pretty good at it here. The directive goes on: Applications for 'A' and 'B' licences which permit the carriage of traffic only within twenty-five miles"— those are the people we were not going to "butt in'' upon, my Lord Chancellor. Renewals without modification"— this is not opposition to an application by a new man coming into the industry, but to an application by a man who is already in the industry and who has held his own in the industry because he has been giving good service— to be opposed by any Executive whose interests are affected. This is the type of man who, I under-stood, in the spirit of what the noble and learned Viscount the Lord Chancellor said with absolute sincerity at the time, would receive renewal practically as a right. The final example where application for renewal is to be opposed is: Where competition for short-distance work is likely to be intensified by diversion of vehicles in consequence of permit refusals by the Road Haulage Executive. There we have the system. I have never known anything in the worst private monopoly come near to this. You put a man out of business in one part of his trade by refusing him leave to continue. Poor devil! What is he to do? He then says: "I must try and make a living with my vehicle. I am allowed to carry on within my twenty-five miles limit, and I may do a little more in that twenty-five miles limit because I have been turned out of the other." But what is the answer to that? It must be opposed. Who is going to be the judge? The Road Haulage Executive. We have always held the principle that where a monopoly was attacked there must be an independent tribunal, and certainly the monopolist should not be a judge in his own cause. But who is the judge, jury, plaintiff and attacker? They are all one and the same, the monopolist Road Haulage Executive. There can be no defence to a glaring, uncontrolled monopoly of that kind.

The Government have made no attempt to deny the truth of these charges; they have made no attempt to deny that in- justice is being meted out to these road hauliers, or that inconvenience, damage and loss is being caused to the manufacturers and traders of this country. If we are to divide here, I trust that your Lordships will do what you can to see justice done alike to the haulier and to the transport user. What may happen to this Bill when it leaves us I do not know; but I am clear as to what is our duty. I am sure that before long a wider tribunal than either House will have the decision in these matters, and I have no doubt what that decision will be.

3.53 p.m.


My Lords, we have this afternoon witnessed an interesting demonstration. We had listened to speeches in somewhat similar form on the Second Reading of the Bill, and when I saw this long and impressive list of speakers I asked myself why so many noble Lords felt called upon to repeat their Second Reading speeches, in view of the fact that they knew the attitude which we have consistently adopted in the course of the proceedings on this Bill. I can well understand that there has been a substantial contribution to Party propaganda, and I have no doubt that it will be given due publicity in the appropriate quarters. It may naturally have been thought to be a convenient occasion to add to the sum of Party propaganda. I am not complaining at all; we are all used to that sort of thing. It was also useful, I dare say, to keep the debate going until nearly four o'clock, when there might perhaps be a better attendance than if we had had a Division at three o'clock. I am sure that is a possibility that is not always remote from the mind of an exceedingly competent Party Whip. But, for all that, no new considerations have been brought forward with regard to the Bill.

The noble Lord, Lord Teynham, is a most plausible advocate, and we all admire him very much. I thought he did his bit very skilfully. He set out to allay our apprehensions by assuring us that it was not the purpose of this Bill to undermine the Transport Act. That was the thesis of the mover of the Third Reading, but it was not the thesis of any of the subsequent speakers. I will give them credit for their frankness. I made particular note of the frankness of the noble Lord, Lord Hawke. He said that this was only a start in smashing things up. That is an accurate description. That is exactly what it is, and that is why we object to it.

We have considered this matter with great care. It was evident that this Bill, if carried, would make it impossible for the Transport Commission to carry out the duties which Parliament placed upon them under the Act. Several noble Lords, including the noble Viscount, Lord Swinton—although he camouflaged it with his usual ingenuity—made no bones about it. They said: "We want competition. This Bill is to promote a lot more competition. Let all these fellows come and have a go at it,"—although they may have been paid considerable sums of money not to do so. That is exactly contrary to what the Transport Act was designed to do. It was designed to create a monopoly, and so the Commission had to buy out these people. I do not now say whether that was good, bad or indifferent, but such was the purpose of the Act. Therefore, the present Bill is completely incompatible with that purpose. We have said so right from the start. My noble friend Lord Lucas has already said it at considerable length on previous stages, and I have not asked him to repeat himself to-day. I must confess, however, that I was not too clear as to what the objection raised by the noble Lord, Lord Gifford, about some gentleman who tried to telephone a shipping office about a passage or something, had to do with this Bill.


What I said was that an Australian friend of mine wished to send two trunks to a ship—it had nothing to do with a passage at all—and he got on to the appropriate office of the Road Haulage Executive. He was referred to four or five different people without getting satisfaction, and was finally told to write in. He did so, but did not get an answer in time to get the trunks away before the ship sailed; and he had to hire a Daimler car at considerable expense and take the trunks down himself.


All that is quite interesting, and it was a very enlightening five minutes. However, even with the noble Lord's explanation, I do not see what it has to do with this Bill. It spun the time out, at any rate. As all the speeches have shown, the Bill is intended to have, and can only have, the effect of torpedoing the Transport Act. I can understand your Lordships wanting to repeal the Act, but I cannot understand your wanting to nullify the whole thing and, at the same time, pretending that it does not make any difference. I am not going to repeat the arguments to your Lordships, because we have heard them all before. We have had a very skilful Party display—which I duly respect—and all I have to say is that we maintain the attitude, entirely logical and incontrovertible, that we have adopted throughout, and that we shall vote against the Third Reading.

On Question, Whether the Bill shall be now read a third time?

Their Lordships divided: Contents, 60; Not-Contents, 33.

Cholmondeley, M. FitzAlan of Derwent, V. Greville, L.
Exeter, M. Long, V. Hampton, L.
Salisbury, M. Mersey, V. Harris, L.
Portman, V. Hawke, L.
Albemarle, E. Simon, V. Hindlip, L.
Bessborough, E. Swinton, V. Llewellin, L.
Buckinghamshire, E. Lloyd, L.
Carlisle, E. Amherst of Hackney, L. Mancroft, L.
Fortescue, E. [Teller.] Badeley, L. Mendip, L. (V. Clifden.)
Halifax, E. Baden-Powell, L. Milverton, L.
Howe, E. Balfour of Inchrye, L. Monkswell, L.
Iddesleigh, E. Belstead, L. Monson, L.
Lindsay, E. Brocket, L. Newall, L.
Manvers, E. Burnham, L. O'Hagan, L.
Onslow, E. Carrington, L. [Teller.] Palmer, L.
Ypres, E. Cawley, L. Rochdale, L.
Cherwell, L. Saltoun, L.
Allenby, V. Clanwilliam, L. (E. Clanwilliam). Schuster, L.
Allendale, V. Clydesmuir, L. Teynham, L.
Buck master, V. Courtauld-Thomson, L. Tweedsmuir, L.
Cecil of Chelwood, V. Gifford, L. Wolverton, L.
Jowitt, V. (L. Chancellor.) Burden, L. [Teller.] Macdonald of Gwaenysgor, L.
Chorley, L. Marley, L.
Addison, V. (L. Privy Seal.) Crook, L. Merthyr, L.
Douglas of Barloch, L. Morrison, L.
Baldwin of Bewdley, E. Douglas of Kirtleside, L. Ogmore, L.
Haden-Guest, L. Pakenham, L.
Alexander of Hillsborough, V. Hare, L. (E. Listowel.) Piercy, L.
Hall, V. Henderson, L. Rochester, L.
St. Davids, V. Holden, L. Shepherd, L.
Stansgate, V. Kershaw, L. Silkin, L.
Lawson, L. Uvedale of North End, L.
Amwell, L. Lucas of Chilworth, L. Wilmot of Selmeston, L.
Bingharo, L. (E. Lucan.) [Teller.]

Resolved in the affirmative, and Bill read 3a accordingly; Amendments (privilege) made. Bill passed, and sent to the Commons.