Lords Sitting of 3 November 1954

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
  VISCOUNT SIMONDS
  The Right Honourable Gavin Turnbull Baron Simonds, lately Chancellor of Great Britain, having been created Viscount Simonds, of Sparsholt in the County of Southampton—Was (in the usual manner) introduced.

VISCOUNT SOULBURY
The Right Honourable Herwald Baron Soulbury, G.C.M.G., G.C.V.O., O.B.E., M.C., having been created Viscount Soulbury, of Soulbury in the County of Buckingham—Was (in the usual manner) introduced.
The Lord Cawley—Sat first in Parliament after the death of his father.

RAILWAYS REORGANISATION SCHEME
2.56 p.m.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT SWINTON)THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT SWINTON) rose to move to resolve, That this House takes note of the Railways Reorganisation Scheme presented by the Minister of Transport to Parliament by Command of Her Majesty, July, 1954 (Cmd. 9191). The noble Viscount said: My Lords, I rise to present the Railways Reorganisation Scheme for your Lordships' consideration and comment. Noble Lords will recollect that the procedure under which this Paper comes before the House to-day is, in a sense, one of peculiar interest to this House, because it is a procedure which we hammered out together. We have succeeded in achieving a very convenient arrangement by which this important Scheme can be presented to Parliament in draft form with explanations, for discussion and comment before a final Order is presented to the House. The necessary
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Order will in due course be presented to both Houses of Parliament.
The Transport Commission have worked very rapidly to produce this Scheme since the time when the Act of 1953 was passed because, although the Scheme comes before your Lordships only now, in November, the Commission had produced their Scheme by April 15 of this year. The Scheme is produced in a very convenient form. We have the Draft Scheme, which the Act of Parliament directed that we should have; we have also (perhaps more important than the Draft Scheme) the full Explanatory Statement by the Commission and we have, too, the covering Memorandum by the Minister. I think it is very valuable to have the Explanatory Statement because it shows the intent and the spirit in which the Commission have framed and intend to work this Scheme. The Scheme in itself, as a legal document, can only be, as it were, the dry bones of the plan, and the Explanatory Statement is the spirit which gives those bones life.
The Scheme comes to us to-day after the Minister has consulted with representative bodies, as the Act directed him to do. If your Lordships will look at page 4 of the White Paper you will see that he could hardly have got a more representative and comprehensive lot than those with whom he has taken counsel. These bodies, who also, I think, acted with commendable despatch, broadly speaking, appear to have found the Scheme acceptable, and to have found it acceptable as combining a proper degree of decentralisation of management with a sufficient amount of flexibility to allow the Area Authorities to apply their experience. I think your Lordships will appreciate both those points, because in the debates we had about the Scheme during our discussions on the Bill your Lordships stressed the importance of both devolution and flexibility. I think your Lordships will find as agreeable as I did the passage in the Explanatory Statement on page 6 where the Commission say that:
"Organisation is a means to an end and not an end in itself. It is also a live thing, constantly changing …"
There was one matter which the Minister found in his discussions required clarification, and that was the relationship between the Commission and the

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Area Authority and the Chief Regional Manager. That, I think, is stated clearly in paragraph 6 of the Minister's Introductory Memorandum. I think that this is so important that I should like to read one or two extracts from it. First of all, it says, in paragraph (a):
"The British Transport Commission is a policy forming body."
Then it goes on to say:
"The Area Authorities are also policy forming at area level, and supervisory. They are not intended to be executive organs of day-to-day management, nor will they be suitably composed for that purpose. In this they resemble the boards of the former railway companies."
In spite of (a)"—
that is, that the British Transport Commission is a policy-forming body"—
… there are certain matters of day-to-day management requiring general treatment. The wagon stock, for example, must be managed so that it is put to the best possible use throughout the country; some large undertakings prefer to do their business with British Railways by negotiation at the centre instead of separately in the six Regions. Other examples could be quoted. There must be a focus for these and like matters, and that focus must be within the Commission's headquarters."
Then comes paragraph (d) which I think is equally important:
"It is common sense that direct contact should exist between this element of executive management within British Transport Commission headquarters and executive management in the person of the Chief Regional Manager in the Regions. Moreover, new policy itself is more often than in any other way initiated by discussion between those who are responsible for the daily operation of existing policy. This is an additional reason for direct contact between them. This is no more a by-passing of the Area Authority than it is a by-passing of the British Transport Commission. It is merely two policy-making bodies freely admitting that a number of day-to-day matters can be settled by their executive organs and that contact between them is desirable and helpful."
Then we see—and this is really the key to it:
"The chain of responsibility is from British Transport Commission to Area Authority and from Authority to Chief Regional Manager."
I think that sets out the chain of command clearly. I believe that it is the only practical system under which this plan could work.
In the light of the wide measure of agreement which the Scheme commanded when the Minister discussed it, it is hardly surprising that neither he nor the Secretary of State for Scotland with whom
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he consulted have suggested any modifications. Your Lordships will have studied the Scheme, so I do not propose to go through it in full detail, particularly as my noble friend Lord Selkirk will reply to any questions or comments. I think I can best serve your Lordships interest by drawing attention to some of the salient features. First of all, the First Schedule sets out that there are six areas—five in England and Wales and one for the whole of Scotland. These correspond broadly to the present Regions. They will be precisely delineated within a month. The delineation will not necessarily be final, and, as experience shows what is convenient, the delineation may be altered, subject to one thing, and that is, that there must always be one single Area Board for the whole of Scotland.
Then paragraph 22 of the Explanatory Statement shows that further decentralisation may take place on sub-areas—and no doubt will. I think that that decision is sound and I think it carries the principle of devolution further, which is what the House hoped would happen. It is hoped—indeed, it is expected—that that will produce three results, all of which I think are desirable. First of all, it should secure, so far as possible, close local contact between users and the railways. Secondly, it should give to the staff a feeling, and indeed the reality, that the control and the relationship with them is close, and that there is not too much of what I might call "remote control." Thirdly, this further devolution ought not only to make for more effective supervision and better relationships but should still more encourage what is so important—local initiative. The general functions and responsibilities of the Area Authorities are set out in paragraph 27. I do not think I need dilate upon those. It is important, however—and I would draw your Lordships' attention to this point—to read paragraph 27 with paragraph 23 in the Explanatory Statement, and particularly with these words which the Commission have inserted:
"… the Commission have reserved to themselves only the minimum powers necessary to enable them to ensure fulfilment of their responsibilities. …"
Let me say one word about the composition of the Area Boards: your Lordships will find that in the Second Schedule and in paragraphs 25 and 26 of the Statement.

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The number is flexible. You do not want too big a board and a maximum is set of seven, including the chairman. In order that the contact may be close and intimate between the Commission and the Area Boards, it is laid down that one member, at least, of the board must also be a member of the Commission. The other members are intended to be, and I think certainly should be, part-time members with real knowledge of public and business requirements in regard to transport. One of the important results of making them part-time is that they will have a continuing knowledge of changing needs, because they will be continuing their own activities in business, or whatever it may be, while they are serving and in that way it is hoped that their views will always reflect current knowledge and current needs. This is a very definite decision and I would submit to your Lordships that it is undoubtedly a sound one.
While the members of the board will have great knowledge of the requirements of particular interests, they are not to be representative of particular interests. I am sure that that is the best way to get a team. I think it is wrong to have people who are tied as delegates. Once we start saying that this body or that must be represented, we shall find a hundred and one bodies who can say that they ought to be represented. The result would be to get a cumbrous board, and a board that did not really work as a team. The question of trade union representation has been raised and I should like to repeat what the Minister said in another place a day or two ago. It is quite clear that in these days the trade unions occupy such a position in the life of the country that no body performing functions of wide public interest could be said to be sufficiently broadly constituted if the trade unions were omitted from the field of selection. The Commission are quite right, in my view, in standing out against representative boards, but—and these are the Minister's words (OFFICIAL REPORT, Commons, Vol. 532 (No. 170), col. 148):
"I have been told by the Commission that it is counting upon the services of experienced trade unionists to assist it on its Area Boards."
As I said before, Scotland will be a single region, so there will be one authority and one board for Scotland as a whole.
I do not think I need go into more of the details of the Scheme itself, but there are three other matters which I think particularly interested your Lordships in the debates on the Bill. Some of them are reflected in the Scheme, it is true. The first is operating costs and statistics, the second is docks and inland waterways and the third is omnibuses. I should like to say a few words on each of these subjects. On operating costs and statistics, your Lordships will see that Article 9 of the Scheme and the Third Schedule provide for the compilation and publication of costs and statistics, and your Lordships should read with them paragraphs 36 to 39 of the Explanatory Memorandum. The object is to have statistics which will give information affording a reasonable comparison as between regions, which will provide, so far as possible, a yardstick of efficiency, and which will also stimulate the spirit of emulation between the Areas.
It is easy to say that that is what we want and that we are all agreed, but it is not so easy to lay down exactly what statistics we should have. There is absolutely no limit to the number of statistics that can be produced. Indeed, I am often horrified by the number of statistics which are showered upon me, not only by Government Departments but also by outside bodies of all complexions—they are all equally guilty of this. Statistics seems to fall like leaves in Vallombrosa. While there is certainly no limit to what can be produced, in my opinion there are very strict limits to what is practical and useful. If I may adapt what the Commission said about organisation not being an end in itself, I would say (although the statisticians themselves forget this) that statistics are not an end in themselves; if we get too many irrelevant statistics, nobody will bother about them and the grain will be lost in the chaff.
Even the old railways found difficulty in producing comparable statistics, because so much of the traffic was pooled or shared. Of course, now that has happened to an even greater degree, and we have a complete pool of wagons, which is certainly very sound from the economical point of view. I hate the idea of what are called "notional

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statistics," a conception which is cropping up nowadays. Statistics are something real and accurate and not something guessed at. Moreover, even if we have perfectly adequate statistics as between one region and another, when the regions are quite disparate we might easily draw quite wrong deductions. It would be unfair to compare, for example, in the same statistics, the Highlands of Scotland and the densely populated Midlands Region. We can get tables of figures that tell us nothing at all, even if they are produced on the same basis. What we want to get are statistics which really will show results and which will meet the criteria which I have set out earlier. I know that that is the aim of the Minister and of the Commission. They will be continually consulting about this matter and it may well be that the statistics and forms we start with will change. One thing I would say with great earnestness to your Lordships is that the worst possible service we could do to the Commission, the Minister and ourselves would be to try to put these statistical and costing provisions into a straitjacket.
The second matter I said I would deal with is docks. That is something about which I can be brief and categorical. On the previous occasion I said that it would not be the intention of the Commission to transfer the docks they owned to the railways. That stands. They have no such intention, and unless there are some exceptional cases where, after full discussion with the Association of Docks and Harbour Authorities, it is agreed that this is desirable, there will be no further transfer. I leave out the little packet ports which are already under the control of the railways; there is going to be no change with regard to them.
Finally, I come to omnibuses. I have discussed this subject fully with the Minister and the Chairman of the Commission because I wanted to be sure that what I said to the House in our previous debates represented, and still represents, their intention. It does. Noble Lords will recollect (I am paraphrasing my previous remarks) that I said that these omnibuses fall broadly into two classes. There are the omnibus services which are an alternative to, and are no doubt to a certain extent competitive with, the railways. Then there is another class of
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omnibus which is obviously ancillary to the railways; that is to say, omnibuses which feed a station and bring people up to the trains, or omnibuses which take the place of an unremunerative branch line which has been shut down, or will be shut down in the future. Certainly, the more economy we can get by that sort of procedure, provided that a satisfactory alternative service is given, the better.
I have said to the House before that, in my view, there is a great difference in the way those two kinds of service should be managed. Everybody would agree that the service which is obviously subsidiary and ancillary to a railway should be made to subserve the railway interest—that is what it is there for. But there was, I think, a genuine anxiety lest the big alternative separate services should be, if not actually suppressed in the way the canals were said to be suppressed in the old days, at least subordinated to railway interest, to try to make people go by train when they wanted to go in an omnibus by road. I said that in those cases what I may call the independent services ought to be run as bus undertakings by what I think I called "bus-minded people," in order to give the best and most efficient service to the public that could be given. The Scheme itself makes no alteration about omnibuses at all in the powers of the Commission. That, to my mind, in a sense (though I may say that it is not wholly relevant to this) seems to make it all the more important that we should know what the intention of the Commission is. And after discussion with the Chairman and the Minister, I can give the House an absolute assurance that what I expressed to the House before, and what I have again expressed to the House today, represents entirely the intention and purpose alike of the Minister and of the Chairman of the Commission.
My Lords, I do not think I need say any more. I believe that the House will find in this Scheme what ought to be in it: the right combination of principles, of direction and of flexibility, which is so vital and important because the Scheme cannot be an immutable affair. Your Lordships will find here in the Explanatory Memorandum the spirit in which the Commission mean to operate the Scheme. I commend both the Scheme itself and the spirit and purpose of the Commission to

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your Lordships, and shall welcome those comments which so many of those in your Lordships' House are peculiarly qualified to give. I beg to move.
Moved to resolve, That this House takes note of the Railways Reorganisation Scheme presented by the Minister of Transport to Parliament by Command of Her Majesty, July, 1954 (Cmd. 9191).—(Viscount Swinton.)
3.25 p.m.
LORD LUCAS OF CHILWORTH: My Lords, may I say straight away that I think I speak for the whole of your Lordships when I welcome back to the Despatch Box opposite the noble Viscount, Lord Swinton, especially on transport matters; and I may express personal satisfaction that once again we battle upon this well-worn battle ground. We also thank the noble Viscount for the full way in which he has explained the highlights to your Lordships. I agree with him that the manner in which this White Paper is brought before your Lordships reflects the very good sense of your Lordships' House, because I remember well the discussion upon how we could criticise an Order without really confronting the Government with a difficult position. When the Order comes before your Lordships eventually, you must either approve it or reject it; you cannot amend it. Hence this White Paper, upon which everybody is free to say precisely what he thinks. At the opening of the remarks that I am going to make (I am not going to attempt to dot any i's or cross any t's, but I shall have observations to make about the Scheme in general) I would ask your Lordships to believe that I approach this Scheme more from my commercial upbringing than from my political experience.
I say, quite frankly, to your Lordships straight away that, to me, this White Paper is unreal. To me, any scheme for the reorganisation of the railways is unreal unless it embraces at the same time a scheme for the integration of road transport, passenger and goods, which is complementary to the railway system. Any scheme that brings forward reorganisation of the railways alone falls far short of national requirements. In my view, what the Government should do is to withdraw this White Paper—and if they did withdraw it, it would not be a novel experience for them—and ask the British
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Transport Commission to prepare a properly integrated scheme for the transport of this country, based upon their practical experience over the last seven years. The British Transport Commission are the only body of men in this country with a collective wealth of experience on this subject. They have had the opportunity of working an integrated system of transport, and of working a disintegrated system of transport, and they must have learnt a lot. I should think that the resultant scheme would be some way between the extremes of the 1947 Act and, on the other hand, the extremes of the 1953 Act. I know that that is far too much to expect the Government to do. But some Government will have to do it, and do it in a very short time. It may well be that a Government will have to do it before the Scheme set out in this White Paper is a reality, because the 1953 Act is failing, and failing rapidly.
Section 18 of that Act, which sets out the reorganisation of road passenger transport, was stillborn; it has never been put into operation, and great credit should be given to the Minister of Transport for not putting it into operation—he knew what an abject failure it would be if he did. The scheme for the disposal of the British Transport Commission's road haulage assets threatens to be, and will be, the biggest commercial failure we have known in our lifetime. Only 6,000 vehicles have been sold out of 20,000 offered; not a property has been sold, and not an offer has been made for large units such as the parcels service. If one can believe what one hears, the net loss to the country to-day is £20 million, and threatens to exceed the figure which I forecast on the Second Reading of the 1953 Transport Act, when I said that the whole scheme might eventually cost the British taxpayer £75 million. It is liable to cost them more. Very shortly—I would estimate it to be somewhere in the middle of next year—the Government will have to go to the British Transport Commission and say: "Take these remnants back and reorganise them." The remnants they will have to take back will be about three-quarters of the whole. That is why I say that any scheme in any White Paper which deals only with the reorganisation of the railways fails lamentably to stand up to the test of the transport needs of this country.
I think it was the Economist which

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pertinently said that small boys play trains and elderly gentlemen play the more sophisticated game of reorganising railways. We have been charged this afternoon with playing the game of reorganising railways. I suppose we had better now get on with it. In this White Paper, I read more between the lines than on the lines, and I think the biggest criticism to make is that it is in itself a woolly document. It had to be a woolly document, because the section of the 1953 Act which inspired it was itself woolly. My mind, and I expect the minds of many of your Lordships, goes back to the debate on the Second Reading and Committee stage of the Act which dealt with the reorganisation of the railways. I heard many pious speeches made about competition between the Regions. Whether or not that was said with any real knowledge of how competition was going to work, I do not know; but it was always evident to me that, unless we had a railway reorganisation scheme which allowed the Western Region to advertise something to the effect, "Come to Weston-super-Mare on the Western Region and do not go to Skegness on the Eastern Region, because we will take you at half the price," competition was always ruled out. This is what the Commission say in paragraph 31 of the White Paper:
"The Commission are of opinion that while competition in the ordinary business sense between the railway Regions is impracticable, it is very desirable that there should be a strong emulation between them."
So we now have emulation and not competition. We also had long discussions about devolution or decentralisation and charges—two matters upon which I shall address your Lordships in a minute or two.
There is one thing which I admire in this document, and I will give the Commission full credit for putting it in. It is quite evident that the Commission, in this strong and unequivocal statement, are determined that it is not necessary for them to learn a lesson twice. This is what they say in paragraph 26:
"The experience of the Commission between 1948 and 1953 has shown how essential it is that the authority of the Commission in the scheme of organisation should be absolute. The scheme should admit of no doubt on this point. The function of the Commission is
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primarily to determine policy, but they must have the authority to ensure that their decisions are carried out."
I agree with that 100 per cent. The Commission have learnt that lesson, as I think we all have, especially those of us who were close to the problem. During the relevant time of 1950 and 1951, I was very close to this problem, being in the Ministry of Transport. I am quite free to admit now that if there was one single mistake which was made in the 1947 Act, which appeared so nice in 1947 but was at the main root of all the troubles of the British Transport Commission afterwards, it was the fact that while it placed the responsibility upon the Commission, the Minister appointed the Executives, and the Executives were entities in their own right. That was the prime cause of the trouble—there is no doubt about it. I think the noble Viscount said that it is impossible to divorce authority from responsibility, or vice versa. There were many other causes, but it was from the day that that was realised, and the Commission started reorganising itself on better structural lines, that they started making the terrific headway they have done over the last two or three years. In this White Paper I see a small seed planted of the same trouble—I will come back to that in a minute or two.
Now I turn to perhaps the most controversial of the matters in this White Paper, and that is devolution and decentralisation. May I say to your Lordships, quite frankly, that there is a lot of nonsense talked about devolution and decentralisation. In principle it is right, and I support it. There are many factors in the work of the British Transport Commission where centralisation must exist—for instance, in policy and overall financial control. Do not forget that, while the British Transport Commission is a trading organisation in the fiercely competitive world in which the 1953 Act thrust it, it is still a State-owned body, with the taxpayer having to foot the bill, if bill there be. Therefore, overall finance is essential. It must have the last word in deciding how the Areas spend their budgets. You cannot have an unholy scramble for the £446 million which it is said they are going to have. There must be priorities where it is more essential to do work in one region than in another.
Then there is the question of standardisation. Standardisation of design and

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manufacture must be centralised. I do not think it is sufficiently well realised that the British Transport Commission to-day is the largest manufacturing concern in this country. It manufactures steam engines; it manufactures coaches, carriages and wagons, and it prints tickets. On its manufacturing side alone it employs 100,000 men. I do not know another manufacturing concern in this country which employs that number. It is only a matter of geographical chance that Swindon is in the Western Region and Derby in the Midland Region. All these activities must be centralised and then decentralised in a far different manner than by areas. You cannot allow the Western Region or the Western Area to manufacture something entirely different from what Derby manufactures, just because they are in two different areas. Standardisation has proved to be one of the greatest economies brought into the British transport system. My Lords, that must go on.
Then there is labour. That must be dealt with centrally, because labour is one of the greatest problems with which the British Transport Commission has to deal. In the delicate negotiations that are always arising with the various unions, all the discussions must be upon the very top level. I am confident that the doing away with centralisation would bring chaos into the labour relations of that section of the transport industry operated by the British Transport Commission. That is not to say that these Area schemes and the devolution that can go on cannot bring a closer relationship between the various grades of management and men. They can. I do not know whether the Transport Commission put the words into this White Paper to lighten it humorously, but it says that of course they are quite willing to consider whether it would lift the esprit de corps if they put the different men in the different Regions into different coloured uniforms and painted the coaching stock a different colour. My Lords, the employees on the British Transport railways do not want different coloured uniforms. They want good conditions, and they want good uniforms. And the esprit de corps is there to-day, working for British Railways. I do not think that the kind of thing that is suggested is going to do any good whatsoever.
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Now I turn to another aspect. I do not think it is realised that all the headquarters of every Region except two, the North Eastern and Scotland, are situated in London. Whether that is good or not I think is open to question. It is a matter of administrative convenience. The British Transport Commission headquarters and all the Regional headquarters are within a circle of about three miles at this present time. Whether that is, as I say, advisable or not I think is open to question. Now I come to the Area Boards, and there I really see the shape of things to come. I am glad they have been called Area Boards. If I read Article 10 correctly, I read there between the lines that even the British Transport Commission are to-day looking to the future on the basis of an integrated scheme. The noble Viscount did not mention it—perhaps he did not think it necessary—but his right honourable friend in another place said that before many months are up the British Transport Commission are going to bring out a huge and drastic plan for railway development; they are going to lock years and years ahead. It would be unreal for anybody to bring out a plan like that unless it also looks forward, as it must do—because it is inevitable—to some close integration with road transport which is complementary to the railway service. How are the Area Boards going to do their job unless it is so?
The noble Viscount, in his lucid explanation, said something about the buses; I thought he touched on the matter lightly. That is a fundamental problem. How can economies of branch line working be effected unless the Commission has at its hand the alternative forms of transport? How can it?
VISCOUNT SWINTON: That is exactly what I said.
LORD LUCAS OF CHILWORTH: I said the noble Viscount touched lightly upon it. It has got to go far deeper than the noble Viscount envisaged. The Area Boards will have a very difficult task, an unenviable task, and I agree with the noble Viscount that they will have to be very carefully chosen. I agree with him that mandated representatives of any organisation are a curse. We want men of wide experience upon these boards. They need not know the slightest thing about rail transport. There are plenty of

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railway operating technicians in British Railways—some of the finest in the world. But where British railways fall down to-day, and in my view have always fallen down, is in their commercial approach and their commercial staff. I would have printed all round the board room of every Area Board "What does the customer want?" because that is going to be the keynote of success. All too long has the policy of the railways been, "The customer must have what it is convenient for us to provide." My own industrial experience has taught me this: that the better the technician the less commercial sense he has. I was once discussing this problem with Henry Ford, and I asked him, very many years ago now, what was the secret of his success. I remember he said that one of the secrets was that he never allowed himself to get into the hands of technicians. He told his folk what they had got to make and the price at which they had got to make it.
I am very glad that the Commission reserve to themselves the right to choose the personnel of the Area Boards and do not leave it to the Minister. Ministers of all Parties have been singularly unsuccessful in choosing the right people to put upon these public corporations. There are, of course, outstanding examples to the contrary, but they are so rare as to prove the rule. My Lords, the small seed that I detect lies in what is the position of the regional manager vis-à-vis the Area Board. The Area Board do not employ the men; all the staff are the servants of the Commission. The chief executive head of the Area is answerable only to the Commission. That in a smaller way was one of the failings of the 1947 Act, and it will take a lot of care to get over it. It may be that it can be got over. I think that in the wise choice of the personnel of these Area Boards lies the secret of the success of devolution. In my experience, devolution or decentralisation on its own is useless; it is made or marred by the men upon whom you devolve that responsibility. It is very pleasant to think that even in to-day's age of mechanics and machinery men really matter after all. That is where I would counsel a great deal of caution. There is a shortage of good men. There is a great shortage of good men throughout industry. I think the age in which we
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live is an unfortunate one. It is sapping our initiative. It is making us a country of clock-watchers. I really think that the Transport Commission have a great task before them in recruiting not engineers—they have some of the finest engineers that this world possesses—but good commercial men.
When I compare some of the branches of activity of the British Transport Commission to-day with industry, I am staggered at the paucity of high grade executives. If you could take a comparable business in industry, I would say it would have about ten times more highly-paid executives than the British Transport Commission has. I hope the British Transport Commission will change its policy. It is niggardly. You cannot get good men unless you are willing to pay the price. There are men to-day who are serving in a part-time capacity on the Commission who are getting a measly £500 a year and are giving 75 per cent. of their time to the work of the Commission. They are supposed to be part-time, yet the amount of time they are giving is 75 per cent.
VISCOUNT LONG: But do they not get the gold pass still?
LORD LUCAS OF CHILWORTH: I do not know anything about that. I know that the pre-war railways issued a gold pass. I should think a man would need to spend all his waking days and his waking nights travelling by train to get any value from that to equal the value of his time. You cannot run a great industrial concern like this on charity. I think that many of the higher administrative grades of the Transport Commission are underpaid at the present time.
Another point on which I should like to touch is hotels. I should like consideration to be given to whether the hotels—I am not talking about the restaurant cars or the refreshment rooms—should not be hived off and sold completely. Hotel-keeping is an art which the British Transport Commission have not acquired, and I do not think they ever will acquire it. I do not consider that hotels to-day are a real part of the British Transport Commission's operation. In the old days you stayed at a railway hotel because you travelled by train, but I would dare swear that only about one-half of one per cent. of the nightly residents at the Midland Grand

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Hotel in Manchester have arrived there by train. I think the hotels could be hived off and sold. I do not know whether present ideas will improve the restaurant car service or the refreshment rooms, but refreshment rooms in the future can be regarded only as waiting rooms where one can get refreshment.
The only remaining subject upon which I want to comment is the question of costs and charges. I think the Commission, as a public corporation, are in a difficult position. They have to balance their responsibility to Parliament, to whom they are required to give sufficient statistics, with their concern in so doing not to give a commercial advantage to their competitors. As the noble Viscount said, you can have notional figures and you can pay accountants thousands of pounds to apportion them out. But they are meaningless; they mean nothing; they are even worse than no figures at all because they are misleading. It costs the Transport Commission, I should think, a few hundreds of thousands of pounds to prepare the statistics and the figures which they get out to-day. Your Lordships will remember that Parliament decreed that the British Transport Commission should run a competitive business; and while they are a competitive business you must give them as much security regarding the disclosure of their facts, their costs and their figures as you yourselves would expect if you were running a private enterprise business. The only qualification in that regard is that at the same time they are a public service.
I am prepared, and we on this side of the House are prepared, for this White Paper to go forward. We may have some more comments to make when the Scheme is brought forward, but, for myself, I think the British Transport Commission is deserving of a rest. If we keep on digging the tree up to see how the roots are growing, the tree will die in our hands. I am quite prepared, for myself, to leave the job to the Commission. If they fail, they will have to get out and let somebody else do better. But, qualifying that by what I said at first, I do not think that we shall serve the best interests of this country by keeping on interfering in the detailed management of the railways. The railways cannot be run by Parliament; they can be run only by those to whom Parliament
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delegates the responsibility for running them, with, as I say, the qualification—and I say this quite sincerely—that this Scheme will not serve this country until, integrated with the railways, are the other forms of transport, goods and passenger, that are complementary to this nation's railway service.
4.0 p.m.
LORD TEYNHAM: My Lords, the noble Lord who has just sat down was certainly forthright in his opening remarks. In fact, he suggested that the White Paper should be withdrawn and that the Commission should put forward another one, with an integrated scheme. I would say that one of the troubles is that we already have too much integration. The noble Lord also asks, "What does the customer want?" Is it integration, with high fares on the buses, or good healthy competition with the railways? I think we all know what the customer wants.
I can assure the noble Lord that the Commission are fully behind the Scheme which has been laid before your Lordships to-day. They feel that it will bring benefit to the railways, and they are quite, ready to work it. I think it is true to say that this Scheme has already met with a wide measure of agreement from many associations and organisations in the, country, but I suggest that there are a number of points which need some clarification. It has been said to-day by the noble Lord, Lord Lucas of Chilworth, that the plan is a very vague one and rather woolly. I have no doubt that it is intentionally so. Surely, it is better that changes can take place within the framework of the Scheme without having to resort to any cumbersome procedure.
It is indicated, I think, in the White Paper that the Commission contemplate some smaller units than exist at the present time in one or two of the big Regions. I should like to ask the Minister who is to reply for the Government whether the Commission have come to any conclusions on this matter. I think it is agreed by most people that one or two of the present Regions are far too large for efficient management. In spite of what the noble Lord, Lord Lucas of Chilworth, said, I was particularly glad to note that distinctive uniforms are to be reintroduced for the railway personnel. I believe that this will be welcomed by

1127
most people on the railways. I hope that it may also be possible for this distinction to be carried a little further, to the colours of the engines and the passenger rolling stock. That, I think, will be of further assistance in promoting Area pride and responsibility. I also hope that the Areas will be allowed to develop their own individual characteristics in every possible way, because unless the boards in these Areas are given considerable responsibility and, if need be, are free to criticise, they will become merely a shadow of the Commission, and what is more, it will be difficult to get the right men to sit on the boards.
I hope that when the new organisation gets into its stride the Commission will decentralise more and more, so far as is practicable, so that the Area Boards will become strong and vigorous entities. At one time I was very much in favour of having Area accounting, so that it could be seen what were the figures of net earnings in relation, let us say, to the capital employed—in fact really to have a profit and loss account. I see, however, the difficulties which would prevent a true picture from being obtained for each Area, because, of course, since the passing of the 1953 Act the Areas have become more mixed than they were before. I hope that it may be possible to evolve a system which will give a comparison of costs in each Area without their having to give too much away to their competitors. I agree with the noble Lord, Lord Lucas of Chilworth, that it is only right that the railways should have protection in this respect.
I should like for one moment to refer to Article 10 of the Scheme, on page 18 of the White Paper. When I read this paragraph I felt that the provision was wide enough to permit the transfer to an Area Board of the control and management of bus companies. I was glad to have the assurance of the noble Viscount, Lord Swinton, that this is not the intention of Her Majesty's Government. I feel sure that under the Scheme as a whole we shall have a rejuvenated railway service and get back to that esprit de corps which existed in the old days of company administration, and revive that local interest which is so necessary for an efficient and up-to-date service.
4.13 p.m.
LORD GLYN: My Lords, I do not want to encroach too much upon the time of the House, but there are one or two things that I should like to say in regard to this Scheme and the White Paper. First of all, from paragraph 14 it is quite clear that the functions of the headquarters staff are divided as between legal, public relations and research, in one section, under the control of the Commission, and, in the other, commercial, operating and engineering staff, also under the Commission. I think those are wise and proper decisions, because since the 1947 Act vast economies have been made from the engineering point of view, both mechanical and civil, by operating the railways as a whole. One has only to read the Annual Report of the Commission, as no doubt your Lordships have done, to see the actual figures of savings that have been made. It would indeed be a retrograde step if the advantages of this central organisation were in any way changed. Then, as the noble Lord, Lord Lucas of Chilworth, has said, I think it has been clearly laid down by everybody that it is impossible to have labour conditions under any other authority except the supreme authority of the Commission. The whole of the trade union movement is on a national basis, and it would be perfectly futile to try to change that.
There is one matter which I think is worth remembering. I served for, I think, twenty years on the Scottish Committee of the London, Midland and Scottish Railway. At Euston we kept complete financial control; it was essential that we should do so—and the Scottish Committee is the nearest thing that I know to the form that these Area Boards are going to take. When one sat on that Committee, it was quite clear that there were a large number of things which the Committee could do with greater efficiency, especially, as the noble Lord, Lord Lucas of Chilworth, mentioned, on the commercial side, because on that Committee there were people who represented all the different facets of trade and industry in Scotland, which made the whole difference. Moreover, Parliament in London sometimes forgets that Scotland has its own legal forms. Therefore, it is most essential that legal matters—the transfer of property, the sale of land and the rest of it, should be administered not from London but from Glasgow. The

1129
same was true of the similar Committee, covering the east coast, of the London and North Eastern Railway. Therefore, I think that it is worth while that your Lordships should pay some attention to the history of these two Committees, in regard to how they were able to work and what good they did, while the control of the main line concerned was kept at the headquarters.
Another point that I think is of the utmost importance in the White Paper is mentioned not once but several times—namely, that if you attempt to put the railway industry in a straitjacket and submit to Parliament a scheme which is rigid, you are bound to get inefficiency. Therefore, the whole idea behind this Scheme—and this is why I can give it full support—is that it should be flexible. The worst part of this Scheme is that it has to come to Parliament at all. The right thing is for the railways to be left alone by politicians, and to be allowed to get on with the business. Ever since I have had anything to do with the railways, the amount of trouble that has been caused, and the money that has been wasted, through interference by Parliament is incredible. It seems to me that one of the great hopes that we have in this Scheme is, as the Transport Commission have said, rather pathetically, the hope that, after a very short time, public confidence in them will be such that it will be unnecessary perpetually to come to Parliament for alterations and changes. Believe me, my Lords, there is nothing that the railways want more than peace from politicians. All the time the trouble has been that, just when the system was beginning to work successfully, there was a change of Government and of ideas. This has not helped the economy of the country. I hope that, once this Scheme is passed, there will be peace.
The other matter that I should like to mention is the size of the Regions. It is mentioned in the White Paper that some of the Regions are too big. I think that they probably are. But you have to remember this. I think I am the only person still alive in either House who took part in the introduction of the 1921 Act. I was then on the board of a railway, and in the 1918 Parliament we had the first essay to reduce twenty-eight companies down to the four groups The debates then were supposed to end it all.
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As we all know, there were subsequent changes, but the size of the Regions dates right back to the 1921 Act. That was largely fortuitous, and it is therefore most important that this flexibility for which the Commission ask should be permitted, not to alter the six Regions but, within some of the Regions, to sub-divide them in some way, so that they can achieve greater contact and closer personal influence.
There are three matters which it is the business of Parliament to consider. They are mentioned in the sixth policy report of the Transport Commission which was published a few days ago. If noble Lords will read Part I, paragraph 63, they will see that one of the great difficulties now confronting the Transport Commission in its work is in regard to charges and licences. It is a matter which can be settled only by Parliament. It is a curious fact that there are two authorities, with no liaison whatever between them, charged with comparable duties. It is of the greatest importance that that position should be reviewed. I hope that when the Area Boards are established they will be able to go in greater detail into the different areas and report back to the Transport Commission. There will then, inevitably, have to be, before long, a Parliamentary Bill. That matter should be one of the subjects dealt with, for it will save an enormous amount of time and trouble if there can be more of a link between the licensing authority and the charging authority. Since 1921 that difficulty has persisted, and it has never been tackled.
I remember very well that in about 1920 the railways tried very hard to get rid of the canals and were prevented from doing so by Parliament, for purely sentimental reasons. If noble Lords will look at the Report of the Transport Commission to which I have referred they will find there a very interesting paragraph, number 375, from which it will be seen that the large deficit of the canals is due entirely to the fact that the Transport Commission have been forced to continue trying to operate 800 miles of canals which have never paid. Were those 800 miles taken away, the remaining 1,200 miles or so would then be on a paying basis. Surely it would be a very good thing to do that. Having set up the Transport Commission, and having

1131
now established these Area Authorities, it is the business of Parliament to try to put things straight and to remove anomalies, which have grown up over a very long time, wherever they exist.
On paragraph 299 I am still unrepentant. I believe that the method of the 1953 Act was not in the best interests of transport. I have said so and still feel so but it is now the law of the land, and we have loyally to carry it out and make the best of things. It is of great importance to look back in retrospect, as the Transport Commission comment. It should be recorded, for the sake of the men who operated, under most difficult conditions, the last period of working of the British Road Services, that they had traffic receipts of over £8 million, a very high figure, and a very steep curve also. From personal experience I know how hard the men who were in charge of those services worked. They were being "sniped" at all the time by politicians, but they were serving the country; and so well were they organised that the last Report—the final one, for no longer will It be under the Transport Commission—tells us that the good work done by those men brought in receipts of over £8 million. Just think of the other side of the picture! You have a large number of vehicles which will never operate again. The loss of those vehicles has to be borne by the taxpayer.
Those two points are worth recording, for I think it has not been fully recognised what a tremendous burden was thrown on the Commission, and what a dispiriting thing it is for men who have built up a service—from those in charge, in a supervisory capacity, down to the last newly-joined man—to find that they are operating, a dying concern. Yet their feelings were such that they produced that admirable figure of receipts. They should get full credit for it.
Many changes are coming to the railways probably, in relation to the history of transport in this country, in a very short time. I look forward to the day when railways will be operated more and more electrically and less and less by steam. I believe (though I know that the noble Viscount, Lord Falmouth, does not agree with me) that the atomic energy investigations justify the hope that by
1132
1965 the first reactor station will be working. Let us hope that electricity so generated will be passed to the railways, because if we continue to increase the amount of traffic on the roads without spending money on road improvement, then, if people want to go from place A to place B, they will be unable to go by road and will have to go by railway, for that will be the only practicable way to get there. I look forward to a time of great prosperity for the railways. They have a great future before them by using the new means of locomotion and so keeping themselves alive. I end, therefore, by saying: leave the railways and the transport of the country to run things as they believe best, without too much interference by Parliament.
4.19 p.m.
LORD BALFOUR OF INCHRYE: My Lords, we must all be grateful to the noble Viscount for his presentation of this case, and particularly because it gives us in this House an opportunity of looking at the Scheme and putting forward criticisms or voicing the misgivings which some of us may hold and which will, no doubt, be allayed by the Minister who is to reply, misgivings which may well result from individual misunderstandings in one's particular case. The Commission are obviously sincere in their wish to decentralise, but they are equally sincere and equally emphatic in their determination to keep within their hands all the powers which they consider necessary for the discharge of their functions. It seems to me that those two requirements are slightly in conflict, and that in order to reconcile them the Commission have evolved this Area Board scheme. But the Commission have retained to themselves not only policy but also certain selected executive functions. They have retained those at the centre, and they are giving, as it were, restricted responsibility to those out on the rim of the wheel.
My misgivings about this Scheme can be summarised by saying that it appears to centralise the substance of power and to decentralise the shadow of responsibility. The noble Viscount, Lord Swinton, referred to paragraph 23 of the Explanatory Statement, and particularly to the passage which reads:
"… the Commission have reserved to themselves only the minimum powers necessary to enable them to ensure fulfilment of

1133
their responsibilities, and to effect by measures of co-ordinisation and standardisation maximum economy in the utilisation of the resources of the railways."
Then in paragraph 26 we find:
"… the authority of the Commission in the scheme of organisation should be absolute. The scheme should admit of no doubt on this point. The function of the Commission is primarily to determine policy, but they must have the authority to ensure that their decisions are carried out."
It seems to me that if you are going to have the power to ensure that your policy is carried out, in the final event you have executive responsibility. If one looks for a moment at the three elements in organisation—policy, finance and administration—in relation to this Scheme, policy clearly remains the province of the Commission. The Commission also reserve to themselves certain executive functions which must further circumscribe any policy devolution intended to areas. Design, manufacture, standards of permanent way, labour—these are functions which are retained at the centre, and each one of those retentions must restrict liberty of action in area policy.
Right through the White Paper it is clear that the Area Boards must work—and quite rightly—to policy laid down directly or indirectly by the Commission. If an Area Board departed from the policy laid down by the Commission, it seems to me that the chief regional manager would have an immediate duly to the Commission to report the deviation. It would be for him to see that his Area Board did not go outside the limits which the Commission had allowed. The chief area manager in these schemes seems to me to be in a difficult position. He is appointed by the Commission; he is dismissed by the Commission, I am not clear how in the chain of command this works out. I hope that the noble Earl the Paymaster General will be able to clear up the point as to whether the chief regional manager is in fact the servant of the Area Board or the servant of the Commission but working under the Area Board.
VISCOUNT SWINTON: If there is a difference of opinion between an Area Board and the Commission—supposing, for example, it was said that the Area Board was acting contrary to the policy laid down by the Commission—would not the Commission deal with that as
1134
between the Commission and the Area Board through the member of the Area Board who was himself a member of the Commission, and not the regional manager?
LORD BALFOUR OF INCHRYE: I think the noble Viscount has reassured me on that point. If it works out that way, that will be all right. This shows the value of a debate like this in which we can get these matters made clear. As regards the second element which I have mentioned—that of finance—the Area Boards do not control their revenues. They can spend only moneys sanctioned by the Commission. For reasons which we understand, they win not see financial results in terms of profit and loss of their own Areas. The Areas prepare spending budgets, but these have to be sanctioned at the centre and the amount authorised to be spent is according to that central sanction. The White Paper says that £446 million is to be spent on the railways, of which about £445 million is going to be spent in the Areas. I think that that is, if I may say so, a specious example to use in support of the argument that there is decentralisation of financial control. In fact, all of the £445 million is spent in accordance with a budget submitted to and authorised by those who control finance at the centre. The real paymasters are at the centre, and the Areas are in fact the agents of the central paymasters.
As regards administration, the Area Boards are going to consist of part-time members with a chief regional manager who is their chief executive servant. All staff appointments above a certain level are going to be made by the Commission, even though those staff appointments are in respect of servants to be employed under the Area Board. As Lord Lucas of Chilworth has said, labour relations, conditions and rates must be settled nationally at the centre. It is difficult for me to understand how Areas can exercise an essential right—to use an ordinary industrial term—of "hiring and firing" within their Areas if, in fact, any dispute would at once move from the Area up to the centre and any discharge of labour which was contested on behalf of labour by the unions would at once be short-circuited and would have to be dealt with at Commission level. So I think that as regards administration and staff matters, both senior and labour,

1135
Areas will really have very little freedom of action. My doubt is whether men of first-class ability in industry are going to agree to serve for long with such restrictions as regards policy, finance and administration. Those are just some misgivings of mine.
The alternatives to the Scheme put forward are two. There could be some form of federal railway body—that is, Areas with a central federation—such as has been suggested by the Associated British Chambers of Commerce, but I am not advocating that in any way. The other way would be to have frank admission of control at the centre, with administrative control decentralised to the chief regional managers, and not to have Area Boards but to have advisory committees without executive functions, composed of prominent and suitable persons who would be able to help in many of the matters which these Area Boards are going to help in. However, the Commission have chosen the centre path. One can only say "Good luck" to the Commission for having done so. I think that this Scheme starts with so much in its favour that any criticisms which I have made are outweighed by this advantage: that this is a Scheme which the Commission believe in, which their chief people believe in, and which they feel can work. That seems to me far more important than any criticisms which I have been bold enough to put forward. Such criticisms as I have been bold enough to offer are based on doubts and misgivings which I hope will prove to be thoroughly unfounded. I repeat that it is debates such as these that give us the opportunity of putting forward criticisms and misgivings. The fact that I have tried to express misgivings does not in any way belittle the support I give to the Scheme and the good wishes which I, like other noble Lords, extend to it.
4.30 p.m.
LORD HURCOMB: My Lords, May I offer some observations for your Lordships' consideration? If, in speaking upon this Scheme and the accompanying White Paper, I find it difficult to condense what I have to say into a few sentences, I must crave your Lordships' indulgence. The Scheme and the White Paper deal with matters of which I have had some experience and in respect of which, until very recently, I had a con-
1136
siderable degree of responsibility. The White Paper is full of thoughts and ideas which I have proposed, and language which I have used over and over again in the last four or five years; and on those grounds alone I should find it very difficult to express any strong dissent from its conclusions. However, I should like to say that I am satisfied that, for the purposes of the 1947 Act, the appointment of a separate Railway Executive under a Commission responsible for policy was correct. Without such a device, the progress of the railways could not, and certainly would not, have made the rapid and extensive successful achievement that it did. The Railway Executive very successfully carried through what was inherently not an easy operation, and I think that every individual member of the Executive is entitled to have that fact recognised; their services should not be forgotten.
It may be asked: if the set-up worked so well in its initial stages, why was it necessary to alter it? The authors of the Act (and it is only fair to them to say so) foresaw the likelihood of a need for a change; and not only foresaw but provided for it. Of course, the Railway Executive could have been abolished without any further legislation at all. Everyone now takes the view that the decision, which was criticised at the time, to put the appointment of the Commission's agents into the hands of the Minister was not one which was going to be the best, at any rate for the future. Looking at the matter, as I always did, from outside, and with no kind of political feelings, it seemed to me natural, and indeed proper, that when a new and vast organisation of a novel character was being set up, the Government of the day should wish to satisfy themselves that the principal people who were carrying it out were rightly chosen. Of course, that could be disputed, but what I think cannot really be disputed, and is no longer disputed in any quarter, is that reappointments and replacements of the Commission's agents, as they fell to be made in subsequent years, should be left to the Commission. I mention that point only because the somewhat subtle consequences of the other policy have obviously burned deep into the minds of the Commission and have a very direct bearing on a good deal of what is said in this White Paper.

1137
Why was it that people's minds moved towards the view that the Railway Executive should be abolished (that is a rather harsh word, but it is the draftsman's choice) and replaced by some other type of organisation? I think there were two main tendencies. First of all, there was the argument about decentralisation which, in my humble opinion, was greatly exaggerated outside, because there never was a patient or thorough discussion on the extent to which decentralisation had gone. All the mutterings of people who never liked unification were listened to, but there was not a really full and patient examination of the extent to which decentralisation had been carried, even from the first. I agree that there was, and is, scope for further devolution, not only to the chief officers of the Regions but also down the line below them. It is a curious thing that the people who are vociferous in demanding delegation to themselves are often the people most reluctant to trust their subordinates with any real power. That was one stream of thought.
The second tendency, about which, obviously, for some years nothing very much was said in public, was the feeling of the Commission itself that, largely as the result of the work of the Executive, a stage had been reached where it was unnecessary to interpose between them and the Regions a separate statutory managerial body. It was those two trends of thought—the conviction that there was scope for more devolution and the feeling that the Commission itself should be able to come closer to the people in the regions—that brought my colleagues and myself, long before there was a change of Government, to the view that the original type of organisation needed overhaul and change.
I do not want to appear critical of the past, and I do not agree with all that is said about the remoteness of control, so far as the great bulk of the stall are concerned; but it is significant that during the whole of the six years I was Chairman of the Commission I never saw a report or a recommendation from a regional officer in his own language and in the form in which he originally made it. It can very well be argued that that was quite right, but it always struck me as a little odd. I am throwing no stones, but I think that everyone, fortunately, has
1138
now come to the conclusion that what is being done is at least not very much overdue. In coming to the conclusion that the Railway Executive might be replaced, there is one point which has been emphasised by several noble Lords this afternoon—namely, that it is essential to maintain at headquarters a strong control, fortified by personnel of the highest quality and equal in status to the top people in the regions, to deal with the major issues of policy, whether financial, technical, development or even commercial policy and of course, national staff relations. I will come back to that point, but subject to what I have said, I should be glad to see the Scheme proposed in the White Paper tried.
May I say one word on areas? Unfortunately, my recollection, like that of my noble friend Lord Glyn, goes back to 1921 and to the Geddes legislation of that year. I well remember the arguments that were made for the grouping which was then adopted, in particular, the very interesting argument about why there was not a Scottish Region. It was because Scotland would not have it. They meant to be tacked on to what were then thought to be the richer companies south of the Border. As to the areas, your Lordships will remember that one of the first decisions of the Commission, made within a few weeks of its formation, was to create a separate region for Scotland. No one will challenge that that decision led to great economies, and, if I may presume to say so as a mere Englishman, I think it did something to recognise the legitimate national aspirations of Scotland and also the technical facts of the situation, because there is not only traffic passing north and south, but also a vast amount of business which is purely local and Scottish.
Another thing we did was to re-create the railway centre at York. I hope that that work will not be undone without very careful consideration. The Scheme provides that there must not be fewer than five Areas, which seems to contemplate that one Region might be squeezed out; and no doubt that would be the smallest, which would be York. In my view, there are very good reasons why that should not be done. York is historically an important railway centre, having a great tradition. The industry and trade of the North-East coast and all

1139
the great industries of Yorkshire are entitled, it seems to me, to have some manager to whom they can resort, without having to come up to King's Cross every time they want to see the top. Apart from that, the Commission have pointed out, the boundaries of the Areas are not ideally drawn. They hardly can be, because traffic, unfortunately, will not flow ideally, from the point of view of either geography or administrative boundaries such as counties and divisions of that sort. I should not waste too much time in trying to get them ideally right, because every change means substantial other changes from the point of view of the staff: a man may have to go out of one pension fund into another, or be attached to one depôt rather than another. Inevitably, the railway staff have had enough of that sort of thing during the last six years.
What ought to take the place of the Railway Executive? I think the imagination of a great many people rather boggled at devolving the whole gamut of power upon a single regional manager. I do not think the suggestion of federalised railways is a good one; in fact, I think it would be almost the worst setup one could devise. If I do not trouble your Lordships too much with historical matters, perhaps I may say that I approached this problem from the angle of Scotland, which always seemed to me a special case. I went to Scotland some eighteen months ago and put before a great many important Scottish bodies a plan which is, in substance, the plan in this White Paper; and I found that it won general acceptance. So far as Scotland is concerned, it seems to me to be undoubtedly right. It would be difficult to run two systems, and, though the circumstances of all the English Regions are not the same as those of Scotland, where the case for a separate board is very much stronger, the Commission have come down on the side of boards. They have found that that idea is generally acceptable; it is agreeable to the Minister, and I am not going to dissent from it. I expect that my own mind had, in fact, moved to the conclusion that they were inevitable. I suppose they are to be called "boards." The White Paper says they may be called whatever the Commission like, and I suspect that in the course of the next few years they will
1140
be called quite a number of names. But everybody is speaking of them as boards, so perhaps boards they had better be.
The status of these boards may not be easy to define. The Commission have made it clear that their appointment must rest with the Commission, and I cannot believe that that can be challenged. They are to be kept on a rather short string of a two-year appointment, and they are to be part-time. They will be more than advisory committees to the general manager, because they also have to supervise him: in the language of the White Paper, they have to see that he "carries out the policy of the Commission." On the other hand, they will not be in the same position as an ordinary commercial board, responsible to shareholders; nor can they be.
I was interested to hear the noble Lord, Lord Glyn, refer to the Scottish boards of the old companies, over which the main boards kept so tight a hand. In the case of the London, Midland and Scottish board there were, I think, five members, who were also members of the main board, and six Scottish shareholders. But to make quite sure that the balance lay on the right side of the Border the chairman and one of the vice presidents of the company used to take the precaution of attending meetings. In the case of the North-Eastern, if my recollection is right—the noble Lord, Lord Balfour of Burleigh, will correct me if I am wrong—all five of the members of the local board were also members of the main board; and there again the chairman took the precaution of attending meetings. Their powers were closely restricted. In one case, I believe that they could sanction expenditure up to £1,000, and approve appointments up to £1,000. In the other case, the North-Eastern, whose finances were not perhaps so affluent, the figure was limited to £500 as regards appointments, and £1,000 as regards expenditure, provided that it was not of a capital nature. Though those powers were restricted, I agree with what the noble Lord, Lord Glyn said as to the utility of such a board.
I believe that the defence of the Commission for the local boards is that they will bring local knowledge to bear; they will be able to make some suggestions by way of initiative, as well as by way of criticism, and in that way will perform

1141
a most valuable function. As has been said by the noble Lord who spoke last, there is no doubt some questioning as to whether men will want to give their time to a board of that kind. They have got to know their place. The Commission use slightly more tactful language than that, and say that "they must understand their rôle." But that is what it comes to, and that is very necessary. It will want a little trial and error to see just what is the right kind of relationship to establish.
The Scheme is criticised because it is vague, but, of course, it cannot be as flexible as is desirable without a certain amount of vagueness. There is a valuable point, to which the noble Viscount, Lord Swinton, drew attention, in the interlock between the local boards and the Commission. I should like to ask whether it is possible to say a little more definitely how that will work. I suggest that there are two ways of looking at it. I was attracted by the idea that the chairman of the board might be ex officio, as it were, a part-time member of the Commission. Alternatively, there is the view that a member of the Commission can sit in with an Area board as a sort of visitor and liaison officer, to hear their troubles and explain the point of view of the Commission to the Area board. The language may be wide enough to allow it to work both ways.
There is a difference. Perhaps I may put it this way: in choosing the man, you will first of all say, "Who is the most suitable man to be chairman of the local board?"; and having done that, you will say that he can sit as a part-time member of the Commission, or that four out of six of them can sit at any one time. The other course, as I say, is to take someone who has been appointed a whole-time member of the Commission and say that he shall be a sort of visiting member from headquarters to the local and subsidiary boards. I hope that the wording of the Scheme is wide enough to permit the consideration and exploration of both ideas. As regards Scotland, surely it would be right that one of the two Scottish members of the Commission should be the chairman of the Scottish board. It seems to me that someone who was both chairman of the board and a member of the Commission would be in a strong position to cure any of these difficulties that have been suggested, if
1142
they should arise, and to ensure the avoidance of possible friction.
That is all I want to say about the powers and position of the boards, but there are one or two things which are not easy to follow. There is some rather curious language as to the function of the boards in relation to staff. It is said that they are to encourage loyalty among the staff. I presume that means loyalty to the Commission, but it is not very clear. Then it is thought that they would improve personal contact with the staff. I think I can guess what is in mind there. It is desirable that the boards, as well as the general manager, should have some knowledge of the personnel upon whom they rely when questions of promotion and so on come up. They should not have merely a few names before them which are names and nothing more. They ought to know something of the personalities of the people whose promotion they are asked to approve or recommend to the Commission. That may be what is in mind, but it is one of the matters which conceivably, as it seemed to me on reading the Scheme, might put a general manager in some difficulty if the direct contact of the boards with the staff were carried too far.
A much bigger point than that is the way in which the regional manager and his chief officers are to work with the headquarters staff. On the whole, I would agree with the present chairman of the Commission in what is said in paragraph 6 (d) of the Minister's Paper. If I may say so without presumption, it seems to me that the Minister did a great service to the understanding of the Scheme when he secured those further elucidations of the Commission's Paper which are contained in paragraph 6 of his own Memorandum. Formally, of course, the chain of responsibility must be from the British Transport Commission to the Area boards, and through them to the chief regional manager. But business cannot really be conducted in that way. It is impossible to have everything going down from the secretary or chairman of the Commission to the part-time chairman of the board or some secretary there, and through him to the general manager. There has to be complete viability of ideas; and while I welcome the recognition of the chief regional officer's responsibilities in his region, a corollary of that is that he also recognises

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the position, not only of the Commission but of the Commission's chief officers—functional officers if you like—and accepts their advice and their decisions without challenging them, except on some major issue of principle.
It seems to me that paragraph 14 of the White Paper tends to reduce the headquarters men to the position of mere advisers and counsellors. If that were so, it would throw an intolerable burden upon the members of the Commission itself, and in practice I think things will have to work rather differently from what, in form, may be the strict procedure. One thing to avoid is the growth of any kind of parallel organisation to the Commission's headquarters, by meetings of the chief regional officers and their advisers attempting to carry out something like a federal notion which has been suggested. That would mean overlap, the complication of administration and all sorts of difficulties. Indeed, we might soon find ourselves regretting the disappearance of the Railway Executive and functional system of supreme management. But, as I have said, I agree with the chairman of the Commission that, by good sense and experience, and by a very careful selection and, if necessary, weeding out of personnel, a proper technique will emerge which will combine control of policy and major matters of nation-wide application at headquarters with a maximum of devolution in operation and management to the regions.
There are many other points to which I should have liked to refer had time permitted. I shall not follow my noble friend Lord Glyn in the latter part of his speech, but I venture to think that while a good point can be made about having the control of bus fares and railway fares in the same machinery, it is a very theoretical subject which can well be left for a long time. I was glad to hear that the noble Viscount, Lord Swinton, recognised that the decision to separate the docks from the railway management will not be disturbed. I had not thought that it had entered anybody's head that the control of the bus services would be transferred to the railway managements or to these Area boards of the railways, and I was glad to hear that that has not been contemplated. Catering is more difficult, and
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time does not allow me to say anything about that.
There is one further point to which I should like to refer, and that is the hint in the White Paper—and it is no more than a hint—that the manufacturing and constructional activities of the railways, to which the noble Lord, Lord Lucas of Chilworth, referred, might be hived off into a separate business and put upon a commercial basis. That is an idea which has attracted me sometimes in the past, and, when other more urgent matters are out of the way, I have no doubt that it will be looked at again. As I say, I generally accept this Scheme. One of the reasons why we may hope that the boards will work well is that the Commission are so acutely conscious of the dangers and risks they run from such a set-up. If all these dangers are clearly foreseen beforehand they can, I am sure, be avoided.
In conclusion, without entering upon a controversial matter and without taking advantage of what the noble Lord, Lord Glyn, said, I should like to pay tribute to my old colleagues in the road haulage organisation who have produced satisfactory financial and organisational results, once they were given time, in spite of all the "sniping" to which they were subjected. Without going into those matters, I am bound to say that I should not expect too much in improved financial railway results from the changes which are now being made. I hope that the Commission will not weaken the authoritative central organisation which they have inherited for dealing with matters which are essentially nationwide in their application. If they keep to that, I see no reason why things should deteriorate. But the future of the railways will not be helped, either by abandoning any part of the ground for unification which has been so hardly won, or by yielding to antiquarian hankerings after old managerial empires and after-Georgian nomenclature of regions or Victorian colour schemes. I would say to my old railway friends that they have serious competition to meet from outside. They have the inevitably constantly growing competition of the roads, to say nothing of the incipient competition of the air. Those are the challenges to them, whether management or men, whether on the North-East coast, in Cornwall or in Kent.

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These are challenges to railwaymen as a body, and it is to answer and meet these challenges that they should direct their energies, rather than to attempting to maintain and intensify old rivalries between Regions which in truth are obsolete and ought to be forgotten.
5.0 p.m.
LORD MATHERS: My Lords, I am sure we are grateful to the noble Lord who has just sat down for the valuable contribution he has made to this debate. I pay tribute to him as one who did great work in the difficult days of the inauguration of the nationalised transport system in this country. I could have wished that more time had been left to him and that more of his wisdom had been used in dealing with matters at the present time. I well remember the days to which he has referred, the days of unifying the railways, long before nationalisation, back in the 1920's. Those were great days when a great railway revolution was carried out, and days which I remember, for they in considerable measure changed the course of my life. I was one who was affected by the arrangements for amalgamation into the great group system of railways. It was necessary for me, at that time a servant of the railway company, to move because of what was done in the amalgamation; and that change, as I say, had a profound effect on my life.
I speak in your Lordships' House in the presence of those who have in the past had a great deal to do with railway administration. The noble Lord, Lord Glyn, from the directors' side, spoke in his usually forthright and uncompromising way, giving voice to what his views are. I have happy recollections of working with him and not against him—although I was working from an entirely different point of view, so far as the railways were concerned—when matters relating to railways came before the other House, and there was a clash of opinion between the trade unions and the management of the railways on grounds of principle. I am glad to pay tribute to the noble Lord, Lord Glyn, for the way in which he exerted himself to see that justice was done to the railway employees on those occasions.
In approaching the consideration of this White Paper, I have great reservations, and I still have apprehensions
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about the idea of establishing Area Boards. It seemed to me—and I am not quite convinced yet about them—that they are to a certain extent unnecessary and wasteful financially, as to my mind they will inevitably involve further administrative and supervisory machinery which requires to be paid for. My idea would have been to let the Transport Commission give adequate policy guidance to existing regional managers and leave them to work out their plans in consultation with each other and possibly in consultation with advisory bodies representing the different interests for which the railways cater. These executives are competent people and I think could be trusted to make the best of existing circumstances until the time came when, having regard to the political complexion of things at the present time, arrangements could be made under a Labour Government for a fully co-ordinated system of all forms of transport, with the public interest and service as its paramount objective. That, it seems to me, is the only sane policy to pursue in a country such as ours.
I regret very much that the tendency of Her Majesty's Government of the present clay has been to go against that kind of principle. There is in the White Paper a kind of suggestion that, while not going to the length of fostering competition between different Areas, desires to compare the results of the working in the different Regions and, to a certain extent, to put one against the other. That, it seems to me, would be a wrong principle to pursue. Tile noble Lord, Lord Hurcomb, has made reference several times to the position of Scotland. Scotland would come off badly in a comparison of that kind, and for perfectly understandable reasons. To put Scotland on her own in respect of results, particularly financial results, from a railway point of view would be quite unfair. There are many miles of railway track in Scotland that could not be expected in ordinary circumstances to pay from a financial point of view, but they are necessary all the same—necessary from, if you will, a strategic point of view.
Think of the line from the middle of Perthshire up to Thurso and Wick. That is not a line that is likely to pay its own way. The line also from Dingwall to the Kyle of Lochalsh, or even the West Highland Railway and especially

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the Mallaig extension, are probably not railway projects that would be embarked upon at the present day if there were the need for making lines of communication. It seems to me, however, that they are essential from a strategic point of view, and this must be taken into account against the poor results that they might achieve, when making any comparison between the Scottish achievement and achievement in other Areas. I am not saying anything that is not germane to this debate, because the noble Viscount, Lord Swinton, spoke about comparison of results achieved in other Areas. One area would compare itself with another; and he talked about the results as being a yardstick of efficiency. Well, I declare that that is not the position and would not be the position in Scotland.
I well remember the amalgamation of the railways, to which the noble Lord, Lord Hurcomb, has made reference, and the determination of the Scottish public, and especially the traders and the trade unions, that Scotland should not be made a Region on its own at that time. It was right to organise the railways longitudinally, instead of seeking to make a small Region of Scotland on its own. That was the unanimous opinion at that time, and the reasons were not far to seek. There was the fear that, owing to the financial resources available, the public would be asked to pay more than was paid in other areas; that traders would be required to pay heavier rates, and that, through Scotland being treated on her own, the workers might have a poor bargain as compared with their confreres south of the Border. So the decision was taken for longitudinal grouping at that time. That seems to me to be a legitimate criticism of any idea of comparing Area results.
As I say, I have taken a line in my own mind against the idea of the Area boards, but I must say that the kind of contribution that has been made by the noble Lord, Lord Hurcomb, makes me wonder whether the fact that I have been out of the railway service for a number of years now has caused me not to realise all that there is involved, in the way that great authorities do. I did say that I thought that an advisory committee, acting in the public interest and representing different aspects of national life, might be a good enough way in which to arm
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the Commission with information about how the policy that they were carrying on might be brought into effect. There are consultative committees of the kind doing valuable work in other directions. There seems to me to be no reason whatever why they should not be able to act in the same way in respect of railways, although the overriding point that I want to make is that even railways should not stand upon their own; there should be a co-ordinated transport system in this country of all forms of transport.
There is the specific suggestion made that hotels and train and station catering might be taken out of the ambit of railway management. I hope that it will not be because I am becoming antiquarian—the word used by the noble Lord, Lord Hurcomb—that I think differently in this regard. The railway hotels at one time set a great standard and were looked upon as the most efficient hotels in the country. Some of them to-day, to my knowledge, stand comparison with any that we have existing in this country, although I am perfectly willing to concede to the noble Lord, Lord Lucas of Chilworth, that the railway hotels of the present day are more frequented by those who do not travel by railway but who are able to travel because they own big motor cars and are getting about in that way from one part of the country to another. As a matter of fact, some of the charges in railway hotels make it necessary for someone to be able at least to afford a motor car before he thinks of going to stay in a railway hotel.
I would ask that this particular question of taking the hotels out of the railway ambit should be very carefully considered before such action is taken. They do belong to the railways now; they might, under nationalisation, be used as a means of demonstrating the best hotel-keeping in this country, something that I think we have to learn, for we are not quite up to the standard of some other countries and therefore do not attract, to the extent that we might, the tourist trade that is so lucrative to some countries. But that, of course, is something for the days that lie ahead.
Mention of tourists, prompts me to say that it would be a fine thing if we could arrange things in this country so that people coming here from abroad could know, from the day they stepped ashore,

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that everything in the way of their transport from one place to another, and their living accommodation, could be arranged through one agency; and if that were the agency of British Railways, it could be made the best that could possibly be achieved.
I have indicated that I have doubts about this Scheme, but it would not take long to put this into operation. There would be no very lengthy legislative process to be gone through in order to make the changes that are indicated in the White Paper. If that is done, we shall be presented with the fact of the Area boards being in operation and then, when this Government is replaced by a better one, it will be necessary for that Government to consider the position and to make the necessary alterations, on the basis of what has been done in the way of the Area boards, to make the best of the set-up that can be made at that time.
I have a question to ask. What is to be the actual fate of the docks, canals, road haulage and passenger services that still remain with the Commission? I hope that the Government intentions in that regard will be made quite clear to us during the course of this debate. I look upon the arrangements set out in the Scheme in the White Paper as being purely tentative. I hope that everything connected with this Scheme will still be looked at with an open mind. And I hope that, before we are asked to authorise their actions by some kind of legislative instrument, the Government, so far as they can, so far as their wisdom will take them, will see that great care is taken that any changes they make are on the right lines. I am glad to have had the opportunity of taking part in this debate. Whilst I still have a number of misgivings with regard to the Scheme propounded in the White Paper, I hope that the good sense of this House and of another place will be applied to seeing that whatever the Government propose will be scrutinised carefully, in order to make the best of the position, and to see that what is achieved is in the best interests of the public of this country.
5.21 p.m.
VISCOUNT FALMOUTH: My Lords, many of your Lordships who took part in the debate on the introduction of the Bill, now the Act of 1953, some twelve
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months ago have looked forward very much to the long-promised White Paper which we have before us to-day. So many of the points have already been discussed by previous speakers that I do not want to take up much of your Lordships' time. The Report, I think, may be criticised in certain directions in that it is rather nebulous. In paragraph 20 we see the emphasis on "the necessity for allowing as much flexibility as possible" within the framework of the Scheme. That, I think, is a sentence which must be very welcome. Throughout the Report we must look upon flexibility as being the key word in some paragraphs which are not easy to follow. For example, I find considerable difficulty, as I understand do other noble Lords, by reason of seeing the words "region," "area," and again, "geographical area." It is very difficult to know what is the difference between a "geographical area'' and an "area." Perhaps, when he comes to reply, the noble Earl will explain that. I think one may be right in saying that into the word "region" one reads the word "area," or vice versa. I am not quite clear on that, but certainly these two words seem to interchange in many instances throughout the Paper. This makes it rather confusing.
Paragraph 22 deals with the question of decentralisation. I think we must all welcome the view of the Transport Commission that a great deal of decentralisation is to be encouraged. For my own part, I am a part-time member of one of these national boards, and as a result one comes to realise how important decentralisation is. One can encourage the local managers to take a real interest in their own activities. This applies not only to the local manager but also to his technical staff. I am quite certain that in order to get the best out of one of these undertakings the centre must ride the districts with as light a rein as possible; in that way the people concerned will have real enthusiasm and interest in the working of their undertaking.
The next point I wish to raise is in connection with paragraph 22. There, there is this difficult question of interpenetration—when railway lines belonging to different regions penetrate one another. That presents a serious problem, and I presume that it is one for which plans for decentralisation are being

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worked out. Later on, when we get the detailed plan, we shall see exactly what is proposed. Another matter which is most important and has been raised before is the question of the Area boards. I see that it is proposed that the Area boards shall consist of seven members. I should have thought, from my own experience, that seven persons was too small a number. After all, there is influenza, and there are other horrible complaints, and often one finds a certain number of members of a board have to be absent for various reasons. I should have thought that ten would have been a more suitable number. No doubt, that is a matter which will receive careful consideration.
I have wondered whether it would not be better for the chairman of the board to be the chief regional officer. The chairman of the electricity area board is really the chief executive officer of the board. That is an arrangement that works very well. It enables the chairman and the board to keep closely in touch with the central authority, especially as this gentleman represents them on various committees at headquarters. I feel that that is a possibility which might be considered, as nothing is clearly stated in this particular paragraph. Another point that I wish to raise is that of the matter of esprit de corps. When you have a rambling organisation such as a railway company or a railway authority of this kind, surely the encouragement of esprit de corps is one of the most essential features of happy and efficient working. I am very pleased to see that this phrase is used in two places on page 12.
There is, I think, a point which has been overlooked, and that is the question of recruiting staff who will eventually be taken into the higher grades in the railway service. We have got to induce young men of great ability to enter a service of this kind. We have got to persuade them that this is a service of which, it is really worth becoming a member. The noble Lord, Lord Lucas of Chilworth, has mentioned something about salaries. But salaries are not the only factor concerned in this matter. Very often, technical people look first to the job and then to the salary. We have got to encourage in every possible way the young idea that these great services are worth entering. There is a tendency now
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for bright young men not to enter nationalised services because they feel that to do so would lead to a dead end. I am confident that by encouraging this spirit it will increase the interest of this type of young man, and induce him to enter this most important service.
In paragraph 34 of the White Paper there is a statement about refreshment rooms and catering services on trains. It is rather disappointing to see in this paragraph that the chief regional manager has the right to ask the catering services officer to effect improvements. Surely, the chief regional manager should be in a position to tell the chief catering services officer what he has to do and not just to ask him. This is quite an important matter in connection with the railways. Here there appears to be an unfortunate diarchy which I would submit should receive further consideration.
Another point that I raised during the passage of the Bill through your Lordships' House was in connection with the difficult and important question of each Area being able to produce a profit and loss account. I am sorry to see that this is one of the few things about which the Report comes down in a positive or, more correctly, a negative way. The Report says there is no possibility of constructing a profit and loss account. I am quite sure that it is an immense advantage to those interested—the Area boards, the Area managers and the staff generally—to see how their business is doing. I know of the arguments against this. It is said that it would mean restarting the railway clearing house. I am the last person to want to spend a large sum collecting a lot of unnecessary statistics, but there is a very great advantage here. After all, things are moving on. The other day I was looking at an electrical computor which was solving 25 linear equations in an incredibly short time. Clerks in a clearing-house will not want to waste time solving linear equations; but there is a moving forward in the world of complicated analysing and calculating machines. So I think it is a mistake to say, at this juncture, that this would be impossible. It should be carefully reconsidered, to see whether some modification of the existing arrangement could not be brought about by the institution of this type of control.

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The noble Lord, Lord Mathers, raised the question of the position of Scotland if this arrangement were brought into operation. The noble Lord will no doubt have read with care the Report of the British Transport Commission. There he will see, time and time again, the three columns dealing with Scotland. The factors of which he has spoken, the sparsity of traffic and so on in Scotland, will be reflected in the columns of the Report where such headings as freight train traffic and so on appear. It will be found that throughout this Report Scotland is specially mentioned. It is not in any way derogatory to Scotland, in view of its difficult geographical conditions, that various figures concerning train operation are not as satisfactory as in England. We know that the, population is scarce and tracks are very long. It does not seem to me derogatory to Scotland to ask for receipts to be broken down into different areas, instead of lumping them together, as they are on page 184 of this Report. I hope that that proposal will be reconsidered.
The noble Lord, Lord Lucas of Chilworth, raised a question on the main mechanical engineering workshops: he thought they should be cut off from the railway organisation and put under a separate administration. These great shops are not necessarily manufacturing now material, they are largely devoted to repair and maintenance. There is a great deal to be said against looking upon them as manufacturing shops when 80 per cent. of their time is devoted to, and intimately connected with, the operation of an individual railway system. The noble Lord, Lord Glyn, spoke of my pessimistic view of the future of atomic energy in driving railway systems. That is a little outside the scope of this particular White Paper but I am still rather pessimistic. I believe that it will be a very long time before the last steam locomotive goes to South Kensington Museum as its final Valhalla.
I look upon this White Paper as giving the railway systems what we have so long looked for—the green light. For 100 years, up to the beginning of the First World War, British railways were famous throughout the world for their enterprise and progressive spirit. Then we had the war, after which road traffic became a
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very serious competitor. The railways fought back very hard; and until just before the Second World War their position was not too bad, and they were giving very good service indeed. After the last war, unfortunately, as many of us think, noble Lords opposite and their friends mixed up ideology with technology. Those two things have never worked well together, and as a result we have had a very unsatisfactory position for the railways over the last four or five years. Now we look forward to this as the green light, the signal which will enable British railways once again to obtain the position they so long enjoyed of being the leading railway system of the world.
5.36 p.m.
LORD BURDEN: My Lords, I hope it will not be considered presumptuous on the part of one who spent forty-five years of his working life, first in the service of the old Midland Company and then with the London, Midland and Scottish Railway, to say a few words on his subject, and particularly to follow the noble Viscount, Lord Falmouth, who, I believe, at one time occupied the high position of a director of the Great Western Railway. The noble Viscount was, in any case, connected in many ways with the old Great Western Railway, a railway which in my working life was always described, in a claim sedulously pumped out from headquarters, as the premier line in Great Britain, until they really believed it themselves.
A NOBLE LORD: And so they were.
LORD BURDEN: The noble Viscount referred to the difficulty of obtaining young men in the railway service and in nationalised industries to-day. I agree it is going back a long time, but I well remember my own association in what was known as the famous (perhaps the other side would call it "infamous") purple pamphlet published in the first decade of the present century and circularised to schools and headmasters and to everybody who could be reached throughout the country, in order to stop entrants into the railway service because of the scandalously low salaries then being paid. It was very successful, too, because in a short time we were able to get a rise of two shillings per week in our salaries. That is long ago, and one need not dwell too much on those conditions.

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May I now apologise to the noble Viscount, Lord Swinton, although he is not in his place, for the fact that, owing to circumstances outside my control, I was unable to hear his opening speech. On this White Paper, my comment is that it is all quite unnecessary. Everything necessary in regard to reorganisation could be done under the 1947 Act. No one has claimed that the organisation as set up under that Act was immutable or unchangeable. In this country we progress by trial and error, and obviously in a changing world the organisation of 1947 was capable of adjustment to changing times. The Transport Commission has itself set forth, in its 1953 Report, that in 1951 it submitted proposals for reorganisation and the Minister deliberately sat on those proposals until August, 1953. It is true the proposals are now in operation, but they were deliberately held up until the Transport Act, 1953, was passed and became law.
Noble Lords will remember that on the morrow of the return of a Conservative majority to the House of Commons, one of the leaders of the road transport industry claimed that the spoils were now to go to the victors. "The spoils to the victors" was the elegant phrase he used. And those rare and refreshing fruits—if the figures that have been quoted to me are correct—will cost the country something like £20 million. I have heard the figure of £33 million mentioned as likely to be the cost to the country when the goodwill of the road transport undertakings is taken into account. I would remind your Lordships that this scheme, as outlined, is opposed by the Trades Union Congress. And while the Scheme has been produced by the British Transport Commission, it has been produced under political pressure, and the three railway trade unions are joining in the opposition to it. I would submit to your Lordships that that opposition is not lightly to be waved aside. In my judgment this scheme—the result of Tory political pressure—is simply a sprag thrown into the works by people who have no desire—and this is stating it very calmly to see national ownership and control of a major industry prove successful.
VISCOUNT SWINTON: Really I cannot allow that to pass. I presume that by "political pressure" the noble Lord means in accordance with the terms of the Act which Parliament has passed.
LORD BURDEN: That is so.
VISCOUNT SWINTON: I see. It is quite a good thing to have that clear. It is grossly untrue—and I do not mince my words—to say that we do not wish to make the railways a success. We do wish to make them a success, and the Commission wish to make them a success. I want that to go on record.
LORD BURDEN: I am very glad to hear that. But if that is so you dissemble your love very strangely by throwing this sprag into the works.
LORD HAWKE: That is in your opinion only.
LORD BURDEN: It may be my opinion, but it is also the opinion of the Trades Union Congress and of the three trade unions I have mentioned who, after all, are the people who have to deliver the goods. I would rather, with due respect to Lord Hawke, take their opinion than his upon this subject. For that matter, I would rather take their opinion than the opinion of the noble Viscount, Lord Swinton.
Now surely it is crystal clear that the British Transport Commission, responsible to Parliament, must retain control over major questions of policy, and any attempt to devolve responsibility to any other authority—call it what you will—can only lead to disaster. It is obvious from what was said in another place with regard to the functions of these Area Authorities that Her Majesty's Government—if the Minister was expressing the mind of Her Majesty's Government—have very muddled ideas about those functions. Take two instances which were given by the right honourable gentleman in another place the other evening. The first was that one of the jobs that these Area Authorities might undertake would be consideration of a drastic revision of the time-tables. Drastic revision of the time-tables! Now if there is one highly specialised task in the railway service it is the working out of time-tables. It involves weeks of careful planning and. one might almost say, a knowledge of the higher mathematics. I doubt whether

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the right honourable gentleman has ever seen a working time-table or knows what a working time-table is. Most of your Lordships will, no doubt, have some experience of working through the intricacies of a Bradshaw, and you know what that means. And these gentlemen—no doubt gentlemen of eminence—are to undertake this highly specialised job of drastic revision of the working timetables. The next instance was, perhaps, if it is possible, even more fatuous. It was that the Area Authorities—within, I presume, the maxima fixed by the appropriate authority—could consider any special rates which might be necessary to secure traffic.
THE EARL OF MORLEY: The Area Authorities are the only people who can work out a time-table. The people in the individual regions of the railways must work out time-tables; no one else can do it.
LORD BURDEN: I quite agree. But, as I have said, that is a highly specialised job and not one to be handed over to a small body of individuals appointed for anything else but railway experience. That was my point.
THE EARL OF MORLEY: You would need to give more power to the railways in the individual regions. The people who control the old Great Western and Southern Regions for instance—they must do this. No one else can.
LORD BURDEN: I am afraid the noble Earl and I are at cross purposes. I agree that within Regions that responsibility works at the present time. But this task is done in co-ordination and in conjunction with other Regions. Obviously it would not be any use for the Midland Region, say, to work out, without collaboration with the Scottish Region, its timetable for a service from London to Edinburgh. One can see that quite easily. "It is elementary, my dear Watson," as the late Sir Arthur Conan Doyle would put it. But that does not mean that this is a job for half a dozen people selected for reasons entirely different from knowledge of railway working. I trust that the noble Earl has got the point. I am sorry to be so elementary in this matter.
The next point I would make is in regard to rates. Now if there is one thing
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which is made clear in the White Paper it is that these gentlemen appointed to the Area Authorities would not interfere with day-to-day working. Imagine, for one moment, that a railway goods agent has an application for a special rate for transporting from London to Liverpool some 250 tons of traffic for which road transport is also offered. According to the right honourable gentleman in another place, that matter is to go to these four or five gentlemen, working on a part-time arrangement, for decision. I have heard many farcical pleas in connection with railway reorganisation, but never anything quite so fantastic as that. If it meant anything at all, it would mean that the whole rates sections of the different Regions would have to be under the control of these four or live gentlemen appointed to the Area Authorities. The right honourable gentleman may have a great inventive genius for coining such phrases as "Jobs for the boys" and equally misleading innuendos, but his excursions into railway organisation are somewhat unfortunate, to say the least.
There are one or two important aspects of the new Area Authorities. First of all, I submit to your Lordships that they must be appointed by the Transport Commission itself. Secondly, assuming that the right people are appointed, men of good will who are prepared to devote themselves wholeheartedly to ensuring a measure of understanding and co-operation between the railways and the traders and travelling public, then perhaps some good might result from them and the experiment might be worth while. The Area Authorities might even try to educate some of the travelling public—and I emphasise "some"—into some elementary ideas of honesty and decency. Like many of your Lordships, I have seen letters in The Times complaining that there were not adequate washing facilities in the toilets and lavatories on the trains. No one, I think, has ever said that the British Railways would find it absolutely impossible to out hand towels in the lavatories because they would be stolen. No one has yet computed the loss of British Railways from spoons and cutlery taken from the refreshment rooms. I agree that only a minority of the travelling public do this, but unfortunately there is that minority, and it hampers the working of the railways. Perhaps these new Area Authorities may help to instil

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better ideas and standards. I know, unfortunately, that some of the railway employees are not above reproach in this regard, but the railway trade unions have most strongly set their faces against things of this kind and in the main these culprits have only a short run before they are caught. Still, I agree that the losses from pilfering from the railways are very substantial, and in that direction we should like to see a substantial improvement.
Finally, may I say that I wish for the railways a period of freedom from political interference? I sincerely hope that we can look forward to that. While we reserve criticism on points of detail until the regulations are produced, when they do receive an Affirmative Resolution we should like them to have a fair trial. When I say that, I am reminded of the story of the Englishman who was lost in the wilds of Connemara. He came across an Irish peasant working and asked to be directed to Letterfrack. With the customary enthusiasm of his race, the Irishman took him up the top of a small hill and, with more eloquence than precision, pointed out over the bogs and wastes and said, "Sure, if I was going to Letterfrack, I wouldn't start from here. "In this new era some of us, if we had our own way, which we have not, would not start from here. In any case, I believe it is possible to tap the latent good will in all ranks of the railway services by approaching, them in the right way. Without at all detracting from the great service the noble Lord, Lord Hurcomb, rendered to the railways of this country in the gigantic task he undertook in 1947, let me say that the present Chairman, Sir Brian Robertson, in the brief time he has been there, has won the confidence of the railway trade unions and has shown high qualities of leadership and imaginative insight into the problems of railway organisation.
Like almost everyone who has spent his working life with the railways, railways are in my blood, and no one could be more anxious than I to see a new era of prosperity opening for the railway service. The proper functioning of the railway service in this country is the very life blood of industry. When we get these regulations, for what they are worth, out of the way, for heaven's sake let the politicians leave the railways alone and
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let the railwaymen get on with their job! I am sure they will not let the country down.
5.59 p.m.
LORD HINDLIP: My Lords, I do not intend to follow the noble Lord, Lord Burden, who has just sat down, for two reasons: the first is that he has had a great deal more experience of railways than I ever shall have, and the second is because I disagree strongly with the earlier part of his speech. As usual when one speaks rather late in a debate, it is hard to find much that is fresh to say, because nearly all the points have been covered by previous speakers. May I be so bold as to humbly welcome the White Paper? I am pleased to understand that it has been arrived at by complete agreement amongst those who produced it. If they are all in agreement, it follows automatically that the Scheme has a much better chance of working than if there were one or two dissentients. Therefore, let them have their way.
The rules of debate in your Lordships' House are rather wide, and I should like to diverge slightly from this White Paper on to another subject, although really it is a question of railway reorganisation. I noticed that in the other place mention was made of a considerable amount of capital expenditure within the next few years. During, the last few years, as many of your Lordships will know, I have spent some time on Select Committees upstairs dealing with the promotion of private legislation. In a number of Private Bills that have come before the Select Committee there has been a clause for the abatement of smoke. This has always been opposed by the railway companies and by the British Transport Commission, and there has nearly always been a report from the Ministry of Transport advising the Committee that this clause should not apply to the railways; it can apply to anybody else, but not to the railways. I do not know what the Transport Commission have in mind regarding electrification or the provision of diesel locomotives, but I hope that when they get this sum for capital expenditure they will use as much of it as they possibly can for the elimination of smoke, because there has been a great deal of evidence of bad smoke conditions produced by the railway companies. As one noble Lord has already said, we in this country are making progress in every direction, and therefore I

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do not see why the railways cannot make progress in that direction. Having said that, I will not detain your Lordships longer, other than once again to wish the British Transport Commission all the success which I feel they thoroughly deserve.
6.4 p.m.
LORD WOLVERTON: My Lords, it is getting rather late and I, too, shall be brief. I should like to congratulate the noble Viscount, Lord Swinton, on the able way in which he moved this Re-organisation Scheme to-day. To some of us who have been interested in this matter for a considerable time it is a great pleasure to have this Scheme before us, and I wish it well. On the whole, I feel that it should work much better than the previous scheme. However, like my noble friend Lord Balfour of Inchrye, I have one or two fears, and as this is the only opportunity on which this matter can be discussed, I should like to express them now.
I feel it is right chat the Commission should appoint the members of the Area boards because, when all is said and done, they have to find the finance and be responsible for their vast organisation as a whole. Having said that, I would add that I hope they will be able to give as much delegation of their powers as possible to the Area boards, because the Area boards, as has already been said by my noble relative, Lord Glyn, have a big job of work to carry out. It has also been well said by my noble friend Lord Falmouth that decentralisation of these great nationalised industries is one of the most important things. In my experience in electric supply over about a ten-year period, I have had the honour to be a director of one of the Edmondson Group of companies. We were given wide powers of delegation. The senior director of the Edmondson organisation, the chairman or managing director, sat in on the boards of the various subsidiary companies. The subsidiary companies were nearly all fully owned by the Edmondson Group, and they put forward their schemes and capital requirements once every year or two years; they were carefully "vetted" by the holding company, the Edmondson Group, and, that having been done, they were allowed to carry on.
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Where I feel that the nationalised gas organisation has been successful, from that point of view, is that the Gas Council have been the policy maker and the financial controller, but they have given wide powers to their fourteen area boards. On the whole, that system has worked well. I hope that the Area boards will be given as much power as possible, otherwise I fear, like my noble friend Lord Balfour of Inchrye, that we shall not get the best people on the Area boards. Nobody wants to sit on an Area board if he feels that they have no authority. I believe, too, that they should have the authority of appointing their general manager. I know that it is difficult, but to my mind it is most important that they should be able to hire or "fire" their senior staff.
There is a big job to be done in the next ten years, because we must modernise our railways. We have the finest railways in the world, and we are all proud of them; but I am sorry to say that we have lost a little ground. The French have gone ahead with the electrification of their railways. I was glad to see that the important electrified railway between Sheffield and Manchester, which has taken some years to construct, has now been opened. But we have to do more. I feel that the Areas have a large and important job to do, and the Commission should delegate to them as much power as they can. Otherwise, if the Commission keep too much in their own hands, I doubt whether this Scheme will work. I have one final word to say about accountancy. Like my noble friend Lord Falmouth, I am a little disappointed that it has riot been considered possible to produce profit and. loss accounts and a balance sheet. However, we have been promised statistical information which should be a great help to the Area boards. It is most important, in my opinion, if they are to be, given a fairly large capital sum to spend in the various regions in the next few years—as they will have to be—that the, Area boards, their general manager, their chief engineer and so on, should know how the money is coming in, and whether the new capital is earning good interest. With those few words, at this late hour, I wish the Scheme all the success possible, and hope that it will be put into operation at the earliest possible moment.
6.10 p.m.
VISCOUNT LONG: My Lords, having listened to every speech on this White Paper this afternoon, I think it would be proper to say first of all that there has not been a single noble Lord who has really criticised it at all. One or two constructive ideas have come from both sides of the House, but no serious criticism has been made. I think that is due, in the first place, to the hard work of the British Transport Commission, and to the very able way in which my noble friend Lord Swinton opened the debate this afternoon. There was only one point on which I agreed with the noble Lord, Lord Burden, in the whole of his speech. I do not know whether the noble Lord wanted to cast an aspersion on the general public, but I think that if he reads in Hansard to-morrow what he said he will not be quite so happy about it. Like, no doubt, the noble Lord, I travel third class. I get only paper towels, and no member of the public would try to steal those.
LORD BURDEN: I thought I made it crystal clear that I was referring only to a minority of the travelling public and, secondly, that I was referring to hand towels. May I also say that it is not unknown even for paper, bulbs and things like that to be stolen by a minority of the travelling public.
VISCOUNT LONG: I will accept that it was a minority. The noble Lord knows far more about railways than I do, although I have travelled on mine for fifty-seven years and know something about the Great Western. We do not seem to go in for activities of that sort on our part of the railway system. It is only a small point, but the noble Lord raised it.
Under the new system of running the railways, to which I hope the Commission will pay attention, the engine drivers, great fellows that they are, and their mates have to be brought home. My experience is that on a crowded long-distance train third-class carriages are now given up to these men. I suggest that steps should be taken about that in the future, and the noble Lord opposite could do a great deal to get that sort of thing put right.
Now I turn to the speech of the noble Lord, Lord Lucas of Chilworth, who I am sorry is not here. He referred to the
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fact that the railway workers do not want to go back to their old uniforms. He has only just come to live in the Great Western area, and in that area they have wanted to go back to them since 1947. I can well understand that he has information, but there are a great body of railway workers who, up to 1951, wore the red tie as part of their uniform and now, if asked whether they would like to go back to it, say they would rather not. I can well understand that with a Conservative Government in power.
LORD BURDEN: There was nearly a strike in my area in 1912 because a Mr. Paget was insisting upon everyone wearing red ties.
VISCOUNT LONG: I merely point that out as a fact. That leads me to these Area boards or regional boards, or whatever you like to call them. Are they not the modern idea of the boards that used to be held in the old days in every railway centre in London? They will sit in the same rooms, and they will no doubt debate the same problems that the old board of directors used to discuss in the old days. May I suggest that this Paper should go a little further, and, instead of calling them regions, call them by their own name? I believe that that would bring back far more morale to railways than anything else at the present time. I believe it to be a fact that if we did that, the railway workers would rally to it and the morale would be far higher.
Now I will turn to one other point which is causing me considerable worry over these Area boards. Who is to appoint the directors or the members of these boards? There are to be five at least and maybe seven. It is most important to me, as a member of the travelling public, and one who has lived in the West of England all his life, that those appointed should know what is going on in the West of England. My old father and my grandfather, who were directors of the Western Railway in those days, knew nearly every engine driver and their mates on the main trains, and nearly every pilot engine driver in the great centre of Swindon. That brought confidence to the people on the line and to the travelling public, because they could always approach them and get

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things done. I hope that in the appointment of these Area boards that fact will be taken into consideration, and that these men will be local men. I also hope that there will be a representative of road haulage on those boards. In these days I think that is vital. When I say that, I am reminded that nearly twenty-five years ago, when the late Sir Robert Horne was chairman of the Great Western Railway, he said that if he had his life on that line over again he would have road haulage representation as soon as he got any say.
Lastly, I turn to something which worries me very much. I suppose it will be the responsibility of the Commission to decide who is to look after security. In the West of England we are proud of our security. We know full well that it is the engine driver and his mate who are the responsible people for getting us from A to B. The Great Western adopted a system of security in which every driver and his mate, and, indeed, the travelling public, had confidence. I understand that a new system is now being invented, and that it will come before the Commission. I wish to ask what power the Area board will have in the Western Region for disagreeing with it. I am told that if this new invention is put into operation it will cost the country £20 million. I am also told that if we were to adopt the Great Western system it would cost a great deal less. Surely the proof of the pudding is in the eating. I believe it to be a fact that there has been only one accident on the Great Western since the First World War, and that was in the South Wales area. There was one other at Faringdon station between Swindon and Didcot, when a coach came uncoupled. Apart from those two accidents, there has been practically nothing at all. I am not casting any aspersion on other lines, but I am asking whose job it will be to ensure security. No doubt in the first place the Commission will lay down that this new and costly security scheme will be put into operation. Will the Area board have power to say, "No we want to keep on with our own"? At this late hour I will not elaborate that point. I know that it may be a detail, but it is one which is causing great anxiety at the present moment in the West.
6.20 p.m.
THE PAYMASTER GENERAL (THE EARL OF SELKIRK): My Lords, the Motion before us is to take note of this Reorganisation Scheme. It therefore falls to me first to thank all noble Lords who have taken part in the debate, because the purpose and object of it is to hear the views of the House. If I may mention two speeches, I think we were all particularly glad to hear those of the noble Lords, Lord Glyn and Lord Hurcomb, who can take us back through thirty years of various forms of organisation of railway services. In the last ten years we have examined transport fairly often in this House arid we have heard the views of monopolists and free enterprise competitors. But this debate is entirely different from anything we have had in the past, for this reason: that we are not considering theories here; we are considering proposals from practical railwaymen. We are not considering what the politicians can thrust on the railways but what the railwaymen want to do themselves. I think that puts this debate in an entirely different light from any we have previously had on transport.
The noble Lord, Lord Lucas of Chilworth, said, but I do not think he meant it seriously, that he had tried to read between the lines. In a document of this kind, prepared by the railwaymen themselves, I do not think one needs to read between the lines, because it is written by the people who intend to carry it out. Lord Macmillan, speaking about Statutes, once said:
"It is not enough to attain to a degree of precision which a person reading in good faith can understand: but it is necessary to attain, if possible, to a degree of precision which a person reading in bad faith cannot misunderstand."
That is not necessary with this document. I do not think we need go into it in the way in which we should have to examine an Act of Parliament, for this reason: that it is quite clear that this is the work of the Commission, who believe in managing the railways in this way. It is their belief and the belief of all the leading executive officers. People may say it is a little short and that it could be interpreted in different ways; that it could mean either a lot or a little. But the answer is that the people who have to work it want to do it in this way.

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I have a number of small questions to answer. The noble Lord, Lord Teynham, asked about sub-areas. I am afraid I cannot add very much on that subject, except to say that it may well be necessary to have something between the Area boards and districts in different parts of the country. The noble Lord, Lord Mathers, asked about docks and inland waterways and the road transport services. That matter was dealt with fully in the speech of my noble friend, Viscount Swinton, and I think the noble Lord will see clearly laid down what is to happen. Lord Falmouth referred to the fact that catering officers are not under the direct command of the chief regional officers. Up to now they have been entirely separate, but this is a step towards bringing them more closely into line with the regional organisation. The noble Viscount, Lord Long, asked who is to make appointments. I refer him to the White Paper and particularly to the Second Schedule. Appointments are made by the Commission, and he will see in paragraph 2 that it includes people
"likely to be conversant with the circumstances and special requirements, in relation to transport, of the area of the authority."
General questions have been raised in regard to the Area Boards and the nature of their authority. The noble Lord, Lord Mathers, said that they were wasteful; the noble Lord, Lord Burden, said that they were unnecessary. The noble Lord, Lord Balfour of Inchrye, thought their position was not sufficiently clear and that if we were to get first-class men the position must be clarified. Much the same view was expressed by the noble Lord, Lord Burden. The first thing I should like to say on this point is that the Transport Commission have said that they want to arrange things in this way, and, frankly, if the Scheme does not work, one must say that to some extent they are to blame. I am not pretending it is going to be easy to work it. They quite clearly intend, and obviously need, to get men of first-class calibre. To get "Yes-men" would be absolutely ridiculous. What I must emphasise is that the tasks in these Areas are big tasks. Each of the Areas will have at their disposal, I imagine, somewhere of the order of 100,000 or 200,000 men. It is a very big organisation indeed. When one looks at it in that way, one cannot but
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see that men of considerable calibre must be there.
Moreover, it seems to me that they have a very definite role to fulfil, a rôle entirely of their own. The noble Lord, Lord Lucas of Chilworth, talked to us about the danger of technicians, and I quite agree. The members of these boards will be essentially non-specialists. They will not be railwaymen; they will be non-specialists with a very good knowledge of affairs generally which includes management of personnel and, of course, possibly knowledge of technical or commercial matters. I emphasise that because I think your Lordships know the definition of a specialist as "A man who knows more and more about less and less until he knows everything about nothing." I am not suggesting that that is the position with the railwaymen, but I think it is possible that the railwayman looks too narrowly at his own structure and does not appreciate that a railway is an essential element in the whole life of the community and it is necessary to take a wider view. I think these men certainly can have a very definite rôle.
If you have men in an organisation who are in full-time employment there is a limit to the point to which they will disagree with their superiors, because if their whole future depends on employment in a railway organisation they will not make light of throwing off their superiors and throwing in their resignation. There is always a danger in such an organisation that such people would hesitate to bring undesirable or unpleasant information to the attention of their superiors. The people appointed under the Scheme, however, will not depend solely on their employment by the Commission, and they can therefore express their views with perfect clarity to the Commission and can walk out and be none the worse off. It is absolutely clear in the White Paper that the Commission will, if they have a disagreement, still maintain control. The Commission are responsible to Parliament through the Minister, and they must do that. If they disagree with one of their boards they must have their way, but there is no reason why there should not be the freest expression of opinion.
There is a third point that I would suggest. Railways, like all big organisations, must from time to time do unpopular

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things. We all know that. Railway lines can be closed down; all kinds of things can happen. There is nothing that annoys local people more than if they think that such action has been carried out by some unknowing, unsympathetic body, buried in files, studying national statistics. If there as someone on the board who is a known figure, who has understood that such an action is necessary, the local people will take the view, "If he thinks, in spite of all the disadvantages, that this step is necessary, then we are satisfied that it is necessary." I suggest that in that sphere the railway organisations will derive considerable strength in any unpopular action which they wish to carry through.
The noble Lord, Lord Balfour of Inchrye, raised the question of exactly how the Area boards will stand. Of course it is difficult to give a complete answer to that question. I know that the noble Lord would not have a picture of the railway organisation as a sort of harmonious, bureaucratic pyramid. I know that he would not think of it in those terms, but I do feel, frankly, that one has to allow for the fact that there will sometimes be disagreement in this organisation. It does not matter, however in fact, in some ways disagreement is a source of new ideas and development. But what I want to emphasise is that these boards have very real responsibilities. The noble Lord queried that. I find it difficult to make a full case on this point, but if he looks at the White Paper he will see certain definite things. They will have the whole management of the railways. That is quite a big thing. It may well be that in the expenditure of money a great deal will be money which has been budgeted for by them, which has beer approved and whose payment will to some extent be formal. A great deal will be formal, but the fact remains that the whole expenditure of the Area will pass, through the board. It will go through the board procedure in being paid. That means that at any point they can check that things are being done as they want them done, and can bring to light that which they consider unnecessary.
In the second place, they have the initiative: they can make proposals as to what improvements can be made, and it is quite obvious, I think, that any member
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of the board would always be free to meet the chairman of the Commission if he wanted to, and make any personal representation that he desired to make. In regard to appointments, I think the noble Lord got the personnel side wrong. Of course, central negotiation with trade unions or with labour will be done by the Commission, but, by and large, personnel management will be at the Area level. They will be free to make all appointments up to the £2,000 a year level. I submit that that is a pretty big part to play, and men who ensure themselves competent to make such appointments will be of real service to the Commission. Then the noble Lord, Lord Hurcomb, was very interested in the story of the evolution of the executive. I will not comment on that matter, except to say that, in appointing these non-specialised boards, it is a step further away from the functional set-up which originally existed under the 1947 Act. Whether it was necessary to go so far as that is a matter that I need not go into. But we want now to get away from the functional set-up. These boards should fortify the chief regional manager in his task and the duties which he has to carry out.
'The noble Viscount, Lord Falmouth, and the noble Lord, Lord Wolverton, have come back to this question of the profit and loss account. I thought they were a little hard-hearted about it, compared with what I have heard on former occasions. I will not go into it in great detail, but I should like to make this point. If what they suggest means anything, each one of these Areas must be financially self-supporting—that is to say, the Commission have got to carve up the country into Areas which can pay their own way. The Commission do not want to do that. They want to have Areas which are most easily administered; they do not want to have them necessarily based on whether each of them can pay its own way by itself.
The second point is this; the whole question of costing is not something special to the Transport Commission. There is not a firm in this country which at one time or another is not concerned about costing. Costing is a constant problem which every firm in this country has to face. One does, not get over it, by producting a balance sheet and a profit and loss account; that is not the end of it. One has still to go right down to

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the bottom. Supposing these boards had balance sheets and profit and loss accounts, that would not excuse the Commission from examining thoroughly the whole system of costing from top to bottom. That is a matter which must be constantly examined. As a result of these examinations, we are hoping to be able to produce figures which will enable both this House and another place, and the public, to judge sensibly what is happening. We hope to be able to do that. If we produced merely a profit and loss account, we should not.
The only other point I should like to mention is the question of smoke, which was raised by the noble Lord, Lord Hindlip. This is a trifle outside the subject we are discussing to-day but we are very much aware that this nuisance exists in certain localities, and particularly in locomotive depôts. I can assure the House that the Transport Commission are very well aware of this nuisance. They seek, wherever they can, to palliate the problem, even at the expense of their own convenience, and even if it affects their own efficiency. I think I can make it clear that this problem will diminish, and that in the coming years the increasing use of electrical power and diesel locomotives will gradually reduce it until it becomes a much less serious matter. In the meantime, as I say, I can assure the noble Lord that the Transport Commission are doing what they can to alleviate this problem.
I do not know whether there is any other point I need mention. Perhaps I may end in this way. We are sometimes tempted in these days of modern transport to regard the railways as a survival
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of Victorian times. Therefore, I think it is necessary on these occasions for all of us to remember that the railways are the most important form of internal transport in this country. It is good to hear the noble Lord, Lord Glyn, looking to the future of various things that are going to take place. I should like to quote these figures. So far as passenger travel is concerned, 33 per cent. of the money spent by people travelling by means of public transport internally in this country goes to the railways. In regard to internal freight, I believe that something in the region of 60 per cent. of what is spent on freight carried by means of public transport goes to the railways. It is, therefore, abundantly clear that the railways are vital to our economy, and, so far as we can see, will always remain so. For that reason I was particularly glad to hear the noble Viscount. Lord Falmouth, emphasising the point of recruitment. It is essential that the finest brains of the country should go into these great nationalised industries; otherwise, they cannot be expected to work properly.
I will end with these words. Whatever we may say in criticism of this Draft Scheme, I am certain that everybody will agree with me that we wish Sir Brian Robertson and the whole of his staff, from top to bottom, every good fortune in carrying out this reorganisation. I will express the hope that never again will the railways be a matter of political and Party controversy in the future history of this country.
On Question, Motion agreed to.
House adjourned at twenty-three minutes before seven o'clock.