§ 2.47 p.m.
§ Order of the Day for the House to be put into Committee read.
§ Moved, That the House do now resolve itself into Committee.—(The Earl of Selkirk.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The LORD MERTHYR in the Chair]
§ Clause 1:
§ Disposal of property to companies remaining under Commission's control
§
1. For subsection (1) of section four of the Transport Act, 1953 (which relates to transfers of property to companies under the control of the Commission, otherwise than with a view to the sale of their shares) there shall be substituted the following subsection—
(1) Subject to the provisions of this subsection the Commission may make over to any company under their direct or indirect control any property held by them for the purposes of the existing road haulage undertaking and any of their rights and obligations, whether under contract or otherwise, being rights and obligations connected with the property transferred, and in that event subsections (4) and (5) of the last preceding section, section six of this Act, and the First Schedule to this Act shall have effect as if
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the transaction had been a purchase resulting from an invitation under the last preceding section to tender for the purchase of that property on conditions providing for the purchaser taking over the connected rights and obligations, as if all such things had been done as would have fallen to be done if the transaction had been such a purchase and as if any vehicles specified by the Commission to the company as additional vehicles at the time when they are made over had been so specified under the said subsection (5), and, without prejudice to the generality of the preceding provisions of this subsection, references in the said provisions of this Act to transport units, to purchasers of transport units and to additional vehicles shall be construed accordingly.
§
Provided that—
(b) the total number and the total weight unladen of the vehicles made over to companies under this subsection which belong to each of the three following categories, that is to say—
shall not exceed, in the case of the first category, three hundred and twenty-five vehicles and two thousand seven hundred and fifty tons, in the case of the second category nine hundred and eighty-nine vehicles and three thousand three hundred and thirty tons, and in the case of the third category seven thousand seven hundred and fifty vehicles and thirty-six thousand tons, and, of the vehicles so made over which belong to the third category, not less than three-fortieths, in number, shall be specified as additional vehicles;
§
LORD LUCAS OF CHILWORTH moved, in paragraph (b) of the proposed new subsection (1), to leave out "thirty-six" and insert "forty" [thousand tons]. The noble Lord said; The first Amendment which stands in my name on the Paper is of an exploratory character. I wish to ask the noble Earl in charge of the Bill if he will tell your Lordships the significance of the additional words in this clause which set out not only the number of vehicles which are to be made over to companies, but the tonnage of every one of the three categories. Perhaps I may say a word by way of explanation. This provision deals with the companies
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under Section 4 of the Transport Act, 1953:
Transfer of transport units to companies under control of the Commission.
As I read it—and I know the noble Earl, Lord Selkirk, will be kind enough to correct me if I am wrong—the figures in this clause have significance only upon the day that the Bill becomes an Act of Parliament. There are three categories—I am now quoting from subsection (1) of Clause 1. Category 1 consists of the big vehicles which cumber up the roads of the country and which carry these abnormal loads. The second category is vehicles which carry special loads, and the third is the 7,750 general haulage vehicles which are to be transferred to the company—I suppose it will be called "British Road Services General Haulage, Limited," or something like that—which I understand is already in existence, on the day after this Bill becomes an Act.
§
I want to ask the noble Earl whether it is the number of vehicles or the weight of vehicles which will be transferred. What is the significance of putting these figures in all these three categories? If your Lordships will read from line 31, you will see the words:
shall not exceed, in the case of the first category, three hundred and twenty-five vehicles and two thousand seven hundred and fifty tons, in the case of the second category nine hundred and eighty-nine vehicles and three thousand three hundred and thirty tons, and in the case of the third category seven thousand seven hundred and fifty vehicles and thirty-six thousand tons".
I have done some mental arithmetic and can understand the first category, because I have worked out the average weight of the 325 vehicles making up the 2,750 tons. I have clone the same with the second category, but when it comes to the third category—that is, 7,750 vehicles and 36,000 tons—my practical experience of this industry prompts me to say that there must be some mistake. Perhaps the noble Earl can give me a simple answer. Either it is a mistake or, if it is not a mistake, it is a very serious matter. I estimate that with these 7,750 vehicles which are to be transferred to the company which is formed to carry on the general long-distance haulage, the average vehicle will be more than four and a half tons unladen weight. If I divide 7,750 into 36,000, I get about four and a half. As these vehicles range from about three tons to
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ten tons in weight, I would hazard a guess —it can be only a guess—that the average unladen weight throughout the whole fleet would be somewhere in the region of five tons. I want to ask the noble Earl this question. Does this Bill transfer 7,750 vehicles, or a number of vehicles aggregating 36,000 tons in weight? Because, if the latter is the case and the average weight is five tons per vehicle, it means that the company will have transferred to them not 7,750 vehicles but 7,200 vehicles, which will be 550 vehicles short. I am certain the Government do not mean that. I cannot understand the significance of putting in a tonnage figure at all. I work it out that, if the average is five tons per vehicle unladen weight and the number of vehicles is 7,750, the 36,000 becomes nearer 40,000. I am not seeking to increase the number of vehicles—the noble Earl understands that, does he not?
§ LORD LUCAS OF CHILWORTHI am not seeking to do that, because, of course, the day after these vehicles are transferred these figures will have no significance. The noble Earl will appreciate that, because this is only the figure of vehicles to be transferred by British Road Services to the company formed under Section 4 of the 1953 Act. From that day onwards the number can be increased if the company are able to persuade the licensing authorities of the country to grant them licences, and can be decreased if commercial or any other considerations dictate that they shall sell the vehicles, because the vehicles then become the property not of British Road Services but of the company formed, as I say, in accordance with Section 4 of the 1953 Act. I hope I have made the point clear.
It should be a simple question to answer, because this fleet of 7,750 vehicles is in existence. It is not a "ghost" fleet: the vehicles are actually there. I feel that there has been a slip, a mistake, because I am sure the noble Earl does not want to see these vehicles transferred upon a tonnage basis. I want them transferred on a vehicle basis, as we have all along understood they would be. This is, in fact, the first time that tonnage has ever 364 entered into it. If I may just recall the history of this matter, this was the number which the Chairman of the Disposals Board recommended should be given to general road haulage. Sir Malcolm Trustram Eve said the figure was, as near as he could ascertain and guess, 7,750. He did not say 36,000 tons' weight of vehicles; he said 7.750 vehicles. I believe that, if the noble Earl could walk round the British Road Services depôts and add up all the unladen weights of those 7,750 vehicles which are there now, the aggregated unladen weight would come to more than 36,000 tons; it would come nearer to my figure of 40,000 tons. That is the reason why I have put down this Amendment. Perhaps the noble Earl can give me the answer. I beg to move.
§
Amendment moved—
Page 2, line 38, leave out ("thirty-six") and insert ("forty").—(Lord Lucas of Chilworth.)
§ THE EARL OF SELKIRKThe noble Lord is not quite right when he says that these figures have no significance except on the day on which the Bill is passed—because, of course, these are the vehicles which are retained and are licensed specially. He is, however, right in saying that subsequently additional licences can be granted under the 1933 Act in the ordinary way. The significance of this provision is that, in the first place, the 1953 Act was based entirely on tonnage; there was no mention at all of numbers. In the second place, I think the Report of Sir Malcolm Trustram Eve mentions specifically 7,750 vehicles. It also suggested that it is fairly clear that the weight factor would need to be included. So, if I may say so, it was clearly envisaged that some measure of tonnage would be put into that Bill. What it amounts to is this: that the Commission may not retain more than the number which is specified or a total greater weight than the tonnage mentioned. They could, of course, retain fewer numbers with a greater weight, but I do not believe they could get up to 40,000 tons if they wanted to.
I have some figures of various sizes and average weights of the fleets of the British Transport Commission. The original retention under category (iii)—that is, general haulage, which the noble Lord mentioned—was 2,341 vehicles. Their average weight was 4.1 tons. The noble Lord will remember that the question arose as to disposal of the trunk 365 services and they were, in fact, more or less put up for sale in a body in two substantial lists, S. 4 and S.C. (iii). If I take the 6,115 vehicles put up under S. 4, I find that the average weight is 4.4 tons. Taking the 691 vehicles under S.C. (iii), the average weight is 4.3 tons. I think it is fair to say that these two lists substantially represent the trunk services. What we have done here is to take the figure of 7,750 and we have given an average weight of 4.64 tons, which is higher than any of the figures that we have given now. I think that is broadly reasonable and, as the noble Lord has said, in certain circumstances the member can be increased. That is really the basis of it. I think it is necessary to have some weight figure, and I think this weight figure will broadly represent what is required. I would make only this one further point. Of course, the trunk services are not entirely identifiable; had they been, it would not have been necessary to have Sir Malcolm Trustram Eve's Report. They are not the precise figure, and therefore this is a broad estimate of what we consider reasonable. I hope that that meets the noble Lord's point and that he will not press this Amendment.
§ LORD LUCAS OF CHILWORTHI am grateful to the noble Earl for explaining the matter, but I am afraid that he does not quite satisfy me. This is a very serious matter. The noble Earl has said that, on a basis of 4.6 tons unladen weight per vehicle, the tonnage of 7,750 vehicles amounts to 36,000.
§ THE EARL OF SELKIRKI hope that my mathematics are correct.
§ LORD LUCAS OF CHILWORTHYes, they are; I have worked it out. One must look at the significance of this point. I have got no basis, except guesswork, but I say that the average weight of the vehicles is nearer five tons. If I am right, and the noble Earl is wrong, it means that on the transfer, the General Road Haulage Company will get 550 fewer vehicles. That is a serious matter. If your Lordships will do a simple calculation and will divide five into thirty-six, you will see just how many they get. Five tons into 36,000 tons means 7,200 vehicles, instead of 7,750 vehicles. That is a substantial difference. Fortunately, I think it can be, easily proved whether 366 I am or the noble Earl is right, because the 7,750 vehicles that are to be handed over on the day when this Bill becomes law are in existence—they are all being used on the general long-distance haulage services of British Road Services.
If it meets the convenience, of your Lordships, who I am sure will be impressed with the seriousness of this matter, I will withdraw this Amendment for the time being and will put down a starred Question for the first Sitting Day after the Recess, to ask whether Her Majesty's Government will tell your Lordships the exact unladen weight categories of the 7,750 vehicles and the number of vehicles in each category; and if it mounts up to an average of 4.6 tons and the number is 7,750 I will apologise to the noble Earl for causing all the trouble. If it does not—if it adds up to five tons unladen weight—I feel certain that he will then accept my Amendment. If I may use the vernacular, I do not want to "pull a fast one" over the Government—I should be clever if I succeeded—in getting more than 7,750 vehicles; but I want 7,750, not 7,200, vehicles. If your Lordships will give me permission to do as I have suggested, the facts can be ascertained. This is a question of fact it is not a question of guesswork. I am satisfied with category (i), I am satisfied with category (ii); but I am not satisfied with category (iii), and I want to make sure that 7,750 vehicles are handed over to the General Road Haulage Company and not 7,200, as I fear may be the case. With your Lordships' permission, I will now withdraw this Amendment, and will put down a Question on the first Sitting Day after the Whitsun Recess. Then on the Report stage, having had the benefit of the Answer, I can decide whether or not again to put down this Amendment.
§ Amendment, by leave, withdrawn.
§ 3.5 p.m.
§
LORD LUCAS OF CHILWORTH moved, in paragraph (b) of the proposed new subsection (1), to leave out all words after "thirty-six thousand tons". The noble Lord said: This is a simple Amendment. I now return to the question of what I call the "mothball fleet". For some reason, when it was found that Her Majesty's Government, via the Disposals Boards, could not sell any more of these vehicles, they decided that the
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British Road Services had better keep them, after all. The number which they thought British Road Services should have in order to carry out the splendid service which was being given to the industry of this country—and industry and chambers of commerce throughout this country were the principal agitators that no more disposals of the general haulage fleet should take place—was not arithmetically decidable, and outside opinion was asked. Sir Malcolm Trustram Eve, who was the chairman of the Disposals Board, stated
to the best of my knowledge I would hazard the opinion that the correct number is 7,750 vehicles",
and, as the Committee will see in Clause 1 (1), 7,750 was the number of vehicles put into the Bill.
§ When the Bill was printed, the trouble started. I do not know where it started —it may have started in an outside organisation, or on the Back Benches in another place. But a way had to be found to placate the Opposition if 7,750, instead of 2,000-odd, vehicles were to be retained by British Road Services. This unruly section had to be placated and a way had to be found to reduce the number. Somebody thought of the excellent political expedient of saying, "In the average road haulage fleet in this country, 7½ per cent. of the vehicles are always under repair, and so 7½ per cent. of any fleet is sterilised. What we had better do is to sterilise 7½ per cent. of the 7,750,"—if my arithmetic is right, that comes to about 582—"and we will say that they cannot have A licences." That means that British Road Services will have 582 vehicles fewer than the number of 7,750. The Minister said on Committee stage, and I think also on Third Reading, in another place, that, in spite of the fact that the Chairman of the British Transport Commission, Sir Brian Robertson, had protested that he could utilise, in the national interest and the national economy, every one of the 7,750, he had, by force majeure, to agree to this, as I think, rather foolish bargain. I want to bring back that 7½ per cent. That is the sole object of this Amendment.
§ May I put it simply in this way? We are now talking about A licences, without which a vehicle cannot run on the roads for hire or reward. If the vehicle is under 368 repair, it is immobilised in any case, of course. If British Road Services, or the company which is now to be formed, are clever enough and are so efficient that they can reduce to 4 per cent. what is supposed to be the usual 7½ per cent. of vehicles under repair, why should not they have the benefit of their efficiency? If they can put 3½ per cent. of their vehicles back on the roads why should they not be encouraged to reduce to the smallest possible percentage their "mothball fleet" or the number of vehicles under repair? Let us make no bones about it; this is really political expediency and it is one of the most ridiculous things that a Government has put in any Bill, for it means only that British Road Services are to be put to a lot of trouble and will have to do a lot of paper work applying for these A licences when they want to use the vehicles. I hope that, in this last despairing effort of mine to get some sense into this matter, the noble Earl will concede my point and accept this Amendment. It purports to achieve only this: to provide that the 7,750 vehicles shall all have A licences; that they can be used at any time for the whole of the services of the British Road Services fleet, and that 7½ per cent. of the number shall not be immobilised under the guise of the suggestion that 7½ per cent. is the usual proportion for vehicles under repair and that that percentage should therefore be immobilised anyhow. I beg to move.
§
Amendment moved—
Page 2, line 38, leave out from ("tons") to end of line 41.—(Lord Lucas of Chilworth.)
§ THE EARL OF SELKIRKI believe your Lordships are generally familiar with the way in which this matter has arisen. Her Majesty's Government decided to permit the British Transport Commission to retain the trunk services. The question then arose: what were the trunk services? As the noble Lord, Lord Lucas of Chilworth, said on speaking on the first Amendment there was no specific answer. Sir Malcolm Trustram Eve was accordingly asked to examine the point, because as chairman of the Disposals Board he was in a peculiarly good position to do so. He did so with his customary skill, and he made a report. He was then asked whether these 7,750 were vehicles on the road or included those necessarily to some extent under repair. 369 Those of your Lord3hips who are familiar with the Royal Air Force organisation will know the difference between immediate reserves and immediate equipment—that is to say, aircraft. It is obvious that in that sphere one can never have al] the aircraft flying at one time, because there will always be some under repair. The same situation applies to road haulage.
Here Her Majesty's Government were fortunate in being able to take a wise course. Again through the medium of Sir Malcolm Trustram Eve, the chairman of the British Transport Commission and the chairman of the Road Haulage Association were brought together and were able to reach an agreement. The noble Lord, Lord Lucas of Chilworth, has suggested that that agreement was reached by force majeure, but the argument applies just as much one way as the other. The two gentlemen who came together did not know what decision might be taken by Her Majesty's Government, should they be unable to come to a decision; and accordingly both had considerable interest in reaching an agreement which was, broadly speaking, reasonable to them both. That is what they have done and that is what we have incorporated in the Bill; and I suggest to the House that it would be a great pity to disturb that now.
The Commission are now able to retain up to 7,750 vehicles, and if they wish to put one of these additional vehicles into operation they can do so either by getting in touch with the licensing authority, or, alternatively, as the noble Lord, Lord Lucas of Chilworth, suggests, they have only to apply for an A licence under the 1933 Act. There is nothing unusual about the additional vehicles. A number of transport units were sold with additional vehicles, in exactly the same way as is provided here. I believe that every fleet has additional vehicles. I very much hope that the noble Lord will not press this Amendment. This agreement has been reached, and if Her Majesty's Government were to go back on it, whichever side it took, the other side would feel that it had been roughly treated. This matter has been thoroughly threshed out, and, while I do not feel that this is a strong reason, I would point out that there have already been two Divisions in 370 another place and I do not think the other place is likely to come to a different decision should we send the matter back to them again.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHThe decision was a very stupid one, and while we will not go to a full Division on this we will certainly negative the decision by voice.
§ On Question, Amendment negatived.
§ Clause 1 agreed to.
§ Clause 2:
§ THE EARL OF SELKIRKThis Amendment is really a piece of machinery which does two things. First, it ensures that the Transport Commission continue to retain Part II licences: that is to say, licences granted under the first Schedule of the 1953 Act, for companies formed for sale. Originally these Part II licences lasted only for five years. Now the period is extended until the company ceases to be under the direct or indirect control of the Commission. Secondly, it also ensures that a special A licence under Part 1 of the 1953 Act will be granted to the purchaser of any or all of these companies which have been formed for sale, and the Special A Licence will remain valid for five years from the date on which that control passes to the purchaser. I beg to move.
§ Amendment moved—
§
Page 4, lire 15, at end insert—
("(4) As respects any vehicles which, immediately before the expiration of the five year period mentioned in Part II of the First Schedule to the Transport Act, 1953, are—
the said licence shall be deemed to have been granted for a period expiring with the end of the said five year period or with the date when the company ceases to be under the direct or indirect control of the Commission, whichever last occurs:Provided that if, after the expiration of the said five year period and before the company ceases to be under the direct or indirect control of the Commission, a:1y of the vehicles authorised to be used under the licence are disposed of by the company to the Commission, the licence shall thereupon cease to have effect with respect to those vehicles.")— (The Earl of Selkirk.)
§ On Question, Amendment agreed to.
371§ 3.18 p.m.
§
LORD LUCAS OF CHILWORTH moved to add to the clause:
(7) Notwithstanding anything in this Act or in the Transport Act, 1953, if all or any of the securities of a company to which property has been made over under the said section five remain unsold on the thirty-first day of December, nineteen hundred and fifty-six, the Commission shall be released from the duty of selling the said securities.
§ The noble Lord said: This Amendment is put down in order to give Her Majesty's Government the opportunity of showing how sincere they are when they keep telling us that they really want to take politics out of the road haulage industry. In his Second Reading speech the noble Earl spoke of coming to the end of a chapter and said that he hoped this Bill would be the end of a chapter. We want to come to the end of the book, then shut it and lock it away. The drafting of this simple Amendment may be bad or loose for, as I am always confessing to your Lordships, I am no Parliamentary draftsman. But it seeks to provide that on December 31, 1956, we shall come to an end of disposals for good and all. We believe that that is the most sensible course.
§ This Amendment really affects the parcels company and the meat company. The parcels company, which conies under Section 5 of the 1953 Act, is a company whose shares and securities can be sold. The Minister has often stated in another place that he does not intend to sell the shares in this company until such times as this company has been put upon a real profit-earning basis. Is it not a marvellous thing? Here is a Minister of Transport who is the custodian for the shareholders, the taxpayers, in the British Transport Commission, as well as in the British Road Services and in the parcels company, and, on the one hand, he is denying the British Transport Commission the right to cover their costs. I would not saddle the Minister of Transport with the whole of the responsibility, but by not accepting the advice given him by the Transport Tribunal he has prevented the British Transport Commission on their railway side from reducing the deficit of £13 million. On the other hand he says: "I am going to sell the most profitable asset of the British Transport Commission"—that is, the parcels company, 372 which is now making, according to its directors, £1 million a year. "I am going to sell that at an opportunity which will present itself in the years to come. I am going to sell it to the public."
§ We say that that is wrong. It is fundamentally wrong. It is commercially wrong. I do not think it is too harsh an expression to use to say that it is playing ducks and drakes with the taxpayers' money. We on this side of the House are going to resist it right up to the last. We say: "Let us call a halt to this. Let us take politics out of the transport industry." This parcels company and the meat company will be the only two companies that were formed under Section 5 of the Transport Act, 1953, which do not come under control of the British Transport Commission. Here is a business that has been built up until now 100 million parcels a year are handled to the satisfaction of the whole business community of this country. I ask the Committee to remember Lord Hurcomb's plea to the Government. I hope that I am not doing the noble Lord any injustice when I say that he is certainly not moved by political ideology in this; he is moved by something which I would describe as "horse sense." He says it is a tragedy that this company should be sold when it is a profit-earning concern, one which is well run and which has built up a national network. And it can never be as profitable hived off from the operations of the British Transport Commission, because already there is integration between the parcels services and the railways, and a lot of the 100 million parcels are trunked on the railways. If we want integration for industry, here to hand we have the whole benefit of this valuable parcels service, which will go on making money for the taxpayer and go some way to alleviating the great difficulty with which the railways will be faced for years to come in meeting their costs and reducing their deficits.
§ Here in the Bill is a suggestion that this company shall be sold and that the Sword of Damocles shall be suspended over the heads of Major-General Russell and his colleagues (who have done such an outstanding job of work) for two or three years until someone has been conditioned to come along and buy the undertaking. I have argued this matter 373 at length before and I do not intend to waste your Lordships' time by going into more detail to-day. I conclude by saying that this Amendment offers a chance of doing the sensible thing, of acting in the national interest. Let us close the book of nationalisation. As Lord Hurcomb told your Lordships in the Second Reading debate, this big business has been built up on public money at public risk until it is earning profit at the rate of £1 million a year, and now it is going to be sold off to the private speculator and the private investor. So far as we on this side of the House are concerned, we feel that we must do what we can to resist this policy, and any sensible Government that comes into power must reverse this decision at some future date, because it is taking the guts out of an integrated organization, tearing them out, just for the sake of pandering to private profit-makers. The State has taken the risk; the taxpayer has money at stake right the way through in the British Transport Commission—and the money was guaranteed in principal and interest. We ought not to allow one of the most valuable assets to be taken out of this organisation. My Lords, I have explained the purpose of this Amendment. I beg to move.
§
Amendment moved—
Page 4, line 39, at end insert the said new subsection.—(Lord Lucas of Chilworth.)
§ 3.26 p.m.
§ LORD GLYNI rise to support the Amendment moved by the noble Lord, Lord Lucas of Chilworth, for a very particular reason: that is that in another place, I think in 1933, it fell to my lot to invite the House to pass the permission for private enterprise—namely, British Railways at that time—to take over Carter Paterson & Co. That was done because, after considerable inquiry, it was found that the four railway companies, in those days of private industry, could greatly help the trading community if they were able to take over Carter Paterson & Co. and, almost simultaneously, Hay's Wharf, so as to provide a service which would cover the country. The noble Lord in moving this Amendment talked about nationalisation. The proposals that are under review at the moment were carried though by private enterprise, by the railway companies, before nationalisation. I hope noble Lords wilt forgive me for saying this, but 374 I personally feel that it is a great pity that the railway industry, which was a great industry, should be perpetually upset by political circumstances. It is obvious that if matters stand as they are now, then some day another Government will come into power and will reverse the whole thing.
I take it that it is possible to speak on this Amendment in rather general terms. I think it is worth remembering that one of the reasons why originally these proposals came into force in August, 1933, was that it was then possible to convey goods by trunking and so relieve the roads by putting such goods as could be accumulated for passage to the North, or any other pars of the country, on the rail. It seems to me that in these days the roads are already frightfully congested, and it is an extraordinary proposal that anything should be brought into force which would divorce that close association between rail parcel traffic and the delivery by road when the goods get near their destination.
Many people have no doubt studied the effect on the principal trading industries which utilise these services if the system is changed in any way, and I believe there is a feeling that it will do great damage to industry. With all respect to the individual road haulier, it seems to me rather foolish, as the nation is interested in the railways, that any action should be taken which would not only be to the detriment of the traders but remove valuable traffic from the railways. I fail to see how there can be any advantage in this to private enterprise, road hauliers or anyone else. It used to be the boast of the four railway companies in the old days that if any trader handed in a parcel it would be delivered at any destination within thirty-six hours. That is the ideal we ought to aim at and, if possible, we should try to reduce the time. I have not heard it said, in any argument for an alteration in the present system, which, as the noble Lord says, is making a profit of £1 million a year, that there are not some devoted people operating the parcels service, who have done a great deal to make it efficient.
There is another aspect which I do not think has been mentioned: that is, that traders are much more likely to insure their goods if they know who is going up handle them throughout the journey. It is a matter of great importance that that 375 should be recognised by the public. We had a system which was called "company's risk"—I suppose now it is called "Commission's risk". In the old days it meant that the companies took full risk for the safe arrival of articles sent, but the right to insure always remained to persons sending goods. I do not know whether it will be so easy to carry out insurance if the transit of goods is divorced from the control of one authority—namely, the Transport Commission. I beg noble Lords to realise that this is a matter far transcending Party politics. I think it is unfortunate that one service which under nationalisation is so successful should be left in a state of doubt about its future, because it is neither fair to the public nor to the men who are operating that service.
§ LORD HURCOMBI am not going to repeat what I have already said on the Second Reading of this Bill, but I should like to reinforce what the noble Lord, Lord Glyn, has just said. On transport merits, surely there can be no argument against leaving this service with the Transport Commission; but that means going back on what was done some three or four years ago, and I realise fully all the difficulties of doing that. Apart from that, I do not yet understand—and no answer has been made on this point—why, if it was right and proper in the public interest and in the interests of their shareholders that the old railway companies should own Carter Paterson & Co. and Pickford's 100 per cent., it is not equally in the public interest and right and proper that those concerns should be owned by the nationalised transport system, including the railways. I realise the length to which the Government have already gone in the proposals contained in this Bill, though I feel that it would be more expedient and wise, in the interests of a permanent settlement, to put an end forthwith to the doubts about this particular service. Surely there is a great deal to be said for putting a time limit upon the period during which this undertaking is to be left lying about, for someone or other to accept or reject or be induced to make some offer colourful enough in appearance to enable it to be accepted. I admit that it would be too much to say: "Put an end to that period now." But, 376 surely, there is a great balance of advantage in putting a short time limit upon the period during which this service is to be left in doubt; and I hope it is not too late for the Government to consider the matter from this angle now.
§ THE EARL OF SELKIRKI am sure that we shall all weigh carefully what the noble Lords, Lord Glyn, and Lord Hurcomb, have said to us, but the Amendment is not the way of doing what they have in mind. Indeed, it is almost the worst possible way of trying to do it. The Amendment means that if this company is to be sold, it has to be sold before next December. Clearly, that means that it would be sold at a very bad time and, if I may repeat the term so graphically used by the noble Lord, Lord Lucas of Chilworth, if we sold it then, we should be "playing ducks and drakes" with the taxpayers' money. For that reason I cannot commend this Amendment to the Committee. Moreover it is contrary to the Minister's intention. He intends to run the company for a term of years so that there will be some continuity in the future. If he attempted to sell the company before the end of the year, it is obvious that it would be sold below its true value. If the Minister does sell it, he wishes to get the full price.
The noble Lord talks about its being a profitable undertaking. No doubt it is, and so we may expect to get a very good price for it. By this Amendment the Minister would have only two choices: either to sell below price, or not to sell at all. What the Minister wishes, and what I think is a fair way of doing it, is to keep this company together: whether the shares are owned by the Commission or outside should not affect the continuity and structure of the company itself. We recognise the value of its work. The integration which has so far been attempted by the railways has not been entirely successful in itself. There may be other ways of doing it. In this Bill we are trying to get the balance on a difficult subject. We are trying to supply, in the first place, good public service, and secondly, an arrangement which is not regarded as fundamentally unfair by either side. Plainly, if that balance is overturned then one side or the other will consider that they are being treated unfairly. That is an important question if the future of this industry is 377 to be maintained and proper competition is to be maintained by the public service. This subject has been thoroughly ventilated already and there have been two Divisions in another place, and I would ask the noble Lord not to try to force us to send back something which I cannot believe the other place could possibly accept. Therefore I should be glad if he could withdraw his Amendment.
VISCOUNT ALEXANDER OF HILLS-BOROUGHListening to the noble Earl, I must say I feel convinced that my noble friend is right in putting down this Amendment. It is perfectly clear that the Government are trying to keep a provision for selling a valuable part of what is owned by the nation, a part which pays a profitable return to the Transport Commission and helps the general work of the Commission. There
§ Clause 2, as amended, agreed to.
378§ is no possible sense in it. We have listened to one of the members of the body which originated the linking up of the parcels service with the railways—the noble Lord, Lord Glyn—who ably stated the case. It only remains for us to say this: the Government plead with us not to send this question back to another place, because there will be no difference in the result. The warning must be repeated now, at this stage of the Bill in your Lordships' House. If this is put into the Statute Book, it will certainly be repealed when there is a Government of another kind, because this is merely carrying out a political dogma against the interests of the nation.
§ On Question, Whether the said Amendment shall be agreed to?
§ Their Lordships divided:—Contents, 23; Not-Contents, 56.
377| CONTENTS | ||
| Cork and Orrery, E. | Chorley, L. | Lucas of Chilworth, L. |
| Lucan, E. [Teller.] | Douglas of Kirtleside, L. | Milner of Leeds, L. |
| Faringdon, L. | Monkswell, L. | |
| Alexander of Hillsborough, V. | Glyn, L. | Ogmore, L. |
| Stonehaven, V. | Grantchester, L. | Pakenham, L. |
| Thurso, V. | Haden-Guest, L. [Teller.] | Pethick-Lawrence, L. |
| Henderson, L. | Sherwood, L. | |
| Archibald, L. | Lawson, L. | Sinha, L. |
| Winster, L. |
| NOT-CONTENTS | ||
| Kilmuir, V. (L. Chancellor.) | Monsell, V. | Hacking, L. |
| Runciman of Doxford, V. | Hampton, L. | |
| Salisbury, M. (L. President.) | Soulbury, V. | Harris, L. |
| Templewood, V. | Hawke, L. [Teller.] | |
| Cholmondeley, M. | Hindlip, L. | |
| Ferrers, E. | Abinger, L. | Leconfield, L. |
| Grey, E. | Balfour of Burleigh, L. | Luke, L. |
| Morley, E. | Balfour of Inchrye, L. | Lyle of Westbourne, L. |
| Munster, E. | Birdwood, L. | Mancroft, L. |
| Onslow, E. [Teller.] | Blackford, L. | Milverton, L. |
| St. Aldwyn, E. | Carrington, L. | Monk Bretton, L. |
| Selkirk, E. | Cawley, L, | Monson, L. |
| Swinton, E. | Chesham, L. | O'Hagan, L. |
| Clitheroe, L. | Rathcavan, L. | |
| Bridgeman, V. | Conesford, L. | Rochdale, L. |
| Cilcennin, V. | Congleton, L. | Sandys, L. |
| Crookshank, V. | Croft, L. | Teviot, L. |
| Goschen, V. | Dorchester, L | Teynham, L. |
| Hailsham, V. | Elton, L. | Tweedsmuir, L. |
| Leathers, V. | Gridley, L. | Waleran, L. |
| Resolved in the negative, and Amendment disagreed to accordingly. |
§ Clause 3 [Special provisions as to vehicles used exclusively for particular contracts]:
§ 3.50 p.m.
§ THE EARL OF SELKIRKClause 3 deals with contract A licences, and the Amendment which I am about to move is really introductory to a new clause that I shall be moving in a moment. Perhaps it would be convenient to your Lordships if I deal with that now. The purpose of the new clause is to leave with the Commission a reserve of vehicles which they can substitute for those they are retaining under Clause 3, which deals with the contract A licences. Under the Amendment the reserve vehicles will not be licensed. The Commission have two courses open to them if they want to bring these vehicles on the road. Either they can substitute vehicles by ad hoc arrangements, when required, with the licensing authority or, alternatively, they can apply for a general A licence. As a flatter of practice, for the 1,800 vehicles used for contract A work, about 99 were kept in reserve. It is expected that in future this will be roughly on the same basis. This will be a matter of adjustment between the Commission and the Disposals Board or, later on, with the Minister. I beg to move.
§
Amendment moved—
Page 6 line 24, after ("section") insert ("or under the next following section").—(The Earl of Selkirk.)
§ On Question, Amendment agreed to.
§ THE EARL OF SELKIRKI beg to move the next Amendment.
§
Amendment moved—
After Clause 3, insert the following new clause:
§ Extra vehicles for companies to which s. 3 applies
§ ".—(1) In addition to any vehicles made over to a company under the last preceding section. the Commission may, notwithstanding anything in subsection (5) of section six of the Transport Act, 1953, make over to that company such further vehicles as they may determine, so, however, that the total number of vehicles made over to companies under this section shall not exceed such number as may be agreed between the Board and the Commission or in default of agreement determined by the Minister.
§ (2) Where any vehicles are made over to a company under this section, any A licence under which they were authorised to be used before they are so made over shall cease to have effect so far as it relates to them. And 380 the Commission shall give all such notices and make all such applications as are necessary to secure that the licences are revoked or that the vehicles are removed therefrom, as the case may require."—(The Earl of Selkirk.)
§ On Question, Amendment agreed to.
§
LORD LUCAS OF CHILWORTH had given notice of an Amendment to the Amendment, to leave out all words after "section", in the new subsection (2), and to insert instead:
the provisions of Part I of the First Schedule to the Transport Act, 1953, shall have effect for the purpose of giving to the company the rights referred to in those provisions of obtaining in respect of those vehicles authorisations under A licences as if the transaction had been the purchase of a transport unit, and as if all such things had been done as would have fallen to be done if the transaction had been such a purchase.
§ The noble Lord said: I tried to follow the noble Earl closely when he was moving Amendment No. 5, but I do not think I followed him accurately. There seemed to be other and more important matters to discuss in other parts of the House, and the noble Earl's voice did not reach as far as this. The object of the new clause—the noble Earl will tell me whether I am right—is to carry out an undertaking made by the Minister in another place. This deals with Contract A licence vehicles—vehicles that are under contract by British Road Services to firms such as Cadbury's, Lyons' and people like that, who have their own painted vans. These are Contract A vans which are let on contract to big contractors.
§ THE DEPUTY CHAIRMAN OF COMMITTEES (THE EARL OF BUCKINGHAMSHIRE)I regret to have to interrupt the noble Lord, but I put Amendment No. 6 and it was agreed to. I do not think we can take Amendment No. 7, because it should have been moved before I put No. 6.
§ LORD LUCAS OF CHILWORTHWith great respect, I thought the Chair would have reminded me. I thought that before one could amend an Amendment, the Amendment had to be passed. If I am wrong, surely I may have available to me the expert and professional guidance of the Officers of the House. What am I to do?
§ THE DEPUTY CHAIRMAN OF COMMITTEESI regret the mistake which has been made, and I offer my 381 apologies to the noble Lord. What should have happened—and perhaps I should have explained this to him—is that after the noble Earl, Lord Selkirk, had moved Amendment No. 6 formally, the noble Lord, Lord Lucas of Chilworth, should have risen to move Amendment No. 7. I have not called Amendment No. 7.
§ LORD LUCAS OF CHILWORTHAmendment No. 7 was called.
§ THE DEPUTY CHAIRMAN OF COMMITTEESYes, that is quite correct; I did call Amendment No. 7.
VISCOUNT ALEXANDER OF HILLS-BOROUGHThe Chair called Amendment No. 7 after the new clause had been inserted. I cannot, for the life of me, see how the noble Lord can be prevented from bringing to your Lordships' notice a matter of this kind when he has been called upon by the Chair. If he cannot, he should have been called by the Chair before Amendment No. 6 was agreed to.
§ THE EARL OF SELKIRKI do not know whether it is in order to go back on what we have done; but if it is possible to discuss this Amendment we shall be only too glad to do so. I do not know whether the House would consider it most improper to consider that Amendment No. 6 has not, in fact, been passed. I do not know whether the Lord Chairman will accept that.
§ THE EARL OF SWINTONOught we not to conform to the Rules of Order? As this is the Committee stage, it will be quite easy, if we have made some mistake, while conforming to the Rules of Order, to have the Amendment moved on the Report stage, when it can be fully discussed.
§ THE DEPUTY CHAIRMAN OF COMMITTEESI very much regret this mistake, but perhaps it would be easier if the Amendment could be moved on the Report Stage. I am afraid I must take the blame for making this mistake.
VISCOUNT ALEXANDER OF HILLS-BOROUGHI do not think it would be the first time in the history of Parliament if the House agreed, in the case of a genuine mistake, to reconsider the position and discuss what many people have come here this afternoon specially to discuss. It is not always possible for them 382 to be here on another occasion. I should have thought that where there was a genuine mistake it could be put right.
§ THE LORD CHANCELLOR (VISCOUNT KILMUIR)With the permission of the House, might I suggest that the noble Lord, Lord Lucas of Chilworth, should let us know what the points are, and then, if the matter is still of importance in his mind, he can put it down again on Report. If the House will agree to that, we shall then know the point the noble Lord has in mind. All I want to do is to help the noble Lord and to let the House know what he has in mind.
§ THE EARL OF SWINTONMay I make one suggestion? It is not in the least anything personal, of course, but it is rather important that we should keep to our Rules of Order in this House, particularly as we have no Speaker and no Chairman of Committees who has any authority. The House is therefore the master of its own procedure. There is a way of dealing with this matter, if I may suggest it. If the noble Lord wishes to deploy an argument upon this subject, it might well be done on the question that the clause stand part. Then if he, having deployed his argument, also desires to get a decision from the House in a constitutional manner, it would be quite in order for him to put down an Amendment on the Report Stage. He is such a regular and valuable attender in this House that I feel sure he would wish to do it in that way.
§ LORD LUCAS OF CHILWORTHI am grateful to the noble Earl. That was a suggestion I was going to make: that in fact I should pass the observations I would have passed when the Lord Chairman puts the Question that the clause stand part; and then perhaps the noble Earl, Lord Selkirk, will reply to the points I make. I can then consider between new and the Report stage whether I shall put the Amendment down.
§ THE EARL OF SELKIRKThis is a new clause; therefore, strictly speaking, it does not stand part. But I have an Amendment to Clause 4 which, in a sense, is consequential. If we could stretch the Rules of Procedure, perhaps the noble Lord could deal with it under Amendment No. 8.
§ THE DEPUTY CHAIRMAN OF COMMITTEESI again offer my apologies to the noble Lord, Lord Lucas of Chilworth, for not putting this in the right way. Perhaps the noble Lord would like to put his argument on the question whether the clause stand part. The question is that the new clause be agreed to.
§ LORD LUCAS OF CHILWORTHWould the noble Earl be kind enough to tell me what this means, because it may cover the point? As I said, I was trying hard to follow what the noble Earl said, both on Amendments No. 5 and No. 6, but my attention was distracted by noises that should not have been made. As I understand it, what the noble Earl has done by the Amendment of Clause 3 and this new clause that he has moved, is to carry out an obligation which the Minister entered into quite voluntarily in another place. As I see it, this clause deals with contract A licence vehicles, and it is necessary, to carry out those contracts, that there shall be a float of vehicles. The float has to be there because these big firms who prefer to hire their vehicles, painted in their style and in their own colour, from British Road Services, have seasonal demands. They themselves do not run a fleet of vehicles, and the contractors who supply them with vehicles must have a float. The Minister said in another place on April 16 last [OFFICIAL REPORT, Commons, Vol. 551 (No. 133), col. 734]:
I give this undertaking. I think the point on retention is made"—that is, the retention of a float.If I am satisfied that the Commission needs a certain float of vehicles to carry out properly its contract hire work and that the Bill bars it from keeping that float which is a proper commercial thing to do, I will introduce an appropriate Amendment in another place to deal with the point.I understand that the noble Earl has now allowed the float but, if I read his Amendment correctly, he has then doubled back on his own traces and said "Yes, you can have the float but you cannot have any licences to operate the float." That appears to me to be even more nonsensical than the 7½ per cent. "mothball fleet" which will have to be a "mothball fleet" because it cannot have licences.This is not a case of repair; this is a case of having spare vehicles ready for instantaneous operation. If you take 384 away all their contract A licences, it means that immediately Messrs. Cadbury or Lyons, or any firm of a like nature, have a sudden rush of business—perhaps before Easter, Whitsun or any holiday period—when they may want four, five or more vans or lorries, or whatever they may be, British Road Services will then have to go to one of the twelve licensing authorities throughout the country and get a contract A licence. That may mean days before they can fulfil that demand. The noble Earl mentioned the figure of ninety-nine. That, I take it, is going to be the number of the float?
§ THE EARL OF SELKIRKNo. Perhaps I ought to make that clear. I must apologise to the Committee if I was a little brief. Ninety-nine is the number which the Commission have had on reserve of the 1,800 which they are using, and the number which we anticipate will be roughly in proportion to those figures, according to how many A contracts are taken.
§ LORD LUCAS OF CHILWORTHThey will come in the float; it may be ninety-nine or it may vary?
§ THE EARL OF SELKIRKDepending on the contract size.
§ LORD LUCAS OF CHILWORTHBut they will not have any licences for them. That was the object of the Amendment which I put down and which, through circumstances, I cannot move. Really, what is the sense of giving them a float of ninety-nine vehicles and then immediately immobilising them by not giving them contract A licences? They can always go to the licensing authority and get a licence for a vehicle. Surely this float is for emergency operation. Why do you not say that the fire engines of all the local authorities cannot have a fire engine licence until there is a fire, and that they can then write and get a licence to operate a fire engine and go and put the fire out? It would be just as much sense. This is an emergency squad of vehicles to cope with industry's extraordinary demands at any particular time of its season: Now, for some ridiculous mania of ideology of some kind which passes my comprehension, it is said "Yes, we will give you the vehicles, but you cannot use them until you have applied to the licensing authority for a contract A licence for them."
385 Suppose the licensing authority say: "No, you cannot have a licence"—and, after all, every application for a contract A licence can be opposed. Suppose that an application is opposed by the gentleman who insists upon having the 7 per cent. "mothball fleet." I cannot go any further to-day, but I shall put down an Amendment unless the noble Earl likes to concede my point and himself put down an Amendment. But, so that he will not tell me that my Amendment is out of order, or badly drafted, I am going to him and will let him draft the Amendment for me. I will put it down on Report stage. I feel certain that your Lordships will agree with me.
§ THE EARL OF SELKIRKPerhaps I may reply to that. The noble Lord is quite right. This is dealing with contract A licences. The arrangement is that the Commission keep all the contract A licences which they are able to obtain, and in cases where they do not obtain such licences, they will have to sell the vehicles which formerly they held. This is a float which they can retain against those licences. The noble Lord has shown more than his usual ingenuousness in pretending not to understand the licensing system of this country. He is well familiar with the nature of the licensing system here, but he now pretends that he does not understand it at all. He knows that the contract A licence is an entirely different thing from the A licence. He knows that the contract A licence is given with great facility and it is always for a precise number of vehicles. Every private contractor has to carry out the contract A licence procedure when he is doing this particular type of work. But, if he wants an ordinary A licence, as opposed to a contract A licence, that is an entirely different matter.
The Amendment which the noble Lord is suggesting here is directly intended to put the Commission in a privileged position as compared with the private operators in this country. He is saying that they may have a reserve of contract A licence vehicles against their contract licences. No private operator could do that. The noble Lord knows—or I think he is aware—that, if the Commission are unable to obtain any contracts, the vehicles which they might have used for that purpose will be sold without special A licences So, when the noble Lord 386 thinks it over, he will see that it is fairer not to have the Amendment which he has suggested, and that to accept the Amendment would put the Commission in a privileged position in respect of this matter. Therefore, I hope that on reflection he will not even put down an Amendment on Report stage.
§ Clause 4 [Reduction of number of trailers covered by licences under Part II of Schedule to Transport Act, 1953]:
§ THE EARL OF SELKIRKThis Amendment is consequential on the new clause which I moved. I beg to move.
§
Amendment moved—
Page 7, line 2, leave out ("the last preceding section,") and insert ("either of the two last preceding sections,").—(The Earl of Selkirk.)
§ On Question, Amendment agreed to.
§ Clause 4, as amended, agreed to.
§ Clause 5:
§ Supervision and control of disposal of property, etc.
§ (2) The Minister may give such directions as he thinks fit to the Commission as to the exercise by them of their powers (whether conferred by this Act or not) as holders of any of the securities of any company to which property has been made over by them under section five of the Transport Act, 1953, and of any powers conferred on them by name under the articles of association of any such company, being directions designed to procure either—
- (a) a reorganisation or alteration of the securities of the company; or
- (b) the inclusion on the board of the company of directors named by the Minister, not being a majority of the directors thereof.
§ LORD LUCAS OF CHILWORTH moved to delete subsection (2). The noble Lord said: This Amendment seeks to delete subsection (2) of Clause 5. This is about the worst piece of political—may I use the word without offence?—jiggerypokery that I have seen for a long time. This subsection gives the Minister power to direct a reorganisation or alteration of the securities of the company—I am now dealing with the parcels company. What exactly does that mean? It means that the Minister may cause a reorganisation of the finances of the company to the extent that if he wants to sell a profitable part he can do so. He can reorganise the finances so that the whole national network of the parcels company is split up into areas. He can do anything he likes 387 to alter or to reorganise the securities of the company—in other words, the share capital. When I was connected with the Ministry of Transport it was sacrosanct: the Minister could never give a direction to the British Transport Commission unless it was on a matter of the highest national importance. In this Bill the Minister can alter the financial constitution of the company.
§
The subsection then goes on to say that the Minister may:
procure either—
(b) the inclusion on the board of the company of directors named by the Minister, not being a majority of the directors thereof.
He can come along and say, "I want you to appoint Mr. Jones, Mr. Brown and Mr. Robinson to be directors of the company." In defence of this almost infamous suggestion it was stated in another place, I think by the Parliamentary Secretary, that the directors would be interested in the purchase of the company because they would have been appointed to the board as persons likely to command the confidence of investors—contact men, I suppose, to rig and arrange the takeover bids. I always thought that the first and paramount duty of a director of any company was to watch the interests of the shareholders. The shareholders of this company at the time these directors may be appointed will be the taxpayers of this country. We are going to have planted in this company the nominees of the Minister who may be acceptable to the City—spies inside the camp—so as to facilitate, and I suppose get, the best bargain they possibly can for those people in the City who are going to invest money. I doubt whether anybody has heard a more infamous suggestion.
§ Why should they want to command the confidence of the City? If I take the Minister literally, I should imagine that he is not going to sell this company for something like four or five years, and that he is going to sell it only when it is such a success financially that the directors who have been responsible for making the financial success will command more support and more favour from potential investors than one or two "place men" from the City, who no doubt will be far more interested in arranging take-over bids and getting commission than in running the company in 388 the interests of the taxpayers, who are the shareholders.
§ Then, what is the new policy of Her Majesty's Government? I thought we had heard that the highest places in nationalised industries—in fact, in all industry—should be for those who have worked their way up from the ground floor. I am not for one moment going into this point in great detail, because it is something which is going to engage your Lordships at the conclusion of this stage of the Bill. What kind of incentive is there for the senior executives of British Road Services Parcels Limited to work themselves up to be members of the board when they know that "place men" from the City are coming in, appointed by the Minister? I hesitate to suggest that this is perhaps a loophole for retired, but not retiring, civil servants to find a job after they have finished their active life in the Civil Service, at about twice their pension. Is that what this is? That now seems to be rather a habit of Her Majesty's Government.
§
I should like some explanation from the Minister of why it is necessary in the case of a company whose whole share capital is owned by the State, by the taxpayer, for the Minister to seek to be able to juggle with the financial arrangements of the company and, in the words of the Bill, to reorganise or alter the securities of the company or procure:
the inclusion on the board of the company of directors named by the Minister, not being a majority of the directors thereof.
I do not care whether or not it is a majority; they have no right to be there without some far better explanation than we have been given at the present time. I will not say any more. I will move this Amendment and perhaps the noble Earl can give us some far better reason for doing this than has been vouchsafed to us so far. I beg to move.
§
Amendment moved,
Page 7, line 15, leave out subsection (2).—(Lord Lucas of Chilworth.)
LORD TEYNHAMIn spite of what has been said in a most impressive way by the noble Lord opposite, I cannot see any infamous suggestion at all in this clause. Surely, as the clause is drawn, there are in fact a number of safeguards. In the first place, the Minister has no power to force policy on the board of the company, because he can appoint 389 only a minority of the directors—he cannot appoint all the directors. Nor can there be any question of packing the board of the company—it just cannot be done. The powers asked for by the Minister in this clause are, I understand, required for a specific purpose. It is really a reserve power to assist the Commission when necessary. As I understand it, that is the purpose of the clause.
§ LORD GLYNMay I intervene for a moment? I think that this is liable to create misunderstanding, because in another place there was rather a Contradiction between the Parliamentary Secretary and the Minister. After all, one must take the Minister's words as meaning what he wants, and he said
… persons likely to command the confidence of investors. They would have been put upon the board with a view to there being some degree of continuity between the administration of the parcels company while it was still owned by the British Road Services and when it had been taken over by private investment.The position seems to be one that requires clarification, because it is difficult for the executive and senior people working in British Road Services Parcels Division to have confidence in the future of the company or in their own future if they find that people are going to be put on the board by way of a type of Trojan horse, with a distinct understanding, according to the Parliamentary Secretary, that they are there to attract investors from outside to take over the concern and alienate it from the railway. Whatever may be the political motive behind this—I quite see that the Minister may require expert opinion—if we are going to have this service run in the way that we want it run, for public service, and to help the trade of the country generally, one wants some assurance that this minority on the board of directors will not have an adverse effect upon the labour employed by the concern.
§ 4.18 p.m.
§ LORD HURCOMBMay I ask for some further explanation of what is intended by the suggestion that there should be continuity between the old and the new boards? That seems to imply that the minority directors to be appointed by the Minister will in sonic way be connected with the new company after the sale. If that is intended, surely it puts these gentlemen into a most 390 ambiguous position. When I read the statement to which the noble Lord, Lord Glyn, has referred, I found it exceedingly difficult to be sure that I was understanding it aright, or to see the propriety of the interpretation which can be placed upon it, if by "continuity of management" is meant that the minority directors, or some of them, are also to be part of the management or directorate of the company after its sale. Surely, as the noble Lord, Lord Lucas of Chilworth, has said, there must be some conflict of duty in such a position. That may not be the meaning or intention of what was said, but it would be in the public interest, and would avoid suspicions and misunderstadings that are floating about, if the noble Earl would make some clear and categorical statement on that particular point.
I hope I have made clear what is troubling my mind, but to make sure may I put it again. Here are gentlemen serving on the board of this company, formed under the Transport Commission and still wholly owned by it, appointed by the Minister. I should have thought that one of their first duties was to ensure that it is competently and efficiently managed; secondly, that it is properly organised, and thirdly, that sales, when the time comes, are at prices which are right and proper. But if they are also to be part of the prospective directorate of the company to which the sale is made how can they act in a completely impartial position? It places them in what I can describe only as an ambiguous position, and though it is being suggested in many quarters that that is the intention and effect of this provision, I cannot feel that such an interpretation is right.
§ THE EARL OF SELKIRKI do not mind in the least what the noble Lord, Lord Lucas of Chilworth, says about Her Majesty's Government, but I feel that it is a pity that he should bring in the Civil Service, whether retired or not.
§ LORD LUCAS OF CHILWORTHSurely that can be brought in. If I cannot say that, what can I say? I am not attacking tile Civil Service; I am attacking policy.
§ THE EARL OF SELKIRKThe noble Lord is bringing in comment, which I 391 think is a pity. I take no objection to the rest of what was said. I can quite understand that those who do not want these companies to be sold should take exception to this particular part of the Bill, but I would ask them to look at the matter in this way. If one wanted to sell the companies one must have powers of this kind to do so. These are really permissive powers which are to be put into use when the time comes for selling these companies. It is not intended that these powers should be used in connection with other companies remaining with the Commission. The difficulty about commanding the support of investors outside is that, in the ordinary way, the directors of this company would be officials of employees of the Commission. They would be quite likely to look to the Commission for their future and to be concerned with the Commission's work. In the ordinary way, in the event of the company being sold they would not pass, as directors, to the company in private hands. In those circumstances, obviously it would be difficult to get the best price such as could be ensured by providing a measure of continuity when the company passed from one side to the other. Their purpose is to ensure that when the company is sold the best possible price is obtained.
I can give the noble Lord, Lord Hurcomb an assurance that there is no immediate intention of appointing anyone to these boards. This is run by the Commission, who will have every incentive to make it as great a success as they can. These powers will be used only when the time comes to sell. The noble Lord will recognise that, if the companies are to be sold, some powers of this kind are absolutely necessary and that it would be impossible to float a company in the City unless powers of this kind could be put in, providing for some continuity in the board of directors. There is here no sinister intention of interfering in the Commission's ordinary work. With that explanation, I hope this Amendment will not be pressed.
§ LORD LUCAS OF CHILWORTHI usually accept wholeheartedly what the noble Earl says, but I have never heard a weaker reason for doing what I believe is an infamous thing. If the noble Earl will forgive me, he is not following what 392 the Minister and his Parliamentary Secretary have said. He has taken an entirely different line. Every time a spokesman for Her Majesty's Government gets up in another place, or in Committee or in this House, he puts a different construction here. Take the wretched thing out altogether! What did the Parliamentary Secretary say. He does not speak unless he is instructed so to speak, for Parliamentary Secretaries do not dare to do so. He said during the Committee stage in another place:
They would certainly be interested in the purchase because they would have been appointed to the board"—they would not be officials: they would have been "appointed"—as being persons likely to command the confidence of investors.What does that mean? Here we have the noble Earl, Lord Selkirk, saying they would be put on the board to see that the organisation would be run efficiently after purchase. They cannot see that it is run efficiently before purchase. Surely the best persons to run things efficiently before purchase are those directors appointed by the Commission who have brought it to the state of competence and money-making which would attract the City.I can assure the noble Earl, as he should know, that the only thing in which the City is interested, is the profits of the concern and what the shares will be worth. Pretty faces on the board, because they are officials of the Minister of the British Transport Commission, will not inspire any more confidence in the breast of the City than directors who remain and who have been there in the past to bring it to that state of efficiency which will warrant the Minister selling it. This question has to be debated at far greater length than we can do this afternoon. The noble Earl should take out this provision. It is the most objectionable thing I have ever seen put in a Bill by any Government. Nobody could get away with an action like this—putting such dictatorial powers into a nationalised concern owned by the taxpayer when he, above everybody else, should be the custodian of the taxpayers' interests. The directors ought to see that the best price is obtained in the best sale to those most likely to be interested in purchasing.
393 When the noble Earl says that these powers are only permissive I must say: What crimes have been committed by Ministers under that excuse in the past few years! If it is only permissive what is it put in for? If it is not intended to be used, then take it out. I will certainly withdraw this Amendment, but I assure the noble Earl that this matter must be argued at greater length at the Report stage. Has the noble and learned Viscount the Lord Chancellor ever seen anything quite as bad as this? To me it savours of the "bucket shop. "The Government are inviting the Minister to put on the board of a nationalised organisation, when it is ripe for sale, people who will have the confidence of the City to "rig" the sale in favour of those who arc going to purchase.
§ THE LORD CHANCELLORI should not have interposed between the noble Lord, Lord Lucas of Chilworth, and his withdrawal had he not appealed to me, but as he was good enough to do so, I would ask the noble Lord to face the facts of this situation. As my noble friend Lord Selkirk said, we are dealing here with a situation where the object of the exercise is to sell this company. That is a situation with which we are faced, and this Bill makes elaborate provisions for that to occur. The effect of the noble Lord's Amendment would be to deprive the Minister of the powers conferred upon him by this subsection, first, to give directions to the Commission as to the exercise of their powers in relation to companies formed for sale, and particularly to give directions as to the reorganisation of the securities of the companies; and, secondly, to appoint persons named by him to the board of directors.
The first point I put to the noble Lord is that to take these powers away from the Minister would destroy the flexibility which the Bill seeks to introduce into the sale of companies. There can be no doubt about that point. And with respect to the noble Lord, the view that he has put so strongly to your Lordships is based not only on the ignoring of the object—which is the sale of the company —but also on the noble Lord's strongly held view, which he has expressed with such force to the Committee, that the company should not be sold. If one approaches it from that point of view, from the point of view of putting any 394 possible difficulty in the way of the sale of the company, then the noble Lord's Amendment fits into that background. But if the company has got to be sold, then the Minister must have the flexibility that I mentioned. The first part of the subsection to which the noble Lord objects deals with the question of structure. Now he appreciates very well that if you are going to sell you may have to change the nature of the securities of the company from being merely shares in the company to partly shares and partly loan capital. And it may well be that a very good offer may depend on some of the securities being loan securities, and, in fact, on there being some time before the loan is paid off, however it is arranged. I cannot see, so far as that is concerned, how there can be any objection—and, in fairness, I must say that I do not think the noble Lord has deployed many objections to that part of the clause.
The second part of subsection (2) gives the Minister the right to appoint directors. Again I ask the noble Lord (I do not want to make any debating or Party point of this) to consider this as a business proposition, and to consider it for the moment from the point of view of the Government; that is, on the basis that a sale is desirable. At the moment, the company will be run by a board the members of which are all appointed by the Commission. If the board is limited to persons employed by the Commission, then it follows that, when the sale takes place, there must be an entirely new board—unless, of course, one envisages taking people away from the service of the Commission, which I am sure the noble Lord would be the last to desire. I am not going into any possibility of that. But that follows as a logical necessity. You cannot avoid that if it is to be an entirely "Commission board"—if I may put it that way. Then, after purchase, the board will either be entirely different or it will be necessary to tempt away some of the Commission's people, which is prima facie not desirable. That situation has to be dealt with.
The Minister appoints persons to the hoard. In that situation, their duties, of course, are perfectly clear, as the noble Lord has said. They are then clothed with the duties and responsibilities of directors. Their first duty is to carry on the company as successfully as possible, 395 in accordance with the objects of the company as set out, and they cannot divest themselves of that duty. But a time will come—and it has been said that there is no desire to rush that time—when the sale has to take place. That happens in companies, as the noble Lord is aware. I do not know, but I should think he has probably been in a position where that has happened. And it can happen, of course, without any arrière pensée of any kind, that there is a transfer of the share capital; and in that situation the directors will have to consider what is a proper price. Again, I do not want to go into details; I know the noble Lord is entirely familiar with the various methods by which that is done. There is earning capacity, and you may have to take into account the assets at break-up value. You may follow the system known as the Cutforth system, which was invented by that very distinguished accountant, and which gives a certain weightage to both.
All these are commonplace things which every director will have considered either if there was going to be a sale or if he was going to advise shareholders as to the proper price for the sale. They are in that position, and again I say they cannot divest themselves of their duties in that position. But so long as it is fully known, and everyone appreciates it, and so long as they do not divest themselves of those duties which I have mentioned, I cannot see that it would be improper, in those circumstances, if they were asked to continue on the new board, for them to do so. Impropriety usually comes, I think the noble Lord will agree (I am trying to argue this matter dispassionately and objectively), where there has been some concealment of the position, where someone who is apparently looking after the interests of the seller shareholders is implicated with the buyers, and that fact is not known. Here, persons are put in the position that they have to carry out these duties, and it may well be in the interest of the Commission, as shareholders of the original company and therefore desirous of getting the highest price, that there will be people who will give to the purchasers that continuity which will ensure that the purchasers have the chance of carrying on the company in the most effi- 396 cient way. I think the noble Lord will agree that that is the form. You do not look entirely at pre-sale matters; you look at post-sale matters, your ability to make profits which have been made before. That is the situation.
And I would remind the noble Lord of what Lord Teynham said: that it is only a minority of the board that can be appointed by the Minister. I would say to the noble Lord, Lord Lucas of Chilworth, that I cannot see, on the basis I have put forward, why men of honour should not take that position. I put it to the noble Lord that this is one of the difficulties in politics, of which he knows —I have had some "at the other end of the gun". I have had to lead the opposition to nationalisation measures when I have been defeated on the main principle, or on secondary principles, and I have tried—I am sure the noble Lord will believe me, however ineffective my trials may appear to have been—to produce after that a working piece of mechanism. I think it is the duty of a responsible politician, when beaten on a major point, not to take the position of trying to make it unworkable. All that we ask the noble Lord—and I know that he will do it, whether he agrees with me or not—is to consider this matter before Report stage from the point of view of someone accepting the policy that these companies should be sold, and sold for the best price that the Commission can get for them. I have tried to deploy the case to the noble Lord, and I should like him to think that I appreciate the difficulties, because I have been through it the other way. I want to put this final point to the noble Lord. He said that he would withdraw the Amendment to-day but if, after consideration of what I have said, he still finds other criticism, we shall be very willing to meet it on Report stage.
§ LORD LUCAS OF CHILWORTHI am grateful to the noble and learned Viscount. I assure him that I am willing to use my best endeavours to make something I do not like work, but as my mind is working at the present time, the last thing I should do is to go about it by this method. To put buyers' representatives on the board before the companies are sold is as alien to getting the best price for the assets as any way of which I can think. I am not going to delay 397 your Lordships longer. I will study carefully what the noble and learned Viscount has said and perhaps return to this at a later stage. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 5 agreed to.
§ Clause 6 agreed to.
§ Clause 7:
§ Abolition of transport levy and winding-up of Transport Fund.
§ (3) The payments falling to be made to the Commission under subsection (2) of this section shall be in lieu of any payments falling to be made to the Commission under sections thirteen to fifteen of the Transport Act, 1953, and—
- (a) in subsection (1) of the said section thirteen the words from "and out of which there shall he made" to the end of that subsection; and
- (b) subsections (2) to (4) of the said section thirteen, and the whole of sections fourteen and fifteen of the said Act and of the Third Schedule thereto,
§ 4.44 p.m.
§
LORD LUCAS OF CHILWORTH moved to add to subsection (3):
Provided that, if the payments falling to be made to the Commission under subsection (2) of this section fall short of the payments that, but for the provisions of this subsection, would have been made to the Commission under sections thirteen to fifteen of the Transport Act, 1953, a sum equal to the difference between the first mentioned payments and the second mentioned payments shall be paid by the Minister to the Commission out of moneys provided by Parliament.
§ The noble Lord said: This Amendment seeks to make certain that the levy shall end at the end of this year when the Transport Fund is closed. It is estimated that it will have £12¼ million in its coffers. It is also estimated, by some method that I do not know, that the capital loss on the Commission's sale of vehicles will amount to £12¼ million. It may be more, arid what I want to be assured of is, that if it is more, the Transport Commission will not be the losers. I am prepared to accept the 1953 valuation of goodwill, though the Commission are not: I do not think it is any good jobbing backwards to that. But there may be circumstances which go past the date when the Transport Fund is closed down, which may involve the Commission in loss. I agree that the Transport Fund has to be 398 I closed down and that the Government I have done their best to see that the revenue into that Fund is equated by the estimated loss. What I want is a safeguard so that, if something should go wrong, the Transport Commission are not the losers. That is the simple reason for this Amendment, which I beg to move.
§
Amendment moved—
Page 10, line 9, insert the said proviso.—(Lord Lucas of Chilworth.)
§ THE EARL OF SELKIRKI am grateful for the brief way in which the noble Lord has moved the Amendment. I think I can give him the assurance for which he is asking. The capital loss estimated has been agreed by the Commission's auditors, and both compensation and expenses of sale have been specifically agreed with the Commission. The noble Lord accepts the 1953 basis for estimation. I assure him that he need have no anxiety in that respect. The noble Lord has chosen a somewhat unusual way of meeting this point. I will not go into the details, but we did not think it was a good way of doing it in 1953, and I cannot commend it in 1956. What I can say—and I believe that it meets the point which the noble Lord has in mind—is that on the basis on which we are working there is no possibility of the Commission being out of pocket unless the parcels and meat companies are sold below the price assumed on sale, which is equal to the written-down value of assets. We think that that is highly improbable and that there is every possibility, if and when the sale takes place, that it will be at a better price. Moreover, the Minister has said that he will take the best advice on how he can sell the assets to the greatest advantage. In these circumstances, I think that the anxiety of the noble Lord on this matter need be nil. I do not think he need worry about it, and I am certain that he would not expect roe to accept the way he proposes to get out of this difficulty.
§ LORD LUCAS OF CHILWORTHMy apprehension arises from this fact: that though the Minister has said that he will take the best advice, he is not very good at taking advice. He goes around and does not accept the advice of the Transport. Tribunal; nor does he accept the advice of the chairman of the Disposals 399 Board or of other people. He does not want advice; he wants acquiescence. The only disturbing thing that the noble Earl has said was about the written-down value of the parcels companies. The parcels companies have been written down in value, but I do not know how that is done, because the companies are subject to company law and income tax, and if they are written down in value—
§ THE EARL OF SELKIRKI said, "the written-down value"—that is, the book value.
§ LORD LUCAS OF CHILWORTHThe book value is not the true value. The noble Earl says in the next breath that they are going to make a large profit on the sale.
§ THE EARL OF SELKIRKOn the written-down value.
§ LORD LUCAS OF CHILWORTHI do not want the noble Earl to come to the House and say that the profit we have made on the sale of the parcels companies is the difference between the written-down value and the realisation value and that that, added to the £12¼ million, will reimburse the British Transport Commission. That is just a paper transaction. I can see a lot of pitfalls here. I am prepared to accept the noble Lord's sincerity in this, and that he does not want the Commission to come off badly through any untoward happening but I do not want the parcels companies sold at a peak figure against a written-down value to make a profit to set against any losses that might be sustained in other directions. That is all I ask. This Amendment was put down only to get an explanation from the noble Earl. I do not intend to press it now, but will give the matter further thought, and it may help if I have a discussion with the noble Earl about it. It is an intricate point, but I do not think we should waste the time of your Lordships in arguing it now. I beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 7 agreed to.
400§ THE EARL OF SELKIRKThis Amendment deals with quite a small point. It is really for the convenience of the Commission. The Commission are to be regarded, from the point of view of the Companies Act, as a holding company. The advantage of that is that if they wish to transfer drivers from one company to another they can do so without further impediment; or, if I may put it in another way, they can employ drivers differently in one subsidiary organisation from another subsidiary organisation. I beg to move.
§
Amendment moved—
After Clause 7 insert the following new clause:
§ Application to Commission of enactments relating to holding companies
§ " .—(1) For the purposes of the definition of the expression 'holding company' in subsection (3) of section twelve of the Road and Rail Traffic Act, 1933, the Commission shall be deemed to be a company, and the said section twelve (both as originally enacted and as applied by any subsequent enactment, whether passed before or after the passing of this Act) shall have effect accordingly.
§ (2) Nothing in this section shall affect the provisions of subsection (7) of section five of the Transport Act, 1953 (which relates to the application of the said section twelve where property is made over to a company under that section)."—(The Earl of Selkirk.)
§ On Question, Amendment agreed to.
§ Remaining clause and Schedule agreed to.
§ The Title:
§ THE EARL OF SELKIRKThis is an Amendment to cover the new clause after Clause 7 which I have already moved. I beg to move.
§
Amendment moved—
Line 6, after ("Fund") insert ("to extend certain enactments relating to holding companies to the British Transport Commission"). —(The Earl of Selkirk.)
§ On Question, Amendment agreed to.
§ Title, as amended, agreed to.
§ House resumed.