HL Deb 23 February 1953 vol 180 cc583-609

2.35 p.m.

Order of the Day for the Second Reading read.


My Lords, I rise to move the Second Reading of the Transport Bill. Perhaps your Lordships will forgive me if I begin on a personal note. For over fifty years I have been engaged in transport matters of one sort and another, and as time has gone on it has been borne in upon me that what is most important of all is that there should be efficient transport in the whole of our industrial system. And that has continually occupied my attention. I am glad that the scope of my present appointment has given me the opportunity of playing a part over the last fifteen months in shaping the proposals which I now put before your Lordships. I outlined these plans in the debate on the White Paper which we had last May. Since then we have in certain respects altered our proposals in a proper response to public opinion.


You will alter them again.


But the main principles—and I would emphasise this—are just the same: denationalisation of road haulage, decentralisation of the railways, and greater freedom for the railways in the matter of charges. These special items remain throughout.

Your Lordships will not want me to go over the background of the problem again, as I did in the White Paper debate. But I will just say one thing. Modifications in the system set up by the Transport Act, 1947, are necessary, I have no doubt at all; and I know that this view is shared by a great mass of people up and down the country. Nationalisation has not been a success. It has not provided, and shows no signs of providing, the country with the cheap, swift and elastic transport service which it needs. Integration, the basic principle on which the 1947 Act was founded, has made little, if any, real progress. It may be urged that five years is too short a period for effective integration to take place. There may be a little truth in that view. But it is not too short a period for comprehensive plans for integration to have been prepared and made public if, in fact, they were practicable. Apart from the failure of the 1947 Act to achieve its main aims, it has, in the view of the Government, led to excessive rigidity and centralisation which, in the case of road haulage, are particularly inapt. In private hands, speed and certainty of delivery by road haulage was the leading characteristic of the industry, and the enormous and continuing expansion of road goods transport in the last fifty years affords conclusive evidence of its advantages. Largely owing to the effect of the licensing system set up by the Road and Rail Traffic Act. 1933, this increase has been far more marked in the case of "C" licensed vehicles than in the case of haulage vehicles operated under "A" and "B" licences. But in nationalised transport the fleet of vehicles engaged in haulage has actually declined.

In setting these facts before your Lordships I should not like it to be thought that I am criticizing the Commission or the Road Haulage Executive. They have done their best and, indeed, have devoted the most strenuous efforts to carry out the policy embodied in the 1947 Act; and the fact that their efforts have not been more successful is due not to any lack of energy or ability on their part but to the defects of the Act itself. The Road Haulage Executive have achieved the remarkable feat of absorbing something like 4,000 individual firms and bringing them into a single entity and organisation, but the results have shown that this form of administration is ill-adapted to secure the best service which haulage can provide. I would not, of course, deny that in many cases the Executive give a service which satisfies their customers. But in many cases they do not, and where the service is one in which the Executive have a monopoly there is no one else to whom the customer can go. He must either use the Executive's service or buy and operate vehicles under "C" licences, as in fact so many people in trade have already done. I dwell on this point because it is an essential premise of Government policy that road haulage cannot give the service of which it is capable if it is organised as a nation-wide network, subordinated to meet the dictates of a central administration. Here is a business which, if ever there was one, needs quick, individual, on-the-spot decisions, the freedom to quote quick and individual rates, and the freedom to go out and canvass for, and collect at short notice, traffic of every variety. By its very nature it is a business where personal incentive is a sine qua non. Conversely, it is a business which suffers from reference to higher authority, from nation-wide agreements and from the absence of almost all long-distance competition.

Surely, my Lords, the financial results alone of the last five years illustrate the general truth of what I have been saying. On a conservative estimate, the purchase price which the British Transport Commission paid for the many units which now make up the Road Haulage Executive means that in the aggregate they were earning from£7 million to£10 million each year. By contrast, the Road Haulage Executive over the four years for which we have results have now made a working surplus, all told, of only£4,500,000—on average, a little more than£1 million a year. And this before any contribution whatsoever has been made to the Commission's central charges. A proper contribution for interest alone would be appreciably in excess of this amount. As for 1952, we have not got the figures yet, but I fear a poor result. Over the last year carryings were about 16 per cent. less than the previous year, and costs, as we know, have not been diminishing.

But quite apart from these specifically road haulage considerations I must turn for a moment to that much-laboured word in transport circles, "integration." It was the hope of those who supported the principle of nationalisation that, the Act of 1947 having been passed, there would come about a realistic division of traffics and routes between road and rail, and that not only would better services be achieved but that the financial results would relieve the country of the road-rail problem which has affected us all from the 1920's onwards. But look what has happened. Both forms of transport have continued in quite separate compartments. Nothing significant in the way of integration has been achieved and I do not think any reasonable person could see hope of its coming about. As for the financial aspect of the problem, road haulage, as I have already illustrated, has proved to be merely a drain upon the Commission's reserves. I hope, therefore, that it will now be admitted on all sides that to take away the bulk of the Road Haulage Executive from the Commission is not—as was first represented—an act of wanton political partisanship. On the contrary, it is a measure which any realistic appraisal of transport economics thoroughly justifies.

In disposing of the assets of the Road Haulage Executive we envisage that for the most part they will be sold by the Commission, with the approval of the Road Haulage Disposal Board (that is in Clause 2 of the Bill) in the form of what we call "transport units." We shall, no doubt, have a long discussion on this point. It has been urged upon us from many quarters—including Her Majesty's Opposition in another place—that the sales should take place by way of breaking up the Executive into the form of companies and selling the assets in that shape. Those who have made such suggestions have not always had the same final objective in mind. Certainly it could not be accepted as the only, or necessarily the principal, means of disposal. It would clearly be wrong to attempt to dispose of the Executive's undertaking in parcels of which the form or content did not suit potential purchasers. There may well be, however, a substantial number of buyers who would prefer to take over a company as a going concern, and for this reason, and also because it may ease for the Commission the process of transfer from public to private enterprise, we propose, as my right honourable friend the Minister of Transport said in another place, to include permissive powers in the Bill which will enable the Commission to assemble ready for sale some of the Road Haulage Executive assets in the form of companies. The extent to which these powers will be exercised will be dependent upon the consent of the Disposal Board, and in my judgment their actual use will vary from area to area, according to the desires and interests of prospective purchasers. How far they will be employed thus remains to be seen. It would certainly be misleading to suppose that our intention in this matter revolutionises the Bill. It merely adds another method of disposal; it in no way affects the major principles of the Bill.

I should say a word about Clause 4, under which the Commission may retain, in company form, not merely the number of road vehicles which they inherited at the date of nationalisation but 20 per cent. in excess of that figure. The vehicles in the retained fleets must, however, be comparable in size, in value and in quality with the vehicles in the 1948 fleets. The 20 per cent. overall limit is perhaps too small, in that it does not make sufficient allowance for the horse-drawn vehicles of 1948 fleets which have since been replaced by lorries, and the Commission may be too restricted in their choice of vehicles. As my right honourable friend indicated in another place, we are prepared to adjust these limits somewhat. This will mean that the Commission are still by far the largest haulage undertaking in the country. But the essential point is that they will not be the only long-distance haulage undertaking and will be subject to the refreshing breeze of competition. At the same time it does allow the Commission to incorporate the benefits of road haulage as feeders and proper adjuncts to railway services.

We hope that the process of disposal will be well advanced by this time next year, for the latest reports of the number of prospective purchasers are encouraging. Then at the end of 1954 the 25-mileradius limit, which has so crippled and uneconomically confined the private road haulier, will be taken off. This provision is set out in Clause 7. The fixing of this date at the end of next year allows those who will have purchased lorries and so on to get their business properly organised and to have a reasonable start in the competitive atmosphere which we are deliberately encouraging. The 25-mile limit has always been an unloved imposition, but it would be unfair to purchasers to remove it before the end of 1954.

I now turn to the transport levy. We must be realistic about the sale of the Road Haulage Executive's undertaking. As I have already said, it is unfortunately the case that it is not a profitable concern. And we cannot expect that as such it will realise the price which the Commission paid for the undertaking from which it has been built up and which, in the hands of the firms to whom they belonged, had earned substantial profits. At the same time the Government would not wish to saddle the Commission with the capital loss which will thus inevitably occur. Then there will be other consequential but lesser losses. There will be a payment of£1 million to reimburse the Commission for losses from disturbance while the Executive is being disposed of (Clause 12). There will be the expenses of the Disposal Board, and there will be the payments which we have always proposed should be made to cover compensation awards. We propose that the funds to meet these various expenses shall be found by a levy, and taking the provisions on this subject as a whole I do not think it can be said that the Commission are being unfairly or ungenerously treated. The levy will be made upon operators of "A," "B" and "C" licensed vehicles above a certain limit of weight and numbering about half a million. This will mean that the incidence of the levy will be widely spread. In the case of a 2-ton lorry it will amount to not more than£5 8s. 0d. per annum, and in terms of average running costs it represents only a very small fraction of a penny per ton mile.

We confidently believe that trade and industry will get a better service by reason of this Bill, and this is our justification for requiring the owners of "A," "B" and "C" vehicles to contribute to the levy. It may be asked why the "C"licensees—that is, those who run vehicles for carriage of their own, and only their own, goods—should contribute. But these operators have the privilege of using their own transport when it suits them, and of using public transport again when it suits them. Few of these are, in fact, completely independent of public transport in the conduct of their business. It would not be fair that they should be exempt from a charge to which the public haulier is subject. It is well known that since nationalisation the number of "C" licences has more than doubled. Indeed, this is a strong piece of evidence in the indictment of transport nationalisation. A return to free enterprise road haulage should, we think, result in a diminution of the number of "C" licensed vehicles. Originally in our proposals, of course, the levy was to serve another purpose, that of making good revenue losses which the railways might unavoidably suffer from the transfer of further traffic from rail to road, and which they could not offset by compensating economies. Whatever the merits or demerits of that proposal, it did not commend itself to public opinion, and after prolonged discussion in our own midst we came to the conclusion that we might be able to achieve the same object—that is, helping the railways in their competition with road—by relieving them of some of their ancient statutory obligations in connection with charges and so put them in a stronger position in relation to their rivals. Thus we have included in the Bill Significant provisions altering railway charging legislation, and these provisions shall come to shortly.

Now I come to the part of our proposals which concerns the organisation of the railways. In Clauses 14 and 15 are set out the provisions requiring the British Transport Commission to prepare and submit its plans for railway decentralisation. I do not think there is anyone who, in broad principle, disagrees with this part of our proposals. The time has surely come when the tide of centralisation should ebb. It has been flowing in ever since nationalisation took place, and, indeed, before that, since the 1921 mergers. Now it should be reversed, sensibly and properly—but none the less reversed. We have been criticised for failing to give in detail the shape of the railway system to come. But, my Lords, I am sure that we are right in taking our stand on this point. In these clauses we have given a very general indication of the intentions and my right honourable friend has indicated in another place that he proposes, as soon as the Bill is passed, to consult with the Commission to evolve a framework which will enable a detailed scheme to be worked out. And when the scheme is formally submitted to the Government, the Minister has to consult interested parties about it. Then he has to make an order to bring the scheme into force, and this order is subject to Affirmative Resolution in both Houses of Parliament. In such circumstances it would, we feel, be improper for us to air our views at large at this early stage on what the contents of the scheme should be.

This, however, I would say at the very least. The Railway Executive is, as the Bill says, to go. And thus the uneasy division of responsibility between the Commission and the Executive will no longer continue. We on our side of the House have always held that the structure of Executives set up by the Transport Act of 1947 held in store great dangers; and so, I feel, it has proved in fact. I do not think that it is going too far to say that modifications in this structure might well have taken place in agreement between the Commission and the Minister apart from the provisions of the present Bill. The Government, however, regard the decentralisation of the raildays as imperative and the Bill accordingly takes steps to see that it shall take place. In all very large concerns, and the Railway Executive controls nearly the largest organisation in the world, the combination of overall direction at the centre with such measure of freedom at the lower tiers as will encourage initiative and a sense of responsibility presents a difficult problem. The right balance is exceedingly difficult to strike and necessarily varies with the nature of the organisation concerned. Generally, in my view, it is better to err on the side of local authority than of central control. In our view some of the advantages which accrued from a highly centralised direction during the initial period of the taking over of the former main line railway companies by the Commission are now outweighed by the need for greater freedom in the areas. This, of course, does not mean the complete abandonment of central control, but merely some shift of the balance of power.

Among matters which must be retained at the centre must clearly be wages and conditions of service and, indeed, of labour questions generally relating to railway employees. By that I mean the big questions. I do not mean that all and every question of labour recruitment and discipline should be referred up and up. Such individual matters are essentially decisions for the man on the spot. But as for going back to, for instance, regional settlement of wage rates—well, there is no thought of that. Locomotive and wagon construction is another example of something to be kept for central control. British Railways have benefited substantially from standardising types and gaining the benefit of multiple orders, and this must go on. At the same time, there may well be a fruitful field for developing and encouraging local initiative in design.

Equally, central wagon control should continue. I well know myself, from the other side of my co-ordinating responsibilities—the Fuel and Power side—how many coal wagons the present system saves. The National Coal Board estimate that central wagon control has saved a very great number of wagons. Such an economy must be retained. Charging policy is another matter which it is up to the centre to formulate. But in the actual quotation of rates I look forward to considerable delegation, so that the railway system can get the benefit of the much greater freedom of charging powers which we propose. Further than this I should not wish to go. The conditions with which a scheme must comply are clearly and briefly set out in subsection (2) of Clause 14 of the Bill; and provided that those objects are secured, the Commission have, and properly have, the widest latitude as to the form and content of the scheme.

Your Lordships will observe from the first words of Clause 14 that the Commission are to produce, if they possibly can—and we certainly think they should be able to—the reorganisation scheme within twelve months of the present Act. The Minister is then to consult such organisations as he feels proper about the scheme, and in the case of Scotland he is to consult the Secretary of State for Scotland. My noble friend, Lord Home, will be dealing very fully with Scottish matters tomorrow and I propose to leave that angle of our proposals to him.

Before I leave the subject of railways I would add one more comment about their future as I see it. Any estimate that our proposals, including the freeing of road haulage, mean a black future for the railway system is, in my judgment, totally wrong. In the first place I rely a lot on the decentralisation scheme to give more power to the man on the spot to take quick decisions, and so give a real uplift to railway morale. We envisage a streamlined railway system which will, as time goes on, concentrate more and more on the traffics, and particularly the long-distance passenger and goods traffic for which it is best suited. During the period since the war the railways have been handicapped in their capital investment. In face of the overriding demands upon the national economy of defence, the export industries and so on, the railways have inevitably had to submit to severe limitations in this field. The increased competitive power with which the Bill will provide them, and the lightening of restrictions on capital investment, will enable the railways to take advantage of such improvements in equipment and in operating techniques as their skill, judgment, and ingenuity can devise. The railways are not a static organisation and are well fitted to take advantage of developments in many fields of science and engineering.

We lay great store by our proposals in regard to railway charges—Clauses 18 to 22, which are of the highest importance. They free the Commission from a number of Statutes of, at the oldest, over 100 years ago. However necessary these may have been in those distant days, they are quite inappropriate at present and in present conditions, and they place an unfair burden on the railways. The effect of our proposals is that the Commission will be free to quote what rates they like, subject only, speaking broadly, to maximum rates and fares approved by the Transport Tribunal. This, as your Lordships will readily appreciate, is a landmark in transport legislation. No longer will the railways be subject to the law of undue preference and equality of charge, or to publication of rates and charges, other than the maxima, or to a number of restrictions in the charging of rates below the maxima and in the making of agreed charges. We shall, no doubt, have detailed discussions on these clauses in Committee; and, as on all matters in the Bill, we shall be very glad to have your Lordships' comments and suggestions, provided that they do not undermine the basis of our Bill.

While the Bill gives the railways this new freedom it is only right that a certain protection, both for traders and competitors, against unreasonable or unfair treatment should be included. That is done in Clause 19 (with the relevant Schedule) and Clause 20. For example, any trader whose traffics are tied, or more or less tied, to rail—coal, for example—may appeal to the Transport Tribunal about a charge which he considers unreasonable or unfair. The Tribunal, after hearing the complainants and the Commission, may make such order in the matter as they consider just. And here in the context of these words "as they consider just" I should like to pay a tribute to the work of the Transport Tribunal. This eminent body carries out work of considerable difficulty with skill and judgment, and without fear or favour. To the matter of protection for competitors we have given a great deal of thought. We originally had in the Bill a clause giving some protection to competitors, including road hauliers, against the Commission quoting uneconomic rates with a view to eliminating competition. But we have not proceeded with that particular proposal. We are, however, embodying in Clause 19 a protection for coastal shipping which I understand is agreeable to the noble Viscount, Lord Runciman, and his colleagues in the shipping industry. We are very glad about this, because we certainly recognise the force of the arguments which he and his friends have expressed.

There is another matter on which my right honourable friend the Minister has been having detailed discussions with the shipping industry, and that is about the Coastal Shipping Advisory Committee. Since 1947 this has been a useful piece of machinery for consultation between the Commission and coastal shipping interests. It may in future have to be enlarged to take under its wing representatives of road hauliers. This is already taken care of by the present wording of Clause 28, but there are still one or two points here which we are studying. There is also a protection in Clause 19 for independent dock authorities, so that the Commission shall not charge railway rates which discriminate in favour of their own ports. The other competitors to be given protection are the canal carriers and such canals as are not now owned by the Commission.

One thing which has hampered the efforts of the Commission to get on an even keel financially ever since nationalisation is the inevitable time lag involved in getting approval from the Tribunal to increase charges to take account of increases in costs which have been so lamentable a feature of the last five years. Now, under Clause 21, it is our intention that when faced with serious increases they should be allowed to apply to the Transport Tribunal far temporary increases in passenger charges sufficient to bring in not more than another 10 per cent. of revenue from those charges. The Tribunal is to hear the Commission on the application, quickly and in private, and bring the proposal into force with or without amendment. There is a special provision to prevent undue increases in London Transport fares. In regard to other charges governed by charges schemes, the Commission will have power by notice to increase any maximum charge by not more, than 10 per cent. without the Tribunal's prior approval. Such increases, whether in passenger or other charges or in both, will have to be regularised subsequently through the normal Transport Tribunal procedure with full hearings.

I will not say much more about the remaining aspects of the Bill. They are fairly straightforward. We propose, as we said in the original White Paper, to repeal the Commission's power to make area road passenger schemes and the same power relating to trade harbours. We also propose that the Minister, with the consent of the Treasury, may be able to direct the Commission to dispose of majority shareholdings in road passenger transport companies. There is nothing sinister in taking this power; it is merely a sanction against possible abuse of monopoly powers and it is certainly something of which we shall await the advice of the Thesiger Committee before moving any further. With the disappearance of the Railway Executive and with the possible disappearance of other Executives, the British Transport Commission will have closer contact with its responsibilities and it will be reconstituted and enlarged. Clause 23 (2) provides that the maximum number of members shall be increased from eight to ten. But there may well be room for latitude here, and it is a point on which we shall be glad to have the benefit of your Lordship's views and experience.

We are fully alive to the fact that our proposals may mean some redundancy amongst road haulage employees of the Commission, and possibly, though less likely, among railway employees as a result of the railway reorganisation scheme. We are therefore taking power to make regulations to safeguard the pensions of Commission employees who may be displaced as a result of this Bill, and also to provide for compensation on recognised lines. We regard the two clauses concerned, Clauses 25 and 26, as two of the most important in the whole Bill, and much thought is being devoted to the framing of these regulations so that they can be brought into force quickly. At the same time, I should not wish it to be thought that we envisage large-scale unemployment. Admittedly, during the change-over there may be some temporary redundancy, and it is only right that we should make suitable provision. But as I indicated, in the White Paper debate, I would not for one moment accept any suggestion that the drivers and employees of the Road Haulage Executive generally will be the worse off. On the contrary, our proposals are designed to bring about a prosperous and developing haulage industry, and this will redound to the advantage of the men in it.

My Lords, this is the first measure of denationalisation to come before Parliament, and we are fully alive to its significance. As I said at the opening of my remarks, we should certainly not embark upon a step like this were we not absolutely convinced that it is for the benefit of trade and industry, and transport itself, and in the interests of the general public. We should certainly not embark on something which we know means a period of temporary disturbance if we were not absolutely certain that, after that period, the result will be for the general good. I have said this before this afternoon, and I do not hesitate to say it again: that we are most ready to listen to all your Lordships' constructive suggestions on this Bill, and I am sure that we shall be able to improve it, just as the House is accustomed to improve most Bills. This will be limited, if at all, only by the fact that in our readiness at all stages to listen to public criticism and comment we have amended the measure substantially over these past months. But few things in this world are perfect and, as I say, we shall be grateful for your Lordships' suggestions.

I end as I began, with a reference to the past. Possibly in my young days we in this country—industry especially—tended not to think enough about transport problems.. We were brought up to regard an efficient transport service, like cheap and abundant coal, as one of the facts of economic life which called for no comment. But now things are different. Just as industry has become increasingly alive to the importance of efficient handling of materials within a factory, so we are much more alive to the need to make sure that the further stage of handling goods over longer distances is carried out in the most efficient and economical way. And with this aim before us we submit this Bill. I bee to move that the Bill be read a second time.

Moved, That the Bill be now read 2a.—(Lord Leathers.)

3.16 p.m.


My Lords, as I sat and listened to the noble Lord placing this Bill before your Lordships—in a speech upon which, if I may, I would sincerely congratulate him, because I doubt whether in the whole of his experience he has ever had a worse case to put to a meeting of the shareholders' representatives, as your Lordships are—I could not help recalling some of the words he used at the time when the White Paper—that first attempt of the Government to find a transport policy—was debated in your Lordships' House. I refreshed my memory, and this is what the noble Lord said in his opening remarks (OFFICIAL REPORT, Vol. 176, Col. 1049): …we are firmly convinced that we have produced in the White Paper a sound scheme. We believe that it is in the best interests of inland transport, and of trade and industry, and that it makes a positive contribution to the solution of the transport problem which has vexed the country over the past thirty or forty years. The noble Lord's peroration was even more rhetorical (Col. 1062): My Lords, I take my stand by these proposals. We are working hard upon a Bill to embody our intentions. Then with a final flourish (Col. 1063): …I have no doubt that posterity will look back and thank us for placing these proposals before Parliament. Brave words, but, unfortunately for the noble Lord, neither Press, public, industry nor trade, believed him. I doubt whether any White Paper setting out Government policy has ever been subjected to such criticism as that White Paper on Transport Policy. We did not have to wait for the verdict of posterity, because the Bill which Her Majesty's Government produced, as a result of all the hard work the noble Lord said was being put into it, was received by such a blast of criticism that Her Majesty's Government had not even the courage to put it to the test of a Second Reading in another place. So the Bill before us this afternoon is the third attempt of Her Majesty's Government to find a transport policy.

The Bill has made remarkable progress since it was produced for Second Reading in another place. In spite of the use of the guillotine, the arguments from both Opposition and Government sides in another place, as well as public opinion and the Press, have forced the Government to have fourth thoughts on their transport policy. Moreover, the Bill which we have before us to-day is not, by a long way, the Bill that will eventually leave your Lordships' House. We are informed by the right honourable gentleman the Minister that in your Lordships' House the Government will table Amendments which will alter the very principle embodied in this Bill for disposing of the road haulage assets—Amendments which The Times with characteristic pertinency, has said arise from the belated recognition by the Government of the dangers inherent in their proposals for selling the Transport Commission's road haulage assets. It puts not only your Lordships' House, but Her Majesty's Opposition in a very difficult position, because we have not yet seen those proposals. They should, in ordinary practice, have been inserted in this Bill, in another place. Our Amendments to those proposals—such Amendments as we wish to make—will have to be Amendments to Government Amendments; and, to say the least, that is not an easy way of conducting business.

However, my Lords, I do not complain unduly, because I face my task rather in the spirit that "There is more joy in heaven over one sinner that repenteth." It may well be that history and posterity will transfer their thanks from Her Majesty's Government to your Lordships' House for being custodian of the interests of the taxpayer, a position from which Her Majesty's Government has abdicated right through the progress of this Bill. I would remind the noble Lord opposite that there are other people concerned in the sale of the taxpayers' assets than those who wish to buy; there are the owners, the taxpayers. Let me say straight away that this Bill does nothing towards finding a solution to the transport problem of this country: it does not even touch the fringe of the subject. In fact it puts the clock back thirty years, to a state of affairs to which every responsible transport authority in this country has sworn we should never return.

What are the main purposes of this Bill? They are to break up the organisation of the Road Haulage Executive, and to denationalise, but not completely—that is where the noble Lord made his first mistake, and I will come to it in a moment—the road haulage system, and to sell the bulk of the assets of British Road Services. The noble Lord proposes to do that by forming, in the words of the Bill, "transport units" of a size not to exceed without the approval of the Minister (I quote from Clause 3) fifty motor vehicles or motor vehicles the aggregate weight of which unladen exceeds two hundred tons. So, according to the Bill, unless the Minister gives permission, a transport unit cannot be sold if it consists of over fifty vehicles. Yet it is not uninteresting to note that of the 450 to 500 road haulage concerns voluntarily acquired by the British Transport Commission under the 1947 Act—having, in the aggregate, 12,000 vehicles—according to my researches not one had a fleet of less than sixty-three vehicles. Why in future transport units are to be limited to fifty vehicles one can only conjecture, but I should not be at all surprised if it did not have some connection with a certain Election promise that was made.

The Bill says that the whole organisation is to be broken down and disposed of as quickly as is reasonably practicable"— those words appear in subsection (1) of Clause 1—and (I now quote from subsection (2))— without delay and on the best terms available, and without avoidable disturbance of the transport system of the country. How that is to be done the Bill does not indicate, and no Ministerial utterance has been made on the point. The only emphasis up to date has been upon speed of disposal. But wiser counsels have prevailed. It appears that somebody has found out that the total assets of the Road Haulage Executive are not confined to the 40,000 vehicles in their possession. In fact the assets, which Clause 3 of the Bill lightly passes over as such other property, if any, as may be specified. form the major part of the assets.

The Minister in another place, and I think the noble Lord, Lord Leathers, this afternoon, talked about these transport units as business units. But when you have become the possessor of a few vehicles, you have not a business unit. You have not an operable transport unit or a business unit until you have surrounded it with all the ancillary trappings, the buildings, plant, spare parts, stocks, accounting machinery and, let us be frank, a few customers. That is an operable unit. I ask the noble Lord how he proposes, or how the Government propose, to surround a considerable number of units, each containing from one to fifty vehicles, with assets of the description I have just outlined. The total net assets of the Road Haulage Executive amount in round figures to£100 million. The vehicles, again in round figures, would be worth about£ million. So there are£60 million worth of other assets which the Bill lightly dismisses as such other property, if any, as may be specified. It may be to the interests of some firms to buy only a parcel of vehicles; but that is vastly against the interests of the taxpayer. And may I remind the noble Lord—though he may think it impertinent to be so reminded—that this concern, valued at£100 million, belongs to the taxpayer? If the buyers of the vehicles do not want to buy these other assets, we want to sell them to them, because they are the only real buyers to whom we can possibly look forward.

I would say, frankly, that an orderly disposal, as opposed to an auction sale or something reminiscent of a Government surplus stock disposal after the war, is the only possible way in which the whole value of these assets can be recouped. I do not agree with the noble Lord when he says—falling into a rather elementary error in salesmanship—"Of course, this must be sold at a loss." I deny that these assets of£100 million need be sold at any loss; their value could be recouped if they are sold in an orderly way. That is a matter to which I will refer in a minute.


Before the noble Lord leaves this subject he will, no doubt, explain to us how we are still to realise a large profit when the nationalised undertaking has made a solid loss for two years.


I shall not leave the noble Viscount with any illusion upon any of these points by the time this Bill leaves this House.


For honest salesmanship, that is a factor that should be taken into account.


It is not a case of being honest or dishonest; it is a case of having different conceptions, according to whether you are acting on behalf of the owners or whether you are, like the noble Viscount, acting on behalf of the buyers. It is possible to have a different point of view from his, and that is what I intend to have right the way through the passage of this Bill. I do not intend to bore your Lordships with Committee points—I shall make a long enough speech as it is this afternoon—but I will accommodate the noble Viscount on any Amendment if he likes to discuss this matter with me at greater length.

While the noble Viscount is on "losses," let me tell him this: that if the Government persist in the proposal, outlined in this Bill, to sell these assets by public auction, without a reserve, the loss to the taxpayers of this country upon realisation must be at least£50 million, while the loss to the industrial and commercial community of the country will be absolutely immeasurable. Perhaps I may have the attention of the noble Lord the Secretary of State. I am trying to address to him a serious argument, and as I listened with rapt attention to every word that he uttered, I feel sure that he will wish to accord me the same compliment. I have said that the total assets of the Road Haulage Executive are£100 million.


Does that include the goodwill?




Thirty-five million pounds?


Thirty-three million pounds is the precise figure. Of the total of£100 million,£40 million represents vehicles and about£60 million other assets. It is only by turning these transport units into real business entities, such as operable limited companies, with their own identifies and with all the trappings of companies, that eventually these assets can be sold and disposed of, as they were acquired, by the passing of pieces of paper. Therefore, the only alternative method of disposal to that which the Government have provided by this Bill is via the limited company structure, upon which the noble Lord has now embarked but which he sought to qualify by saying "to a limited extent."

I want to ask the noble Lord one or two questions. I do not expect a reply now but I want him to consider them. I want to list some of the items in this other property, if any, as may be specified. First, debtors: the total amount of debtors included in this£100 million is£15 million. How can you wrap that around a parcel of vehicles, which may be one vehicle or any number up to fifty? How can you allocate, and pass on,£15 million worth of debtors? And yet the records, the ledger accounts, are valuable to the buyer of those units. They are the records of what he is going to purchase, his potential customers, the turnovers, the nature of the service rendered, and the credit record. In them is wrapped up a large amount of goodwill which we wish to dispose of. Then there are consumable stores, valued at£7 million. How is it proposed to spread£7 million worth of spare parts, stores and equipment, over parcels of from one to fifty vehicles? Then there are£14 million worth of properties. How is it proposed to convey these to unknown identities? There are garages, workshops, sorting depôts, offices and buildings of all kinds all over the country. It is only by the proper allocation of all these separate items that we can recoup the£33 million worth of goodwill that stands on the books of the British Transport Commission.

I am not going to weary your Lordships by talking too much about goodwill this afternoon, but I shall return to that matter at greater length at a later stage. That goodwill has not been lost; it is still there. If a set of business men were handling the disposal of these assets in an ordinary business way, they would recoup the vast majority of that goodwill. We shall not be satisfied, at least on this side of your Lordships' House, until, on Committee, we have seen inserted in the Bill a provision for the creation of a sufficient number of limited liability companies to absorb the vast bulk of these various assets. We do not expect that we can absorb them all; there must be some chattel disposal.

The next thing we shall do is to oppose the formation of a Disposal Board. We say that it is an unnecessary and extravagant structure, and that if we have the company structure, and if the bulk of the assets are disposed of by way of share transfer, there is no earthly reason why we should have a Disposal Board. We shall also oppose the levy. Here the noble Lord made his second mistake. He said, "Of course, our proposals in this Bill are really no different from those in the White Paper." But in fact half the levy has gone. In our debate on the White Paper the noble Lord said "that is the keystone of our policy." So half the "keystone" has gone. Admittedly, the noble Lord has substituted something better for it, but the present proposals are not quite the same as those in the White Paper.


The Bevanite section has gone.


If I may, with apologies to the noble and learned Lord on the Woolsack, say this, I suppose that the noble Viscount thinks that is an apposite interpection.




I do not. We shall oppose the levy. We say that, if this company structure method of disposal is skilfully planned, there is no need at all for the levy. The loss upon realisation, the loss by disturbance, and any necessary compensation paid to employees for the worsening of their conditions should be minimised to such a sum that it can be included in the ordinary accounts of the British Transport Commission and amortised in the ordinary business way.

I am going to say this quite bluntly. If there is any loss on the sale of these assets, it will be the Government's own fault. They are forcing the Commission to sell. They are forcing the sale, and it is no good the Minister, in another place, in terms or by insinuation, saying that Her Majesty's Government are doing in 1953 only what the late Government did in 1947. Admittedly, under the Transport Act of 1947 the road haulier was forced to sell, but the British Transport Commission were also forced to buy, at a pre-determined price written in a Statute, with all the safeguards for appeal again written in that Statute. This Bill will force the British Transport Commission to sell, but of course the Government cannot put any statutory compulsion upon private enterprise to buy at any price. That is the difference.

Our other objection to the levy is this. Since when has it been suggested that we should agree to introduce into the fiscal system such an unsavoury principle as that one section of the community shall be taxed to pay for the commercial blunders of the Government—because that is what it is. If the Government were not in such an indecent haste to sell these assets there need not be any loss to be covered by a levy; it is only because of their indecent haste to fulfil a foolish Election pledge. The Minister at one time in another place said, "We shall sell these assets within nine months." He has rather recanted from that statement. The issue joined here is whether Her Majesty's Government are the representatives of the taxpayer, and whether the taxpayer's interests come first, or whether the Government are proceeding in the interests of those who want to buy, of course at a loss to the country.

I want to put to the noble Lord a question on what the levy would cover. If, before or during the sale of these assets, the Chancellor of the Exchequer, in his wisdom, reduces or abolishes the purchase tax on goods-carrying vehicles, thereby depreciating the value of all these 40,000 vehicles, will the levy be used to cover that loss? Of course it will. I should think the Chancellor is bound to reduce the purchase tax on goods-carrying vehicles before these vehicles are sold. That will mean a loss. Since when has it been suggested that we should accept in the fiscal system of this country the principle that the Chancellor of the Exchequer can reduce a tax on one thing, and then tax the same people by a different method to get that amount back again? Yet that is what he will be doing. My Lords, it is upon those grounds that we shall oppose the levy.

I will now deal with the next mistake the noble Lord, Lord Leathers, made, when he said that there are no differences between the proposals in this Bill and those in the White Paper. In the original proposals in the White Paper the Road Haulage Executive were to be bereft of vehicles of any sort, size or description. It was only when, in the debate on the White Paper, I pointed out across the floor of this House that what the Government were doing was to leave the Railway Executive in a worse position than they were even before nationalisation, when they had 4,000 vehicles, that the Government started this amusing game of thinking of numbers. First of all they thought of 6/5ths; then they changed that to 5/4ths. That related to the number of road haulage vehicles operated by concerns wholly owned by the railway companies on January 1, 1948. Now I see that another number, 13/10ths, has crept into the calculation. I think The Times is illuminating on this point. It says: The truth is that a rational division of the Commission's property is gravely prejudiced by the procedure of returning vehicles of particular kinds to the railways in broadly the same proportions as they held them six years ago. Why revive a pattern of organisation which has ceased to operate? To do this is to live in the past. But, my Lords, when the Daily Telegraph criticises Her Majesty's Government it is time they looked up and took some notice. The Daily Telegraph says this: Again, the proviso limiting the road haulage interests of the railways to 5/4ths of those they held at the time of nationalisation has no logical or practical basis. On the Committee stage we shall join in this game of numbers, and the number we shall think of will be one that has some meaning and connection with the national, industrial, and economic interests of the country. That will be the vast difference between us. Our number will also pay some regard to the number of vehicles which are operating the basic services to-day.

From all sides—the Associated British Chambers of Commerce, finance and accountancy—we have heard criticism that the breaking up of the basic services will mean heavy loss to the industry and commerce of the country. The Road Haulage Executive to-day, in its "parcels and smalls" services and the specialised traffics carried on by Pickford's, Carter Paterson's and the other "grown-up children" of like companies are giving a satisfactory nation-wide service. It does not matter what Her Majesty's Government put into this Bill, or what they may say; the British people will always look to the British Transport Commission to give a national service. What is going to fill the gaps after the speculators have taken what they will—the choice pieces? Who is going to be responsible for dealing with the unremunerative services? There will always be unremunerative services. Who but the national organisation is going to do that? So far as possible we on these Benches will take care that Amendments are moved to see that the number of vehicles retained is commensurate with those requirements.

I will give one example within recent memory. On the occasion of the unfortunate disaster of the floods, the Midland Region of the Road Haulage Executive was called upon late on the Sunday night, and within an hour about 500 tipping vehicles were sent to Lincolnshire—not only the vehicles themselves but the whole organisation to run them. Who but a national organisation could have done that?


Will the noble Lord allow me to interrupt for a moment to remind him of the private road hauliers who, in their hundreds, helped to save the situation during the war, in Coventry, Bristol and London?


I am not contesting what the noble Viscount says. I am not going back to the last war; I am going back only a fortnight in order to give one example.

What plans have the Government, assuming they do not sell all these vehicles? There is nothing in the Bill. What is going to be the organisation? Nothing is said here. There is one significant omission in this Bill, and perhaps the noble Viscount, Lord Swinton, when he comes to wind up will deal with this matter. Why is the Road Haulage Executive not to suffer the same fate as the Railway Executive? The Railway Executive is to be abolished, but there is not one word about the fate of the Road Haulage Executive. Yet the Bill purports to sell all its property. Is it to be kept in cold storage in case all the property is not sold? Is it to be kept in cold storage to save the face of the Government if their scheme of disposal proves a failure?

The absence of constructive thinking upon and of any knowledge of the subject of transport is well illustrated in this Bill when we come to the question of the railways. I know the noble Lord, Lord Leathers, will not take this unkindly, but I was really amused when he asked, "Why should we say anything about the railways at the present time?" I thought of the old adage: "If you do not know anything about a subject, keep your mouth shut; do not open it and prove your ignorance."


A very good maxim.


It is one which I hope the noble Viscount will remember on Wednesday evening. The Government are full of ideas about how to dispose of the assets of the Road Haulage Executive, but they have not one idea as to how to reorganise the railways—not one. What do they say in the Bill? First of all they say, "We are going to do away with the Railway Executive." But you do not need a Bill to do that. You can do that under the provisions of the1947 Act. Decentralisation of the railways is the next thing. You do not need a Bill to do that. You can decentralise the railways under the 1947 Act And why not? Now the only statement we have is that the Commission must produce a scheme—one of those things "hereinafter to be revealed." I think the noble Viscount, Lord Swinton, will be able to tell us something about this. He was a great authority, in connection with the 1947 Act, on schemes "hereinafter to be revealed." Perhaps he will tell us why the Government have not revealed this one. The truth is that they do not know anything about it. In this connection again I quote a very pertinent remark from The Times: It is to be hoped the Government are not as much in the dark over their intentions as they leave the public. What is this claim for freedom which the noble Lord has made, this claim that the railways will now be free? The Minister, in another place, said that they will now be able to compete on equal terms. I do not want to look a gift horse in the mouth, for concessions have been made in another place as regards railway charges; very valuable they are, too, and they should go a long way to remove some shackles. But are we indeed expected to believe that this freedom is real? The railways are still the only transporters who have to submit their charges schemes to a national Tribunal. There is not another transporter in the country who has to do it. Bus and coach companies can get their fares settled very quickly by going to any of the twelve local licensing authorities in the country. But as these authorities take into account only local conditions and considerations, their policies are quite unco-ordinated, either among themselves or with the national Tribunal. The time has come when we require reconsideration of this question of tribunals, in order that they shall fit every form of transport and have a common policy. If we take the air services what do we find? Internal air service fares need not be submitted to any tribunal, and a careful study of the 1951 accounts of the principal provider of the internal air services shows that it costs the internal air service authorities just over£4 million to operate their internal routes and short cross-channel routes, whereas they receive in revenue only£3 million. The balance was made up from their Scandinavian routes and by a Government subsidy. Yet that was traffic which British Railways could have handled at great profit.

Then we have concessional fares. British Railways provide about£6 million worth of workmen's tickets and£12 million worth of season tickets a year, while the figures for London Transport amount to about£6 million worth of these tickets a year. I believe there is a case to be made, while we have the peculiar fit-up that we have in this country, for giving the lower paid worker some subvention for his travel to and from work. But why should it be financed out of the coffers of the railway companies in a supposedly competitive system? By Section 3 (4) of the 1947 Act they still have the statutory requirement to operate at a profit. I do not grumble at that—they should do so. But do not place handicaps upon them when the road haulier is as free as the wind. There is no tribunal to exercise control over him. The consultative committee structure is kept in this Bill, but it obtains only so far as the nationally owned transport is concerned. A private bus operator, a private transporter, does not come within the ambit of the consultative committee.

As the noble Lord has said, those concerned with coastwise shipping can complain about the rates on the railways, but the railways cannot complain about the rates charged by the shipowners. Why do the Government retain this setup in what is supposed to be a competitive system? If, as they say, they are going to free the railways; if they believe in freedom, why do they not sweep all this away? Of course, the truth is that the Government know very well that the national provider of transport can never be free. He will always have a moral obligation, and the public will always see that he accepts it. As I have said, this Bill does nothing to face these problems. Politically these problems are very difficult. That I freely grant. But at some time or other they will have to be faced. At some time or other in this country, we shall have to make a study of transport economics—not of road transport economics or rail transport economics or air transport economics, but of transport economics as a whole. Until we do that we are not going to make progress. We do not make progress with this Bill. We go back.

May I conclude by paying tribute to the right honourable gentleman the Minister of Transport? I think he has done exceptionally well. He came to this problem knowing nothing about it; but he has learned. He has provided in this Bill many concessions which are wholly good. May I say this, more in sorrow than in anger?—and I hope the noble Lord, Lord Leathers, will not think I am being impudent. The noble Lord said at the opening of his speech that he had been fifty years in transport. I should have thought that anybody with fifty years of experience in transport would shun this Bill like the plague, because never have I seen anything quite so had. We shall not divide against this Bill, but we wish to probe it on Committee stage. I appeal to the noble Viscount the Deputy Leader of the House, who will appreciate the difficulties which face the Opposition, and to the noble Lord the Secretary of State, to give us time to probe this Bill. I hope the noble Lord will be as accommodating in this House as his right honourable friend the Minister was in another place. We hope that when this Bill leaves this House it will be a charter for the protection of the interests of the taxpayer. That, at any rate, will be our main object through all stages of the Bill's passage here.

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