§ 2.53 p.m.
§ Debate resumed (according to Order) on the Motion for Second Reading moved on Monday by Lord Leathers.
§ EARL JOWITT
My Lords, my first words to-day must be an expression of thanks to the noble Earl, Lord Birkenhead, who has allowed me to come in front of him, and to the noble Viscount the acting Leader of the House, and words of apology because I have to go away in the course of the debate this afternoon. The explanation is that a long time ago, lone before I knew of this debate, I fixed an arrangement for this afternoon and I am afraid I shall have to go in due course. I know that noble Lords will acquit me of any sort of discourtesy in being absent.
We have had a most interesting discussion on this Bill. I think it has been well up to the standard which we expect in this House. I found it most informative. I very much hope that noble Lords opposite will see to it that we have an equally useful discussion on Committee stage. I hope that on Committee stage we shall not meet with closed minds but that we shall find noble Lords anxious to listen, at any rate to those parts of the argument they think sound. We do not intend, of course, to divide on the Second Reading of this Bill—I will say that at the outset so that noble Lords need not remain here if they do not want to. Whether it is a good Bill or a bad one, there is no doubt at all that in the main it is a Bill for which the Government had a mandate. It was plainly put in their Election Manifesto and, that being so, it would be no part 776 of the function of this House, as I understand it, to decline, even if we could decline, to give it a Second Reading.
May I say at the outset where I stand in this matter? I have no sympathy with those people who think that nationalisation is a panacea for all our ills. I do not believe it. Equally I do not believe or have any sympathy with those who say that nationalisation must always be bad, always be damned. I think that is an equally foolish point of view. Following up what the noble Lord, Lord Winster, said yesterday, I believe that if we are to have a system of politics in this country under which one Party is to nationalise and the other Party is to denationalise, and the first Party when it comes into office again are again to nationalise, then, quite obviously, that way lies absolute disaster. I believe in the British genius for common sense and compromise, which is a thing about which we need not be the least ashamed—at least, not if we have read John Morley's book. We may not be very logical in comparison with the Latin races, but to a large extent we have that blessed sense of compromise which will get us through our difficulties. That is why, frankly, I am sorry that the Government have resorted to this drastic measure in dealing with this problem. I would far rather they had tried to deal with the matter by some form of compromise.
I have not the slightest objection to the existence of competition between nationalised and private enterprise undertakings. What the noble Lord, Lord Teynham, called "the free interplay of competition" between the two is, I believe, healthy for both. As your Lordships know, there are some 7,000 hauliers, with a total of 15,000 vehicles—that is to say, in the main they are small men—who are carrying on long-distance haulage. They were all established before 1946. And there are nearly 100,000 vehicles under "A" and "B" licences which have the restriction of 25 miles attached to them. I say, frankly, that I think it is a profound pity that the Government did not proceed in the first instance by emancipating these 100,000 vehicles from a 25-mile limit in order to introduce what they desire, an element of competition, without at the same time disrupting altogether the services which we now have. I believe that there are occasions when doctors 777 have to drain off the blood of a newly born infant and provide it with wholly new blood. Obviously, such a drastic interference with the circulatory system is a very serious matter. And this is a very serious matter.
It is not a mere debate between those who believe in nationalisation and those who are opposed to it. The question here is whether, having got the existing system, we are wise to disrupt and disturb it. Shall we not gravely imperil the national well-being by doing so? Whenever one starts any new system, whether a nationalised system or a private enterprise one, there is bound to be an element of disturbance until the system gets into its stride. It seems to me that deliberately to embark upon such a drastic course as the Government are taking here is a very serious step indeed, because the efficiency of transport is the life-blood of industry. To justify the course which they are taking the Government must show, not only that the present service is inadequate or has its defects but that the present service is so bad, so inefficient and so inadequate that it cannot be remedied by any less drastic measure. That is what the noble Lord, Lord Teynham, has said and what the noble Lord, Lord Leathers, also has said, rather less emphatically. The noble Lord, Lord Leathers, said that in many cases the Road Haulage Executive do satisfy their customers, but he added (OFFCIAL REPORT, Vol. 180, Col. 584):But in many cases they do not.The noble Lord, Lord Teynham, said, much more emphatically (Col. 611):… trade and industry have suffered enough already through the inefficiency of the nationalised road transport services.He added that the set-up of the Road Haulage Executive was organisedwith little regard to the main trunk routes. …Now, I should like to know what proof there is of these statements. Throughout this debate so far—and it has now continued two days—we have not had a single instance given to us of any inefficiency whatsoever. I cannot help thinking that the noble Lord, Lord Leathers, has been reading as his bedside book The Hunting of the Snark—and if anybody is entitled to a little light relaxation 778 at this time the noble Lord is. He has there read the words:What I tell you three times is true.The noble Lord said it three times, but we have been given no evidence that the system now established is inefficient. We have not had quoted to us—I invite correction if I am wrong—the opinion of any of the great organisations: the Association of British Chambers of Commerce, the Federation of British Industries, the National Farmers' Union, or any of the industries who use this service. We have had absolutely nothing except the ipse dixit of the noble Lord, Lord Leathers.
I have had, therefore, to make many researches, so far as I could, to see what these organisations think. I am told (and the noble Viscount, Lord Swinton, will be able in the course of his speech to correct me if I am wrong) that the Central Transport Consultative Committee have made recommendations about this matter. I have not, of course, seen the documents, but I am told that the Committee have made a recommendation to the effect that nothing should be done to impair the services now available, and that they said that there is great risk of impairment if this service is disturbed We should like the noble Viscount to tell us, in due course, whether the Central Transport Consultative Committee, on which, if I understand aright, there are representatives of the Federation of British Industries and the National Farmers' Union, have made any representations to that effect.
§ VISCOUNT SWINTON
I think I can answer that point at once. The representation was not at all that they objected to what was proposed in the Bill. What they said, quite naturally, was, "When you are making a change please make that change in a way which, in the interval, causes as little disruption as possible." That was the substance of their representation.
§ EARL JOWITT
I have not seen the documents and therefore I cannot check that; but I can be more certain about the attitude of the Association of British Chambers of Commerce, because that is stated in a public document. In their Report of October, 1952, they said this:Vital interests of consumers could be seriously impaired if the existing network of services, both local and national, were disbanded or disrupted…779 Now, my Lords, the existing network of services cannot be as bad as all that, because this organisation is saying that if the existing network is disbanded or disrupted it would be a great misfortune. Moreover, the Vice-President of that Association, on November 7, 1952, said this:We maintain that the experience of British Road Services"—he was speaking about the existing services—shows that there are services which can best he given by a larger and co-ordinated road haulage unit—I refer particularly to long-distance trunking and the full load of general haulage. This assumes added importance when the desirability of road-rail co-ordination is considered, and we do not despair of a future measure of such co-operation.It is not for me to prove a case; it is for the Government, who desire to disrupt this existing service, to prove a case. We have not had a single statement from any of the great organisations alleging that the present set-up has given a bad or inefficient service; and I say that for noble Lords to come here and declare that the service given is so bad that it must be altogether disrupted, without adducing a single illustration of what the alleged defects are, is entirely wrong.
I have made other inquiries to try to find out what traders think of the service. I have found that the Road Haulage Executive are now parties to contracts with a large number of traders, under which the Executive supply vehicles to those traders who previously were accustomed to operating them—people like Whitbread & Co. Ltd., I.C.I. Ltd., the Imperial Tobacco Co. Ltd., Joseph Lyons and Co. Ltd., Liptons Ltd., Cadbury Bros. Ltd., Huntley & Palmers, Marks and Spencers and a host of others. They go to this road organisation to get their vehicles from them. Those people know where they can get proper service, and they have deliberately selected the Road Haulage Executive to give them vehicles and their services. In face of that, it does not seem that this Road Haulage Executive is as inefficient as is said. That is something which I find exceedingly difficult to believe.
Then I was astounded to hear the noble Lord, Lord Teynham, say that the Road Haulage Executive had paid little regard 780 to the main trunk routes. I thought it was in this service that the Executive had had their best successes. May I quote the figures? They were quoted in another place. I understand that the scheduled timetable of transport services amounts to 702 every night—that is, services operating from London to Manchester, or London to Newcastle, or what you will. Of that total of 702, 368 come from terminal depots and I am told that the daily tonnage of goods handled is 34,000 tons. The noble Lord, Lord Leathers, will tell me if my figures are wrong, but I have taken great trouble in getting them, and I believe they are right. I cannot understand how it was suggested that little regard had been paid to the main trunk routes.
Will the noble and learned Earl allow me to interrupt him, particularly as this point has been mentioned? I did not intend to convey that there were no trunk routes but that it would be very difficult, with the present organisation in geographical areas, for conveyances to be carried through from one area to another and that that fact was causing some disquiet among traders generally.
§ EARL JOWITT
The phrase which the noble Lord used was "main trunk routes" and the figures I have given indicate that there are 702 services nightly. The noble Lord's statement was an astounding one.
The noble Lord, Lord Leathers, criticised the Road Haulage Executive by reason of the fact that the fleet of vehicles had declined. I should have thought that that was a good proof of their efficiency: the more efficiently vehicles are used, if they are used to capacity, the fewer vehicles required. I do not assert that there are not other factors, such as a fall in trade and the amount of goods carried, which enter into the matter; but when all that has been allowed for the average amount of back-loading is now 80 per cent. And I believe that there are many instances where services are fully balanced—that is to say, a vehicle can go one way with a load and come back another way with a load. That is a higher efficiency rate than existed under any system of private enterprise. I shall be told in due course whether that is right or wrong. But, obviously, if these vehicles are operated laden both ways, 781 fewer vehicles are needed than if they are used laden only one way—in fact exactly half the vehicles would be used.
In the absence of any argument whatever—apart from the assertion by the noble Lord that this has been an inefficient system—we have to consider other arguments. We have the argument, for instance, about the "C" licences, and I want to say a word or two about those. The noble Lord, Lord Leathers, said—I think these were his words—that since nationalisation the number of "C" licences taken out had doubled. I do not like to question the noble Lord's figures, but I think he was quite wrong. I believe the fact is that the number of "C" licences has doubled since the war. Perhaps the noble Lord will check that point, to see which of us is right. I do not doubt that the reason why people went for their "C" licences was, in part, because they received a not ungenerous income tax allowance in respect of writing off; and I do not doubt, too—and I make a present of this to noble Lords opposite—that another reason was that there was some doctrinal prejudice against nationalisation. But, be it observed, it was not until the end of 1950 that British Road Services were effectively in the field, and even then their organisation was not consolidated. If we compare the number of "C" licences in the period before British Road Services had consolidated their services and the period after they had consolidated their services (I have not the precise figures before me, but they can easily be checked) I think it will be found, broadly speaking, that the number of "C" licences in 1951 and 1952 was little more than half that in 1949 and 1950–60 per cent., I believe. So that directly British Road Services have begun to establish themselves, there was a drop in the number of "C" licences.
However, there is much more to it than that. I believe that the argument based on the number of "C" licences is a most unsound argument. The Transport Division of the Economic Council for Europe have shown what has been happening in other countries, where, of course, although they have not our classification of "C" licences, they do classify vehicles which are used to carry only the owner's own goods and which correspond to our "C" licence vehicles. It has been found that the numbers of these licences have 782 increased in every country in Europe. I believe that the smallest increase has been in Norway, where they have increased 79 per cent.; in Belgium they have increased 91 per cent.; and in the United Kingdom they have increased 82 per cent. I have not bothered about precise figures—the noble Lord, Lord Leathers, will know that those figures have been given—but what I have quoted is approximately right. Observe, then, that the increase in the number of "C" licences is a general experience extending throughout the whole of Europe—and the United Kingdom is by no means at the top of the list. It seems to me that the argument that these particular services are inefficient because "C" licences have increased is a complete and absolute fallacy.
The next argument put forward is, I think, an even bigger fallacy. This is the argument, as I understand it, advanced by the noble Lord, Lord Leathers, repeated by the noble Earl, Lord Selkirk, and passing throughout the debate. It is stated that before nationalisation the various private concerns were making a profit of something of the order of £7 million to £10 million, as compared with the nationalised undertaking which now is making a profit of, I think, only £1 million. They say, "Look at the two pictures. There is the £7 million to £10 million made by efficient private enterprise, and here is only £1 million made by this wretched public enterprise." Let us examine that statement for a moment, because I believe it is an astounding fallacy. How is the £7 million to £10 million arrived at? To arrive at that figure, if I understand, the argument aright, you take £30 million, roughly speaking, in the books as the value of goodwill, and you assume that it is based on either three or four years' purchase. Therefore, dividing £30 million by three you get £10 million and dividing £30 million by four you get approximately £7 million. That is how you get the £7 million to £10 million. I ask the noble Lord, Lord Leathers—because this is the sort of thing with which I used to be concerned—whether any reputable accountant would say that that is a sensible way of calculating profits. I cannot believe it for the moment.
To give a simple illustration, let me take the case of two businesses. Let us 783 suppose that on a valuation basis of the assets, the garage, and so on, the valuation for each business came to £10,000. Let us suppose that the profits of the one business have been £1,000 a year and that that seems to be a maintainable profit; and let us further suppose that the accounts of the other business show a steady loss over the past years of £1,000 a year, with no prospects of redeeming it. You buy those two businesses on a valuation and pay £10,000 for each, but in the case of the first business, in addition to the £10,000, you pay a sum of £3,000 or £4,000 for goodwill, based on the £1,000 maintainable profit. In the case of the other business you pay £10,000 but you do not subtract anything for the yearly loss; you buy the business on the basis of a valuation of the assets. If you are going to run those two businesses as one, what do you find? The actual goodwill you have—the losses and the profits balancing each other—is nothing, but you have had to pay £3,000 or £4,000 for it. Any calculation whereby you disregard losses in this way is, I am advised—and I have asked eminent people if I am right about this; I do not pose as an expert on accounts—an obvious fallacy. But that is what has been done here.
In addition to that, if the results were not going to be satisfactory to the vendor of the business he could, in circumstances into which I will not go—the noble Lord, Lord Leathers, knows them well—demand that he should be paid a compounded figure of £70 per ton capacity; or he could demand that of the three years he should be allowed to eliminate the least favourable and take the most favourable. I am bound to say that, as the noble Lord knows, sometimes the accounts were so sketchy that they had to be written up to make them bearable at all—that was by no means uncommon. In all the circumstances, I would say that the annual profit of the vehicles in private hands, instead of being £7 million to £10 million—I say this on advice—could not possibly be more than £5 million.
Now look at the £5 million. Then, if we are comparing this picture with that, consider what has happened since. If we consider all the added costs—the petrol duty, petrol tax and excess wages—in comparing the figures for 1951 with 784 those for the end of the period before nationalisation (this is a sobering thought) we have to add to the 1951 figures, I am told, no less than £18 million, and the £5 million profit—if I am right in saying it is £5 million; at any rate I treat it as £5 million—would therefore become a debit of £13 million, the difference between £5 million and £18 million. To meet that debit charges had to be increased. In fact, the road haulage people did increase their charges three times, and those three increases brought them in £13 million, so that against that £13 million debit there are the increases of £13 million, and the answer will be nought. Yet it is right to point out that British Road Services made, I think I am right in saying, £3 million gross profit in 1951. If one looks at those figures critically and carefully, so far from there being anything against British Road Services, on that basis the result comes out in their favour. But I believe it to be a completely fallacious basis, which no businessman and no accountant would ever take.
May I say a word or two about integration? It has been said, and said with truth, that the nationalised services still have a long way to go in this matter of integration; they have only just started. Is that remarkable, when one considers what they were doing? In 1949 and 1950 this concern were acquiring new undertakings at the rate of ten a day; and one must allow them to get their own organisation going before they start integrating. Even so, although the integration results were not spectacular—I do not suggest they were—they were steady; they were small, but they were developing. And the most important development of all was this. At the latter part of 1951 a major scheme was put forward for the fusion of the collection and delivery services of the railway and of the Road Haulage Executive. The political change which took place at that time made it impossible to bring about that plan. But let it not be said that active steps towards integration have not been taken, because I think they have.
There is one other matter that I should like to discuss. It may be thought to be irrelevant—indeed, I think it is—but it is in the minds of all of us who read the papers and consider things, and I feel that it should be mentioned. Perhaps 785 the noble Viscount the Acting Leader of the House will see fit to say something about it. I have been greatly disturbed, as we all have, to see the extent of pilferage which is going on at the present time: it really is deplorable. It seems that the standards which we had fifty years ago have largely gone. I do not think that that is a criticism of the nationalised service as against private enterprise service; I cannot think that the thief will prefer the one to the other. If he is that sort of person he will go wherever he can. On the other hand, let us not get an exaggerated view about this matter. The facts are these. The estimated claims against British Road Services in 1951 in respect of all goods lost, stolen, pilfered or damaged, was £650,000. It must be remembered that the Road Haulage Executive handle about 250 million consignments a year, of a total weight of about 45,000,000 tons. The total value of these goods is probably over £1,000 million, and their freight revenue £75 million a year. The value of all goods lost comes to only.06 of 1 per cent. of the entire goods carried. I do not want it to be thought that I am complacent about the matter, or that any of us is—I certainly am not. But we must consider this thing in proportion. I am afraid that it is a factor which does not apply only in nationalised industry.
There is one other point that I wish to make. The noble Lord, Lord Leathers, said that the British Road Services suffers from nation-wide agreements—"suffers" was the word he used. There are, of course, certain purchasing agreements. I believe that by getting their tyres in bulk, for instance, British Road Services get them rather more cheaply. Presumably the noble Lord does not object to that. Does the noble Lord object to the wage agreements which have been centrally negotiated?—because when the noble Viscount, Lord Swinton, comes to reply we should very much like to know that.
§ VISCOUNT SWINTON
I say at once, No. It has been made perfectly clear that wage agreements will always be nationally negotiated.
§ EARL JOWITT
I am glad to hear that. Of course, there has been comprehensive wage-negotiating machinery which covers all categories of employees, and I understand from that reply—I shall be cor- 786 rected if I am wrong—that that applies to all grades, garage hands and the like, who may be transferred to private employment, and not only to those covered by the Road Haulage Wages Council. The remarks which the noble Viscount has made on that subject, if I interpret them aright, will give great satisfaction.
§ VISCOUNT SWINTON
Perhaps I ought not to have interrupted. I should not like to commit myself about a detail of that kind. One thing that is perfectly clear is that I was addressing myself to decentralisation of the nationalised railways system. I say, quite categorically, that when we decentralise the nationalised railway system wages and conditions of employment will be made a matter for national negotiation.
§ EARL JOWITT
The noble Viscount said "railways." I think he meant road. I am talking about road haulage.
§ EARL JOWITT
I am not talking about railways at all. I am talking about road haulage. Perhaps we are at cross-purposes, and if I did not make myself plain I am sure that it is my fault. I asked whether, so far as road haulage is concerned, the statement which the noble Lord, Lord Leathers made about the position of drivers and employees of the Road Haulage Executive (it appears in Col. 595 of the OFFICIAL REPORT) applies to all grades who would be transferred to private employment. The particular illustration I have been asked to mention is that of garage hands. I should be grateful if the noble Viscount would tell me in due course—I do not want him to interrupt now—whether or not Lord Leathers' statement applies to them.
I wish next to say a word about the levy and the cost of the disposal. The noble Lord, Lord Leathers, said that we must not break up the undertaking in such parcels as would not suit potential purchasers. I think that is the substance of what he said. That, of course, is true, but it is only one element in the picture, and perhaps not the most important. The first thing that has to be done is to see that the disruption of this undertaking and the disposal of these assets are carried out in such a way as not to cause 787 a breakdown or hardship to the user. The next person to be considered—let us not forget him—is the taxpayer. His assets are public property to-day, and the Government have to try to dispose of these assets in such a way as to get the best price possible, in his interests as well as in that of everybody else. So the Government have to consider the user. They have to consider the purchaser; and, last but by no means least on these occasions, they have to consider the taxpayer. When the noble Earl, Lord Selkirk (I am sorry that he is not here) said that the cost to the Treasury is nothing, that did not seem to me to be a very sapient remark. The Treasury have to give the usual guarantee of gilt-edged stock, which they gave of £1,000 million. Of course, selling does not cost the Treasury anything, but that is no reason why the noble Earl, Lord Selkirk should be proud of selling. The seller is always in a better position than the buyer. He has not to raise money to sell. But I think this levy is unfair. I do not see the basis of it. It seems to me that it is a matter for the general taxpayer, but I think it is also unwise.
I appeal to the noble Lord, Lord Leathers, with his vast experience. If you are disposing of an asset, and you make it plain that there is a fund, and if you do not get enough on the sale, all you have to do is to dip your hand into the till and make it up in that way. You lose all financial discipline and you will almost certainly find that you will not get what you want to get. I ask him of his vast experience to tell me whether I am not right in saying that the worst way of encouraging people to get the best price that can possibly be obtained is to say to them. "If you don't get a good price, my dear boy, it doesn't matter all that much; there is a nice little fund here which will be available to you." I would much rather that this, levy was not imposed at the present time. If you like, you can prepare for it and let it come in when you press the button, pressing the button if and when the losses become unmanageable. I hope the noble Lord will consider that suggestion. To my mind, this levy is very unfair. I cannot see why a "C" licence man should pay part of the levy any more than—what shall I say?—an eater of macaroni. I can understand it being 788 said that people must pay for their freedom, but the "C" licence man already has it.
Now I pass to consider the railways, and here I have a serious criticism to make. I was greatly impressed, as we all were, by the speech of the noble Earl, Lord Radnor. He spoke from great experience and knowledge, and with brevity, which is always attractive. He also spoke, I think, with great courage. There are not many Members of your Lordships' House who would have shown sufficient courage to make that speech. And I must say, I found it very cogent. I do not mind very much whether the Railway Executive is done away with or not. I can understand that there may be respects in which one might wish to regionalise or decentralise the railways, but I think that the gathering together of all the railways in one group has undoubtedly been of immense national advantage. I do not think anybody can doubt that. What is going to be decentralised I do not quite know. Lord Radnor did not know and Lord Ridley did not know. Obviously, you are not going to disturb the arrangements about rolling stock distribution—at least, I assume not. Finance, as Lord Radnor said, must be central. Design of rolling stock, I suppose, would be central. Wages negotiation, Lord Swinton (anticipating my words through a mistake just now) told me is central, and it always has been, of course. Research, I suppose, is central. Well, there may be something left; I am sure there is.
But what is the position? Lord Leathers used this phrase: "We are not going to air our views about this at the present time." I really think it is an outrage that the Government should come to this House and say, "What we ask you to do is to give us carte blanche to do what we want by Order in Council. We are not going to air our views about it at the present time or tell you what we are going to do. In due course the Minister will propound a scheme, and when he propounds the scheme it will come here in the form of a statutory instrument, and you can take it or leave it, but you cannot amend it."
My Lords, I appeal to the better recollection of the noble Viscount who is acting Leader of the House—I will not 789 say I appeal from Philip drunk to Philip sober, but from Philip sober in Government to Philip sober in Opposition. If I had done anything like that in the old days of the Socialist Government, if I had dared to say I wanted authority to get a scheme for reorganising the railways; that I was not going to tell your Lordships what it was and I would not air my views about it, but that I would discuss it with various people and then bring it down to the House and say, "This is my scheme and you can take it or leave it," I wonder what your Lordships' reaction would have been? If that had been done by Mr. Aneurin Bevan it would have been thought that red ruin was upon us. Yet here that very thing is being done by Lord Leathers. I have always heard that the real revolutionaries are very mild-looking men. Here is the greatest revolutionary, more concerned to disturb the institutions of this House than anyone since Guy Fawkes.
I really do ask the Government to consider this matter again. This is a political point on which I say quite frankly that I shall rely on the help of noble Lords on that side of the House who have for the last seven or eight years, quite rightly stressed that Orders in Council must not be abused. It is absolutely wrong, to my mind, that an important matter of this sort should be regulated by Order in Council. What we want, is a Committee stage in order that these details may be threshed out.
I find that on February 9, 1953, the Under-Secretary for the Ministry of Transport, who was being pressed about why he did this thing by Act at all, when he could have done it under the powers of the 1947 Act said:… we felt that so important a change of structure as decentralisation should be carried out by Statute.Now the corollary of that is obviously that this also should be carried out by Statute. Let us see what your scheme is. It is the fact, as we know, that there has already been a submission of a scheme by the Commission. That has been stated by the Minister. I should like to see that scheme. The Minister said it would not do because it did not provide for sufficient decentralisation. It is only right that this House should know what is in the Minister's mind. If we see the scheme and ascertain why the Minister was not satisfied, we may find out what is in his 790 mind. I appeal to the acting Leader of the House, having regard to the passages we have had about this matter in past years, not to do the thing in this way.
Clauses 14 and 15 of this Bill provide simply that the Minister can tell the Commissioners to prepare a scheme, that the scheme shall provide for certain things, and that it may provide for certain other things, Then when the Minister gets the scheme he has to consider it and, after consulting various authorities, may promulgate the scheme with or without modifications. So it is the Minister's scheme, because modifications may be drastic or may be small. That is the scheme which he is going to propound to this House. He is going to discuss it with various bodies but he is not going to discuss it on the floor of this House. But this is the place to discuss the details of the scheme. The position as regards Scotland was being discussed yesterday. Suppose the details of this scheme are not satisfactory to the Scottish Members, would it not, be right that we should have an opportunity in this House of discussing such a scheme on Committee stage and moving the necessary Amendments? The Government's doctrine here is a most dangerous doctrine. If this is to be done it is really the end of Parliamentary government. I beg the Minister to consider what is the right way to deal with this matter.
There is some precedent to be derived from the Government of India Act, 1935, where, though it was provided that the scheme should be promulgated by means of an Order in Council, yet it was also provided that either House might make Amendments to that Order in Council. I think we ought to have, at the very least, a scheme of that sort, but I very much hope that, having regard to what noble Lords opposite have said before, the acting Leader of the House will tell us that on reflection the matter will be left to this House. I do not want him to withdraw any of his ideas at all; I am merely on a point which I believe is of great importance in Parliamentary procedure. I say that, whatever he is going to do, he ought to come down to this House and do it in the form of a Bill with the ordinary procedure of a Bill, so that we can consider what the provisions are and, if necessary, amend the 791 Bill. I very much hope that if the Minister does not give way on this point, your Lordships will at any rate give me the half-way house of the procedure adopted with the Government of India Act. I am sorry I have detained your Lordships so long, but this matter is one of very great importance: it concerns the interests and the welfare of this country.
§ 3.40 p.m.
§ THE EARL of BIRKENHEAD
My Lords, we have just listened to an admirable speech by the noble and learned Earl which I think noble Lords on both sides of the House appreciate. I was interested to hear him quote Edward Lear, but perhaps he forgot one passage in that eminent writer's works, which, so far as my memory carries me, was:When the tide slackens and sharks are around,His voice has a timid and tremulous sound.That certainly cannot be said of the noble and learned Earl to-day. I agree that this is a Bill which has now gone a long way already, and probably, in my opinion, it would be better left now to the Committee stage. In any case, this discussion this afternoon will be summed up by the noble Viscount, Lord Swinton, who will pick up all the points. I have listened to them with considerable interest and I think it would be both undesirable and unnecessary for me to burden your Lordships with a very long speech to-day.
The noble and learned Earl talked at some length about railways. In the first place, we think that the Minister should be placed under an obligation to consult bodies representative of interests specially affected by a scheme of reorganisation; in our opinion the reorganisation of the railways is not comparable in any way with the reorganisation of a small business or concern. How the railways are run obviously vitally affects trade and industry and the prosperity of the country. Further, Parliament should, we think, have an opportunity of considering any scheme made, and this is provided by the requirement that it shall be subject to an Affirmative Resolution of both Houses of Parliament.
There is one further advantage in dealing with the matter in this way which should appeal to the Opposition. If the 792 reorganisation had been carried out under the 1947 Act, employees whose position was adversely affected by reorganisation could have received compensation only on the basis of the position and the emoluments which they were enjoying in 1947. For example, if a man who in 1947 was receiving £5 per week is now being paid £10 per week and, as a result of the reorganisation finds himself in a position where his pay is, say, £7 a week, he will, if the reorganisation is made by Statute, be able to base a claim for compensation on his present position at £10 a week; whereas if the reorganisation were carried out as I think has been suggested, he would have no claim at all for compensation.
The noble Viscount, Lord Falmouth, in the course of his interesting speech, asked about the future control of docks and harbours. It is not possible at this stage to say, and I think it would be improper to attempt to lay down, what should be the organisation of the British Transport Commission to deal with this particular issue. The reorganisation of the railways will obviously have a most profound effect upon the whole structure of the British Transport Commission. We cannot say exactly what will emerge. My right honourable friend the Minister of Transport in another place has said that the Commission-owned docks and harbours will not be placed under the control of the decentralised railway system. It is envisaged that they will be administered as a separate part of the Commission's undertaking, as they are at present. The question whether they shall be administered by an Executive or by some other organisation under the Commission's control cannot be decided now. The important point about this is that the docks and harbours will not be placed under the authority of the railways. This is a consideration to which the Dock and Harbour Authorities' Association, of which the noble Viscount, Lord Waverley, is Chairman, attach very great importance.
My noble friend Lord Hawke suggested yesterday that the Commission should be compelled to sell Pickford's, by which I think he meant the lucrative heavy haulage business. As the Bill stands, the Commission will be able to retain road goods vehicles up to the total unladen weight of the vehicles possessed before nationalisation, plus one-fifth; 793 and the distribution among classes of vehicles would be the same as obtained then. It is now proposed to increase the total retention by 5 per cent.—that is to say, the 1947 holding plus 25 per cent.—and to give an additional margin by which any class of vehicle which is specified in the Amendment may exceed this figure, provided that the grand total of all vehicles is not exceeded. This business is extremely complicated, as your Lordships Know, but the various questions which the noble and learned Earl asked, and which I have not attempted to answer at the present moment, will be dealt with later to-day by my noble friend.
§ 3.48 p.m.
§ THE MARQUESS OF LINLITHGOW
My Lords, this is, as your Lordships all know very well, a frightening moment. I shall be very short. The debate has gone on a long time. I feel that the horses have been twice round the circuit. Some of the fences are looking a bit shabby and, if your Lordships will allow me, I shall be quite short and trot my horse around the outside for a few minutes. Before I make any remarks on the Bill itself I have an interest to declare. For some years I worked for a bus-operating organisation. Before the war, I left them for other fields, but not long ago they invited me back in the capacity of director of one of their local boards, a position which I was proud to accept. If your Lordships will allow me a slight boast, I think that perhaps I am the only Member of your Lordships' House who at one time held a licence to drive passenger service vehicles. There is a lamp-post in Chesterfield which, if it could talk, would bear eloquent testimony to the hardships of my apprenticeship.
I should like to take up just two or three points which have occurred to me in the course of this debate. I hope that I shall not be accused of being too controversial. This is a controversial subject and, naturally, in any point I take up I am not going to refer to any noble Lord who may have raised the point. One ball which, so to speak, came into my court, I cannot resist hitting straight back. There have been suggestions, not so much in your Lordships' douse but certainly in general discussions about the Bill, and in another place, that transport 794 which is now an efficient public service is being thrown to the wolves of private enterprise, the profit-makers. I have only one comment to make on that. As a consumer I prefer to deal with a man who is, in fact, trying to make a profit; but, more important, with someone who, if he does not make a profit, has to pay for any loss incurred. A man who is trying to make a profit I can kick where it hurts—I can kick him in his pocket. But I defy your Lordships to locate a tender portion of the anatomy of a Commission or a pious hope in a Bill.
Another point that I should like to raise is this. A great deal has been said, and rightly so in my humble view, about the position of the taxpayer—perhaps rather too much about the taxpayer and not enough about the consumer. One of the things that disturbs me about this Bill is that it is not going to be easy to avoid a loss to the taxpayer, although I hope that that may be possible. Again, if noble Lords will forgive me for another little piece of controversy, my feeling is that the taxpayer should never be in the business at all. What disturbs me about the Transport Act, 1947, and all other nationalisation Acts, is that the unfortunate taxpayer is there to stand a loss: he is, in fact, an equity shareholder, without any dividends at all. I do not think that is right, and that is one of the reasons why I am glad to see this Bill before the House.
My Lords, just one last word on this matter of centralisation. It is a very difficult word, but in my own mind I can draw a distinction—which I hope to be able to persuade your Lordships is valid—between two forms of centralisation. May I call the first one unification and the second one integration? I believe that there is an important difference between the two. I would describe unification as the breaking down of entities and the establishment of a long chain of command between the man at the top and the man at the bottom. That is a very suitable organisation for certain things; it has its obvious functions. Undoubtedly, the military services need an organisation of that sort; it is successful where the objective is limited and clearly defined. But I do not think it can be said to be a successful organisation for a business. The things that a business has to do are never clearly defined. There are as 795 many questions as there are variables of demand. Decisions must be taken for which there is no time to refer to headquarters.
Unification is also very suitable for Governments and for Government Departments, for a rather different reason. I am not an expert on constitutional form, but I believe that I am right in saying that the Minister is responsible to the public through Parliament. He cannot, therefore, answer to the public, nor can he protect the public, unless he operates to a very large degree by Statute. If that is the case, I do not regard Parliament as the sort of body that ought to run a business—and for this very good reason. If the Minister has to proceed by Statute he is bound to achieve a unified organisation, the chain of command organisation, in order to protect the public and to do his job as a Minister. If Parliament abrogates any powers to the business then, in my humble view, the public have lost the protection to which they are entitled. If, on the other hand, Parliament does not abrogate sufficient responsibility, then the business itself may break down; and to that there is only one answer. It is a very difficult balance to carry, and that is why I doubt whether Government Departments ought to be in business. On that I am quite sincere. I am not dogmatic about it, because I believe that there is a better answer; that is, the second interpretation of centralisation which I have in my mind, and which I call integration. Integration differs materially from unification: by the very sound of the word it suggests the preservation of entities. I believe that integration preserves entities; instead of forming a long chain of command between the top and the bottom, it relies on the organisation to pick key men on a much more horizontal plane, and to say to them "Carry on with the job." I do not believe that any Minister or any Parliamentary authority can possibly act in that way.
My Lords, I shall not detain you much longer. I have tried to draw what may be a fine distinction, but one which I think is valid. I should like to conclude by describing, very shortly, one organisation about which I know a good deal. It is close to this Bill, and it is a transport organisation in which I was once 796 employed. There the integration is very simple in form. On the boards of the various companies, integrated to the centre by cross-board holdings, are the railways and the bus operators. The management is left in the operators' hands. Below the board level, all over the countryside where these companies operate, there is the key man of the whole show, the chief general manager, a highly paid and a highly qualified official carrying enormous responsibility. He is very little disturbed by the centre, but because of his training and experience, and because of the powers of the boards to pick the right man, he can run that business on the spot, without interference. In addition, in the provinces there is a standing committee which meets, as the word "standing" suggests, regularly. On that committee there sits the general manager and his secretary from the bus operating company and, on the other side, his opposite number in the railway organisation. These two meet, and they thresh out between them the problems. Should they be unable to decide, the rivalry does not cease because, quite separately, the railways and the bus operators then appear before the licensing authority to fight out their case. That is an organisation which I think is remarkable and highly effective.
This Bill is not perfect—I think I can say that, in all humility. I have heard enough criticism from noble Lords to realise that. But I believe that it is working away from what I call the Army-Government Department type of organisation, towards an integration of the type of which I myself have had experience. Therefore I very much hope that if, in the course of the Committee stage, any Amendments are necessary—on my reading of the Bill I do not think they will be—to persuade the Minister to carry out some form of integration between the railways and, particularly, road haulage (which I regard as the kernel of the Bill), I shall be very happy. I have no more to say, except to thank your Lordships for your courtesy in listening to me.
§ 4.0 p.m.
My Lords, it is customary in this House, when some noble Lord rises and speaks for the first time, for the next speaker to make some remarks on that fact. I personally feel very strongly that we do not have nearly 797 enough Peers coming to this House, and having the courage to go to the wicket and "break their duck." I am very glad indeed to welcome one to-day who has that courage. Particularly do I welcome the noble Marquess, because I feel that he has had a particularly difficult job. He follows a father who was beloved in this House and had a wonderful reputation. He must, inevitably, have been saying to himself in the last day or two: "Am I going to let the old man down?" I am sure there is no one here at this moment who will not feel, as I do, that his father must be feeling very proud of him now.
And now to turn to this Bill. Frankly, must say that I am not happy about it. So far as the railway side is concerned I do not know very much, and I am a good deal reassured by what I have heard. As regards the road haulage side, I am frankly worried. I agree absolutely with the objectives of the Bill, but I am doubtful about the ultimate success of the measure as it stands at the moment. I believe that the desired result could have been attained much more simply, as was suggested by the noble and learned Earl, Lord Jowitt, by removing the twenty-five mile limit. I do not think that that would have gone the whole way. There would not have been enough vehicles to undertake the work. But if the twenty-five mile limit had been removed and the "C" licensee had been given the right to carry a return load, I believe that all the objectives of this Bill could have been achieved and the Bill itself would be unnecessary. And, if that course had been adopted, it would have produced great economies in transport. It would have eliminated, very largely, the enormous number of empty vehicles to be seen on the road, and would, thereby, have cleared the road and made it easier for the remaining transport to get about its business.
There is one subject on which I feel very strongly, and that again is a matter to which the noble and learned Earl, Lord Jowitt has referred—the levy. It is objectionable for many reasons, but I propose to deal with only two of them. First, I hate precedents, still more do I hate bad ones. I think it is a thoroughly dangerous precedent that it should be possible to put an ad hoc tax on one section of the community. I regard that 798 almost as an iniquitous thing to do. As to the other reason, I am afraid that in this I am going to disappoint the noble Earl, Lord Selkirk, who said yesterday (OFFICIAL REPORT, Vol. 180, Col. 717):Should any loss on a nationalised industry be nationally transferred to the taxpayer? I suggest that that is an entirely bad principle, and I should be surprised if it were endorsed by any noble Lord here.Personally, I do not see to whom else it is to be transferred. Are you going to make the nationalised industry bankrupt? If you do not, who is going to bear the loss? It must be the taxpayer; there is no other possible person. But, quite apart from that, presumably the Government believe that this Bill is for the good of the country' as a whole. If that is so, surely the people of the country as a whole are the people who must pay any loss, if such loss there be. If this Bill is designed purely for the benefit of the road haulier, the Government have no right to introduce it, but I agree that if they do introduce it they are right to put the cost on him.
But I do not believe that this Bill is for the benefit only of the road haulier; it is for the benefit of the whole country. If it is for the benefit of the whole country, let us all pay for it. Otherwise what is the result? This levy must, and can, do only one thing: it must put up transport costs. Transport costs will be reflected in every article used by the home consumer in this country, and that at a time when all are doing their utmost to reduce costs. It will be reflected in every article we export, and that at a time when this country is fighting to get foreign money to pay for the food that we must have to live on. If the cost is put on the whole country it will not show anywhere, except in the money which disappears out of our pockets in the form of income tax, purchase tax or some other tax. Ultimately, we have to recognise the grossest injustice of the lot—that the road haulier, on his own job, is the most heavily taxed person in the country. The money that comes out of the pockets of motorists and road hauliers amounts to £370 million a year, and that is on top of all their normal taxation, on top of their income tax, on top of any taxation the firms they belong to may pay. They have to pay that tax, and what do they get for it?—about £40 million a year spent on the roads on which they have to 799 earn money to pay the tax. Now it is proposed to put another special levy on them. My Lords, I ask you whether that is fair. The levy was described by the noble Lord, Lord Leathers, as a small price to pay for freedom. I say that it is not only too high a price but an absolutely unnecessary one.
§ 4.10 p.m.
THE EARL OF ELGIN AND KINCARDINE
My Lords, I should like to join at once with the noble Lord who has just sat down in the tribute which he paid to the noble Marquess who has made his maiden speech this afternoon. It is a very special pleasure to me to do so because I am the noble Marquess's next door neighbour, and I look out across the Forth to his home. Indeed, I remember that in the various considerations and discussions which took place with regard to that problem which has not yet been solved—the road bridge across the Forth—I had a conversation with the noble Marquess's father, in which I suggested that far the best way of solving the problem would be to have a tunnel between Hopetoun and Broom-hall, and turn both of them into hotels.
To turn to the subject of to-day, the Transport Bill, we heard a good deal of expression of opinion from Scotland yesterday, and I apologise for encroaching again on your attention to-day, but I think your Lordships will agree that Scotland deserves a special place in the consideration of any matter of transport because the nature of her territory and the configuration of her land involves extra distance in the marketing of her products and manufactures. For that reason above all, a thoroughly efficient and economical system of transport is supremely necessary to Scotland. Yester-day my noble friend Lord Bilsland submitted for your consideration the considered views of the Scottish Council (Development and Industry), of which he is President. The Scottish Council have striven for a number of years for the realisation of two essential principles of transport organisation in Scotland. The first of these is effective devolution to Scotland, and here I could not help feeling that when the noble and learned Earl, Lord Jowitt, made his very effective speech a few minutes ago he did not understand the feeling of Scotland. There 800 is a reason for devolution. There is a reason why Scotland should have more control of its transport and should not have always to leave the decision to be made in London.
The second principle is the co-ordination of the transport services, but of the two, undoubtedly devolution is the more important, because how much use can be made of the co-ordinating arrangements depends largely on what is devolved. After all, it would seem to be explicitly in line with the expressed intention of the Government. Many declarations have been made on that line since they came into office and I think, rather surprisingly, it is on this matter of devolution that we have had the least information. Yesterday the noble Earl, Lord Home, described, as was described in another place by the Minister of Transport, the body which was to be appointed to co-ordinate transport in Scotland—the Scottish Transport Council. We welcomed that announcement so far as it went, but we should be much more reassured if a similar specific description could be given of the arrangements which Her Majesty's Government contemplate for effecting devolution. If Scotland is given devolution arrangements in each of the State-owned transport services, as advocated by my noble friend Lord Bilsland in his speech to your Lordships yesterday, I feel we should get devolution in reality; but without the essential devolution in the individual services it can hardly be more than an empty shell. We have too many empty shells. There has been a great inclination to appoint consultative councils and consultative committees. None of them, or very few of them, have any real power, and we do not want to see arrangements made under this Bill for increases or additions to the number of empty shells of that kind.
The Bill provides for the establishment of a Scottish railway authority. We know that and appreciate it, but before passing any valid judgment on this problem we in Scotland should like to know a good deal more than has yet been vouchsafed to us about the form and powers to be given to this authority. We all appreciate that it might be difficult for the Government to give specific details about the composition and functions of the Scottish railway authority until, under the scheme of the Bill, the British 801 Transport Commission have submitted their scheme for railway reorganisation. I shall come back to that a little later. I feel that it would be important and helpful if we could have a greater assurance about the scheme which will be produced.
We have been told here and by an announcement in another place that the Minister would not approve of authority being in the hands of one individual. If he can say what he will not approve, surely he can give us a little more information as regards what he can approve and what he would like to have. We are told that the new Transport Council will consist of "the Chairman or other representatives of all the providers of publicly-owned transport—road, rail, sea and air." It would appear from that announcement that it is contemplated that at least some of the nationalised transport services in Scotland will have chairmen, and, if they have chairmen, these chairman must have something to chair. That means boards of some kind. Can we not have more information about what kind of board is intended? We were told that the road passenger services are to remain in public ownership and will remain under Scottish Omnibuses, Limited, which is a Scottish concern fully acquainted with Scottish conditions and needs. I quite agree with that estimate of Scottish Omnibuses, Limited, but in the light of what my noble friend Lord Bilsland said yesterday, can we not be given a little more information about how road trans-sport is to be organised?
Turning to air services, there is no one with a more practical knowledge of this branch of transport service than the noble Earl, Lord Selkirk, and I am sure that he will not dispute that the proper development of this service is of vital importance to Scotland, a country so dependent on communications, to safeguard her position in this relatively young but already large, growing and tremendously important service. The noble Earl, Lord Home, said yesterday that this Bill "emphasises the status of regional authorities," that "the first objective is to secure that the executive authority which runs each branch of nationalised transport has a recognisable Scottish identity and sufficient delegated powers," and that the Bill "gives more power to the man on the spot." Similar expressions were 802 made in another place by the Minister when the Bill was passing through its various stages there and by the noble Lord, Lord Leathers, in introducing the Bill here. These intentions are highly commendable, but we should be much happier if we could have more factual information about them and concrete proposals as to what is really meant.
I do not propose to say much about co-ordination of services. A statement was made by the noble Lord, Lord Bilsland, on behalf of the Scottish Council, and mention was made yesterday by the noble Earl, Lord Home, of the Scottish Transport Council which is to be formed. The noble Earl indicated, in this respect, at any rate, that the Government are in large measure in agreement with the proposals laid before them by the Scottish Council. I do hope that if and when this Scottish Transport Council is formed, it will be teal. Again, I refer to the formation of a number of consultative committees. I have had the opportunity and privilege of serving on the Scottish Transport Users Consultative Committee ever since it was formed. That Committee has been a good deal criticised, but I would claim, as a member, that it has done a good deal of useful work.
However, I feel that there are three points in which its work has been hampered. First, it did not get the confidence of the public. There were occasions when even in the submission of representations from representative bodies, those bodies withdrew and pursued the course of making a direct representation to the Secretary of State for Scotland instead of pursuing the discussion through the Transport Users Consultative Committee. For this reason, I say the Committee has failed so far to get the full confidence of the public in Scotland. Secondly, representations have been made to the Committee too late, after a decision has been come to by the Railway Executive as regards the withdrawal of a service, and when the ground has really been prepared too much on the other side. Thirdly, I think there has been a difficulty in the set-up of the Committee itself. The Committee had as its Secretary a member of the Railway Executive staff; the Committee met in the boardroom of the Railway Executive; and on the Committee there was represented the chief executive officer of the railways in 803 Scotland, as well as the representatives of the buses and transport hauliers. I believe that that gave the impression of a bias in a certain direction. I hope that if and when the Scottish Transport Council is formed, it will be relieved of these difficulties, that it will be planted on a fair basis, and that it will be real itself.
This brings me back to the speech of the noble and learned Earl, Lord Jowitt. He emphasised that under this Bill the Minister was taking power to ask the Commission to present a scheme to him, and the only opportunity of approving or disapproving of it was by a Prayer in this House or in the other place that it should be either accepted or annulled. That is a serious position, in which I would add the whole weight of my friends in Scotland to what the noble and learned Earl, Lord Jowitt, has said. This is not the way to carry out legislation.
§ 4.25 p.m.
§ LORD SILKIN
My Lords, at the end of a three days' debate on the Transport Bill there must be few things left for the unfortunate winders up of the debate to say; few arguments that have not already been put forward, and few facts that have not already been stated. All that is left for one to do, perhaps, is to put those arguments in a slightly different form, to criticise the facts and to fill in any possible gaps. Indeed, after a three days' debate even the speeches become a little blurred. In my view, there have been a few outstanding speeches, and if I mention any in particular that is not to say that there have not been others. I am sure the whole House will agree that the speech of my noble friend Lord Lucas was an outstanding one, whether one agrees with it or not. He presented his case in a forceful and well-informed manner, and I do not think he overstated it. There was then the speech of the noble Earl, Lord Radnor, to which my noble and learned friend Lord Jowitt has already referred, which again was a controversial speech but one of great courage. It is much more difficult to say things which are unpopular with one's own friends than it is to say things unpopular with the other side. I thought the noble Earl showed extreme courage and frankness in admitting that the views he had held for a lifetime had been shown 804 to be wrong. Lastly, there was the speech of my noble and learned Leader this afternoon, which again I thought was a masterly speech, whether one agreed with him or not. His speech, I may say, has put me in some difficulty, because many of the things that he said were things which I had intended to say; but he has said them so much better than I possibly could have done.
This debate has brought out a number of facts and clarified all our minds on the issues. A number of speakers on both sides of the House have stated what they regard as the objective in this matter of transport. It is: to use in the most efficient and economic manner all the resources at our disposal for the conveyance of goods and passengers—road, rail, air and water. I think that will be generally accepted. But if that is accepted as a definition of our objective, then the corollary is that it can be ultimately achieved only by complete integration of transport. The Act of 1947, whether one likes it or not, was an attempt to bring about this complete integration. One may agree or disagree that integration of all forms of transport is desirable—I believe that most noble Lords agree that it is desirable—but I feel that one must agree that it is impossible to have integration of transport with a publicly owned railway transport undertaking and a series of privately owned road transport undertakings. That is an exceedingly difficult, if not an impossible, thing to achieve. It may be possible to bring about a measure of integration by an elaborate system of controls and regulations over private enterprise. But noble Lords opposite will probably take the view that that in itself is undesirable, and that the whole purpose of this exercise is to free road transport, and not to put it, to use their own language, in shackles of another form. Therefore, the method of integration by means of controls and regulations would not be a satisfactory method. But if that method is eliminated, I fail to see how it will be possible to get an integrated system of transport by the method which this Bill proposes to adopt.
It is to me somewhat anomalous that noble Lords opposite should be, on the one hand, advocating integration, criticising the existing arrangements because 805 they do not carry out integration satisfactorily, and, on the other, introducing a measure which makes integration virtually impossible. In my view, therefore, and in the view of my noble friends, integration of transport is impossible unless there is public ownership. That is why we oppose this measure which takes away from the system an integral part of the transport undertakings. It may be that noble Lords opposite will say that the virtues and advantages of competition are so great that they are prepared to sacrifice some of the advantages of public ownership; that they dislike monopolies so much that even the wasteful and unnecessary competition between road and rail which existed between the wars is preferable. But, of course, that is not integration—that is going back to a system which everybody condemned before the war, and which all of us were seeking to improve.
I cannot help thinking that noble Lords opposite have not really clarified their minds on the subject of integration and on the subject of monopoly. As my noble and learned Leader said, in many cases competition is a good thing, particularly where the consumer or the user can, with advantage, be offered a real choice. Monopoly is bad where there is a danger of the consumer or user being exploited for private gain; and when we oppose monopoly we oppose it for that reason. But in the case of transport, neither of these conditions obtains. The user of transport is merely concerned with getting his goods from A to B at the cheapest rate, in the most efficient manner; and no question of a choice arises. He does not care whether they go by road, by rail or by air. In most cases, the nature of the traffic determines the manner in which it shall be despatched. For instance, one can hardly send coal by road, and I understand that it is not very satisfactory to send steel by rail. Generally speaking, there is not much choice, so that, on that score of consumer's choice, there is really none of the objection to a monopoly which is normally levelled against a monopoly. Of course, in the case of a publicly owned undertaking, there is no danger of the public being exploited. We all recognise that in the case of a privately owned undertaking that may be possible. Even though it may well be that many privately owned undertakings are sufficiently 806 responsible, and sufficiently alive to their own interests, not to go too far in exploiting the public, nevertheless there is always the fear that that might happen; and there is a natural aversion to a private monopoly.
As I say, neither of these objections applies to a public monopoly. I think the public, generally speaking, realise that. On the arguments that have been put forward from time to time in the course of this debate, one would think that it would be in the public interest to restore private enterprise in the Post Office in the delivery of letters. Why not? The Post Office, I think, offers a good analogy. Why should not people be allowed to canvass for orders to be allowed to collect and deliver letters at a cheaper rate and more efficiently than the Post Office does? The same might apply to the telephone service. But no realistic person to-day suggests either of those two things, because they recognise that the Post Office is a proper subject for monopoly. I submit that, in the same way, road and rail transport are each a proper subject for monopoly.
The difference between the two sides of the House on this issue is purely doctrinal. It is as much doctrinal to be opposed to nationalisation and public ownership as such as it is to be in favour of it. Noble Lords cannot be exonerated from dealing with this matter in a purely doctrinal manner. I do not necessarily complain of that. What I do complain of in the way this matter has been handled is that they have not been content to rest their case on the doctrinal issue, but have found it necessary to introduce against the Road Haulage Executive accusations of inefficiency, of failing to carry out integration, of failing to give the personal service that private enterprise does, and so on—as my noble Leader has said, entirely without a shred of evidence on any of those points. The fact that this is a purely doctrinal issue is amply borne out by the fact that the 1947 Act has never had a fair trial. Noble Lords opposite were determined to kill the Act even before it was born. They said so in the course of the passage of the 1947 Bill, and they said so from time to time thereafter.
Within a very short time of the coming into operation of the 1947 Act, and when the Act had hardly got into its stride, we 807 had a debate in this House. I remember it very well, and noble Lords opposite, who were then, of course, in Opposition, were hurling all sorts of charges against this undertaking, charges of inefficiency, of stupid handling of goods and so on; charges which were obviously grossly unfair and very much exaggerated and which, in any case, were the immediate effects of a very big transfer of ownership and a very big change in management and administration. All these things were the inevitable after-effects of a great measure of that kind. In 1950, when the Act had been in operation for only two years, noble Lords opposite put in their Election Manifesto that they were going to repeal it and they did so again in 1951. Obviously, therefore, the merits of the case have nothing to do with the matter at all. The opposition was begun, as I say, before the Bill became law, and has continued ever since. The Government must know that this Bill provides no solution to the difficulties which confront the industry. All sorts of people, of all political Parties, including the noble Lord, Lord Leathers, have stated from time to time what these difficulties are. There has been a Commission on the subject, of which Sir Arthur Salter was Chairman. Everyone agrees that there is a need for integration between road and rail. This measure, however, does nothing towards a solution of that problem—indeed, it merely sets us back to where we were in the days before the war.
I do not want to take up the time of the House by enlarging on the difficulties which confronted the Road Haulage Executive when they took over the administration of the road haulage service. They will be well known to a large number of your Lordships, who are much better aquainted with the administration of this service than I am. Nevertheless I should like to mention one or two of the difficulties. The Road Haulage Executive were required to take over a number of vehicles which were not necessarily of the right type or size needed for the purpose of integration. There was an unduly large number of small vehicles, and a very small number of maximum capacity vehicles. Then, owing to war conditions, the average age of the vehicles was 808 abnormally high. Moreover, the Executive were compelled to take over contracts for the purchase of £9 million worth of vehicles which had been ordered but which were not necessarily of the type which they wanted. These were tremendous handicaps. The Executive had to create a maintainence organisation, with workshops and stores on a scale commensurate with their new responsibilities. They had to build up a suitable staff, to settle uniform conditions of service, to set up their accountancy and recording departments, and local and regional depots. All these are things which go to make up an integrated service.
The Executive had to do these things under two very heavy handicaps: one, that whenever they had to carry out any building operations they had to get a building licence (and still do), and the other that throughout the time they have been administering this service there have been restrictions on capital expenditure. During the greater part of the time they have been in existence they have been engaged in building up the service and acquiring new undertakings. It was only at the end of 1951 that they finished acquiring their undertakings, and by that time they had had to weld together 3,000 separate transport undertakings and to take over some 46,000 vehicles. I think it is right that somebody should congratulate the Road Haulage Executive and the whole of their organisation on the magnificent job that they have done. I think they have had far too little credit for welding together this vast amorphous service and for making it the efficient organisation that it is to-day. They have gone a very long way towards creating an integrated long-distance haulage service in the very short time of their existence.
I recognise, of course, that that is only the first stage. I do not suggest that they have completed their task, and when they have created an integrated road haulage service there remains the task which has faced the Transport Commission, that of creating an integrated service with rail. That part of it has not gone very far, as my noble Leader has said, because they had to clear the scheme, which of course is now on the shelf, and of which, so far, we have no detailed knowledge. The 809 noble Lord, Lord Leathers, said (OFFICIAL REPORT, Vol. 180, col. 586):Nothing significant in the way of compensation has been achieved, and I do not think any reasonable person could see hope of its coming about.I feel, in the light of what I have said, that this, to put it no higher, is a very much exaggerated statement. I think there is every reason to believe that, given a little longer, the integration would have taken place.
We have heard a good deal about inefficiency and strikes. As my noble Leader said, these charges have been levelled without one single word of evidence of the nature of the inefficiency, and I think that perhaps it would be as well if we were to agree what we meant by efficiency. The noble Lord, Lord Leathers, said that we need "quick, individual, on-the-spot decisions," and, of course, in addition, we need quick delivery. I do not know whether one gets these "quick, on-the-spot decisions" under private enterprise. I have had some slight experience in the last few weeks. I have been engaged in a removal job. I tried to get a quick, on-the-spot decision as to what it would cost me. I got it eventually, but I certainly did not get it "on the spot." I do not say that the Road Haulage Executive would have come to a decision on the spot, but in that respect I do not think that one is any better than the other. One just does not get these decisions "on the spot."
The noble Earl, Lord Selkirk, talked about there being no objective yardstick of efficiency and said that one must have comparisons between what one person can do and what another can do. Perhaps I can give him a few facts and comparisons which may help him and the House to see whether there is a satisfactory yardstick. There is the question of empty running, again a matter to which my noble Leader referred. It is, of course, inevitable in road transport that there should be a certain number of empty vehicles on return journeys. The object of an efficient undertaking is to reduce the percentage of empty journeys as much as possible. The Road Haulage Executive has, in fact, reduced the percentage of empty running from 30 per cent.—which is the best estimate we could obtain of what happened before the vehicles were taken over—to 20 per cent. 810 In so far as that is a valid comparison, that is an improvement in efficiency. Another test would be the economy in vehicle utilisation. That, again, was referred to by my noble friend. To-day, 39,000 vehicles are doing the job which previously was done by 46,000. That must mean an improvement in efficiency, assuming of course that they are really doing the same job—and there is clear evidence, from the volume of traffic which is being carried, that they are. Indeed, in 1951 there was more traffic being carried than in 1950, and yet it was being done with fewer vehicles.
Another objective yardstick would be the tonnage carried per vehicle per week. In 1951 the figure was 44 tons as against 35 tons before nationalisation. In other words, the vehicles are carrying to-day 25 per cent. more traffic than they were before. Another yardstick is the number of staff employed for every hundred tons carried. The noble Lord will agree that that again is a reasonable yardstick. The figures are that, as regards the managerial, administrative and clerical grades, in 1948 there were 1.18 persons of that grade employed, compared with 1.04 in 1951. Thus there has been a reduction, and corresponding reductions have taken place in the grades of drivers, mates and vanguards. There, again, such figures as are available indicate that there is greater efficiency to-day than there was when these services were taken over.
May I give one more figure, and that is for speed of delivery? As I think noble Lords will agree, that is a very good test. I am told that in over 95 per cent. of cases, delivery is effected within twenty-four hours of the receipt of the order. That applies equally to long-distance traffic as to short. I do not want to put my case too high; I do not suggest for a moment that these figures are conclusive; but the onus of proving that this service is inefficient in effect rests with those who wish to destroy the service. It is not for us, who want to retain the service, to prove that it is efficient. I would say that in the light of the figures that I have given and others that can be giver—I do not want to weary the House—noble Lords opposite would have the greatest difficulty in the world in establishing their case that this service is inefficient. Indeed, to do them justice, they made no attempt to prove it; they merely asserted it.
811 A good deal was made of the point that this service is operating at a high cost and not making profits. There, again, my noble friend dealt with that point and referred to the increases in costs which have taken place since nationalisation—something like £80 million. If, in fact, the Road Haulage Executive had increased their charges merely to recoup themselves for the increased costs, they would have shown considerable profits in their service. As my noble friend pointed out, they have partly recouped themselves, but there was a sap between the increased costs and the increased charges. That gap is far greater than the deficiency in the few years in which they have been in office, and, if private undertakings had been still going on, there is no doubt at all that they would have increased their charges to recoup themselves for the increased costs.
The case was put by many noble Lords on the other side that an increase in the number of "C" licences was proof that the Act had broken down. Of course it is no such thing. Putting it at its best from the point of view of noble Lords opposite, the mere fact that there has been an increase in the number of "C" licences does not establish that the only reason for it is the failure of the Act. There may be a great many reasons, but I do not ask noble Lords to conjecture; I ask them just to listen to some of the reasons which have been given by bodies which are in no sense sympathetic to the view which I am putting forward. Take the British Road Federation. It is true that they were arguing against the levy being imposed on "C" licence-holders and it is in that context that they make this statement, but I think, nevertheless, that the statement has to be taken seriously unless it can be challenged. This is what they say:The great majority of those who operate their own "C" licence vehicles do so because the nature of their business makes it impractical for them to use public transport services whatever the charges of the latter may be"—not because of a dislike of a nationalised service, not because they believe that the nationalised service will not give them the service that they need, but because it is impractical for them to use public transport services. They go on then to make the point which my noble and 812 learned friend made as to the increase in goods vehicles since 1946 not being disproportionate to the increase in vehicles generally, and to the increase in Western European countries.
Then Modern Transport, another journal which is not sympathetic to the point of view which I am expressing, said this last May:… a great deal of the increase is due to the normal growth of motor transport and the increase in services it supplies to the community. … There has been an extraordinary increase in facilities for local deliveries … the smallest local tradesman has a delivery van"—and that, of course, we know to be true. We know also that since the war the consumer has to a certain extent come back into his own and expects deliveries to-day which he was not able to get in 1946 and 1947. Retailers have been forced, therefore, to obtain vehicles. Moreover, with the increase in specialisation in industry and with the development of manufacture by means of the conveyor system, it often happens that a manufacturer runs short of some material and is required to get it immediately in order not to interfere with the progress of the machine. He sets out at a moment's notice with his own vehicle and collects it. That, again, accounts for a considerable increase in the number of "C" licences. There are a variety of other reasons but, whatever the reasons may he, not a word has been said in this House during this debate to prove that this large increase is due to the nationalisation of the industry. I shall be interested to know whether the noble Viscount who is to reply still insists on making that point.
Criticism has been made of the centralised system and of this impersonal system but, in fact, there has been a great deal of decentralisation. Depôts have been established in or near every important industrial centre. Indeed, there has been criticism also because that has been done. In fact, in the eyes of the noble Lords opposite, the Road Haulage Executive can never do anything right. If they centralise they are wrong; if they decentralise they are wrong. The fact is, however, that there is a depôt in every important centre and sub-depôts where necessary, and there is the personal touch. Any manufacturer or other individual who wants to get his goods removed at 813 very short notice need only establish, as many of them have done, personal contact with the manager of the depôt, and they can then get their goods removed with the greatest speed and efficiency: whereas in the past to get quantities of goods conveyed of the magnitude which sometimes is required, might have necessitated their getting into touch with perhaps a dozen different private undertakers.
I was informed of the instance of a steel producer who had 350 tons of steel which he wanted taken away within twenty-four hours, because it was cluttering up his shop and he wanted room for new products. He rang up the regional manager and within a matter of hours the whole of the load was distributed to different parts of the country. What would have been the position in the old days? No single transport undertaker would have been capable of handling 350 tons. The producer would have had to ring up a large number of different undertakers and try to get each one of them to fit in with his requirements. It is by no means certain that at the end of the day he would have got the service that he was able to get through the Road Haulage Executive. In any case, it would have involved far more trouble and difficulty than it did in this case. Indeed, before nationalisation this same undertaking actually employed an organisation for the purpose of dealing with its transport—a transport manager with a number of people under him, whom to-day they no longer need. So that from the point of view of large manufacturers the present road haulage organisation is certainly a boon.
I hope I have said enough to establish that any accusations of inefficiency or rigidity, or of any unduly high charges, are without foundation. The noble Lord, Lord Leathers, has a vast experience of business—I should imagine an unrivalled experience compared with that of anybody in this House. In his time he must have been engaged in carrying through business amalgamations. I ask him to say candidly whether he would have been satisfied in carrying out a process of amalgamation of the kind that has been carried out here, with the results that have been achieved in the case of road haulage. And if he had not been satisfied, would he at this time, after so 814 short an interval, have decided to abandon the whole enterprise and sell it up—as my noble friend reminds me, on a chattel basis? I am sure he would not. I am sure he would have done everything possible to make this thing work. If the machinery had not been satisfactory he would alter it. If the personnel had not been satisfactory, he would change it.
I am quite sure that at the expiration of so short a time he would not have thrown up the sponge and decided to sell up this undertaking at a knockout price, if only because he would not have been able to charge up the purchasers and others with his loss—he would have had to bear the loss himself. I am sure he would have been very reluctant to do that. Nor, in the event of his actually deciding to sell, would he have indicated to the world that he anticipated a considerable loss on the proceeds and had made arrangements to meet it. If, in the last resort, he was going to sell these undertakings, I think he would have put a bold face on the matter and have given the appearance, at any rate, that he was going to sell without loss. Indeed, in the view of noble Lords on this side of the House, that is still possible. We think it is a big mistake on the part of Her Majesty's Government, if they are deciding against all sound business principles to get rid of the undertaking, to endeavour to sell in the manner in which they are selling.
May I say one more word on the levy? I think it is grossly unfair to the "C" licence-holders and to others who are not purchasers of the undertaking, that they should be required to foot the bill in respect of the loss. I fail to see what benefit "C" licence-holders are going to get from this sale. It is said that they sometimes use transport. Well, that may be true of some, but many of them do not. But the mere fact that a person occasionally uses transport other than "C" licensed vehicles in his business, does not mean that he ought to contribute towards this loss. Many people in the future are going to use transport, and they will not be called upon to foot the bill. It seems to be quite wrong to pick out "C" licence-holders and other owners of vehicles and say to them, "You are to foot the bill 815 in respect of this loss." But that, of course, has been argued by many people, and no doubt Her Majesty's Government will hear a good deal more about it before the Bill is finally passed.
I have spoken entirely about road haulage which is, of course, the key to the Bill. Indeed, it is difficult to say much about other parts of the Bill because they are quite vague and indeterminate. Apparently, even now the Minister has not made up his mind as to what he is going to do about the railways, and how and what he is going to decentralise. Until we know what the proposals are it is difficult to make any comment on them. But I want to associate myself in the strongest possible terms with what has been said by my noble Leader about the procedure it is proposed to adopt in this matter. The proposals for the decentralisation of the railways are going to be of far-reaching importance to the whole community. They may make all the difference between a successful or an unsuccessful transport undertaking for this country. I think it is wrong that Parliament should be given the opportunity merely of saying "Yes" or "No" to the proposals of the Minister. I hope that, even at this late hour, some means will be devised by which it will be possible for Parliament not only to express its views but to amend these proposals where it considers them to be deserving of amendment.
Then, as regards the disposal of the road passenger services, I would strongly deprecate the imposition of a requirement upon the Transport Commission to dispose of any shares which would have the effect of their losing the control which they at present enjoy. No case at all has been made for this. I have read through the speeches made in another place, and I have listened to the speeches made here, but I have not heard a single word of argument as to why this is being proposed at all. What is wrong with allowing the Transport Commission to have, in some cases, control over a transport undertaking? In what way have they failed, and in what way is it suggested that the undertaking itself will improve as the result of the control going to some unknown person or persons? Before a change of this kind is made, Her Majesty's Government ought to make a much stronger and more effective case 816 than they have done hitherto. We, on this side of your Lordships' House, are opposed to the Bill because we regard it as setting the clock back, and because we believe it would create chaos, waste and inefficiency in the provision in this country of transport which we regard as the life-blood of the nation.
§ 5.11 p.m.
§ VISCOUNT SWINTON
My Lords, with one thing at any rate that the noble Lord who has just sat down has said, I can agree. That is, that after three days' debate almost all that can be said on this Bill has been said—and, I might add, a good many things I should really have thought could hardly be said. The noble Lord has asked Lord Leathers to reply, and to reply promptly, as to what he would have done if he had made this amalgamation. I have authority to reply on behalf of Lord Leathers—indeed, on behalf of the firm of Leathers, Swinton, and the whole Government—and I can answer that question in very simple language. First of all, we should never have dreamt of making this amalgamation, because we believe it to be thoroughly wrong. That is why we are undoing it. Secondly, if we had made this amalgamation, and had turned a solid profit into a loss four years running, we should have expected to be turned out by our shareholders long before we reached the fourth year. Finally, if we had survived our fourth year, if we had been able to bamboozle our shareholders for four years, we should most certainly have put an end to the undertaking. That is the short and simple answer. It is a perfectly sincere answer, and an answer which goes for the whole of Her Majesty's Government. And that is why this Bill is now before the House.
We have had a large number of speeches. Many noble Lords have spoken from wide and practical experience. Among their contributions we have had two maiden speeches which were equally good in their quality, their delivery and their content. The one to which we have listened to-day would have delighted a father's heart. We have had some other speeches which have been delivered from narrow theory—the noble Lord just now said that this was a matter of doctrine; it may be with him; it is not with me. Those speeches were from narrow theory 817 and they were not inhibited or handicapped by much sense of realism. Then, of course, we have had a due Parliamentary meed of synthetic indignation at the Bill, shocked surprise that we should be carrying out our Election pledges—it may be very surprising to some—and that we should be giving effect to our convictions. I must say that I rather prefer the language which Mr. Lincoln Evans used, when writing on the Steel Bill. He said,We may dislike, but we cannot resent, the Government's decision to go ahead with their proposals and we simply have to face the fact that the people of this country, in accordance with the law governing Parliamentary Elections, returned the Tories to do precisely what they are doing. To resent such a measure would be to resent the operation of our democratic process by which Governments are elected.I think that is sensible—and a more democratic and more Parliamentary attitude.
I think it is characteristic, at any rate of this House, that after all the—we must not use that word "boloney": we have been reproved for that—shall I say, bombast of this three-days' bombardment, we should get down to business in the Committee stage and take the attitude we have always taken, whatever Party are in power: that if we think that a Bill is a good Bill we try to make it better, and if we think a Bill is a bad Bill, we try to make it less bad. I promise the Opposition that the Government will certainly meet constructive criticism on its merits. They have done so in another place, and they will do so here. We intend to allow ample time for the Committee and Report stages—indeed, I have offered the Opposition what I think is a day more than they will require. But we shall see, and if the fourth day is required that shall be provided. We have been twitted—Lord Lucas twitted us—because we have made changes in the original White Paper. I admit it. We have made a considerable number, and we shall make some more if we are convinced that they are necessary. But that is not weakness, it is good sense—and in the best Parliamentary tradition. Whatever the Party opposite may say, we are not Bourbons, who forget nothing and learn nothing.
Noble Lords can all agree on the importance of transport. Certainly in goods it serves every industry. In passenger traffic it serves every citizen. If it is a 818 national undertaking, we are all shareholders in it. But whatever the system, there ought to be only one object and one test: does it give the best possible service? Can anyone honestly say that about the nationalised transport system? I think only the most complacent or the most doctrinaire would do so. Can anyone pretend that this nationalised transport to-day is giving to the trader and to the public what they want and what they have a right to demand? In goods, particularly, we certainly want an elastic service. When the noble Lord, Lord Teynham, who made such an admirable speech the day before yesterday—a speech that was none the worse for being brief—introduced a Bill to get us a little more freedom, a Bill which, of course, was rejected by the then Government, I ventured to cite a few examples which were never challenged of how traffic was taken all round the country—"the day we went to Birmingham by way of Beachy Head."
That sort of thing is still happening. Only yesterday the Minister of Transport gave me a letter which he had received from a company in Welwyn Garden City. Your Lordships will recognise that obviously it is a most serious matter if a consignment intended to be shipped is held up. It is had enough when transit of goods takes a fortnight, instead of the couple of days which ought to be ample, to get from place to place in this country, but when a ship is missed with a consignment, then that really is a matter of vital seriousness. The letter to which I refer from the company at Welwyn Garden City contains these statements:A consignment sent from Welwyn Garden City on November 24, 1952, to East India Docks arrived back in the Garden City 24 days later, having been misdirected.A consignment sent from Welwyn Garden City on January 1, 1953, to Basingstoke"—that is not very far—was not received until January 13, 13 days later.A consignment sent on January 13, 1953, from Welwyn Garden City to Ruislip, Middlesex"—that is only 20 miles—was not delivered until the 19th.That means to say that it took six days to arrive. I am not blaming the people concerned; that sort of thing is inherent in the nationalised system. It is just not possible to run road transport as a completely centralised business.
819 In the old days—and the same will apply in the new days which are coming—when a firm was dissatisfied it was open to it to go somewhere else to get satisfaction. That kept everyone up to the mark. The noble and learned Earl, Lord Jowitt, who, I understand has had to leave the Chamber, said that the real test to take was this. You may cite example after example, he said, but take the greatest trade organisation in the country, take the Association of British Chambers of Commerce, and see what they say about it. I am afraid that the noble Earl had not carried his researches as far as he usually does. Let me read from a letter written by the Secretary-General of the Association on November 17, 1952. The letter says:DEAR MR. LENNOX-BOYD,To remove any possible doubts that may be in the minds of the Government and of Members of Parliament I am to reaffirm that the Chambers of Commerce, as represented by this Association, support the Government's aims of ultimately returning road haulage to private ownership and management, and at the same time granting to railways a wider degree of flexibility in their freight charges schemes.The creation of a State monopoly of long-distance road haulage"—which is what the noble Earl said we must have—was in the Association's view, a serious mistake. The Association considers that only by the reintroduction of the widest possible measure of private ownership and management into the industry can a really efficient, flexible and economical road haulage service be provided.To avoid any further misunderstanding on this very important question, my President hopes that you will not hesitate to inform Parliament of the terms of this letter should the need arise to do so…I have great pleasure in informing this House of Parliament of the terms of that letter and of the views of the Chambers of Commerce. I think they are very important.
I must answer the noble and learned Earl's second point. He gave the example of a firm who had made arrangements with the Road Haulage Executive to carry their goods, I think by putting lorries at the firm's disposal. I am told that that is mostly a case of the arrangements which firms had with the private road hauliers before they were bought out or confiscated. When they had all been 820 bought out and the monopoly established, there was nobody else to go to. The alternative is to have a "C" licence. The noble Lord, Lord Silkin, spent the best part of half an hour trying to explain to us that the number of "C" licences had increased because public road transport had become so much more efficient. That "will not wash." A lorry is a very expensive thing to buy to-day, with purchase tax and all the rest and with the wages that have to be paid. Any business man will tell you that he would not go and start a road haulage business of his own to carry his own stuff if he could get somebody to carry it properly for him. Allowing for all that has been said about carrying the kind of cargo that it is convenient to carry, as we get more and more freedom to trade we can expect to have a few more delivery vans. If it were a matter of a few thousands or tens of thousands to be accounted for, that would not be so difficult. But the noble Earl's argument does not account for these figures: on December 31, 1947, there were 487,000 "C" licensed vehicles (I leave out the odd hundreds) and on December 31, 1952, there were 833,936. Is anybody going to tell me that this enormous increase in road haulage has nothing to do with inability to get goods carried?
The noble and learned Earl said that we were going to take all road haulage away from the railways. This is exactly what we are not doing. The railways are going to be left with the whole of their road feeder services. The noble and learned Earl said it was important that the railways should be able to collect goods and bring them to the railways and carry them on the railways. The whole of that power is going to be left to the nationalised railways. No one dreams of taking it away. And we are going to leave with the railways many more vehicles than they had before nationalization—how many they are going to be left with we can discuss in Committee. We mean that both the nationalised railways and free enterprise shall have opportunities to compete for road traffic. The nationalised railways must have freedom to develop not only on the railroads but on road haulage and passenger road transport. That does not mean a monopoly, least of all an over-centralised monopoly.
821 I do not want to be unduly critical of the road haulage business or of the Transport Commission, but we must be honest about it. Have we not all seen strong evidence that this new monopoly is imitating and emulating some of the worst reactions of a past age? The noble Viscount, Lord St. Davids, referred to the fact that in the old days the railways bought up and suppressed the canals. I dare say that in those days the canals were becoming obsolescent. I am not saying the railways were right. But is there not a parallel to-day in what the nationalised transport monopoly is doing? Is there no buying up and suppressing there? Has not the whole tendency of this new monopoly been to suppress—not only to suppress competition but to suppress alternative services, whether by lorry or bus? I find it interesting that only when there is a chance of a bus company running a cheap service from Glasgow to London did the railways find it would be a good thing if they were to run a cheap service. That just shows what a little competition will do and how stimulating this breath of fresh air is. That sort of elimination of competition really will not do. The railways must have their opportunity, both on the rail and road, but it must be an opportunity to use the railways and the road; it must not be an opportunity to abuse and suppress. And they will do it all the better under the stimulus of fair competition.
The noble Lord, Lord Silkin, had a good lecture to deliver to us on monopoly. He said that State monopoly is all very good because there is no private profit in it. If there is a private monopoly for private profit, it is all very bad, but nothing can be said against State monopoly.
§ LORD SILKIN
My Lords, the noble Viscount has distorted quite a number of my arguments, and perhaps he will allow me to correct this one. I said the public has nothing to lose from State monopoly because there is no danger of its being exploited. There is that danger with private monopoly.
§ VISCOUNT SWINTON
My Lords, I dislike monopolies, whether public or private, but if I have to choose between a private monopoly which is making a profit—maybe making an excess profit—and giving an efficient service, and a 822 public monopoly which is making a heavy loss and giving me a bad service at a higher price, then, little as I like either monopoly, I should prefer to be exploited by the private monopoly rather than by the public one. But in our Party we have no intention of being exploited by either. We mean that all forms of enterprise should give the best service.
Then we go on to say that the railways must decentralise. That is a process of reformation; but a process of reformation does not mean that we abandon everything that is good in the old. We keep what is good and remove abuses. I think I can say that—the noble Lord, Lord Pakenham, is not on the Front Bench opposite, so it is all right. Even my noble friend, Lord Radnor—who, it is said, showed great courage in delivering his speech, for several noble Lords said he had showed tremendous courage in making that speech (I do not know what he had to be afraid of!); and a very interesting speech it was—seemed to find some merit in decentralisation. He wanted us to keep the good stuff—and, of course, we will. But even he had a complaint about interference by the Transport Commission with management. That is exactly what we complain about, and just the kind of thing we want to put right through decentralisation. So that my noble friend Lord Radnor, with all his new-found affection for nationalised enterprise, has discovered that even in the nationalised enterprise the lesser fleas have bigger fleas upon their backs to bite 'em. Surely, the gentleman in Whitehall does not always know best; and it does not matter whether the gentleman in Whitehall is sitting in Berkeley Square or wherever the centralised administration of the Transport Commission sits. And that goes for south of the Tweed, believe me, my Lord Bilsland, as well as north of the Tweed. If the noble Lord, Lord Silkin, wants to know whether there is any complaint about having it all in one integrated monopoly, I wish he had heard the noble Lord, Lord Bilsland, yesterday—anyway, I am sure the noble Lord, Lord Bilsland, will be glad to give him a little private instruction at any time. Uniformity, surely, is not an unmixed blessing; a little deviation is legitimate in business, and in our Party even in politics.
823 Then the noble and learned Earl, Lord Jowitt, talked about appealing from Philip drunk to Philip sober, or Philip sober in Opposition to Philip sober in office. He said he was frightfully shocked by Clause 15 and the provision for procedure by an Affirmative Resolution. It is the draft scheme which is to be laid, so there will be plenty of opportunity of discussing it. The noble and learned Earl, Lord Jowitt, said: "What on earth would Lord Swinton have said if I had done this when f was leading in the late Government? I should barely have got away with my life, and certainly I should not have got away with this clause." But the noble and learned Earl got away with something incomparably worse. If he will only read the 1947 Act, which he himself piloted with such eloquence when he was sitting on the Woolsack, he will find that that Act contains a complete power to reorganise and decentralise the whole railway system, and to do it without any reference to Parliament at all: it could be done merely by the Minister's ipsi dixit. No draft order would have come here, and there would not even have been a chance to pray against the Order when it was made: it was to be merely the Minister's act. At any rate, the procedure of my noble friend Lord Leathers, frightfully revolutionary, as the noble and learned Earl has called it, is a good deal better than the procedure which the noble and learned Earl has forgotten he fathered only a few years ago.
We are certainly going to sell a large part of these road haulage undertakings, and we mean to get the best price we can. A great deal has been truly said about there being no one with more business acumen or experience than my noble friend Lord Leathers. If I were proposing to sell an undertaking, certainly there are few hands in which I would rather put it than those of my noble friend. But it is idle to suppose that we can sell goodwill which has been entirely dissipated as if it were still there. What was this goodwill? In the old days before they were bought out, a number of these road haulage firms were making a profit estimated at about £8 million or £10 million a year—I understand that it was nearer the £10 million. That was after allowing for 3 per cent. on physical assets, I am told, so that the 824 profit was probably more; and it was certainly after allowing for all overhead charges. That is what the private companies were making when they were bought out.
Now, year by year, in place of a profit of £10 million there has been, to put it at its highest, a profit of £1 million; and the £1 million is not a real profit at all, because it allows nothing for overheads, I understand, and nothing for interest on capital. When a profit is turned into a loss, the goodwill vanishes. I was amazed at the noble Lord, Lord Lucas. He said that it had to be written back. That really is a new maxim of accountancy which we are to apply. I suppose we might describe it thus: "A liability properly envisaged becomes an asset." That is a very curious maxim in accountancy. If the noble Lord, now that he has returned to private life, is contemplating issuing prospectuses on that basis (I feel sure that he does not) he had better take some of the able legal advice available to him before doing so. At any rate, we are not going to do such a thing, and we could not get away with it if we tried. I cannot pass by another glittering gem in Lord Lucas's coronet. He said that only a nationalised industry could have produced the lorries in the flood emergency. His actual words were (OFFICIAL REPORT, Vol. 180, c. 605):Who but a national organisation could have done that?Not so many years ago there was another emergency, at Dunkirk. I have yet to learn that the great fleet of little ships which saved us at Dunkirk were all nationalised transport entities.
We have heard a great deal about integration and co-ordination. I am rather nervous of these abstract nouns, particularly when they are pronounced like a sort of magic spell or a benediction. Indeed, though noble Lords in all parts of the House have been using the word "integration," I think that no two speakers have used it in the same sense. The noble Lord, Lord Silkin, used it as a charm, and kept on repeating it over and over again, as did other noble Lords. The noble Lord, Lord Burden, and the noble Earl, Lord Lucan, liked it very much, but they thought it meant complete centralisation. The noble Earl, Lord Lucan shakes his head—"Tot homines"; he is different; I beg his pardon. He 825 has another variant. There are variants as to how it is to be interpreted on the Labour side. The interesting thing is that my noble friend Lord Linlithgow used the word "integration." But he used it in the opposite sense. My noble friend said, "I want to see integration, but integration, properly understood, means that you do not have any of this centralisation. You integrate all down the line." I never was very good at this sort of language. As I see it, integration can be either good or bad.
Let me take one example of integration; and I imagine that everybody will agree that it would be right to apply it to this—namely, the schemes which formed such an integral part of the plan under the 1947 Act, and which were to be brought into force. Integration was tried on in Scotland. The noble Lord, Lord Bilsland, took the heather (is that not the expression?) on this occasion.
§ VISCOUNT SWINTON
Set the heather onfire—I must keep to my own sphere. But, at any rate, where these schemes were proposed there was complete unanimity, but it was unanimity against them. Everybody joined in saying that they would not have them. There were the passengers, who, whichever way they voted in the General Election, all voted one way over this matter. There were the town councils—some of them, no doubt, good Tory ones, some good Socialist ones, and some, I dare say, even Scottish Nationalist. At any rate, the one thing they agreed upon was that they would not have that kind of integration. So my noble friend Lord Leathers, very wisely, in Clause 16 of the Bill, says that that kind of integration shall stop; and certainly not a dog will bark at its going.
The noble Lord, Lord Silkin, said that of course the whole of this business is doctrinal. Well, I do not know. It may be with him. I have never been in the least doctrinal about nationalisation. I wish the noble Lord would believe that. I have only one test: Does it work in practice? I think the noble Lord might even go back to Mr. Morrison who said the same thing a good many years ago—I do not know whether he still says it. 826 He said that if we could not show that it was a business proposition, then we have no right to ask Parliament to do it. The proof of the pudding is in the eating: it has not worked out in practice and therefore Parliament has to-day not only a right but a duty to give us a plan which is a business proposition. Mr. Morrison also said that in our country it is possible to have State enterprise and private enterprise side by side. That is exactly what we are proposing for road haulage. Each will stimulate the other, and trade and industry will get better service. We hold that transport should be the servant of trade and industry and of the travelling public, and that the test of policy should be: Does it enable transport to give most efficient and economical services? That is the test we are trying to apply.
What is needed is quick, flexible, immediate service to meet the varied needs of individual traders. A uniform nationalised service has shown that it cannot do this. That is why we have to denationalise. The same is true of the railways. It is in their own interest, as well as that of the traders, that the railways should have more flexibility and the opportunity to meet local conditions and special needs. That is why we propose to decentralise and to give regional managements as much initiative and flexibility as possible. We also mean to give the railways greater freedom to quote special terms for special business. In the past they have been hedged round by restrictions that a rate quoted by one may have to be given to all in similar circumstances. These and other restrictions have cramped their style and have hampered trade. Under this Bill we mean to give the railways more elasticity and more initiative. That, in its turn, should give them more revenue and the traders better and cheaper service. I hope that in what I have said to the House to-night—and I do believe every word of it—I have shown that our approach is not in the least doctrinal or doctrinaire. It is essentially a practical approach, and I hope that, consistently with those principles, based on practical experience, we can make this Bill a still better instrument for its purpose.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.