ROAD AND RAIL TRANSPORT POLICY

HL Deb 02 March 1955 vol 191 cc655-720

2.47 p.m.

LORD LUCAS OF CHILWORTH rose to call attention to the road and rail transport policy of Her Majesty's Government; and to move for Papers. The noble Lord said: My Lords, I can but hope that the very natural reluctance of your Lordships to listen to my voice for the third day in succession may be somewhat mitigated by the importance of the subject matter which I have ventured to place before your Lordships' House. The time has arrived when it would be well for us to survey at least the inland transport position of this country, and to ask Her Majesty's Government what is their policy, upon what considerations that policy was based, what conclusions they came to and what were the events and circumstances which led them to form their policy. I feel the time is opportune because at the present moment we are considering the expenditure of huge capital sums. I do not draw the fine distinction that was drawn yesterday afternoon by the noble Earl, Lord Selkirk, in your Lordships' House in reply to a question by the noble Earl, Lord Howe; I do not draw any distinction between money that is raised on loan guaranteed in principal and interest by the State, and money raised by taxes. We have going forward huge projects greater than any we have had for a very long time, and I see no reason why, in addressing myself to this problem, I should depart from the principles that have been inculcated into me during all the time that I have been in industry and commerce. To me, this is a commercial proposition, and I can see no reason why, just because we are dealing with national finances and our economic future, the proposition should be treated any differently from the way I should deal with any ordinary, private commercial project.

I do not intend to go into a lot of detail or to trespass upon another debate which may take place in your Lordships' House upon the borrowing powers of the British Transport Commission. I cannot dictate the course of this debate, and it would be impertinent for me to try to do so; but I shall content myself with dealing with the question on the broadest level. May I express my gratitude, and that which I believe all noble Lords will feel, to Her Majesty's Government for having considered this matter of sufficient importance for the noble Marquess who leads the House to himself intervene in this debate.

I consider this to be an opportune moment also for the reason that no Government has, for a long time, been confronted with as many problems relating to the subject matter of this Motion as is Her Majesty's Government at the present time. May I list a few of them? There are the plan for the expenditure of £1,200 million upon the modernisation of our railway system over a period of fifteen years; the plan for spending £147 million on the roads of this country over four years; the increasingly serious budgetary problem of the tax on fuel and on road vehicles; the congestion of the roads in our towns and cities—a subject that has been interesting your Lordships for the last six days—and the disposal of the road haulage assets of the British Transport Commission. All those problems are interrelated, and it would be futile, in my view, to consider any one of them in isolation from the others.

As they all deal with finance, I intend to make my starting point capital expenditure. It is inevitable that comparisons must be made when considering the capital expenditure incurred in the projects which I have listed. One must compare the proposed expenditure upon the railways of £80 million per annum for fifteen years, with the £37 million per annum for four years to be spent on the roads. I ask Her Majesty's Government, how was that balance arrived at? What were the considerations which influenced Her Majesty's Government to say that they will spend, or will authorise the expenditure of, or will guarantee the expenditure of—it makes no difference—£1,200 million upon the modernisation of the railways, and will spend as capital expenditure, apart from local authority expenditure and maintenance, £147 million on the roads? I cannot believe that they arrived at those figures on a "hit or miss" basis. But, from what I can see, the railway plan was conceived in the isolation of the British Transport Commission, and the road plan was drawn up in a watertight compartment within the Ministry of Transport. By some strange coincidence they were announced almost within two or three days.

Colour is lent to what I have just said by a little story which was told me by a friend who happened to be in Scotland at the time when the majority of the members of the British Transport Commission were in Edinburgh. They had a Press reception with, I believe, all those nice things that go with Press receptions. This reception, which was attended by Press photographers and journalists, happened to be held on precisely the day upon which the road plan was announced by the right honourable gentleman in another place. Everyone was agog for news, and the question was asked of representatives of the British Transport Commission: "What is this tube which is going to be constructed under The Forth?" The representatives of the Commission who were addressed said: "What tube? We have never heard anything about a tube." They were asked: "But don't you know all about it?" and they said that they knew nothing about it at all. Here is the British Transport Commission, running the railway over the Forth by means of the Forth Bridge, building more ferry boats to relieve road congestion, and this was the first they had heard of the project to drive a tunnel under the Forth to carry road traffic. If that be true—and I have no reason to disbelieve that story—it certainly does not seem that there was much co-ordination there.

There is another point; it is a point that I feel it my duty to make, and I do not think I shall be accused of taking a Party angle in making it. The past history of Her Majesty's Government's excursions into transport economics does not inspire all the confidence I should like in the breast of the impartial observer. I have only to point to the White Paper of 1952 which was ridiculed by all informed opinion, irrespective of Party. That preceded the introduction of the first Road Transport Bill, which, in its turn, was so ridiculed that it did not even see a Second Reading in another place. I have examined all the Ministerial statements that have been made about these two huge capital expenditure projects, and I must confess that I am left with the unhappy impression that a very harried policy garment was manufactured to cover the nakedness of the statements—the railway plan on the one hand and the road plan on the other—after they had been made.

I think credence is given to that by the alacrity with which Her Majesty's Government embraced the railway plan. This gave me the impression that it provided them with a heaven-sent opportunity of amortising—if I may use that word—the unfortunate deficit of the British Railways, swollen to some extent by the wages award. In the middle of all the protestations of the Chancellor of the Exchequer and the Minister of Transport, that the last thing that was intended was that the railways should have a subsidy, they produced a hidden subsidy, because the Chancellor of the Exchequer said, in another place, that if the British Transport Commission had to go on to the money market to borrow £800 million it would be guaranteed in principal and interest by the State. Compare that with the situation which would arise if the noble Marquess and I attempted to go to the money market as ordinary commercial individuals and all we had to offer the investor was a concern that was losing £30 million a year, and night lose it for some considerable time, but which, in fifteen years' time, if only a generous public would give us £800 million, might make a profit. I do not know how much money we should get, but I would hazard a guess that it would not be very much. We might even find ourselves in trouble for issuing what might be considered a "phony" prospectus. So there is this subsidy.

I am not discussing whether it should or should not be given. The question it raises is this. Was there any proper thought as to how this £1,200 million was to be spent? Then the Chancellor of the Exchequer made another statement which noble Lords, if they are so minded, can read for themselves—I am not going to waste your Lordships' time by reading it now. It is in the OFFICIAL REPORT of the proceedings in another place on February 3, 1955. The Chancellor of the Exchequer said, in effect (I am paraphrasing his words): "You may ask how the interests of road and rail are married up. Out of this £1,200 million it is proposed to spend £200 million on the tracks and the signalling of British railways. That compares"—he went on to say—"with what we are going to spend on the roads." This is the last sentence of what he said (OFFICIAL REPORT, Commons, Vol. 536 (No. 25); col. 1308): This enables me to illustrate to the House that a large part of this modernisation and re-equipment of British Railways is not on the track, which is what should be compared with the roads, … That is ingenious, but slightly ingenuous, because what the right honourable gentleman did not say was that the railways have the monopoly of the use of those tracks while the roads are used by the whole community, including the railways.

In the whole of this plan for rebuilding bridges, I see no statement that the necessary bridges are to be built over the 5,000 level-crossings which cut up our highways; no mention of the fact that the money for the capital expenditure on the roads, with the interest and maintenance charges, is found by the motor user and ratepayer. While the railways are going to spend £200 million on tracks, the road user is to contribute £6,187 million, at the current yield—which, up to the end of March of this year, is estimated to be £412 million—in motor vehicle taxation in all its aspects: fuel tax, excise duties, purchase tax and so on. There is not much balance in that. These are big figures in any context, even at a time such as this, when millions slip very readily off the end of one's tongue. I am not complaining about the amount of money that is to be spent, but I would ask the Government to tell me what considerations they had in mind in assessing these sums.

There is a more serious aspect of this question of taxation. Are we to understand that this taxation will remain at its present high level while road expenditure stays at its present low level? A reduction in taxation is something we all hope for, and it is vitally necessary in the interests of the country. I would draw your Lordships' attention to the Report on London transport, which has just been issued and which shows that 9 per cent. of the total costs are eaten up by taxation on fuel. That is true not only for London Transport but also for every other road user in the country—for the British Transport Commission and for John Jones and Bill Robinson.

If we are going to bring road taxation down, as I think we must do in the interests of the country's economy, what will be the impact of the greater efficiency of road transport on the costs basis, and therefore on the charging basis, of the railways? Has that been taken into consideration? Once we start increasing the competitive power of the road, what impact will it have upon the £1,200 million plan? Will the returns reach the nicely and neatly calculated sums expected? The plan says that after we have spent £1,200 million on the railways, freight revenue should go up by £60 million. Is it expected that that increase will be achieved while the efficiency of all other competitors stands still. Were these factors taken into consideration? I want to impress upon the House that I am not complaining about the amount of money that is being spent—perhaps £1,200 million is not enough to spend on the railways. What I want to know is how this nice balance was arrived at. What is the policy?

After we have arrived at these figures, what about the priorities inside both railways and roads? I am going to leave the technical aspects of the railway plan to other noble Lords; I want to stay on the broad highway of policy. I have examined with great care all the details of these two plans that have been published, and I confess that I see in many of the projects rather more politics than sound road economics. It appears to me that the £147 million will be spread over as wide a field as possible, and I am afraid we shall fall into the same error as we fell into years ago, of fitting lengths of two-inch pipe into a one-inch pipe system. If traffic trends—I want the noble Marquess, Lord Salisbury, really to consider this—are maintained as at present, the roads projected by the Minister of Transport will be over-trafficked even before they are completed. In five years' time we shall have to widen some of the roads that are mentioned in the plan for the next four years. I submit that it is useless to build main motor roads—say from London to Birmingham—if they start in a congested area and finish in a congested area. It is useless to have quick-moving traffic in between the towns if the whole gain is lost in those towns. Our most crowded area, the biggest and most congested city in the world, on which we have had many discussions over the last two weeks, is to get only £18 million out of the £147 million. That sum will not even begin to put the congestion of London right.

That brings me to the great problem of congestion; and here I want to address a specific question to the Government. I have read (not read in detail, because I have not had the time since it came out) the Report on London transport. Here we have an informed opinion saying that perhaps it would be as well to take the traffic off the streets of London and put it underground. I am not going to discuss the technical aspect, but I would ask one question. I am told on great authority—in fact, no less than a Ministerial statement—that the new Tube project in London will cost £50 million, and can never be hoped to be made to pay. The only benefit will be that it may make a contribution to the amelioration of the traffic congestion in London. But it foreshortens the revenue. If it takes revenue from the buses and puts it underground it will put London Transport, who are paying £4 million a year in fuel tax, out of a total fuel bill of £6 million a year, deeper "in the red." Who is going to pay for that? Do the Government expect the British Transport Commission, or London Transport—the principal and interest being guaranteed by the taxpayer—to subsidise that loss on their revenue through the building of a Tube which will cost £50 million? I do not know, but surely this great problem has been thought about.

That brings me to the organisation of our road traffic. We have got to do a lot of thinking. If we are going to spend £147 million—and I regard that as an infinitesimal sum compared with what is wanted—on new highways, we must see that that capital cost comes back. We must do the same as industry. If we are to maintain and improve our competitive position in the export markets of the world, our capital equipment, whether it is a machine tool in the factory or a highway, will have to work "all round the clock"; because we cannot afford to have our highways over-trafficked for twelve hours each day and sparsely trafficked for the other twelve.

I now come to what may be considered the most controversial part of the speech I have to make. I do not think I have been controversial so far, but have only asked a few questions. I want to ask the Government this question. Do they not think the time has arrived to call a halt to the disposal of the road haulage assets of the British Transport Commission? I put this to your Lordships on commercial grounds. If we are to keep our highways properly trafficked—delivery from factory to factory, or from factory to dock, overnight; shifting our heavy transport more at night and less by day on these new roads—then only a large-scale organisation can do it. I believe that the time has arrived when we should, without any political bias, study this question.

The twenty-five miles radius limit has gone. Let us see where we stand. Of the total vehicles held by British Road Services at the time of the 1953 Act, the number sold so far is about 13,000. No large units have been sold; nearly every one of those vehicles has gone to increase the fleet of a small operator. At the present time there are in the country 60,000 A licence and 60,000 B licence vehicles—they are the heavy haulage vehicles—competing with the British Road Services' fleet of 17,000. There are 860,000 C licence vehicles, but as a large proportion of those are not long-distance road haulage but more concerned with local delivery, I have left them out of my calculations. Incidentally, I should have thought that was enough competition to satisfy the most (shall I say?) vicious appetite. Before the Transport Act, 1947, there were 18,000 vehicles engaged on long-distance haulage, organised in large units. There is no such thing now.

I want to put it seriously to your Lordships that we have now achieved all the benefits—if one can call them benefits—at any rate all that it is wise to achieve, under the Act of 1953. There is one thing that has not happened which all its most clamorous supporters thought would happen: none of the old large users have come back into the road haulage industry. That is significant. No large blocks of capital have come back into the road haulage industry, and the red light is shining. The reason I say that now is the right time to study this question is that I believe British Road Services are reaching the point where, if any more of their fleet is taken away, if they are (if I may use the expression) beggared, they will be unable to satisfy the demands made upon them. And there is no other organisation to come in and take their place.

The existing British Road Services' long-haulage fleet now comprises 17,000 vehicles, compared to 18,000 vehicles, organised in large-scale units, before the war. I have left out the parcels service and the specialised traffic. The parcels service is one of the most highly organised services that has ever been attempted in this country by British Road Services. Operating 4,000 vehicles, it was formed into a separate company. But they have never had an offer for this service. If we are going to proceed along the lines of political ideologies, if we do not face up to the fact that the red light is showing and that disaster will face this country if we disperse the only large-scale road organisation in the country, then we shall indeed be putting the clock back.

With all this talk of efficiency, I want to ask the Government: Do you not think the time has arrived when we should reconsider this matter? I yield to no one in my enthusiasm for the railway plan, but I approach it with a little more caution. We are increasing the efficiency of the railways. Investment they sorely need, and always have done. But efficiency for what? Has the real place of the railways in the transport economy of this country during the next twenty-five years been thought out? If so, what conclusions have been reached? I beg your Lordships to realise that it is not a question of making the railways pay: it is a question of making the country pay, by giving the country the right type of organisation. To make the railways pay is easy when you have the fiscal weapon in your hand: all you have to do is to increase the taxation of your competitors. Is it not a strange thing how the circle goes round? Because it was in 1926 that the present Prime Minister, when he was Chancellor of the Exchequer, did this very thing. His first raid on the Road Fund in 1926 was to curb the expansion of road transport for the benefit of the railways. Having started that "rake's progress," on and on it has gone until the competitor—if one can put it that way—to railway transport pays £6,187 million in taxation while the capital investment on the roads will be £550 million.

I beg your Lordships to give this matter serious consideration, because transport is in a very difficult position and the Government realise it. The reason why it is in a difficult position is that this attempt at competition, although wise up to a point—I do not decry the virtues of competition—becomes unwise beyond that point. Right the way through this document the British Transport Commission keep making reference to it: that what we must do is to assess what it is most economic to carry by rail and what we must hive off to road. They say we shall have faster trains and fewer stopping places, fewer branch lines, containers that can be taken off the rail and put on the road. But to whom are they going to hive it off—to their competitors or their own organisation? The British Transport Commission must be given the opportunity to expand their economy, but it is useless to tell them they must expand their economy and hive off some of these things on to their competitors.

Let us learn the lesson—and I think it is a lesson we can learn—from how road passenger transport has developed. Section 11 of the Road Transport Act, 1953—the section under which the Minister took powers to compel the British Transport Commission to sell its road passenger interests—has never been put into operation because the Government knew very well that the whole road passenger industry of this country and its service to the community would break down if it were. What is the difference between road passengers and road freight? There are many other aspects of this subject upon which I should like to enlarge, but I have kept your Lordships too long. I wanted to put the whole position as I see it before you, and to ask Her Majesty's Government what tempted them to continue this policy. Did they have a fundamentally sound basis of policy considerations before they did all this? If so, I think this House and, indeed, the country have a right to be told. I beg to move for Papers.

3.26 p.m.

THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY)

My Lords, I should first like, if I may with all deference, to express my personal admiration for the noble Lord, Lord Lucas of Chilworth, for the spirit he showed in advancing to the attack again for the fourth time in four days—at least I think so; certainly the third time in three days. I know from my own experience what a strain that puts upon speakers, and I think that what the noble Lord has achieved is a considerable Parliamentary feat. I should also like to thank him for giving me notice of the broad line which he proposed to take this afternoon on this extremely intricate subject of road and rail, and also for the constructive intention which I am sure underlaid what he said, though I should add that I do not think his constructive spirit went quite so far as to tempt him to suggest any practical alternative to the Government's scheme. All I could hear—I listened as carefully as I could—was that he would, if it had been he, have spent on rail a good deal less money than the Transport Commission—I see the noble Lord nods his head, so he does not disapprove of that. On the roads he would have spent a good deal more, a thing which in fact his own Government when in power did not do. In fact, they did not spend as much as the Government now propose to do.

I do not complain of his criticising the Government: after all, he sits on the Front Opposition Bench, and any other attitude would have been surprising. I feel sorely tempted to pursue him on to that ground. There is a great deal I should like to say in support of the considerations which led the Government to denationalise road transport, and I may add that the experience of the last two years, in spite of what the noble Lord has said to-day, has not led us to regret our decision—indeed quite the contrary. But I propose to restrain myself in that particular direction, first because I do not, for reasons which should be apparent to the House, wish to indulge merely in controversy on a subject of this kind—like the noble Lord, I want to try, so far as I can, to make a constructive speech. Secondly, my noble friend Lord Hawke, who is going to speak at the end of the debate, will deal, I am sure, most effectively with a number of the points made by the noble Lord, Lord Lucas of Chilworth, which are perhaps more suited to a winding-up speech than the one I have personally in mind. Thirdly, I do not want to look back but forward, and I want to give the House what I am sure it really wants—an account of Government policy for the future, both with regard to road and with regard to rail. But to avoid being told later, as I might naturally be told, that I have not even attempted to answer any of the points which have been made by the noble Lord, there are one or two words I should like to say before I pass to the portion of my speech which deals with the future.

The first relates to the unification of rail and road under the late Government's Act, and its separation under the legislation of the present Government. It has been suggested—I do not think the noble Lord directly suggested it to-day but it was, I thought, implied in his remarks—that the arguments in favour of the unification of road and rail transport, the policy which the Government of which he was a member adopted, were not merely ideological but were practical as well. It was urged—I do not want to mistake their attitude but this is how I understand it—that the only way to keep the railways of Britain going was to balance their inevitable losses against the profits of road transport, and run them as a single concern, balancing them one against the other. I would not for one moment accept the assumption that British Railways by themselves can never make a profit in the modern world. I believe that would be both fallacious and extremely dangerous. Once one accepts the premise that it is quite proper for a nationalised industry always to run at a loss, one comes on to a very slippery slope indeed; for, after all, what incentive remains for that industry, and for those who take part in it, to exercise any proper control of their own affairs? How easy it is for them to get into the habit of thinking that someone will always pay for it. And soon the habit will spread from one nationalised industry to another nationalised industry, and it will go on happily ahead on the assumption that somebody else will pay.

And who will ultimately pay? There is only one body who will ultimately pay, and that is the British public, either in higher taxation or in higher charges. That, we believe, is exactly what would have happened in the case of the railways, if we had continued this unified system. The railways would have got further and further "into the red," and they would have leant more heavily on road transport until the burden on that also became too heavy to bear; and then they would ultimately have gone down together in a common ruin. I think the only result of unifying the two would have been to mask this steady deterioration from the public and bolster up this rickety structure until the position was beyond repair. I do not expect noble Lords opposite to accept that assumption. They take a different view. But I believe that that would have been a very unwise policy for us to adopt. No doubt, there may be bad years when any industry or any individual firm may show a loss—that is the common experience of business, as we all know—but neither Her Majesty's Government nor the British Transport Commission themselves accept the fact that British Railways must always run at a loss. We believe that if the railways face up to the facts, and if, above all, both the employers and the trade unions take all the measures that are necessary to set their house in order, it is still possible to make that industry a going concern. That is the main purpose of the plan for the railways about which I am going to speak to your Lordships in a minute.

So far as the railways themselves are concerned, therefore, the purpose of the Government policy, put quite shortly, is to lay them open to healthy competition and to give them the means to meet that competition. It is in that way, and in that way alone, in our view, instead of confining them within the enervating atmosphere of monopoly, that we shall best serve the interests of the British people. In answer to something which the noble Lord, Lord Lucas of Chilworth, said, I would say that if, in order to prime this operation, to give it a proper start, we thought it desirable in respect of a State-owned enterprise to guarantee a loan for the purpose of putting the thing on its feet, I see no reason why anybody should object to it, and I am sure that noble Lords opposite would not, either.

LORD LUCAS OF CHILWORTH

No.

THE MARQUESS OF SALISBURY

I understood the noble Lord to complain of the fact that Her Majesty's Government have said that they would guarantee the loan which must be raised for the purposes of the plan.

LORD LUCAS OF CHILWORTH

I do not want to interrupt the noble Marquess, because it is an interesting point. No; I said only that if you are going to give a subsidy, say it, because a subsidy called by any other name is the same thing. I do not mind, but you must not say one day, "Of course, we are not going to subsidise," and the next day say that you are going to guarantee the principal of a loan, because that is the same thing.

THE MARQUESS OF SALISBURY

This is the point between us. If we really thought that this loan was not going to put the railways on their feet, then it would be a subsidy; but we do not. We think it is going to put them on their feet and, believing that, as we do, it is a perfectly ordinary commercial operation.

If the division of road and rail is in the ultimate interests of the railways, we believe it is also in the interests of road transport. I am not going this afternoon to make an attack on British Road Services. Personally, I think they have done a good job; they have worked hard to deliver the goods in every sense of the term. But the result of a concentration of power inside that vast corporation—indeed, perhaps that was the aim of some of those who conceived the amalgamation which occurred—has been, I believe, more and more to kill perfectly legitimate and stimulating competition from private enterprise. If the aim of the Act of the late Government had been merely to set up British Transport Services and allow throughout the whole range the fullest competition with it, I do not believe the opposition to that operation would have been nearly as strong as it was. But we believe, especially for an industry which is as individualist as road transport, where the demands of customers are so infinitely varied and where the individual operator should be as free as possible to satisfy those demands, the whole conception of a national monopoly for long-distance road transport is entirely unsound. It is, as I see it, the classic case where competition should be given a fair chance. For what, after all, is competition? In other words it is the desire to excel, and we feel that the desire to excel should be encouraged. While, indeed, it may well take some little time, I fully agree, for industry to settle down in its new conditions, I believe there are already signs that the fresh air of competition is operating, and that will mean better service for the customer.

I do not want to misrepresent the noble Lord, Lord Lucas of Chilworth, and I hope he will interrupt me if he thinks I am doing so, but he suggested that there was a lack of balance in the expenditure on road and rail. He said: "Why spend £1,200 million on rail and only £147 million on road?" That is a perfectly fair question. The answer, which of course has already been given and to which he has referred, is that the difference there is more apparent than real. Out of the £1,200 million, £600 million—as I think has already been said; I am not sure that the noble Lord did not say it himself—is in any case to be spent on maintenance, and it would be spent, even if no scheme were in operation. Of the remaining £600 million, £400 million is to be spent on such things as renewal of rolling stock; and only £200 million is to be spent on signalling and track. This is to be compared with the £147 million which is to be spent in four years, or authorised to be spent in four years, on the roads; and, of course, in the case of the railways, there is a much longer period involved.

The noble Lord, Lord Lucas of Chilworth said, as I understood it, that there was no analogy between the expenditure on road and the expenditure on rail. I do not agree. Both road and rail are used by the community. He said the roads were used by the whole community. Both road and rail are used by the whole community; they are used for travelling and for the carriage of goods. Nor, in my view, can you expect to strike a fair balance between the two. It is not one of those things of which you can say, "We are spending £100 million on rail and therefore, we must spend £100 million on roads." You cannot work out the development of these great services in that way. What is relevant, and the only thing which is relevant, is what is required to serve the interests of the community; and if, in fact, rather more is wanted in one case than in the other, I do not think that that would be an argument against spending that larger sum.

In his final passages the noble Lord opposite contended strongly that, whether the 1953 Act was right or wrong, its usefulness was new exhausted. He argued that there was no more to be achieved in the way of denationalisation of road transport—at least, so I understood him. He argued that the attempt to dispose of the assets had largely failed, and that the Government had much better accept the position and not attempt a further dispersal. I think that was the gist of his argument. If he will forgive me, I do not propose to answer that important argument myself at length; I am going to leave that to my noble friend Lord Hawke, who will develop it in more detail. I will only say this: that I believe it is at present far too early to accept that melancholy conclusion. I understand that that, too, is the view of my right honourable friend the Minister of Transport, who is not dissatisfied (so he tells me) with the progress that has been made. With regard to these large units, which I think were worrying the noble Lord, Lord Lucas of Chilworth, more than anything else, I would point out that not the same real attempt has yet been made to dispose of them as has been the case with small units. I am not going to prophesy about the future (I am much too old a hand to do that), but I think it is premature at the present time to draw the conclusions which the noble Lord has drawn.

I hope the House will now allow me to turn to the future, which is the principal subject upon which I wish to speak. First, I should like to say something about the railways. The scheme for the reorganisation of the railways was, as the House knows, fully debated by your Lordships on November 2, and was the subject of an Affirmative Resolution. Today, therefore, I am only going, quite briefly, to summarise the main features of the scheme. I may mention that all six of the Area Boards which were appointed under the scheme have now begun their work, as from February 1. Each board will have a wide measure of autonomy. I think the lists of members published by the Commission, which some of your Lordships may have seen, fully justify the assurances given by them and by the Government as to the quality of the membership.

Having said that, I come to the British Transport Commission's scheme for the modernisation of the railways, to which the noble Lord opposite referred. This plan, which was published on January 24, just over one and a half months ago, has been fully debated in another place, and I believe that my noble friend Lord Falmouth has put down a Motion on the subject. As your Lordships know, and as was apparent from the speech to which we have just listened, that plan is extremely far-reaching; it involves a total investment of some £1,200 million during the next fifteen years. As I have explained, that is, as it were, £600 million for new works and £600 million for maintenance that would have been needed in any case. The aim is to produce a thoroughly modern railway system to meet the traffic requirements of to-day and the foreseeable future. The plan recognises that for certain classes of traffic, like bulk goods and coal, the railways will remain the best form of transport, and it aims to develop this traffic as fully as it can on the most economical basis. It recognises equally, as does the noble Lord opposite, that certain other types of traffic can no longer be carried so efficiently by rail as by other means. The plan concentrates particularly on freight services and it aims, by speeding up movement and reducing costs, to attract some of the freight traffic which is now contributing to the congestion on the roads and therefore to strike a balance between the two methods of transport.

Its main features, as most noble Lords know, are: first, track and signalling improvements to make higher speeds possible; second, the progressive elimination of steam motive power and its replacement by electric or diesel traction; third, the modernisation of rolling stock, passenger stations, and goods depôts; fourth, a drastic remodelling of freight services and the fitting of continuous brakes to all wagons, which I understand will lead to both faster and smoother services, more intensive use of wagons and less interference with the speed of passenger services; and fifth, a number of smaller items which include improvements to ports used by steam packet services, mechanisation of office equipment, staff welfare, research and matters of that kind. I ought to emphasise that the plan as now formulated is essentially an outline plan. It does not attempt to specify particular regional improvements in detail, except for certain electrification schemes around London and Glasgow, in the Southern Region, and on one or two main lines. But that does not mean that areas which are outside that electrification area are going to be excluded from any forms of modernisation; they will be dealt with by the progressive introduction of diesel trains, which form an integral part of the scheme. The Commission intend to work out detailed projects in consultation with the Area Boards, who will be in the best position to advise on local needs.

I do not want to mislead the House into thinking that all this can be done at once. The plan is so extensive that I gather that it must take at least five years before it is fully under way. There are many reasons for this, and I have no doubt that the noble Lord, Lord Lucas of Chilworth, is well aware of them. For one thing, in the case of the electrification schemes the vast size of the engineering works required will involve a long period of engineering planning and preliminary work. And on the maintenance side, the staff will have to be trained in the business of servicing diesel and electric locomotives, which, I am told, although I have no practical experience, are far more complicated and require a higher degree of specialisation in the maintenance staff than the steam locomotive needs. Orders for this vast quantity of new equipment will also have to be placed with the industry, and the Commission's entire railway organisation will have to be adapted to cope with the new developments. That, of course, involves a considerable amount of preliminary work before the scheme gets into its full swing.

There is one other very important matter about which I think I ought to say a word before I pass to the question of roads. It concerns the railway merchandise charges scheme, which I do not think the noble Lord, Lord Lucas of Chilworth, mentioned in his speech. I do not complain of that, because he had a lot to say, and this is so vast a subject that he could not cover everything. As your Lordships will know, the Transport Act, 1953, provided for a change in the railways charging powers; but I think that the full importance of that change for the future of the railways has not even yet been quite fully appreciated. As we all know, the main contention of the railways in the past has been that they have been unfairly handicapped in competing with road transport for goods traffic by the very complicated and rigid statutory control of the charges that they are allowed to make. We have heard that, I suppose, a hundred times in this House, and, as we all know, there is a great deal of substance in that contention.

Therefore, to put the railways in a position to meet the intensified road competition which was bound to result from the 1953 Act, that Act itself included provisions designed to give a much greater flexibility to railway merchandise charges. Certain old restrictions, some of which dated back to the early years of the last century, to the very beginning of the railway system—the obligation to charge equally in like circumstances and to refrain from giving undue preference, and, I understand, a more recent restriction on the power to agree charges with individual traders—have all been swept away by that Act, and other restrictions will go when the new railway merchandise charges scheme comes into operation. At present, as your Lordships know, the railways have standard charges below which they cannot charge except as provided in the Railways Act, 1921. Under the new charges scheme, however, they will in general be subject to maximum charges only and will have complete discretion as to the charges they make beneath those ceilings.

That is a fundamental and very important change. But it is not the only one. At present, as noble Lords know, they have to publish not only their standard charges but also every exceptional rate which they grant below the standard. Under the new scheme only the maximum charges will have to be published. As a result, the railways will no longer be put in the unsatisfactory and extremely invidious position that their charges are known to their competitors while the charges of their competitors are not known to them. The Act does, however, provide certain protections for users of the railways—for traders whose traffic is tied to rail, and who consider that the charges which they are required to pay are unreasonable or unfair—and for coastal shipping, canal interests, and harbour authorities who consider that the charges made by the railways place them at an undue or unfair disadvantage in competition, or are inadequate, having regard to costs.

Having completed a draft of a charges scheme, the Transport Commission began informal consultations with various interested bodies in December last. They now hope to submit a draft scheme to the Transport Tribunal very soon. Her Majesty's Government attach great importance—as I am sure do all noble Lords—to the greater freedom which the railways will have in the future as regards merchandise charges. We believe that the new scheme will give them something they have never had before. They will be able to conduct their business as a commercial undertaking in a competitive market. It will also, we are confident, help them to attract the greatest volume of traffic suitable to rail transport, while the traders, on their side, will got not only the advantages of competition but also the benefits which will flow from prosperous and up-to-date railways. In short, we believe that if the Commission and the trade unions work together in harmony for the common advantage, a new era of prosperity should open for the railways. But, of course, nothing that this or any other Government can do for the railways will, by itself, give the country the up-to-date transport system which we all wish it to have.

The noble Lord, Lord Lucas of Chilworth, in his Motion, quite rightly links rail and road. I entirely agree that to-day the roads are, in their own way, just as important as the railways—and just as out of date. It is of no use to try to apportion blame for this state of affairs. The truth is, as noble Lords will know, that during the last forty years during which mechanised road transport has come into its own this country has been gravely impoverished by two great wars and has been limited in the amounts it could spend on anything, so that, by modern standards, both road and rail transport have been allowed to get sadly behind the times. Now noble Lords in all parts of the House are agreed that a start must be made with modernising both, if we are to be equal to the new strains likely to be put upon us.

This applies just as much to roads as to railways. As the noble Lord has said, roads are now a matter of very considerable urgency. I believe the experts calculate that road traffic in this country may be doubled in the next twenty years. In a matter of this kind it is of no use suddenly to try at the last moment to catch up with requirements; that would be like the Foolish Virgins. One cannot operate public policy on such lines. We must begin now to plan and build the essential arteries, if they are to be ready in time. Moreover, there are a number of new problems which do not brook delay and which have to be dealt with as rapidly as possible. There is, for instance, the problem of abnormal loads, which the House discussed on the Road Traffic Bill. As some noble Lords then suggested, there may be some ways of reducing that particular nuisance, even under existing conditions; but the basic fact is that traffic, including that traffic, must travel by road. It cannot go by rail, because the tunnels are too small; it cannot go by canal, because the bridges are too low; and I am told that the great difficulty about moving this traffic by sea is the lack of handling facilities in small ports. This traffic must, therefore, go by road, with resultant intolerable interference and inconvenience to other users of the highways. Briefly, that is the basis of the road plan of Her Majesty's Government.

As a first stage, road improvement schemes will cost £147 million. That is the sum which will be authorised by the Exchequer over the first four years of the scheme. It is to be hoped that the scheme will not stop at the end of four years, and that this period will be the first four years of a continuing process. The figure of £147 million excludes expenditure on some very large projects of national importance, including, for instance, the question of the crossing of the Firth of Forth by bridge or by tube, to which the noble Lord referred, and the cost of much of the great arteries which are to be built. I use the term "arteries" because such terms as "trunk roads" and "arterial roads" mean something quite different; and if one said "motor-ways" that might suggest road ways to be used largely by very rich people driving very large cars.

These arteries, which will form the basis of the Government plan, will start with the main artery from London to Rugby which, broadly, will follow the line of the present Watling Street. There will be an eastern arm, going north-east into Yorkshire, and a western arm, which is to go from Birmingham, by a spur to the north, through the Potteries and right through Lancashire to Preston. No doubt, as the schemes develops further, roads of that type can be added. These great arteries will be, and must be, of the most modern type, based on experience gained not only here but in other countries; otherwise, as the noble Lord has said, they will be behind the times almost before they are completed. They must be double-track, which I believe is now technically called "dual carriageway," with lanes of adequate width within each carriageway, and supplied with fly-overs and under-passes wherever necessary. The purpose of these arteries, which will be the main basic roadways of the country, will be to allow free traffic, both for goods and passengers, between the main industrial areas of the Midlands and the North and London. Secondly, within this framework of arteries there will be expenditure on subsidiary roads, which will be improved with money, some of which will be drawn from the £147 million and some from local authorities in the areas concerned. I gather that for the first four years this latter will be in the nature of £30 million.

I have tried to give a very brief and bald description to inform your Lordships of the nature and purpose of the road plan of Her Majesty's Government. A start will be made with the London to Rugby portion. The Rugby to Yorkshire and Birmingham trunks portion will come later. I believe that the early completion of at least one artery of the type which I have described is essential, for I feel that it will, apart from any other result, transform the outlook of the public and of local authorities on the standard of roads necessary to-day in a great industrial country like ours, and in that way colour all future planning. At the same time as this great construction is going forward, work will be continuing on subsidiary roads, especially in dealing with black spots, widening bridges and similar improvements.

The noble Lord, Lord Lucas of Chilworth, asked who was to co-ordinate policy between roads and railways. The noble Lord properly stresses the vital importance of the question, "Who is to do it?" The answer is quite a simple one: it must be done by my right honourable friend the Minister of Transport. It is for him to approve the proposals which will be put forward by the British Transport Commission. It is for him to ensure that the road plans for which he is responsible will fit in with the plans of the railways. I do not see why there should be any great difficulty about this. These two sets of plans are to be regarded by him, and by everyone else, as complementary, and not conflicting. There will be certain types of traffic, like coal, which will clearly continue to be carried by the railways—that is far and away the most convenient way by which that particular traffic can be carried. There are certain other types which will clearly be carried by the roads. Between these two extremes there will be an infinite number of gradations—types of traffic over which there will no doubt be a measure of healthy competition which will gradually sort itself out. I should have thought that in this bustling, seething, modern world there is plenty of room for both, especially when the railways are modernised and have greater freedom over their rates charges.

My Lords, in the remarks which I have addressed to you to-day I have tried to sketch in the main features of the Government's road and rail policy. I am afraid that I have spoken far too long, and yet I have only just touched, as the noble Lord knows, upon the fringe of this vast subject. I would, if I may, say this in conclusion—and I say it in a far from controversial spirit. There are, no doubt, aspects of our plan with which not everyone will agree; but I hope very much that this question of road and rail will never be regarded as purely a Party problem. I would remind the House that we who hotly opposed the nationalisation of the railways now accent the position, and we are solely concerned with making the nationalised railways work and in modifying features which have not stood up to practical experience. I hope that, equally, noble Lords who have opposed denationalisation of road transport will show the same spirit and will co-operate with us in making our roads and our road transport the best in the world.

4.3 p.m.

LORD TEYNHAM

My Lords, in the first place I should like to add my congratulations to those which have already been tendered to the British Transport Commission on the full and far-seeing plan which they have produced for the reorganisation of the railways. I think it has been completed in a remarkably short time, and it covers every aspect of railway planning and operation. I suggest that the main point in the scheme is whether it is financially sound, and sound enough for Her Majesty's Government to give it their blessing and help it on its way. At first sight, I would say that the scheme is quite feasible, provided that there is no great financial upheaval in the country during the next fifteen years.

I do not wart to anticipate the debate which will no doubt take place on the Transport (Borrowing Powers) Bill, which will shortly come before your Lordships, but I should like to say how delighted I am to find that the Commission do not intend to rely on the Exchequer for a subsidy and are determined to stand on their own feet. The noble Lord, Lord Lucas of Chilworth, who has unfortunately had to leave the Chamber, has said that there is a hidden subsidy. But surely it is usual for this form of guarantee to be given by the Treasury to every other similar authority which wishes to raise a loan, provided of course, as the noble Marquess has pointed out, that their scheme is a sound and a fair one. No doubt, Her Majesty's Government will examine this scheme in greater detail than they have yet had time to do, and will make recommendations as they consider necessary.

I have listened very carefully to the views put forward by the noble Lord, Lord Lucas of Chilworth. He has suggested that the proposed expenditure on the railways is out of all proportion to that which has been proposed for the roads. I think the noble Marquess has shown very clearly that the railway figures take into account and include such items as locomotives and rolling stock, to which there is no equivalent in road expenditure, since vehicles, of course, are provided from quite a different source. Looked at in this light, I suggest that the railway figures are not so disproportioned as one might suppose. There is no doubt that both road and rail have been starved of capital for a number of years, and this is the first occasion for a very long time that a Government have had the courage to propose a proper investment in both forms of transport.

I fully appreciate the proposals of Her Majesty's Government to spend considerable sums of money on the modernisation and building of new roads, but I am not quite happy about the continuity of these plans. I should like to see the establishment of a Highway Authority which would take over the highways section of the Ministry of Transport, and have full powers to raise loans and to manage its finances in the same way as the Transport Commission or any other authority. There is nothing new about this idea. Some of your Lordships will no doubt recall the old Road Board, which was set up as long ago as 1910, under the Development and Road Improvement Funds Act, 1909. This Act provided that for the purpose of constructing new roads, and also for the acquisition of land for that purpose, the Board could raise money by loan. The Road Board did great service to the country in providing and planning new roads such as the Great West Road, the Croydon Bypass and many others. In fact, the Road Board was the first national authority for roads in England and Wales since the days of the Romans; and I suggest that it is high time we had another Road Board responsible for the highways of Britain.

Your Lordships will recall that the Road Board remained in being for, I think, some nine years, but it had a great uphill fight against Parliament and the Treasury. In those days Parliament was not accustomed to national authorities controlling their own finances, and, in addition, the pressure of local authorities forced the Board to look at the problem through local eyes instead of through national eyes. In the end, in 1919, the Road Board ceased to function, and the Treasury finally resumed control of the proceeds of motor taxes and the funds of the Road Board. I suggest that in these enlightened days the position is quite different, and we are accustomed to an authority having control of its finances. I hope that Her Majesty's Government will seriously consider the setting up of a Highway Authority on modern lines which will give the country the continuity of road development that is so urgently needed. It is interesting to note that the new ten-year road programme in the United States is likely to be financed by I the issue of 30-year bonds, repayable from sales taxes on petrol and oil.

I should also like to take this opportunity of congratulating Her Majesty's Government on the strong line they have taken in the denationalisation of road transport. In spite of what has been said by the noble Lord, Lord Lucas of Chilworth, it may yet be too early to see what will be the final result and how many vehicles or groups of British Road Services will remain unsold in accordance with the 1953 Act. Lord Lucas of Chilworth has said that no large units have been sold—I am sorry that he is not in the House at the moment. If he would turn to page 5 of the third report of the Road Haulage Disposal Board he would find there some very interesting figures showing sales of units so far. There have been sold: 26 units of 428 vehicles; 28 units of 652 vehicles, 7 units of 232 vehicles—and so on. Surely this is going a long way in the sale of large units.

I understand, however, that the minds of Her Majesty's Government are not closed to the possibility of setting up joint companies between the Commission and private enterprise for road haulage. Your Lordships are aware of the successful partnership which already exists between the Commission and certain bus companies. I cannot help feeling that a furtherance of this principle in road haulage might well be acceptable to both sides of the House, and might perhaps, once and for all, remove the whole matter from the field of Party politics. It has been suggested in some quarters that if the principles of the 1947 Act had been continued, the British Road Services would have been able to subsidise the railways. Surely this would mean that the wages of the workers in road haulage would be subsidising the wages of the railway workers. I cannot believe that that is the view of noble Lords opposite; it could not be.

Then we have that all-embracing word "co-ordination" creeping in from time to time. Sometimes it is coupled with the word, "integration." I suggest that what these words really mean is putting into a single hand and under a single control all the alternative forms of transport. Then it would be possible to direct traffic from one form of transport to another; to compel traders to send their goods by a less economic method, and perhaps a more expensive method than they would otherwise use. I need hardly add that we on this side of the House are strongly opposed to any form of co-ordination or integration that has this meaning. I think that the people who are putting forward these ideas have not fully understood their implications. I feel sure that when the new railway scheme has had time to take effect, not only by the re-equipment, but also by the freedom to quote competitive rates with road haulage, we shall see the railways paying their way and the country in possession of an efficient transport system.

4.12 p.m.

VISCOUNT FALMOUTH

My Lords, the Motion which the noble Lord, Lord Lucas of Chilworth, has put down places me in a considerable difficulty, because I had put down a Motion drawing attention to the Government Report on the railway system. As the noble Lord's Motion introduces both road and rail systems. I think it would save your Lordships' time if I took railway transport policy as that part of the subject with which I particularly want to deal this afternoon. I should like to add my tribute to the courage of Her Majesty's Government in formulating and introducing this new programme for the railways. I feel that the railways have been seriously neglected both by the Labour Party and by my own Party for too long a time. The railways are a vital system, and therefore the inefficiency of the railway system would seriously affect the whole economic position of the country.

I approach this problem from a definite point of view: that the railway system gives us by far the best long-distance passenger transport service that it is possible for us to have at the present time and, indeed, that we can foresee for a great many years in the future. It also appears to me to be the only way in which we can deal with dense surburban traffic and with the carriage of bulk goods in vast quantities. For such things as coal and minerals there is no other system available which can handle the traffic presented. Of course there is a problem over what I might call common merchandise and short-distance passenger traffic. For these there is great competition between rail and road. No doubt that will continue for many years to come, but I feel that if only we could put the railways upon a proper footing a great deal of the traffic which we now see on the roads would come back to the railways, where it should be.

Our railway system is a very old organisation: it was laid out some 120 years ago, when economic conditions were entirely different from those in which we find ourselves to-day. It is amazing to consider that what we might look upon as an antiquated system is still serving such a useful purpose without having vast sums of money to spend in order to modernise the whole lay-out. Looking at the railway system as we see it, an ordinary traveller like myself feels that the freight complex of our railway system is by no means up to date. I am glad to see that the Report fully realises this, and suggests that considerable sums of money should be spent—very wisely, as I think—on what our American friends would call "re-vamping" our freight system. The small wayside goods station, with a slow pick-up goods train getting in the way of everything else, is entirely out of date, to my mind. It is high time we had big central goods distribution stations served by express goods trains, running from different central distributing stations which would be equipped with modern handling facilities whereby traffic would be put on the road vehicles and on the railway wagons by mechanical means. I am certain that there is a big field in this direction for developing container traffic. This requires heavy machinery, in the shape of cranes and so on, to deal with it efficiently. We have only to see what is going on in Holland to-day, where a great deal of the coal traffic is being handled by containers, to realise what a big future lies in developing a system of this kind in this country.

I am glad to see that the Report encourages doing away with certain marshalling yards and the establishment of others. As I said just now, the railway system is 120 years old, and a great many points of distribution have changed in that time. I feel that a proper redistribution of marshalling yards, and bringing them up to date by putting wireless on the locomotives, giving them "humps" to shunt the trucks and equipping them with rail brakes—all expensive items, but very necessary if we are to have a really efficient system—would be of great benefit. But what must strike the ordinary traveller to-day more than anything else, I think, is the antiquated goods wagons on British Railways. Except that they are now made of steel, I cannot believe that there has been much change from the time of George Stephenson.

This question of antiquated goods rolling stock raises an immense problem. There are over one million of these wagons in existence. If all of them were put together the national goods train would stretch for 4,000 miles, and as we have only 20,000 route miles of railway, that gives some idea of the size of the problem with which we are faced. We cannot efficiently work our railway system to-day unless we have continuous brakes on our goods vehicles. I am certain that that is an essential factor to any modernisation that is to take place, and I welcome the statement in the Report that one of the most important things we are going to consider is the question of continuous automatic brakes on goods vehicles. To my mind, it is no use spending, vast sums of money on electrification or increasing the power of the haulage unit, whether steam or whether diesel electric, one of the main objects of which is to increase the speed of your trains, unless you are able to stop your trains. What one would like to see would be the railway system running, say, at speeds of 80 m.p.h. for passenger trains and 50 m.p.h. for goods trains. But this you cannot possibly do, because at the moment you cannot stop your goods trains. Therefore, before we do anything else, I am certain that we must Spend a big sum of money—and it really is a large sum of money—in braking goods vehicles by continuous automatic brakes.

This leads on to another difficulty: that of the coupling. If you are going to have continuous automatic brakes, you must have what is known as the solid coupling between your vehicles. At the present time there is the three link chain which is an antiquated system but is very handy for use in marshalling yards, since the shunter can use the shunter's pole to lift the link over the hook. As I say, you must have solid couplings. The present system in this country, and in Europe generally, of the screw-type coupling, which means that the shunter must go between the vehicles in order to couple up the vehicles, is not very satisfactory, but it is the only one available. I hope that the Government will leave no stone unturned to try and develop some sort of automatic coupler suitable to the conditions prevailing in this country. When we are all so clever that we can talk about generating electrical energy from the atom, it is strange to think we are unable to solve a relatively simple mechanical problem of this kind. I hope the Government and the British Transport Commission will do everything they can to encourage this most important development, which will mean so much to the railway system of the country.

I welcome, also, the statement in the Report dealing with the importance of our signalling system. That as a whole has been lagging behind, again due to the want of sufficient finance to enable the many desirable changes to be brought about. But when today it is common practice in certain countries to operate a pair of points fifty miles away from the signal box, one realises the potentialities that are available for a modern signalling system to be fully developed in this country. Another matter to which the Report refers is the layout of the tracks. There, again, much money must be spent on improving tracks in the different parts of the country. A bad example is the position of a station like Peterborough. Peterborough, as your Lordships know, is on the main line to the North, yet it is so badly laid out that all the fast trains are slowed down in passing Peterborough, for reasons which could easily be resolved if sufficient money were available to recondition the layout of the lines.

What has created most interest amongst the engineering world is the future position of the traction unit in this country. When we read the Report, we see that in the view of the British Transport Commission the steam locomotive is on the way out. I am very old-fashioned, I am afraid, and I view this with great sorrow, because this fine piece of mechanism, which has served us so well in the past and with which British engineers have been so closely associated, is now coming to its end, very much in the same way as the poor old horse has been ousted from the farm by the agricultural tractor. The opponents of the steam locomotive quite rightly point out that it consumes a lot of high-grade coal, which we can ill afford to use for this purpose at the present time. Another fault is that it has to spend a large amount of its time in the sheds being conditioned for the next day's service. Moreover, as everybody knows, its thermal efficiency is low, only about 7 per cent. of the energy in the coal being used at the draw-bar of the train. With all these serious defects, it is difficult now to maintain that the steam locomotive provides the best means of hauling the trains to-day or in the immediate future. It has, of course, the great merit that it is considerably cheaper to build than the diesel locomotive, and it is simpler to work. But, in spite of those two quite important factors, I think there is no doubt that we shall see few new steam locomotives being built in this country.

When we look at the position in the United States, we see that an amazing change has taken place in the matter of transport units there. No steam locomotives are being built in the United States to-day, other than for export; and in the last twenty years about 75 per cent. of locomotives in the United States have been changed over to diesel electric. The great claim for this particular type of prime mover is its efficiency and its availability. A diesel locomotive will hook on to a train at Chicago and carry that same train right across to San Francisco or Los Angeles, turn round there, and in five hours, after it has been refuelled and looked over, be on its way back to Chicago on its 2,000 mile run, a performance which is quite unheard of in the history of the steam locomotive.

But although in the United States they have the opportunity of utilising the enormous availability of the diesel locomotive, we have not the same opportunity in this country; obviously our hauls are much shorter and the conditions generally are entirely different. At the same time, however, I am confident that if we revised our timetables to suit the working of this new type of machine, we should be able, if not to get the full availability, at least to make a good deal more use of it than we can at the present moment. The advantage of this will be that, although the diesel locomotive costs twice as much as the steam locomotive, with its increased availability we should need to use considerably fewer to perform the services which are being carried out to-day. There is one other field in which the diesel electric has a great advantage, and that is as a shunter. In the big goods yards the locomotives can be worked twenty-four hours a day. I am glad to see that that is fully realised by the British Transport Commission, who are, I understand, about to adopt the diesel electric shunter in a much bigger way than it has been adopted hitherto.

The Report talks about the electrification of our main lines. Electrification is undoubtedly an ideal which we should all like to see, but it is extremely expensive, especially in a country like ours, which is of such an undulating character. There are over 60,000 bridges in this country—I do not mean that they are all over bridges; this figure includes both over and under bridges: so we can say there are probably about 30,000 under bridges, a great majority of which have to be modified in order to make them available for the increased loading gauge required to take the pantograph of electric locomotives. There are over 1,000 tunnels. What I might call the "national tunnel" is 300 miles long, which again gives some idea of the difficulties which have to be faced with the wholesale policy of electrification.

In fact, I agree with the Report that it is quite impossible for wholesale electrification to be carried out. It would be quite uneconomic. There are certain tracks in the country, where there is a high density of traffic, where it might be possible to get some advantage; but it is of no use, I maintain, to carry out vastly expensive schemes of this kind until continuous brakes have been fitted to goods wagons, so that goods trains can be run at 50 or 60 m.p.h. and can thus take advantage of the expense incurred in electrifying the system. I hope that this scheme will go forward, but that it will go forward in a series of stages. It is necessary to win one position, then the next, and so on; and the final development should be the electrification of some of these main lines—but only where traffic density is very high. Of course, the electrification of the dense suburban areas in many parts of the country is long overdue, and we may hope, as I see the Report hopes, to see a big development of this kind in the not too distant future.

There is one other point in this Report which gives me some anxiety, and that is the question of staff. The question of the higher staff of all these nationalised industries is becoming an increasingly great difficulty. The railways talk about standardisation, and all these nationalised industries are praising standardisation. We cannot expect brilliant young men to want to go into an industry which makes standardisation one of its chief objectives. If the railways are going to get really good men, they must be given some chance of exercising their individuality and not have to accept a standard practice; they must be able to develop ideas of their own. Throughout the nationalised industries this is becoming more and more a serious problem. I think one of the tragic things to-day is to attend one of the meetings of one of our great technical institutions and to realise that a great many of the men sitting round are technicians belonging to one national organisation and serving one master which has adopted a standard policy, whereas in the old days they would have expressed their views on different technical problems—say the type of electrification that should be adopted and so on. We are getting more and more into the position of having a standard policy which cannot be departed from. I am certain that we shall never get the best brains of this country into the nationalised industries unless we can in some way induce them to realise that individuality does count, and that standardisation, although important (and we all admit that it is important, up to a certain stage), is not the whole object of the organisation, and that something should be left on which the individual engineer or technician can express his own individuality.

In general, I welcome this Report. It shows that the Government really do intend to recondition this important part of our national economy. I sincerely hope that the plan will be put into force, not at once but steadily and increasingly, so that, as I say, we can go forward from one stage to another, each stage reaping the advantage of what has gone before.

4.35 p.m.

LORD HURCOMB

My Lords, I hope that it will still be possible to deal with the technical aspects of the railway plan, either on the Motion standing in the name of the noble Viscount, Lord Falmouth, or on the Transport (Borrowing Powers) Bill when it comes before your Lordships' House, because there are many aspects of that plan which, though technical, are yet fraught with much public significance. This afternoon it is not possible to argue or debate whether dieselisation or electrification, or a combination of both, is the right course to pursue, and many other similar problems arise out of the plan. I will merely say at once that I am in general agreement with the plan, embodying as it does many proposals which have long been under careful investigation, and taking decisions which the time is ripe, and indeed, over-ripe, to take.

It is true that the statement says that it should be understood that, behind this brief presentation of the plan, there lies a mass of detailed study. But merely left at that, I think the statement does somewhat less than justice to the amount of investigation and, indeed, decision which was taken by the old Railway Executive and the British Transport Commission in the earlier years of their existence. I have refreshed my memory on one or two points, and I find that in April, 1948, I wrote to the then Chairman of the Railway Executive and said: It seems to me that the question of the future form of traction—whether it be steam, electricity, diesel-electric, diesel-mechanical or gas turbine—is probably the most important long-term problem facing the railways today … I emphasised the amount of knowledge and experience that we had in various countries and which our own railway experts had been able to study in regard to some of these alternatives. I said, therefore, that as regards steam, electricity and diesel-electric the purely engineering and technical questions can be answered already from actual experience. For the gas turbine and the diesel-mechanical, further experiment was necessary.

To cut a long story short, I invited the Railway Executive then to set up a committee to study all these matters and to report to the Commission as soon as they could: as I put it, no longer, in regard to diesel engines, to go on experimenting as though there were no large fund of technical knowledge and experience upon which to draw, and as though our engineers had not been studying the characteristics (as I assume they have been doing) of this form of traction for the past twenty years. The noble Lord, Lord Balfour of Burleigh, is not here, but in point of fact the London and North Eastern Railway had already prepared a scheme for dieselisation of some of their services even before nationalisation. I asked whether that scheme had been shelved and if so on what grounds. I mention that merely to show that, within a few months of the formation of the British Transport Commission, we directed an intensive study of the various forms of traction, both from the technical and economic point of view. We did not get that report until the end of 1951, and with the change of Government everything went, of course, into the melting-pot.

Then there are other questions, such as electrification. The general scheme of electrification was indicated some years ago: to complete the electrification of South-East England where, rightly or wrongly—and probably wrongly—we are committed to the third-rail method Nevertheless, we thought it right, first, to survey the technical aspects of electrification and review the standardisation of the voltages which were to be adopted. In that inquiry we had the assistance of the best expert outside railways in the country, the late Mr. Frank Lydall. That was a necessary preliminary to any decision on whether to electrify or not. As your Lordships know, a start was made from Liverpool Street to Shenfield, and now I am glad to see that the work to carry out the electrification of the line from Liverpool Street to Chelmsford is already going on—and it is hoped to spread further.

The diesel shunting engine was selected some years ago as the right instrument for the shunting yards. That was settled policy. As for the standard mineral wagon, which the statement says was "recently adopted," it is three years ago since I wrote to the National Coal Board and other great users saying that that would be the standard mineral wagon of the future, but I am bound to say there was no enthusiasm for its introduction on the commercial side of the railways. I must infer from this Report that the Commission have told them what they are to do, without any mistake, because that is undoubtedly one of the great opportunities for economy. I do not want to labour those points. I make them only lest it might be thought, from some of the things that have been said in various debates, that during the five or six years of their existence the old Rail-way Executive and their technical and professional officers gave no thought to the future. In truth, under the Commission's constant encouragement, not to say prodding, they gave it much.

I will turn now to the aspects of Government policy which have emerged from recent discussions. First, there is the question of subsidy. Her Majesty's Government have made it plain that they have no intention of subsidising the Transport Commission. There is nothing new in that, because the principle was fundamental to the 1947 Act, which, by spreading the net, if you like, as wide as possible, rather fortified the feasibility of adhering to that policy and did not weaken it. I have said publicly on this question that subsidy is open, first of all, to the objection that a subsidised service is bound to be vulnerable to demands which ought, on merits, to be resisted. I am not thinking only or primarily of the staff, but of local interests, sectional interests and interests of all kinds, and the various forms of public and political pressure which can be brought to bear. In the second place, a subsidy removes the stimulus to efficiency and economy which the consciousness of having to pay their way imposes on the whole staff, from the top management downwards, Lastly—a point of no less importance—in my view, it exposes an undertaking to all sorts of hampering conditions and interferences which the subsidising authority would impose in the vain hope of avoiding the other two evils to which I have just made reference.

I do not say that there are no conceivable cases and no special circumstances which could be put forward as justifying relief from particular burdens; but even in the aggregate that will not amount to putting the situation, if it has once got out of hand, right again. The general objections to subsidy seem to me to remain.

Those views were not always popular in all quarters, as your Lordships can imagine, but I never shrank from stating them when I thought it necessary or salutary to do so. There is, fortunately, one means of financial assistance to which these objections do not apply. I am not altogether clear that I understand just what the attitude of the noble Lord, Lord Lucas of Chilworth, is on that point. It seems to me not open to objection to use public credit to guarantee the interest and principal of a nationalised undertaking. In theory, it might be said to be a form of assistance which private industry does not get.

LORD LUCAS OF CHILWORTH

Hear, hear!

LORD HURCOMB

But I think that, when considering a national undertaking of this order, that is only a theory, and the use of public credit does not bring with it the mischiefs which a real subsidy in other forms would undoubtedly carry. Therefore, I am glad that the present Government have again emphatically reaffirmed that principle of the 1947 Act.

But the negative decision not to sub-sidise carries with it, inevitably, a positive one; and that is that the Commission must be free to adjust their charges to meet increased costs. That has been again stated and admitted by the Chancellor of the Exchequer, subject, as he put it, to proper safeguards. The safeguard he specified was the very proper one that the Commission must show that they have done everything they can to reduce expenditure and to avoid deficits. That is a challenge which the Commission always were ready to meet, and I am sure always will be ready to meet. They ought to meet it in the witness-box before the impartial Transport Tribunal, where their critics can also be put in the witness-box and subjected to cross-examination. All I would ask on that is whether the Commission's right, which is also a duty, to exercise the power of adjusting their charges, is to be left to them to exercise, in future, free from Government intervention or Government pressure.

The third point, which I am glad to see has been emphatically reaffirmed, is that the Commission must be free to raise the capital they need for their undertaking. All through the first six years of their existence the Commission were severely handicapped by the way in which their power to spend capital was rationed; and that extended not only to what is ordinarily understood to be capital, in the shape of new works and developments, but also to the greater part of the renewals of wasting assets. I also endorse entirely what is said in the statement, that it is very bad for the morale of the staff to feel that they are in a stagnating, if not a deteriorating, undertaking. Not only is that bad for the staff as a whole, but it is particularly bad for the engineers and the technical people, who get very tired of making paper plans which they know are not going to be carried into fruition. I welcome, therefore, the realisation, which has come late in the day, of the real needs of railway transport for modernisation of its equipment.

I now come to what is really the crucial question, of which it seems to me too little has been asked—and that is, how are the finances going to stand? So far as the Commission are concerned, they have no alternative but to act, to renew and to develop their undertaking. It would be absurd to go on renewing like with like and not to take full advantage of the opportunities for substituting a better type of equipment which the needs of the times demand and technical progress has made possible. I have no doubt that when these various steps are carried out, albeit in stages, there will be great savings and improvements in receipts. But I have had a hand in a good many five-year and other periodical programmes such as Departments like to formulate and all Governments are fond of formulating, or requiring to be formulated, and producing at convenient moments which do not always turn out to be the right moment because events so often supervene to prevent their execution. I think the timetable is optimistic for, amongst others, the reasons which the noble Viscount, Lord Falmouth, gave. There will be lags in execution and there will be deferments of benefits.

Nevertheless, let us assume that the estimates are realised. On the receipts side, at any rate, the commercial officers of the railways will have an apparatus which they have never had before, as a result of the costing investigations which we entrusted some years ago to a small but able staff and which rapidly threw startling light upon some obscure places. I am sure the commercial officers of the railway will, in future, be able to see much more clearly than they have ever been able to see in the past what traffic it is worth while to carry and what they had better let go. As your Lordships know, the habit of the old commercial officers of the railways was to get the traffic whatever it cost, and, as they were careful not to know what it really cost, that slogan sounded highly commercial, although in truth nothing in the world was less commercial.

I was going to ask the noble Lord, Lord Hawke, whether he could elucidate one or two points in the statement which I may have misunderstood. When it is said that receipts will improve, on an average, at the rate of £1 million a year, I believe I am right in thinking that all that means is that someone, looking back twenty years hence, will find the receipts up by £20 million and will say that that was at the average rate of £1 million a year. It does not mean that the receipts are going to get better and better in an arithmetical progression of £1 million a year. If I am wrong on that point I shall be grateful to be put right. A more difficult point is the statement in paragraph 121 of this Memorandum which says that in addition to the cost of the capital and other expenses which are set out, in order to put the railway into a healthy state and rectify the present inadequacy of net earnings, the current net traffic receipts ought to be increased by about £25 million. I do not think that can have anything to do with the £25 million which has been stated to be the deficiency of the railways last year—it must be a mere coincidence of figures, but I am not sure. If it means that from 1970 onwards it would be desirable that the Commission should have a margin of something like £25 million in order to put them in a healthy state, I could not more heartily agree, because it is impossible to expect any body of men to go on running a vast undertaking of this kind with no margin, or merely one of £1 million or £2 million. A small fluctuation in traffic, or small rises in expenditure, are quite enough to upset their budget, and if the Commission are there demanding a margin of this order, then I would strongly support them.

Are your Lordships going to be satisfied with the hope or the prophecy that everything is going to be all right in 1970? As I have said, so far as the Commission is concerned, it has no alternative but to go on improving its undertaking, carrying on as commercially-minded people would, and carrying on with confidence and with some faith in what it is doing. But in relation to public policy, it seems to me that the situation wants looking at more closely, and that it is essential to knew, not what the position is going to be in 1970, but what it is going to be at the end of five years—say in 1960. It would be unreasonable to ask the Commission to prognosticate just where they will stand year by year, or how this or that plan will turn out; but I do not think it is unreasonable to say that we should have some sort of idea of where they hope to stand at the end of five years. There is, at the end of 1953, an accumulated deficiency of £27 million, £17 million of which is amortisation of capital. I will not take up your Lordships' time by arguing as to whether that policy is right. It seems to me a most prudent and desirable one if it can be maintained, but one must start from £27 million. What was the deficiency in 1954? That must be pretty well known. At what rate is the deficiency running in the current year, always assuming that fares and charges are not quickly and substantially increased? There are, indeed, further economies which can, and should be made, but they will not bridge gaps of that order.

Therefore I should like to ask the noble Lord, Lord Hawke, four questions: first, what will be the accumulated deficit, not of the railways but of the British Transport Commission as a whole at the end of the present year? Second, to what do they expect the maximum accumulated deficiency to rise? Third, in what year will the lost equilibrium be restored? And again, as I said just now, what will be the position at the end of 1960—five years hence? It seems to me, not as governing the immediate action of the Commission but as a basis of public policy, unrealistic and unwise to let our eyes wander off to the projected rosy-fingered dawns of 1970 or 1974. We ought to look at some shorter period than that, because it is on the earlier trend of the figures that the possibility of maintaining these admirable principles of "No subsidy," and so forth, may come to depend.

As I have said, I support the Government's policy in its principle of no subsidy; freedom to the railways to charge (I hope without interference), and the provision of capital on a generous scale, raised by transport stock issued on the market with a Treasury guarantee. It is fortunate that the economic position of the country is now held to make that possible. I welcome the possibility of spending £1,200 million on the railways in fifteen years—it happens to be the same figure as that mentioned in the recent Report on the National Coal Board, and over the same period. I do not suppose that in searching for relationships the noble Lord, Lord Lucas of Chilworth, will find any relationship between those two figures—again, it is a mere coincidence of figures.

I suppose something is to be spent on the canals, something on the docks and a great deal on London Transport. I was disappointed, though not surprised, to hear that the cost of Route C, the new London tube, which, when I urged it upon the then Minister in 1949, was to cost about £30 million, has already gone up to £50 million. Incidentally, I may say that at many periods of their existence, and again perhaps in the future, the cost of the London tubes and railways has had or will have to be paid for partly by the profits on London buses. That is a principle which the noble Lord, Lord Ashfield, discovered some twenty or thirty years ago when both were in private hands.

I agree that the analogy between London and the country at large is not perfect, but then no analogy ever is perfect; but this idea, that you are never to be allowed to balance earnings on one branch of transport against losses on another is one that I cannot accept. They do not always run the same in any one year. I would say, by all means spend all this money; but I cannot persuade myself that intensified competition between the two main branches of transport, one of which, the railways, is publicly-owned, with public obligations that it can never escape, and the other privately-owned and operating under the powerful shelter of a restrictive licensing system, will solve the obstinate transport problem. That problem is not to be so easily conjured away.

I remember that in 1921, Sir Eric Geddes and his railway advisers, the most able and progressive railway men of the time, thought that economies from amalgamation, which were undoubtedly great, technical and organisational improvements, improvements in operation whereby traffic was no longer routed by one's own route but by whichever was the shortest and most economical and so forth, new schemes of charges and other things would save the railway situation, then fairly desperate. So great was their confidence, that they refused the amalgamated railway companies power to carry by road any traffic which had not been carried, or was not to be carried, by rail. The railways were to be self-sufficient and self-supporting. How familiar all that sounds after what we have heard recently!

But the situation did not then develop according to the calculations, and it may not do so now. I do not say that the railways cannot be made to pay; but I do urge upon Her Majesty's Government that they should look at facts which can be measured within a reasonable period of years. We should not let our eyes drift away towards the rosy-fingered dawns of twenty or fifty years hence. It happens that my views of the fundamental transport problem coincide with the solution which was adopted by noble Lords who sit on the opposite Benches, and do apt run parallel with the views now held by Her Majesty's Government. I cannot help that. My views were not formed with any political bias or based on any political grounds. I served Ministers of Transport of all three Parties in the State, I hope with equal loyalty, certainly with equal pleasure, for they were always engaged in moving towards a constructive solution.

Neither further reflection nor recent events lead me to alter those views, though I am not going to attempt this afternoon to argue the reasons why I see no objection, and much advantage, in combining the basic public services—that is to say, long-distance haulage, whether by rail or by road—in the same hands. I cannot presume to argue with the noble Marquess who leads this House on the views which he put forward unless they are said to be based on facts, and that I should very respectfully seek to dispute. It was said that road haulage in the hands of the Commission could never earn a profit; and we used to be taunted with failing to do so, not very reasonably as it seemed to me at the time, and certainly prematurely as events have turned out.

The road haulage organisation, which had become highly efficient, in 1953 earned £9 million, of which £6 million remained after meeting the relevant capital charges. I do not know what the 1954 figure will be, but I shall be surprised if it is much less than £8 million, though from now onwards the figure must greatly diminish as the result of the loss of business. We used to be taunted with not making a high rate of profit, but now that the road haulage organisation does make a high rate of profit, it is blamed for "milking" road traffic in order to assist the railways. I feel that there is some misconception there. A business like road traffic ought to yield a much higher profit margin than a great basic undertaking like the railways. That is quite natural. But why it should be wrong for these profits to accrue to a unified national transport undertaking, I cannot see. If that profit accrues to private people, that seems to be all right. I cannot see that these profits are any more "milky" if they go into the public concern than if they go to private hauliers.

It has been pointed out this afternoon that the road haulage organisation has achieved its results in spite of the competition of C licence holders, which I was always ready to meet. I did not differ from my noble friend Lord Salter on that particular issue, though I fear that I differ from a good many other noble Lords. The road haulage organisation has also had competition from road hauliers for all short-distance hauls and, in the last two or three years, from long-distance hauliers. I feel that one is entitled to suggest—on quite realistic transport grounds—that it is worth while to consider whether it is necessary to carry any further the dissipation of these national assets which are capable, and have been shown to be capable, of earning a good rate, now that the reasonable claims of the small haulier to come back into long-distance haulage (if he wanted to) have amply been met. The small man has had every chance of coming back and I would urge Her Majesty's Government to look at that position again, if only as a means of ensuring the success of the main principles of their policy.

I shall be reminded, as the noble Marquess said I should be, that the object of the 1953 Act was to apply pressure to the railways while helping them to meet competition. An able supporter of the 1953 Act in another place expressed it as hurling against the railways competition from roads while lifting certain obligations from them. If the interests concerned were private interests who were hurling themselves at each other in commercial rivalry, that might be well enough; but is it so right in relation to a vital public service? It is no longer the railway shareholders, it is the Exchequer and the general taxpayer who will suffer the impact of this rivalry. And the Commission, I suppose, are to enjoy the blast and impact all the more because they will be caught like one of those animals which has to change its shell. They will be crawling out of the old steam locomotive and the obsolete equipment in which they now have to labour, and yet will not have got into their new shell of modern equipment, or have given it any time to grow and harden.

However that may be, bigger and bigger public capital is going to be needed. Is capital formation going to be so easy? Are capital resources going to be so abundant, and is the financial future of a truncated public transport system so certain and so rosy that there is no case at all for reconsidering the point (and reconsidering it before very long) to which the liquidation of the valuable revenue-earning road assets should be pushed? I urge that not, as I say, upon any kind of political grounds but as one of the means of making it possible to adhere to these other very desirable principles of non-subsidy and the rest which have formed the underlying basis of the Government's policy. If that is not done, I honestly feel that there is at least a risk that the transport problem which vexed us between the wars, and which is vexing many other countries still, will be lying again at the door of Her Majesty's Government and in a more formidable shape, which this time will touch more closely still the stability of the transport industry and the public interest and also, perhaps, for the first time, public finances.

5.13 p.m.

LORD GLYN

My Lords, I want to intervene in this debate for a short time, and I want to reinforce what has just fallen from the lips of the noble Lord, Lord Hurcomb. Those noble Lords who have had the opportunity of knowing Lord Hurcomb over a very long period, both in the Ministry of Transport and as Chairman of the Transport Commission, recognise that he looks on this problem not from any political point of view but simply from an economic point of view, and from what I should like to call a common sense point of view. When the last Bill was before the House, I so thoroughly agreed with the noble Lord, Lord Hurcomb, that I have never been able to understand why the political spotlight should be deliberately placed to divide transport into two sections. Transport is one thing, not two; and transport must be looked at as a means to help industry and trade, without bothering whether it goes on a steel rail or on a road.

It seems to me—I have put this point to various members of Her Majesty's Government first in another place and now here—that each day that passes the assets which have been set aside for sale are deteriorating. I am sure that the opportunity which has now been given to people to purchase these units has been quite sufficient to test the feeling of the public as to whether they really want them or not. The position is most serious, because, as Lord Hurcomb has said, we cannot cast our eyes right on to 1965 when the first nuclear energy generating station for railways will be operating. There will be an intervening ten years, and I believe it is very important that we should try to see what will be the position in five years' time if the Transport Commission are not to be allowed to operate road services as they were doing. I think that they were stopped for political reasons and political theory only.

It is undoubtedly right for Parliament to intervene if it believes that the public interest is being prejudiced by some action, be it by a nationalised body or by a private enterprise group. I spent most of my life in the railway service, and I always found that when politicians interferred with the operation of the railways it was against the public interest—but, of course, I was prejudiced. I remember well the time when we started the Railway Air Service to enable people at the end of the steel rail to get to places that were more easily reached by helicopter or by aeroplane. That was all done away with by one Government which did not agree that there should be a railway-operated air service. That was done because of the nationalisation of air services. One political Party thought that air services should be carried on solely by one organi- sation. When we pointed out that the public would suffer unless somebody took it over, we were told that they would not suffer; that the particular line operated, for instance, to the outer Islands and the Highlands, would not pay and therefore would not be adopted. But in course of time it has had to be carried out by subsidy—really a hidden subsidy for that part of transport, owing to the fact that British European Airways had not operated these services at a profit. When the railways were operating railway air services, we operated without loss. That is another example of where, for political reasons, transport has been interfered with.

The position is far more serious than seems to be generally realised. I listened carefully to every word the noble Marquess, the Leader of the House, said, and I know that there is a feeling that, from the political point of view, the action taken was the right one. I should have thought there was enough evidence now to justify the Government's considering the unhappy effect upon the public, and not to be afraid, if necessary, to eat humble pie.

THE MARQUESS OF SALISBURY

I am sorry to interrupt the noble Lord, but as he quoted me, I must say this. I hope he will not take me as accepting as a fact that this was done merely for political reasons. We believed that it would make for efficiency; we still believe that it is going to make for efficiency. I do not accept the noble Lord's assumption. It seemed that he was assuming that the Government acted from purely political motives. It might just as well be argued that the late Government acted from purely political motives in dealing with transport in the way they did. Yet I am sure they would equally deny that. I should not like it to be assumed that the Conservative view was that this was purely a matter of political necessity.

LORD GLYN

I recognise that. I think it was obvious that the scheme was a great economic success, operated in the way in which it was being operated. It showed a profit building up to about £6 million a year. That was thrown away, and it was thrown away for certain reasons. If they were not political reasons, I rather wonder what they were. At the same time, I hope that the matter will be looked at again, because, if it is not, I feel that, as Lord Hurcomb has pointed out (and no-one knows more about this matter than he does) there is a very grave risk that in the intermediate period between now and the time when the general electrification scheme comes to fruition, there may be a further deterioration in the finances of the Transport Commission and it will then be too late to take any other action.

The other point I wanted to mention is this. The noble Marquess pointed out that the railways had suffered great difficulties owing to extreme user during the war. And it is true that a very large sum of money has now to be spent, and has been spent, in maintenance, in improving the tracks and all the rest of it. That matter is still not finally settled and further sums will have to be spent, though several factors should make it easier to find that money. One is the question of canals. In the old days of the railway companies, who were responsible for the canals, we were always being told that we were deliberately killing the canals in order to help the railways. It is the fact, however, that the canals are not paying and are a burden on the Transport Commission. Proposals have been made for closing certain canals, and though in some cases local sentiment is anxious to keep them open, that cannot be justified on economic grounds. Of course, there is a possibility of an inquiry into the future user of the canals, I can foresee the routes of some canals being converted into roads, because there is sufficient space to enable a road to be laid, and without much expense owing to the level being more or less accurate.

I know that the feeling amongst the transport trade unions is now rather difficult. That is a new factor. In the old days, every railwayman considered himself a servant of the public and looked upon his duties as helping the country, the traveller and trade. Now, I am afraid, that feeling has gone. I believe it is essential to restore the morale and prestige of the railways, and I think that can more easily be done if transport is recognised as a whole, and if the work that is being done by those who work on both the railways and the roads is recognised. We must recognise that public custom has completely changed. Although trains haul about what the public call "luggage vans" they are now rarely filled with luggage. The tendency is for people to travel with only the amount of hand luggage they can carry themselves. I think that matters of that kind show what a change has taken place in the user of the railways.

On the question of antiquated wagons, about which the noble Viscount, Lord Falmouth, spoke, one point that is often forgotten is that half the factories in the country have turntables built to accommodate a small truck, and it will mean a very large expenditure if 20-ton wagons, for instance, are to be used at these factories. I am sure that the plan put forward by the Transport Commission shows great promise of success, especially if gas turbines are developed. But I agree with Lord Hurcomb's plea that something should be said about what will happen in the intervening period, before the fruition of this great scheme, to ensure that transport is really made to pay. If that is to be done, we must look on the question as a whole and not divide it into two sections.

5.24 p.m.

LORD MONKSWELL

My Lords, I should like to comment shortly upon the headings that appear on pages 6 and 7 of the modernisation and re-equipment pamphlet. I am afraid that a good deal of what I wish to say impinges upon technicalities, but is difficult to separate technicalities from costs, and as technicalities have already introduced themselves several times in this debate, I feel that I shall be in order. The first thing is track signalling improvement. I cordially agree that signalling must be improved. I think that is the soundest proposal in all this modernisation scheme. It makes the greatest possible difference in increasing the capacity of the railways and their earning power. When a driver gets at short intervals a signal which tells him the exact state of the line so many sections ahead, he is in a far better position to regulate his driving than he would be otherwise.

The next heading is better permanent way. The permanent way has always been a serious trouble, on account of rail joints, as the train bumps over every rail joint. Recently it has been discovered that the expansion of steel can be controlled, and in France (I believe it is being done in England, too) great lengths of welded rail are being used: there are several half-mile lengths in use in France at the present moment. The next question is that of traction. Steam, electric and diesel traction are all capable of doing everything that is required in the way of the reorganisation of the railways. Let me take steam first. It is admitted to be very much cheaper in first costs than either of its rivals. In the course of the last thirty years, particularly, the steam locomotive has been enormously improved, principally by superheating and higher pressures. In consequence, its efficiency—that is to say, the percentage utilisation in the cylinders of heat produced by the combustion of fuel in the firebox—has been doubled or more than doubled. I take these facts from a paper presented to the Institution of Mechanical Engineers by the Chief Mechanical Engineer of the former L.M.S. With regard to availability, the only obvious difference between steam and electricity is that the steam locomotive has to be stopped, perhaps once a week, to have the boiler washed out. But all figures of availability are so dependent on timetables, which can so easily be manipulated to prove anything, that they have little value.

It is stated in paragraph 29 on page 12, of the modernisation plan that the manual labour of firing makes it difficult to recruit firemen. Not long ago I travelled from Paris to Lille and back on the footplate of the steam locomotive of the fastest train of the day. The engine was equipped with an automatic stoker and during the whole day the fireman hardly touched the fire. With regard to cleansing and servicing, all locomotives, of course, require this, no matter what system they are on. Now turn to electricity. It is obviously essential for tube railways and railways with stations underground. Otherwise, the sole operating advantage of electricity is that electrically driven trains, when composed of multiple unit stock, but not otherwise, save about half a minute in getting into speed after a stop. I have tested this by comparing Paris suburban trains with electric trains on the London Underground. The French trains were drawn by the latest type of suburban engine on which I travelled, and I saw that no special effort was being made to start quickly.

Perhaps I may give a few figures on the question of power, comparing the power of the electric engine with that of the steam engine. It is generally recognised that the best way of comparing the power of different locomotives is the horse-power per ton of their own weight. At the end of last year, the French railways made some experiments in high speed, and an electric engine weighing 106 tons attained a speed of 151 m.p.h. The French railways have also a large steam locomotive and this locomotive weighs 148 tons. The horsepower per ton of the two engines was practically the same, and they may both be taken as having been doing their best. With regard to the pollution of the atmosphere, I cannot believe that it is worth while spending huge sums to get rid of locomotive smoke when it is remembered that British Railways burn only about 6 per cent. of the coal mined every year in this country. That does not deal with the question of dust, but all fast-moving traffic must raise dust at all times.

In deciding the relative advantages of steam and electricity, by far the most important consideration is the relative overall cost; and, as many noble Lords have pointed out, during this debate we have heard extremely little about cost. It is not claimed by partisans of electrification that electricity can compare favourably with steam unless the traffic reaches what they describe as a minimum density—that appears on page 12, paragraph 30. To be on the safe side, therefore, the Commission and their predecessors have begun by seizing the richest traffic in England—the London suburbs, London to Brighton and Manchester to Sheffield. But even so, they have failed to produce not only figures showing a profit for electricity over steam working, but any figures at all. I remember a meeting of the Southern Railway at which the shareholders were shouting for comparative figures for the cost of steam and electric working, and they were simply refused. The cost of electric working is kept a dead secret. In these circumstances, the country is invited to invest certainly tens of millions of pounds, and, so far as I can make out, hundreds of millions of pounds, on electrification. I earnestly hope that nothing of this kind will be done, at least until full estimates and full information of results up to date have been submitted to public scrutiny and discussion.

As to atomic power, I would simply remind your Lordships that it is the equipment of the line with conducting rails or wires, and their maintenance, that causes expense, not the generation of electricity. To me, it certainly seems that transport is the last thing that should be electrified, because it is always necessary to instal these conducting rails or wires, whereas no other electrical installation requires them. I cannot leave this subject without mentioning a rumour—indeed it is more than a rumour—current in railways circles, to the effect that the real reason for the proposal to eliminate the steam locomotive is the present and anticipated future failure of the National Coal Board to produce sufficient locomotive fuel, either in quantity or quality, while very indifferent fuel is good enough for the immense grates used in power stations. That it should be possible for this to be said in a country where the reserves of coal, much of it of excellent quality, are estimated to be sufficient, I believe, for 400 years, is so deplorable that I hope the Government may be able to refute it, not with a mere general denial but with full facts and figures.

With regard to diesel traction, as has been said the advantages are the absence of a boiler and the consequent possibility of entrusting an engine to a single man in shunting and marshalling yards. This is now being done on a considerable scale. The disadvantages are much higher first cost and enormously more complicated machinery. While a steam locomotive has anything from two to four cylinders, a diesel usually has about sixteen; and diesel cylinders, in which combustion takes place, are far more complicated than steam cylinders. The exhaust from diesel cylinders, though not so voluminous as smoke from a steam locomotive, is far more foul. It is true that in recent years the United States Railways have almost unanimously gone over to diesel traction. Why? The question is wrapped in mystery. There are no easily accessible figures to explain the reason. It is difficult to dissociate this fact front the enormous influence of the American oil companies, exerted by means of interlocking directorates, or otherwise. I wonder! But the fact remains that a diesel engine is a machine of great complication. It is possible that, owing to the absence of a separate engine, diesel-driven cars may be suitable for short-distance local services.

Passing on to passenger rolling stock, I have always thought that passenger rolling stock was about the best part of British Railways, and I hope that we are quite satisfied with what we have. I earnestly hope that in modernising the passenger rolling stock we shall not get those horrible open American carriages where one squalling baby can destroy the peace of all the occupants of the carriage. The freight services are to be drastically remodelled. Certainly it is in principle desirable to carry things like coal and ballast in large wagons, but, as the noble Lord, Lord Hurcomb, has said, the principle is not by any means unanimously approved by British traders.

5.41 p.m.

LORD WISE

My Lords, in the very few minutes that I shall occupy the attention of the House I want to deal with one or two points about the railways. We have had three full and detailed speeches, by the mover of the Motion, by the noble Marquess the Leader of the House, and by the noble Lord, Lord Hurcomb, and that leaves little to be said at this stage of the evening. I cannot approach the subject with the technical knowledge of the noble Lord who has just sat down, but I want to deal with it as one of the seething millions of rail and road users referred to by the noble Marquess in his speech. Personally, I hope that the plan outlined by the British Transport Commission, although it is suggested that it may not be possible to keep to the timetable, will at any rate do much to improve the rail system of this country.

I had the good fortune of being born in East Anglia, but I have the misfortune to suffer travel on the old Great Eastern, and now the Eastern Section of British Railways. Whatever may be said for the other sections of British Railways, there is much to be desired in their working in East Anglia. I may appear a little local or rural in my remarks, but I may tell your Lordships that I started from home this morning in frosty weather, with an overcoat and a neck wrapper on; and when I arrived at Liverpool Street I still retained the same garments. In the course of that journey, the engine on the train had been changed three times, and there was very little steam coming from the engine for the benefit of the passengers in the carriages. In making that point, I would suggest that, in connection with this plan, some better heating systems should be brought into operation. It is a pretty poor job to travel for three or four hours in a train which is either unheated or very badly heated.

I wish particularly to deal with East Anglia because in the Press hand-out of the speech which the Chairman of the British Transport Commission made a few days ago there appeared this statement: The plan is based upon an analysis of the traffic pattern of the future. It aims to adapt our century-old railway system to the needs of tomorrow. It will undoubtedly be of special benefit to those parts of the Kingdom which are rather more remote from the great industrial centres. I hope that, in the operation of the plan, particular attention will be paid to transport in the rural areas. I was interested in what the noble Marquess said about the main arteries from London to Rugby and on to York. I should have liked him to make some reference to certain offshoots from those arteries which I hope will, in the future, operate in East Anglia, Norfolk and Suffolk, Cambridgeshire, Northamptonshire and elsewhere, because although I am all in favour of great trunk roads, or main arteries, whatever they may be called, I think there is much to be said for spending money on the improvement of secondary roads for the safety of people using them.

THE MARQUESS OF SALISBURY

I think I did say that, pari passu with those main arteries, work would continue on the subsidiary roads, and that that would be paid for largely out of the £147 million, although a certain contribution would be made by the local authorities. I entirely agree with the noble Lord, and I think work must be done.

LORD WISE

I hope that help will be given to the local authorities. May I make another personal reference? In a small country area in which I am interested, a semi-main road passes through my property. A few days ago I suggested to the local authority concerned that that road, which is not wide enough to accommodate two lorries passing, should be improved. I was perfectly prepared to give them the land in order to improve the road. The reply came back that certain more important roads, certain more dangerous roads, had to be tackled first. Therefore, I hope that in the plan consideration will be given to the secondary roads of the country.

My noble friend Lord Lucas of Chilworth referred to the bridges and the level crossings. I notice in paragraph 15, on page 9 of the plan, that £20 million is to be allocated over a period of fifteen years for the improvement or work necessary on bridges. The noble Viscount, Lord Falmouth, referred to the number of bridges in this country over railways and under railways. With regard to level crossings, I am encouraged in this matter by what the Minister said in a debate in another place on February 23. In reply to the honourable Member for Lincoln, the Minister said [OFFICIAL REPORT, Commons, Vol. 537 (No. 39), col. 1336]: I am aware of the particular problems affecting the City of Lincoln, through the level crossing to which he referred, and I am anxious, both through my connection with the B.T.C. and other Ministerial capacities, to do what I can to overcome the difficulty. I have had experience of the level crossing referred to at Lincoln, which obviously needs improvement. I also have experience of a very tiresome level crossing in King's Lynn: I have known this level crossing for nearly fifty years. When I first came in contact with it, there was a scheme afoot either for bridging it or for putting a tunnel underneath. Time has passed, but nothing has been done. That road is a by-pass through King's Lynn which leads from the Midlands towards north Norfolk and to the seaside towns and villages on that coastline. It is no idle comment to say that sometimes there may be close upon a hundred vehicles, on a Sunday or other evening, waiting at that level crossing for the railway gates to be opened. The railway gates are still hand-operated, as they were, I expect, some forty or fifty years ago. All traffic into Lynn station comes to a dead end. All traffic, in the same way, I believe, as happens at Lincoln, has to come out again; all shunting has to go through these main line gates. I hope that, in bringing the plan into operation or spending the money which is outlined in the plan, some consideration may be given to that particular crossing.

I do not expect the Minister to be able to give me replies to the points I am raising this evening, but I am encouraged that the British Transport Commission have put into operation certain area committees. What I have to say in this respect will, I hope, go from this House to the consideration of the area committees and will possibly help them in what they have to do. There is one final point that I should like to make in regard to the Report, and that concerns the question of diesel engines. I am not by any means a technician. I understand that the position at the present time is that diesel engines are being partly produced by private firms and are then assembled by the engineers of the British Transport Commission, or the railways. In the Report it is envisaged that there will be no steam engines in operation after two or three years' time. What I want to know, and I think it may be important, is: if the same operation prevails then as prevails now in regard to the construction and assembling of diesel engines, what will be the position of Crewe, Swindon and the smaller railway shops? Will there still be employment for these thousands of men who are at present employed in those shops? Will those shops be fully occupied in helping along the new plan? I finish as I commenced, and say that I hope that the plan will fructify; that it will be carried out as quickly as possible, and that it will be of help in bringing success, comfort and good travelling on British railways.

5.54 p.m.

LORD SEMPILL

My Lords, I will be extremely brief. I should like, if I may, to couple myself with the remarks the noble Marquess the Leader of your Lordships' House made at the commencement of his most interesting speech in regard to my noble friend, Lord Lucas of Chilworth, and his presentation of these very involved matters. I should like to ask the noble Lord who is to reply whether Her Majesty's Government have considered the possibility of removing some of the railways and converting them into roads. The matter has been considered outside your Lordships' House. In the present state of efficiency of road transport the only way in which we can provide quickly the "arteries" (the noble Marquess has used that term) which go right to the centres of the cities is by using some of the present rail tracks for that purpose. Has the noble Lord, Lord Hawke, something to say expressing the views of Her Majesty's Government in regard to this matter?

5.56 p.m.

VISCOUNT STONEHAVEN

My Lords, I have both eyes on the clock. I just want to welcome this programme. Rail and road must, of course, be coupled together when considering the transport question. Also one must bear in mind that there is only the one financial cake to be cut, and one's ideas must be tempered by the general needs of the country. The other point on that score is that both road and rail will draw heavily on civil engineering for both personnel and equipment, and that is not unlimited either. We invented the macadamised road, through John Macadam. Also, so far as I am aware, we invented the railway. Other people have since passed us; nevertheless, both those ideas were our own. All we are trying to do now is to bring them up to date. My noble friend Lord Teynham was, I think, in favour of a highway authority—I am paraphrasing his words; he is not here at the moment. That is quite a good idea, if that authority is to act in an advisory capacity. I should like to see roads classified by that advisory authority, and a classified specification produced for those roads in accordance with their traffic density and their traffic requirements. After the main arteries would come the secondary arteries, and I think the limited amount of money might be made to go further if the specification were somewhat lower. One of the essential needs for a road carrying a reasonable amount of traffic is a dual carriageway, and the enormous specification for a dual carriageway usually includes a footpath on each side, a cycle track, and ten feet or fifteen feet in the middle. For an artery, that is very desirable, but I believe that a dual carriageway with possibly only a two-foot division in the centre would be immeasurably better than, say, a three-lane traffic road. I believe the cost of such a road is not completely out of the question; therefore I feel that that point might be considered.

I pass now from road to rail. Without the wholehearted co-operation of all the railway staff and unions, the plan cannot be made to work as well as it should. I believe that, with that co-operation, we have the opportunity now of demonstrating that a nationalised industry can pay, and can pay well; but we must start off with the idea that, unless the industry is going to be able to pay decent and comparable wages to the people working on that system, we may as well not start. We must have wholehearted co-operation, and no mistrust whatever, between the unions and the managements. I believe that that is quite possible. It is popular in these days to decry the railways, to say that their carriages are dirty and so on. Such criticisms one can read in the Press and hear on the wireless, but I want to state, here and now, that considering what they have got, the stretch of railway with which I am mostly concerned, which is the old L.M.S. and L.N.E.R., is as good as anyone could possibly hope for. The railway-men are courteous. It is true that the trains are not always on time, but they are not at all bad; and the spirit and niceness (if I may use that word) of the railway staff with whom I come in contact is the old spirit which we always knew. One can build on that.

Perhaps there could be a system, not of payment by result but one whereby the operatives might at some time be entitled to a profit share. I should like to see the money accruing dealt with, not by the men, not by the management, but by the trade unions, who have done a good job. They could hand it out as they thought fit. I should like to see the accounts of the railways produced in the form that, I understand, is used in other concerns. I am thinking, for instance, of the excellent pictorial representations that one sees in the Post Office and in explanatory statements of the Budget. That type of thing might go a long way to help. With the war and other frustrations we have been through a difficult time, but we are now getting clear of those obstacles. If we back this plan up to the hilt with a spirit of determination, and make a good job of it, I should not mind ownership of nationalised road transport by the railways in competition with private industry. I think that would be a good thing, provided we could create a spirit of trust to set it going.

6.3 p.m.

LORD HAWKE

My Lords, we have had a useful debate, and the House is indebted to the noble Lord, Lord Lucas of Chilworth, for putting down this Motion, in spite of the great efforts he has made on previous days. I thought that he tried to make our flesh creep a bit—in fact, at one stage I began to think that his speech was something of a horror tract. Nevertheless, it is no doubt a good thing that one's flesh should creep occasionally, because one is called upon to use one's reserves of equilibrium and equipoise. First, I propose to deal with the more detailed points made by various speakers, and then go on to one or two of the larger topics which have been raised by more than one noble Lord and on which I have prepared notes. I am not going into the question of congestion in our great cities. There has been a great deal of debate upon that subject in your Lordships' House, in the last few days, and I do not think we can really accept the position that it is no good going in for a system of roads in the country until one has knocked about our cities so much that the vehicles can get much more freely into them—one might be postponing the roads for ever.

The noble Lord, Lord Teynham, has put forward the view which he has expressed before now (I am not sure whether it was in the Press or in this House), that a Highway Authority is the right medium for taking over the roads of this country. But a pretty formidable legal and legislative task would have to be performed to get them into the hands of such a Highway Authority; and of course, by the Trunk Roads Acts of 1936 and 1946, the Minister, through having taken over a large mileage of the major roads of the country, has done something towards one side of the achievement which the noble Lord would like to see performed by this Highway Authority. Admittedly, the other side, the financial side, by which the Authority would raise loans in the market, and so on, is quite out of the question unless the Authority came into being. Her Majesty's Government think that at the moment there is quite enough change going on in the world without having to set up a separate Highway Authority. The noble Lord advocated the idea of these joint companies to own road haulage, but the views of the Government at the moment have been expressed by my noble Leader, that the disposal is going on all right, as I hope to show later on, and that it is unnecessary to get cold feet on the subject.

The noble Viscount, Lord Falmouth, as he always does, gave us some sound and experienced opinions about the railway plan—in fact, at one stage I wondered whether it was the Falmouth plan or the B.T.C. plan which the House had before it to-night. He rightly laid his finger on one of the most of the important aims in the plan, which is the through-braking of all goods stock, and that, of course, hinges on the decision as to the type of brake and couplings to be used. I am afraid that that matter has not yet been fir ally decided. With the rest of his speech, I think any railwayman could heartily agree.

The noble Lord, Lord Hurcomb, who does not seem to be in his place, has asked me certain specific questions. He wants to know how the finances of the plan will progress. He wants to know whether the railways will reach equilibrium at the end of five years, or when, and what would be their maximum deficit in the interval. Of course, those questions are almost impossible to answer. But there is, I think, one factor which the noble Lord has omitted, and one which would be generally admitted to be the most important factor of the lot—that is, that as the result of the 1953 Act the position of railway finance in itself has become rather unpredictable. Railway finances have been carried into a completely new railway climate—a climate that has not existed in this country for a hundred years—and it is quite impossible for anybody to calculate precisely how much benefit they are going to get out of it, The benefits from the 1953 Act are going to start to accrue much more quickly than the benefits from the capital improvement programme; and with that large, unpredictable factor there, I submit that it is really impossible to answer the questions asked by the noble Lord, Lord Hurcomb.

In the first part of his speech, Lord Hurcomb answered for me many of the criticisms put forward by the noble Lord, Lord Lucas of Chilworth, that we had not sufficiently considered this matter, and so on. The noble Lord showed that in practice this plan has not emerged "out of the blue" and ill-considered: it has actually been maturing within the Ministry of Transport for a very long time. In fact, I understood the noble Lord, rather than anything else, to criticise the delay in producing the rabbit out of the hat. Of course, the answer is that, up till now, the country has not been able to stand the degree of capital investment which we knew was required and which is now being put both into roads and into rail. I am afraid that I cannot let him know at this time what we propose to spend on canals, but I will let him have a note of that amount later.

He does not approve of the element of competition which we introduced by the 1953 Act. My noble Leader has dealt with that matter in extenso. Lord Hurcomb called up the situation in 1921 for comparison, but things were very different in those days. The noble Lord omitted the enormous reform created by the new railway charges plans under the 1953 Act: in 1921 not only were the railways bound hand and foot by legislation but the forms of road transport which they had as auxiliaries to the railways were capable of going only a few miles, for they were horse-drawn vehicles. To-day the railways have a very substantial fleet of delivery vehicles, in addition to the 3,250 vehicles that will remain with the Commission as wholly-owned companies. That fleet is capable of a delivery radius of a great many miles, so that it is now possible for the railways to collect over a distance of twenty or thirty miles, to put goods on to rail, and then to deliver twenty or thirty miles at the other end—a very different proposition from that which faced them in 1921.

My noble friend Lord Glyn was also for calling a halt. Some of the remarks I shall make about the process of disposal will answer some of his arguments, but I suggest that he was expressing what one might describe as the old railway man's view, a view bred out of the despair of the past. Since the advent of a rival form of transport the railways have had what they have felt to be a raw deal. The railways felt that the only way out of their despair, and the only possible alleviation, was to get hold of their competitors by some means or other and to stop the competition. I suggest that the 1953 Act has put a completely different complexion on this question. The Commission, with its railways, will have plenty to do in trying to get back the long-distance haulage of this country without having to embark on much short haulage in addition. There is a tremendous field for the railways in purely specialised long-distance haulage—a field in which they will not come up against very severe competition from these small people.

I am sorry that I cannot agree with a great deal of what was said by the noble Lord, Lord Monkswell. I can assure him that it is necessary to do what is proposed if one takes a forward view of life and production in this country.

LORD MONKSWELL

But that is just what I asked the noble Lord not to do. I asked him to give us the definite facts.

LORD HAWKE

I am giving the most definite facts that I can. Production in this country is going up every year by a certain percentage, and within a certain number of years the railways, as operated by steam, will be quite inadequate to carry the traffic of the country. That can be done only by electricity. I am afraid that the noble Lord, Lord Wise, like many others, lives in one of the more backward parts of the country as regards its railway services. The noble Lord is not the only person who has discovered that the heating on the old Great Eastern is designed to breed hardy men. If, and when, dieselisation descends into those regions, he will, at any rate, be assured that there will be a separate boiler on the diesel engine entirely designed for his comfort. His bodily comfort will not have to share steam with the pistons and cylinders of the driving engine; so at any rate he will have a chance of getting a better deal there.

The noble Lord also referred to country roads. It is for the local authority to initiate improvements there, and I must warn him that a substantial proportion of the cost, varying according to the class of road, will fall on the rates; so that those who advocate a great deal of road improvements are not always popular among their fellow men. There is, in the outline of the plan, no precise provision for level crossings, but that is a matter of detail; and undoubtedly there must be provision for level crossings. The noble Lord asked me a very important point about the manufacture of diesels in railway workshops. I understand that the tentative suggestion is that certain parts shall be manufactured by manufacturers and other parts by the railway workshops which have been manufacturing locomotives in the past. The noble Lord expressed fear or doubt on the possibility of unemployment arising among railway workshop men. I am informed that at present 90 per cent. of the railway workshop staff are engaged on repairs, and only 10 per cent. on the manufacture of new locomotives. The noble Lord should take some reassurance from those figures; they are the best I can give at the moment. This is an important point, and one which the Transport Commission have very much in mind.

The noble Lord, Lord Sempill, asked me whether the railway tracks could be used as roads. That suggestion is very fine in theory and might work in some places, but I am told that generally the tracks are too narrow, and that the tracks which would afford any great relief to the traffic are the very tracks that will be wanted most for the railways. On the whole, there are very few railway tracks between important areas in this country that are not already carrying heavy traffic, and likely to be carrying extremely heavy traffic within the next twenty years. We share the view of the noble Viscount, Lord, Stonehaven, concerning staff and the importance of esprit de corps, and profit-sharing. But it has always been found that railways are the most difficult type of business for which to devise any scheme by which profit-sharing could work. Unfortunately, many railways in the world have had no profits to share for a long time.

I come now to one or two of the major arguments. The petrol tax is now a prop of the general revenue, bringing in £240 million a year. At times it is argued, first, that it is wicked to tax transport and, second, that we are taxing transport at 250 per cent.—higher than any luxury. The answer is that we now tax all sorts of other things. We tax vehicles and labour; we tax food, I believe; we tax homes; we tax tools of trade; we tax capital goods; we tax health, in the shape of medicine. Why is it particularly wicked to tax transport? I do not think one can say it is any more wicked to tax transport than to tax anything else. What about this enormous weight of 250 per cent.? The general public, when it buys a bus ticket, does not buy oil: it buys transport. And the incidence of the oil tax is nothing like 250 per cent. on the transport which is sold to the public. In fact I understand that it is about a half- penny on a threepenny bus ticket, so that there would be only a small reduction if it were entirely removed. Of course it is a great illusion to think that it can be entirely removed. The oil tax has become, in fact, an essential part of the revenue, and the criterion of whethen to reduce it or not depends, first, on its yield and, secondly, on how much revenue the Chancellor of the Exchequer wants. At the moment the tax is still buoyant and, unfortunately, the Chancellor still requires a great deal of revenue.

Now as to the disposal of road haulage. The noble Lord, Lord Lucas of Chilworth, seemed to think that this had been a failure, judging by the numbers disposed of up to date; that the situation had gone too far and should be halted; that the services will soon suffer; that, what the roads becoming more and more congested, we ought to have more and more central planning of road use; and, therefore, that a Road Haulage Executive should be kept in being. Take the task of the British Transport Commission, which is the disposing body under the Act of 1953. The Commission had to dispose of these things without delay, on the best terms available, without avoidable disturbance, and to give small men a chance. This was a difficult task because there is a slight degree of incompatibility in some of these four basic conditions. They have to dispose of 32,500 vehicles, plus some depôts and stocks, and so on, and they started off, first of all, to test the market, because they had no idea how these things would sell. So they started out to see what the small men wanted.

They soon found that anything offered with depôts did not meet with a ready sale, so that a certain amount of time was wasted on that. But they also soon found that vehicles offered in smallish units, without depôts, sold pretty well, and up to January 31 they had sold 12,698 vehicles, of which 10,280 have been sold in units of less than fifteeen vehicles. Out of this ten thousand-odd, 7,516 have been sold in units of less than five. There are lists of another 2,367 which have recently been published, and the results of the tenders may possibly be known next month. In addition, there are lists of 5,800 vehicles sold in larger units which were published in January. It is quite clear, therefore, that the British Transport Commission have ful- filled their task to date. They have sold on terms which are quite fair. Small men have had the opportunity, and have taken the opportunity to come in, and disturbance of the system has been avoided. The only conceivable criticism would be over speed, and I can say that speed has not been neglected. In the result, this competition is already beginning to be in evidence on the roads. Moreover, there have been remarkably few complaints that any place suffers from lack of service, and we intend to go on implementing the 1953 Act in this way. The British Transport Commission will do anything they can to meet the wishes of any particular buyer in making up a unit.

Now, at the end, the British Transport Commission will still be left with 3,250 vehicles, which have been tentatively chosen and will go before the Minister for final approval. In addition, as I said, the railways have an enormous fleet of delivery vehicles, so that under the control of the British Transport Commission there remains a substantial road element. That, I think, answers the charge of the noble Lord, Lord Lucas of Chilworth, that we were planning to buy many more containers but that there were no vehicles to put them on. The answer is that British Railways have a great number of delivery vehicles.

My noble Leader, I think, has dealt very effectively with the accusation, shall we say, that we are breaking up an integrated system. He has fully explained that in practice it was not an integrated system at all: that it was merely integrated through the common ownership of two separate monopolies. There still remains the argument that the Commission are going to lose revenue over their road haulage section. In 1953, they contributed nearly £9 million of gross surplus towards the Commission's gross surplus. This improvement on previous years is the result of much hard work and reorganisation, perhaps stimulated a little by the very severe criticism they had received in the past. But it was a good result. Their total takings were approximately £80 million, and those takings represented about 12 per cent. of the Commission's gross takings. Some £9 million represented the road contribution towards the gross surplus of the Commission of £60 million, out of which central charges and interest charges had to be met. It was undoubtedly a useful bit of revenue, but hardly one on which the whole British Transport Commission revenue would stand or fall. If they were to lose the whole of their £9 million revenue—and I would remind your Lordships they will still be left with 3,250 vehicles—their overall operating ratio would rise between 1 and 1½ per cent.

It may be said that this is only a beginning: if £9 million in 1953, why not more later? Here we go into the realms of surmise. I suggest that there are only two ways in which the undertaking could be used. First to extract its maximum monopoly value from the joint ownership of road and rail, and, secondly, as a separate undertaking operated as efficiently as possible, as in practice it has been run. The first event, of course, we are not prepared to countenance, because that is exactly what we are trying to stop. But if we had to forecast the result in the second event, we only see what an efficient commercial enterprise succeeds in earning upon its fixed capital. In 1953, the Road Haulage Executive earned 21 per cent. on their fixed assets or, if we bring in goodwill, 12 per cent. The 628 companies reporting on the last quarter of 1954 and listed in the Economist of January 15, curiously enough, also earned 21 per cent. on their fixed assets and stocks, and if we brought in goodwill in their case there would be little change in the figure. I think these figures show that the Road Haulage Executive were earning about as much as they were capable of doing in 1953 and it was unlikely that they could earn substantially more, except by the exploitation of the consumer through the common ownership of a rail-road monopoly. To put it another way, I think it at least unlikely that the earnings on the £41 million of road haulage assets could be a substantial prop to the revenue on the £1,500 million British Transport Commission.

As a result of our transport policy, we believe that the road hauliers will again be able to offer the variety of services their customers require. It will be again possible for the small man to start up in business and work his way up. At the same time, the former remunerative method of discovering what the railway quotes and then undercutting is not going to be so easy. For the business they want, the railways are going to be very competitive, but there will be a lot of business that they do not want, and here their prices will be higher. In that field there will be plenty of scope for the road haulier. We are likely to get more real integration in that way, by traffic going to those who can handle it best, than we have had up to date.

On the other hand, every railwayman can now feel he is a member of a live organisation which intends to provide him with the latest equipment and in which there will be scope the whole time for the adoption of new ideas to attract and handle on the railway the ever-growing volume of traffic which the rising production of this country will make. The new ideas and new equipment will mean that jobs will be cleaner and provide more scope for skilled and technical knowledge. That means more opportunities for promotion for those who make themselves masters of the new methods. We hope that the railways will once more become an attractive career to the best of our youth. We once led the world in railway thought, and practice, and it is high time we took up our rightful position again.

6.33 p.m.

LORD LUCAS OF CHILWORTH

My Lords, in asking your Lordships to give me permission to withdrawn my Motion, may I first of all thank the noble Marquess the Leader of the House for the all too generous personal reference he made, for the fullness of his speech and for his concluding words, which I echo, that in future we all can view this problem and discuss it from only one point of view: from the point of view of what is good for the country, leaving ideological, dogmatic and even political opinions right out of the question. I should like to thank all noble Lords who have joined in this debate. If I single out for special thanks the noble Lords, Lord Hurcomb and Lord Glyn, it is only because they so strongly supported my point of view. I think it shows your Lordships' House to be one place at least where a man can speak his mind, irrespective of where he sits. With those words, I ask leave to be allowed to withdraw my Motion.

Motion for Papers, by leave, withdrawn.