§ 3.51 p.m.
§ Debate resumed.
My Lords, I am certainly not against the proposals for the re-equipment of the railways, and it may well be that this large sum, which I think is £450 million and which the noble Lord, Lord Lucas of Chilworth, says is £350 million, is necessary to secure an efficient railway system. But I do hope that the Minister of Transport will see that by its aid the Transport Commission will not be allowed to crush their competitors by unfair means during the seven-year period. As an interested party, may I say that the whole shipping industry has an interest in the provision of adequate and efficient transport services, and certainly recognises that the railways are the essential element in such a system. On the other hand, it feels that certain safeguards are necessary to protect the providers of other forms of transport such as coastal shipping.
From time to time all Governments have acknowledged the importance of the coasting fleet, but little has been done to ensure its survival in the face of uneconomically low railway rates. It may not be generally known that the total tonnage of coasting vessels of under 1,200 tons has decreased by 53 per cent. since 1939. I maintain that if Her Majesty's Government really want a healthy coasting fleet, it is essential to ensure that the Transport Commission do not use the proposed subsidy to intensify their efforts to attract traffic which can be carried economically by sea.
I understand that the Commission have announced their intention of incurring substantial expenditure for new ships for operation between the Channel Islands and the mainland. I again suggest that it is important that the Commission should not be allowed to enter into subsidised competition with their competitors at sea. It would also seem that the Transport (Railway Finances) Bill now before another place, which will, of course, give effect to the financial proposals in this White Paper, leaves a loophole for the subsidy to be used in the way I have just mentioned. I propose to deal with this matter at a later date by a suitable Amendment, but I hope 573 that Her Majesty's Government will see their way to consider rectifying the matter themselves.
There is just one other point that. I should like to bring to the notice of your Lordships. I understand that the dock and harbour undertakings are self-supporting, whereas it is quite clear from the published account that a number of other activities of the Commission are not only failing to make a proper contribution to central charges but are, in fact, running at a loss. It appears that cross-subsidisation (not a word I like but I think it is the only way to express it) is accepted by the Treasury in the affairs of the Commission. In fact, it is specifically provided in the Bill that any surplus on revenue account of the non-railway parts of the Commission undertaking shall be taken into account in order to arrive at the amount to be advanced. I suggest that, if a measure of cross-subsidisation continues, the railway will be receiving assistance not only from the Exchequer but also from the users of the other services.
I maintain that the Commission's charges for their activities other than railways should he maintained at a level which will enable them to "break even". In the case of coastal shipping, I think it is obvious that, if this principle is not established, coastal shipping will be contributing to a subsidy, on the one hand, and suffering the results of subsidised competition, on the other. I should like to make it quite clear that coastal shipping is not any way asking for financial assistance, but I do maintain that they are entitled to a square deal. I would remind your Lordships that in the event of war coastal shipping will be of the utmost importance, because our large harbours may well he quickly closed down. For that reason we cannot, and must not, allow our coastal fleet to diminish, either in number or in quality. I should like a declaration from Her Majesty's Government to-day that they are not content to see the gradual decline in the volume of coastal shipping but that, on the contrary, they realise its very great importance to the nation.
§ 3.57 p.m.
§ LORD HURCOMB
My Lords, while the more technical aspects of the modernisation plan would hardly be a subject for discussion in detail this afternoon, there 574 is much new and valuable information in the British Transport Commission's Paper, and perhaps one or two comments on that part of the Paper may not be out of place, especially if the noble Earl who is to reply intends to deal with some of ills broader aspects. The plan, of course, is a whole, and many of its parts are so closely related that they will not yield the additional advantages expected from them unless they can be carried out more or less simultaneously. But, all the same I was very glad to see that the Chairman of the Commission recently took the opportunity of emphasising the importance of concentrating attention on those aspects of the plan which could be made to yield quick results, for otherwise, partly for the reasons that the noble Lord, Lord Lucas of Chilworth, gave, the financial position might indeed become desperate.
It is particularly encouraging to see the scope and the planned progress of the scheme for electrifying the railways. I have advocated electrification of the railways for thirty years past, and I find it impossible not to regret that the process has been delayed so long that it can be carried out only at an enormouly enhanced capital cost compared with what it wood have cost even twenty years ago. Our Continental friends have been more fortunate and perhaps wiser in proceeding much faster in that direction than either the old railway companies ever did or successive Governments have found it possible to allow. There is perhaps some consolation, though it is a small one, that as a result of the delay it is now possible to adopt a new method involving high voltages and alternating current which has only recently become available. The Commission are to be congratulated on taking rapid advantage of that fact. The system so far as I know, has not been tried on any large scale under operating conditions as cramped and crowded as our own, but there is no reason why it should not be completely successful, and, even if some time-lag develops through the teething troubles incidental to a new development, I am sure that the Commission will have made all necessary allowance for that in their estimates.
A second decision of the utmost importance is one to which reference has already been made—namely, the standardisation of the vacuum brake and the 575 decision to equip the wagon stock generally with such brakes. The railway experts took some years in making up their minds on that question and the decision was no doubt a difficult one for the Commission to take. From a technical point of view, the decision is open to a good deal of doubt whether the choice has been a right one, but there, again, there is a wealth of engineering talent at their disposal and it may be possible to find means of perfecting that brake and reducing its cost, and so yielding the results which are hoped for from it.
Undoubtedly the equipping of the higher capacity wagon stock with efficient brakes is one of the major opportunities for reducing the cost of freight working. Even though it may take years to carry it out fully, that fact. I think, goes a long way to support the Commission's confidence that they can derive a great deal more revenue from their freight working. I think also there is no doubt that a good deal of passenger revenue can be gained by the improved types of service which both diesel and electric trains can give, and I myself would not quarrel with the figures which the Commission put forward as increased revenue likely to be gained under either of those heads, though to some extent I share the doubts of Lord Lucas of Chilworth whether they will accrue quite as fast as is indicated in this White Paper.
What seems to me a very much more doubtful figure is the £20 million to £25 million which are to be derived from freedom of charge. There I think the figure is not intended to represent the revenue that could be gained by increasing charges to balance increased costs; it represents rather a combination of the savings which the railways hope to achieve by rejecting unwanted or unprofitable traffics, on the one hand, and, on the other, winning back traffic from their competitors—from the other public road hauliers and from coastwise shipping, with which I have a great deal of sympathy, but I cannot see that it can look for protection against the railways. If the railways are to be put on a competitive basis they must be able to quote rates which will bring back traffic, whether it be from other road hauliers or from coastwise shipping. That, I 576 think, was inherent in the change of policy in the 1953 Act.
There is another point. If one is inclined to think that in some respects the Commission's estimates are optimistic, one is struck by the fact that in 1955 British Railways made nothing at all—a mere £200,000 on their vast capital investment and their huge turnover—and in the current year apparently will have worked at a substantial operating loss. That leads me to think that there is not only room, which is obvious, but also a real opportunity for a rapid and substantial recovery in their net receipts. I should not feel too pessimistic about this matter. In any case, I think it will be generally accepted that the Commission's estimates approximate to the foreseeable probabilities as closely as any calculations which can be made at the moment are likely to do.
They go far to answer four questions which I asked when your Lordships last debated this matter sonic eighteen months ago, in March, 1955. I put some questions then which seemed to me not only reasonable but necessary questions. I did not succeed in extracting any answers. I was told, I think by the noble Lord. Lord Hawke, that it was almost impossible to answer those questions, and he disposed of me, or at any rate of my questions, for the time being, with the disarming statement that the 1953 Act had made the finances of the British Transport Commission somewhat unpredictable. Well, my Lords, the position could not be left like that, and perhaps I may recall the questions which I asked. I asked: "What will be the amount of the deficiency at the end of the current year? What is the deficiency going to be at the end of five years? When will the lost equilibrium be restored? And what is the maximum to which it is thought the accumulated deficiency will rise?" We are a year further on, and, as Lord Lucas of Chilworth has pointed out, we have the answers. The deficiency at the end of the year is £120 million. It is hoped to achieve equilibrium again by 1961 or 1962, five or six years hence. That answered two of my questions. As to the accumulated deficiency, on the Commission's figures, which include full allowance for interest on capital expenditure but exclude interest on the deficiency 577 itself, this will be some £320 million in all, as has been pointed out—namely, £120 million outstanding at the end of this year, plus something between £170 million and £240 million, which the Commission say should be put at £200 million accumulated in those five or six years. That is an enormous figure and, as I say, excludes the substantial number of millions of pounds for interest on the deficiencies.
I am not going to delay your Lordships by contrasting this position with that attained at the end of 1953. At the end of the first six difficult formative years we finished with an accumulated deficiency of only £27 million, and that was being paid off at the rate of £4 million a year out of surplus revenue. Of course, that period had been one in which it had not been possible to embark on any substantial capital investment, and therefore interest charges had not been incurred. On the other hand, that meant that services were not what they should have been and opportunities for earning money were lost. What is more important to my way of thinking—though I know I ant in a very small minority in this regard—it was before the process of disintegrating the national system of transport, which had been so expensively and laboriously built up, had begun, and it was before rein had been given to the policy of hurling against the railways the competition of the roads, as a member in another place, who is now a member of the Government, so aptly described the objects and intentions—or a large part of the objects and intentions—of the 1953 Act.
But, leaving all that aside, the reasons why I pressed my questions eighteen months ago were twofold. First of all, it was not then too late to halt the process of selling off the most highly remunerative part of the British Transport Commission's assets in their road haulage organisation. Since I spoke, facts have now compelled a halt to that process, and my feeling, so far as the parcels service is concerned, is that it is likely to he left where it is—with the Commission Perhaps the wisest way of dealing with that is to hope that it will be so and not to press the matter on the Minister too hard at the moment. In fact, he has been rather reasonable about it.
578 The second reason why I pressed my questions was my fear that the deficit, if it had been faced and brought out, was already rising to a figure of an order which would make it unmanageable and would endanger the possibility of Her Majesty's Government adhering to their declared policy of "no subsidy to the railways," with which I expressed my agreement. I feel that all parties and all interests concerned now owe the Commission great thanks for the clear and factual way in which they have brought out their position in very telling paragraphs and extremely illuminating graphs in this White Paper, giving their estimate of their situation, present and prospective, the seriousness of which they in no way seek to disguise but which they measure realistically and, as befits them, in no spirit of despair.
The proposals of Her Majesty's Government, so far as I understand them, will enable the Commission, in the first place, to borrow in order to meet their accrued deficiencies. I do not think that under the 1947 Act the Commission could have gone very far to borrow the amount of the deficiencies and the amounts required to pay the interest on those borrowings, which at their maximum apparently, will rise to something over £300 million, as the noble Lord, Lord Lucas of Chilworth, has said. Where I do not follow the noble Lord is in his suggestion that the £70 million of deficiency accrued at the end of 1955 was to be written off. I see nothing in the White Paper to suggest that. If it were to be written off by the Government it would really have to be written off by the taxpayer.
§ LORD LUCAS OF CHILWORTH
My Lords, I believe that the White Paper, or if not the White Paper a certain document which has since made its appearance, has said that the £70 million will be placed to a special account in the books of the British Transport Commission and written down as directed by the Minister.
§ THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK)
My Lords, perhaps it would assist if I said a word. It is intended that the amount shall be written down as directed by the Minister, from surpluses; so the noble Lord is perfectly correct.
§ LORD HURCOMB
My Lords, it will be something of which we have had experience in the last eight or nine years, one of those things, which, taking one with another, will, we hope, disappear and be liquidated out of surplus revenue. Instead of taking one year with another we are taking decades one with another. There is no gift to the Commission under that head.
Nor, so far as I can see, will these proposals of Her Majesty's Government in respect of deficiencies do more than regularise the borrowing of money which, somehow or other, the Commission would have had to borrow. It does not give them a penny by way of subsidy, assuming, as I do, that the interest to be charged on these advances will always be at current rates.
§ LORD LUCAS OF CHILWORTH
My Lords, perhaps the noble Lord, Lord Hurcomb, will forgive my interrupting him on this very important point. We have always to assume, of course, as I am sure the noble Lord is assuming, that this has to be paid off against profits. We always assume that the profits from which to do that will be there.
§ LORD HURCOMB
My Lords, it means that very large sums will be carried to some kind of suspense account, in the hope that the deficit will be liquidated out of future surpluses. That means, of course, that a large demand will be made upon those surpluses, which otherwise would have been available for improving services or reducing fares. It is throwing a burden on to the future, but it is not departing by one hair's breadth from the policy of not subsidising. I hope I have understood that matter rightly, but I am by no means so clear about the interest on capital expenditure, except that here again there is no element of subsidy. I have looked only at the proposals of the White Paper, as I thought that any more detailed elaboration of them was not before your Lordships just yet. But perhaps the noble Earl, Lord Selkirk, will inform the House whether the power to capitalise is to extend to all capital expenditure of British Railways, or only to that part of it which is covered by the modernisation plan.
§ THE EARL OF SELKIRK
My Lords, may I ask what the noble Lord means by 580 that? What other new capital will be brought in to the Commission, except for modernisation, I do not know.
§ LORD HURCOMB
My Lords, I will deal with that point in a moment. It probably gives the answer to my question. I was also going to ask whether it covers all expenditure upon renewals, including the element in those renewals which is mere replacement of like with like and does not involve any capital betterment.
It appears to me that the proposal in paragraph 26 of the White Paper does cover the whole expenditure. When large new capital works, or large schemes of re-equipment, are undertaken, even by a commercial concern, it is inevitable that some of the expenditure will not fructify at once; and much of it may not fructify for a number of years. It therefore seems to me perfectly reasonable to permit capitalisation of interest for a strictly limited period; and there are many Parliamentary precedents for that. I believe that no-one can quarrel with that. In this case, as the noble Earl has just implied, it may be difficult to distinguish between other capital expenditure and capital expenditure under the plan, because, as I think your Lordships will realise, a great deal—in fact almost one-half of the cost —of the plan, is not in the least a new plan but merely the normal process of renewing wasting assets.
With that in mind, and bearing in mind also the fact that the period of capitalisation can only be three years, it may well be that Her Majesty's Government have found a rough-and-ready way of dealing fairly and prudently with that situation. They say "We will take the whole of the expenditure; we will not worry about the precise object of it, so long as it is within this new definition of capital expenditure; but we will limit capitalisation to a period of three years"—though much of it, as I have said, like many of the electrification schemes, will not be yielding its full revenue in three years, or, indeed, for that matter, in thirteen years. So I do not quarrel with that. But what is obscure at least to me (perhaps the noble Earl can help me here), is the period over which the capital borrowings representing interest are to be repaid. So far as paragraph 26 of the Government's Memorandum goes, the Commission would appear to be left 581 free to amortise them over the same period as all the rest of their capital issues; that is to say, over a period of ninety years. That would seem excessive. I am sure the Commission would wish and intend to repay these particular issues much sooner. I should have thought that the physical life of the asset was the maximum period over which that kind of indulgence ought to be granted.
Subject to this matter, and the other points I have mentioned, the proposals in the Government's part of the White Paper and the various methods of giving temporary relief and easement to the present situation, at the cost of the future, appear to me to be reasonable enough; and, at all events, they scrupulously avoid any appearance of gift or subsidy to the Commission. In sonic quarters it will, no doubt, he questioned whether they go far enough. There is, for example, the argument that the British Transport Commission ought not to be required to amortise their stock at all. It must, however, be remembered that depreciation over a wide range of their assets has been, and is still being, calculated on historical, and not on replacement, cost—a difference representing several millions a year, as Lord Wolverton, I think, pointed out to your Lordships in the last debate.
Apart from that, who can he sure that the earning capacity of all or much of the railway system will be maintained intact in fifty or sixty years' time? There is always the risk of obsolescence, quite apart from the physical life of the assets. In face of those risks and of other considerations, it would, in my judgment, be imprudent to cancel the obligation of the Commission to amortise the whole of their stocks, and I am glad that this is not proposed.
In paragraph 77 of their Memorandum, the Commission ask for relief from the cost of maintaining public roads over their bridges. I support that request most heartily. This principle, of course, was urged upon the Minister of the day five or six years ago. Surely it is anomalous to persist in charging the costs of these reads upon the railways, a century or more after they were constructed. Should not the Minister relieve the railways of this cost and himself compensate the highway authorities, if necessary out 582 of the ample funds he derives from motor taxation? Now that we are modernising the railways, might we not take the opportunity to modernise also these antiquated administrative and financial arrangements? I agree with the Commission that requirements as to level crossings might, with advantage, be reviewed. That is another matter which was raised some years ago. Perhaps the noble Earl may be able to give the House some information as to whether any progress has been made.
Apart from points of this sort, which can have very little effect upon the enormous figures of the shortfall between railway expenditure and receipts which we are now asked to contemplate, any other course than that of carrying the burdens forward for another twenty years or so, and then liquidating them at the expense of a future generation of users, who will not get the benefits of the surplus revenue as soon as they otherwise might, would seem to be inconsistent with the declared policy of the Government. What would the alternatives be? They would be to liquidate some part of the deficiency now at the expense of the taxpayer, or to require present users to pay more for the services they are getting. In paragraph 102 of their Memorandum, the Commission, after dryly remarking that there is "ample scope for a reconstruction of their finances," indicate that, despite the gigantic figure to which the deficiency will rise, it is still not beyond the capacity of the undertaking to amortise it out of eventual surpluses.
I fear that there may be ground for some of the doubts expressed as to whether that is going to happen quite so soon. To achieve it will require immense and continuing efforts on the part of every single railwayman from top to bottom of the system. On the part of the Government and the public it will require complete readiness to allow the Commission to adjust their charges to meet increases in expenditure, due to alterations in the value of the currency, wages awards or anything else. All the Commission's calculations assume that there will be no increase in present expenditure, except upon that assumption; but while experience shows the importance of real sing this assumption, it also, unfortunately, shows the extreme improbability of so doing.
583 I cannot think that, when this matter was last debated, it was envisaged in any quarter of the House that the prospective deficits would rise to the dimensions now revealed, or that a precarious scheme of deficiency financing on this scale would have to be devised. If we are not again to run the risk of being confronted with an unmanageable situation, of running deeper into what The Times has called the "dark red", is it not essential not merely to watch the actual figures, as year by year they replace what can now only be estimates, but also to watch most critically their trend, and at once correct that trend if it is adverse? For the trend of the figures is much more important than the point actually reached, or the level of the figures, at any particular moment.
The Government's proposals are necessarily somewhat complicated, and could hardly avoid blurring, to some extent, the clarity of the Commission's original presentation of the situation. And without asking for new calculations —which would be quite unreasonable—I would ask the noble Earl to tell us, in his reply, what is the effect of superimposing the Government's devices on the factual situation as described by the Commission. In particular, I would ask him two questions. To what maximum, on the proposals of the White Paper, are the accumulating deficiencies, and the interest upon the money borrowed to meet them, which are to be carried to suspense, now expected to rise? Secondly, by what date, on present calculations, will that total have been fully liquidated? Will that result be achieved fairly early in the decade 1970–80, especially when one has regard to the important relief arising from the capitalisation of capital expenditure?
Like all noble Lords, I wish the Commission only the utmost success and the best results in coping with their difficulties. They can only do their best in the situation in which they are placed, and look hopefully to what, unfortunately, is a rather distant future. I cannot suppress my own doubts whether all the decisions of Parliament in the last four or five years add up to a transport policy, but I am not going to follow the noble Lord, Lord Lucas of Chilworth, along that line this afternoon. I think that it is quite enough that we should have to consider how, by borrowings and postponement 584 of burdens, we can help the British Transport Commission to get out of a situation which, in truth, had become quite unmanageable.
§ 4.32 p.m.
My Lords, listening to the noble Lord, Lord Lucas of Chilworth, I was sorry to hear that his gloomy account seemed to tally exactly with what I think about the railways. So far as I can see, there was not a gleam of hope that the railways would be able to pull themselves together on their present lines. I will not go on about finance. There are certain passages in the White Paper that appear to me to call for the strongest criticism, and even if some of them are technical, which my noble friend Lord Hurcomb seems to dislike, I will venture to put them before your Lordships.
In the proposals for reforming the railways, the first thing that attracts attention is the enormous cost. This was first of all put at £1,200 million. As rough estimates are almost always too small, it is likely, if the proposals are carried out in their entirety, that the sum will be much greater. This expenditure will be justified only if it enables the railways to make much more money than they did in the past and, after paying for these improvements, to show an improved financial result. The £1,200 million is not all going to be spent at once, and next to nothing is told us of whether the sum is in addition to ordinary maintenance and, if so, on what principle ordinary maintenance and new expenditure are to be separated. In any case, much of the reorganisation is in the nature of maintenance.
Ever since the railways came into existence there have been developments from time to time in such things as improved signalling and stronger permanent way, which have cost money. The principal developments contemplated in the White Paper are a complete change in the goods service and the supersession of the steam locomotive by other methods of traction. It appears to me that both these changes should be approached with the greatest caution and, in particular, should not be put in hand until convincing estimates of the financial results are ascertained and published and subjected to public discussion. To take the goods service first, it is proposed to replace all four-wheel wagons 585 now in general use by much bigger and more elaborate vehicles. One of the consequences would be that a large amount of reconstruction of sidings, particularly of coal sidings, would be necessary. Another result would be, if goods and mineral wagons are to be bigger, that the economic size of every separate consignment must be bigger also. I understand that industrialists have mixed feelings on this subject. I should be sorry to express a decided opinion.
With regard to the proposed supersession of steam locomotives, again the question of cost is dominant. The overall costs of various possible systems—steam, electricity, gas turbine and diesel traction —must be compared. In any case, the clear advantage which steam has now, through having the field entirely to itself, would be lost among a maze of competing systems that can hardly fail to be complicated and changeable. It is not as if steam were, unable to do what is required. There is no important technical advantage over steam in any other system. Comparable overall costs is the only safe guide.
It is true that in many countries the steam locomotive has been superseded by tractors of other kinds, but I think that more remarkable is the reluctance of railways where this has taken place to publish figures. The most remarkable change has been in the United States of America, and, so far as I know, United States Railways have never published comparative figures. It is far more probable that the change to diesel traction has been due to the enormous influence exercised by the American oil companies. Electrification is in full swing in France, but electric tractors can do no more than steam locomotives have done, and wild horses could not drag comparative figures out of the French railway administration. With no more justification than these instances supply, we appear now to be committed to enormous schemes of electrification as the most prominent part of railway reform.
Here I would make a complete protest against the remarks on passenger traffic in Paragraphs 25 and 26 of the Commission's Memorandum, where it is stated that the principle means of securing an improved servicelies in the elimination of steam and the substitution of modern forms of traction.586 In making this protest, I am, of course, aware that I am attacking the heart of the Commission's proposals. They propose, at enormous cost and without giving any facts to support their attitude, simply to sweep away the steam locomotive and to substitute, to begin with, at least, electric and diesel traction. It so happens that I have all my life taken a great interest in the steam locomotive and had altogether exceptional opportunities of studying it for the last sixty years, during which I have recorded the work of the engines of many of the best trains in the world, usually from the footplate of the engine. I am, therefore, speaking of what I know, and I am quite sure that the steam locomotive is capable of everything which the character of the lines over which it runs makes possible. As the Commission give no particulars of what they expect either of the cost of, or the efficiency from, the machines which they propose to substitute for the steam locomotive, I cannot, simply and solely for this reason, give detailed comparisons.
A great deal is sometimes made of the supposed difficulty of supplying the engines with coal. The facts are that the railways use about 6 per cent. of the coal mined in this country each year and not more than half the engines require coal of superior quality. Has British coal mining really sunk so low that it cannot provide the railways with 3 per cent of its output of superior fuel? Last January I asked the Government to tell us the estimated relative cost of different forms of traction. The noble Earl who spoke for the Government avoided a direct answer, but said [OFFICIAL REPORT, Vol. 195. col. 632]:I do not quite see how the noble Lord can expect me to give the overall cost of a complete modernisation.It looks very much as if the Government have been rushed into this reckless plunge without bothering to count the cost. I have pointed out how many rival vultures are hovering over the expiring steam locomotive, every one of them propagandist for spending the greatest possible amount of public money and without regard for the consequences.
§ 4.43 p.m.
§ LORD FORBES
My Lords, from the White Paper there is further evidence that the railway modernisation scheme is not only going to be a costly project, 587 but also a gigantic task. I would venture to suggest that if the British Transport Commission are going to attain their goal the modernisation plan must be kept really flexible, so that any new and practical propositions that come to light as the result of research and other means can be incorporated into the plan. I was glad to see that for moving freight the container system is to be greatly developed. But, far more momentous, to my mind, was the reference made by the noble Earl, Lord Selkirk, during the debate on freight movement, to an entirely new container for moving goods. This is the D.A.F. container transporter, which is a Dutch vehicle. It is a most ingenious vehicle, and it enables the container to be rolled direct on to a flat railway wagon.
I think one might say that the D.A.F. container transporter is a cross between our present container system and the American "piggy-back" system. Luckily for us, it has the advantages of both systems. The container itself, as with our present system, is of reasonable size, so that it is most suitable for our high platforms and low loading gauge. Like the American "piggyback" system, it does not require any mechanical equipment for loading and unloading. I foresee a great future for this D.A.F. container transporter, and I believe that it will be used not only by the British Transport Commission, but also by private road hauliers, as it provides a flexible method of moving goods, either by a combination of road and rail, or by road alone. As a means of encouraging private hauliers in the future to use this D.A.F. container transporter, I think insurance companies might reduce their rates on these vehicles, because this container transporter will be going mainly on our comparatively safe steel rails, and will be travelling for only short distances on our extremely treacherous roads. What a tremendous advantage it would be to-day if we had a fleet of these D.A.F. vehicles to meet the present emergency with which we are faced—namely, that of petrol rationing!
There is one paragraph in the White Paper, Paragraph 50, which deals with the elimination of unremunerative services; in other words, the closing down of some branch lines. I should like to say at the outset that I wholeheartedly agree with 588 the closing down of branch lines where they simply cannot be made remunerative by the substitution of diesel or battery electric cars to take the place of the old and expensive "puffer" and one carriage. I say this because I know that the British Transport Commission take such a decision only after hearing local representation and giving the matter their fullest consideration. However, already one finds, by reference to Paragraph 52 of the White Paper, that the Scottish Region of the British Transport Commission, with only the third largest number of track miles, has since 1948 lost the largest number of passenger route miles.
What alarms me, and many other people connected with the more remote parts of this country, is the thought of what will happen when branch lines have to be closed down because they become unremunerative, and then the local bus services, which are also probably controlled by the British Transport Commission, become uneconomic, too. Inadequate public transport in the rural areas might well lead to a death blow being dealt to the more remote areas. In this connection, I think the North-East of Scotland is particularly vulnerable. One of the best ways of halting the depopulation of the remote areas is by providing adequate transport. Public transport there must be, because, although many people have motor cars and motor cycles to-day, there are still a great many who cannot afford such things. In my opinion, it is essential, not only for social but for economic reasons, as well, that the outlying areas of this country should be properly served with transport, even where such services are not in themselves economic. If the branch lines have to be closed, alternative services must be provided.
Furthermore, where the bus is the sole form of public transport, I maintain that it should form a link with the railway station and, in addition, should be capable of carrying large quantities of accompanied baggage. In Aberdeen to-day the rural buses, controlled by the British Transport Commission, leave from a street which is about three-quarters of a mile from the station. This means that passengers arriving by train with baggage have to hire a taxi from the railway station to the bus stop. This, to say the least, is an expensive inconvenience to passengers. Where buses serve 589 remote areas, and where there are no rail facilities, the buses should, I think, be designed like some of the Continental buses, having large accommodation for baggage, including that very awkward item, the perambulator. There are some of these buses operating to-day in the Western Isles. They have compartments for baggage and also a compartment for mail. Motor manufacturers would, I am certain, welcome the adoption of a rural bus such as this, as it would mean that they could concentrate on one type of bus which would be useful not only for the home market but also for the export market. We must not forget that the export of commercial vehicles is one of our most important exports to-day.
I hope the noble Earl who is to reply for Her Majesty's Government to-day will be able to give an assurance that where branch lines have to be closed to passenger services, adequate alternative public transport will be made available, irrespective of whether the alternative transport is entirely economic or not. I believe that adequate transport facilities will help more than anything else to keep alive the Highlands and other remote parts of this island. Of course, what is wanted now is the sensible application of the modernisation plan by far-sighted people having plenty of common sense. Without that, this country's money will be wasted and the monster plan will not be worth anything. Having produced good plans, let us see that they are intelligently carried out.
§ 4.54 p.m.
My Lords, the noble Lord, Lord Lucas of Chilworth, has drawn our attention to this White Paper which the Government have recently introduced. The financial position, as has been discussed by previous speakers in this debate, is a sorry one indeed: as we know, an accumulated deficit of £120 minion is estimated at the end of this year, and the rate of the deficit will be running at the vast figure of something like £45 million a year. I am glad to see that the Report clearly makes the strong point that the railways are, and will continue to be for as long as can be foreseen, an essential part of the national economy.
We have certain transportation problems which, cannot possibly be satisfied by any other means than the railways, 590 and to meet these conditions the railways must be retained. We are not the only country finding it difficult to make the railways pay. The same problem is acutely felt practically all over the world. The steadily increasing cost of supplies, and the cost of intense competition from the roads, has turned the railway position, which thirty years ago appeared to be a monopoly, into a very shaky state. To meet these new conditions, and to attract traffic back to the railways, it is obvious that we must take full advantage of all the new developments that nave been made available in recent years. I am afraid that we in England have fallen behind the general standard of progress that one sees going on abroad. We in this country, thanks to George Stephenson, supported by other great engineers in those early days who went all over the world, introduced railways which were then a novelty. It is sad that we, who led the world for so many years and were looked upon as the great innovators, have now fallen seriously behind.
I welcome many of the proposals in the Report. They show a real determination to recover some of the lost ground, by adopting both new and, in many cases, well-known methods to cut out costs, and at the same time to improve our services —something that is absolutely essential if they are to attract lost traffic back to the railways where much of it, we feel, should be. I welcome the paragraph dealing with electrification on lines which are subject to high-density traffic. That is an improvement which I think all your Lordships will agree is long overdue. I am afraid that here I must quarrel with my noble friend Lord Monkswell. Like him, I love the "puffer," but I am afraid that we cannot defend it in these days. The "puffer" has at the drawbar a thermal efficiency of 5 per cent. whereas the electric locomotive at the drawbar has a thermal efficiency of 18 per cent. You cannot compare the two to-day. Also, think of the enormous mileage that can be obtained from an electric locomotive, compared with that of a steam locomotive between the shedding period.
With an electric locomotive it is possible to run from London to Glasgow; spend half 591 an hour in oiling up the locomotive, and then come back again. No steam locomotive in the world can do that, and I am afraid that, although we old admirers of the steam locomotive feel sad, this change is inevitable, and we must bow to new developments.
I welcome this bold proposal to try out the new system which is now in operation in France, between Valenciennes and Thionville. It is a brilliant idea. A high voltage of 25,000 volts is to be taken on to the locomotive at the national frequency of 50 cycles per second. It will be transformed down to normal voltage and rectified on the locomotive. This is made feasible largely, of course, by the new germanium rectifier, which is one of the important developments recently introduced, showing how much science and engineering co-operate together. As I think the noble Lord, Lord Hurcomb, said, there will probably be some difficulties when this development is started. Inevitably, new ideas cause difficulties in the first stages. But I am quite certain that it is absolutely right to electrify our railways on this system.
I am glad to see in the Report that the Commission are firmly determined to increase the number of diesel services in this country. In this respect we have far too long lagged behind. As has already been said, practically the whole of America has gone over to dieselfication—a horrible word—in recent years. If your Lordships do not want to go as far as America, you need only go to Southern Ireland, where in the last few months a big programme of diesel locomotives has been introduced. The timetables have been greatly improved and the costs very much reduced. I am quite confident that we shall find exactly the same thing happening in this country when we develop this type of locomotive on a big scale on lines where the traffic density is not too high.
I am glad to learn, too, that we are to do a good deal in connection with our freight traffic. I always look upon the British freight wagon as one of the oldest and most antiquated vehicles in the world to be in constant operation to-day. We learn of the decision, which is welcomed by everyone, to provide continuous braking on our goods trains. But why have the Transport Commission decided 592 on the vacuum brake and not the air brake? Traffic in those countries which have modern railway systems uses the air brake, which has definite technical advantages. It is a retrograde step to establish the vacuum brake firmly in the country, because, once all these goods wagons have been fitted with it, it will be impossible to change again. It is a decision which I think is fatal, though there may be a financial aspect about which I do not know. Certainly technically it is not a sound proposition.
I very much welcome the proposals dealing with signalling. We know that in recent years there have been great developments in electronics, and much of this development can be applied to railway signalling. There is no doubt that in a few years' time we shall see many improvements in this respect. All this will cost a great deal of money, and some of the claims made of savings may be based on wishful thinking. I am certain, however, that there will be a great deal of money coming back in various developments that are taking place. An interesting statement was made the other day by the head of the French Railways, who have developed their modernisation plan far more than we have. He was giving an estimate of the improvement in productivity which has taken place in French railways in recent times. The basis of his analysis was the number of kilometres run on French railways per man-hour. In 1938, the number of kilometres per man-hour was fifty. In 1955, the number of kilometres per man-hour was ninety, which shows a very big increase.
There is one matter in this Report with which I am most disappointed—in fact, I miss it altogether. That is the question of the plans for the top management of our British railway undertaking. I claim that we, the travelling public, who are now asked to put up a vast sum of money for the railways—and nobody can doubt that for one moment: it is an enormous sum; and many of us, the travelling public, criticise British undertakings, and quite rightly when they are compared with some of the other railways—are entitled to be assured that the top management plan of the British Railways system is as modern in conception as it is possible for human beings to create. We must have absolutely A.1 top plans for the management of British railways.
593 I should like to ask the noble Earl who is to reply to this debate: who is the head of the British railways system? I do not know. Who can tell us? The whole thing becomes nebulous. It is true that there is the head of the British Transport Commission. It may be that the head of the British Transport Commission combines the dual rôle of head of British Railways and head of the British Transport Commission. If that is so, we should know; but, so far as I can see from any Press reference or any statement made in any technical journal, it is difficult to discover who is the head of British Railways. It seems to me that an enormous organisation like that should have a definite head. Your Lordships will remember that in 1954 a very scrappy White Paper was introduced into the House dealing with the organisation of British Railways. I always felt that that was a most miserable document to deal with a very important and elaborate organisation. The case was not clearly argued at all, and it seemed to me to be largely a case of what I may call muddled thinking. One of the bodies thrown over in that Report was the Railways Executive. The Chairman, the members of the Executive, and many others were concerned. It may well have been that the functions of the members of the Railways Executive were wrong—I do not know. But it does not follow that, because the functions are wrong, the general conception of the layout is wrong. I submit that the Railways Executive was thrown over far too soon, without any proper consideration of the true position.
I should like to ask the noble Earl who is to reply to this debate whether he will consult with his colleagues in another place and ask that there should be a high-powered committee set up to inquire into the organisation of British Railways. About eighteen months ago the Minister of Fuel and Power set up a Committee to inquire into the organisation and efficiency of the electrical industry. That Committee, was called the Herbert Committee, and had very distinguished members. They brought in a most illuminating Report. Various suggestions were analysed and described and, as a result, recommendations were made. It was all based on proper consideration of the various problems. I beg the noble Earl that we, the travelling public, who are 594 the people who put up the money, should have the whole of the situation of British Railways, so far as the top management plan is concerned, submitted to some important Committee of that kind, and that they should make recommendations and give assurances that the best of all possible worlds is being aimed at.
Not only did the Ministry of Fuel and Power set up this Committee to inquire into the efficiency of the electricity supply industry, but another great nationalised industry, the coal industry, set up their own high-powered committee to inquire into organisation, so there is nothing whatever novel in this request. I would ask the noble Earl—I cannot expect him to answer to-day—to discuss this matter with his colleagues in another place to see whether something cannot be done to assure us that the present plan is the best possible.
Why are we so insular in this country? France has a very good railway system, which was formed by the amalgamation of private companies, considerably larger than ours when they were amalgamated; and at the present moment the system appears to us to be working very well indeed. Why cannot we try to find out how they manage their affairs? Let me take Holland. Holland is one of the outstanding examples in the world to-day of a railway system that is paying. I know that the traffic conditions in Holland are different from those here, just as traffic conditions in France are different; but I am not concerned about the differences. I want to know what is the plan at the top of the organisation. We should learn something from other countries, instead of pretending that we are the only people who know anything about anything.
Let me take Western Germany. They have had a nationalised system there for a great many years. Of course, it has had tremendous knocks during two wars, and they have had to re-establish it. But the system is functioning, and we ought to know how it is functioning. This could be most carefully examined. Let us ask these three European countries to let us see how they are managing their railways. We are making a tremendous advance, in that we are spending huge sums of money, and it is the taxpayers, in the end, who will have to foot the bill. We should feel satisfied, therefore, that our railway 595 system is the best possible, and that it compares favourably with those found in other countries.
§ 5.11 p.m.
My Lords, the thing that worries me about this White Paper is not the White Paper itself but the translation into action of the plans. Some of these plans have been on the way for a reasonable length of time. As a member of the travelling public, I have seen some of them being implemented, but I fail to see from whence the necessary drive and initiative is coming at the present moment—it just does not seem to be there. The beginning of the White Paper makes clear what a vulnerable position the railways are in. The turnover per man and staff employed works out at £870 per head per year, which, I should have thought, is a very small figure. Then, again, two-thirds of the expenditure goes in wages—that means, in rough figures, that if the railways were faced with a 10 per cent. wage increase, their total overall cost would be affected to the extent of 7 per cent. If, on the other hand, we look at it the other way round, and say that by increased efficiency they are going to earn sufficient money in the organisation to pay the employees 10 per cent. extra—after all, they are the lowest paid of the lot—there must be an increased efficiency of 30 per cent. in order to pay 10 per cent. extra wages. That is shown by the figures given in this White Paper, and it seems to me, in considering these recommendations, that that makes the railways very vulnerable.
In the Memorandum by the British Transport Commission to the Minister of Transport there is a paragraph dealing with assumptions which the Transport Commission say are necessary for these plans. There is another assumption which they must have made, one I think also of vital importance. I do not know whether the noble Earl will be able to tell us or not, but the railway transport tonnage between 1951 and 1954 has been reduced by 1 per cent., and I should like to know on what increased volume of tonnage these estimates are based. We are told how much money is going to accrue "when everything in the garden is rosy", but we are not told what is meant by "when everything in the garden is rosy". Whether these estimates are based on the 596 present tonnage or on an increased tonnage is a cogent matter.
Again, as we know, road transport is increasing is this new traffic to be captured from the roads or is it new traffic originating through a thriving industry? Again, there is no information at all on that subject. It is vitally necessary that we should know that if we are to understand this White Paper. When one comes to the rôle of the railways, there are various reasons given for their difficulties. I should like to draw attention to a few that are not mentioned. After all, the travelling public are the customers of the railways, whose business is made up of the sum total of a vast number of individual transactions. To me, as a member of the travelling public, there appears to be no proper liaison, or one might call it public relations, with the customers. The railways are selling service. Anybody else who sells service knows that the customer is always right —or, at least, the customer always thinks he is right, and is generally treated more or less in that way. Not so the railways. They say, "Take it or leave it, John". If you wish to attract more customers, think that that is a fatal way to start —but I may be wrong.
Another point is that when the railways are successful they fail to reinforce that success. With the number of military gentlemen in the railways one would think that that is rather astonishing; nevertheless, it is so. To give an example, I would point out that if you want a sleeper from Aberdeen to London, and you want to be sure of getting one, unless you have a priority of some sort you must book that sleeper one month to six months ahead. Surely there is a case for putting on more sleepers. That has been the situation since the war; it is still the situation to-day, and nothing has been done about it, in spite of countless grumbles.
Then there is a failure to co-operate with industry—I do not say at all whose fault it is, but this is the sort of thing that goes on. At a town near where I live, Laurencekirk, the mail van goes on its round ten minutes before the mail train from the South arrives; therefore, one gets one's mail always a day late. Surely something could be done about that. So far as I know, that is absolutely true. It certainly was true. I have not had time 597 to check whether or not it is still going on now, but I believe it is. Another reason for things not working as they should is lack of drive and dynamic. Noble Lords will remember that before the war, all the railways issued cheap week-end fares. For a long time the Transport Commission refused to have anything to do with that. Now they have issued them to a limited extent, and this is the way in which they have done it. They send to a station a list of six or seven places to which cheap tickets may be issued. There is a station just south of me, Laurencekirk, from which cheap week-end tickets to Edinburgh are issued. The next station south from Laurencekirk is Montrose, but one cannot go to Edinburgh from that station. At the station south of that again, however—Arbroath —these tickets to Edinburgh are obtainable. Really, if the railways are going to he run on that sort of system what is the good of these plans?
After all, there is an established practice in all these things, and the railways are not embarking on anything new. If they have not lost them, they have got records. One cannot book one's weekend ticket before noon on Friday. Why not midnight on Thursday night? If you think that somebody who intends to take a week-end off is going to wake up on Friday morning, get changed and cleaned up and not go off until twelve o'clock, I do not think you know much about psychology. But: that is the case with the railways. I may say that the lower officials concerned, who gave me these facts, are "fed up to the back teeth" with it. They have sent in their protests to the higher authorities but nothing has happened. There is frustration. There are a jolly good collection of chaps in the lower management grades; you could not ask for better. What happens?—nothing. As I see it, that is the great difficulty there.
Then the White Paper deals with the corrective action in progress, and refers to passenger traffic. It deals with the speeding up of trains. We are told that in 1953 there were twenty trains running at over sixty miles an hour between stops, and that now, in 1956, there are fifty-eight. I should like to know whether that has resulted in an increase in the number of passengers travelling and, if so, whether those passengers have been drawn from slower trains or whether 598 there is an overall increase in passenger traffic. The same applies to the results on these new diesel trains. We are given the numbers of extra people travelling on diesel trains but we are not told whether that is an overall increase or has come merely from people who cannot go on the old trains because they have been taken off. The picture is incomplete.
Next there is the question of new coaching stock. For many years now there have been two highly successful coaches, the improved type of third-class sleeper. These are so popular that it is almost impossible to get one, but nothing happens; they are not increased in numbers. There are two highly successful types of coach, but nothing is done to increase them. Yet that is the way to get extra passengers. It seems to me that there has been ample time in 'which something could have been done to attract passengers. One should remember that the passenger who travels is also the customer who is going to send freight by the railways, if he thinks that the railways are a good institution; but if they make him uncomfortable and thoroughly "put his back up" he is certainly not going out of his way to help the railways.
Then we come to the question of dining cars and sleepers. A dining car is a very heavy vehicle needing a large number of men to run it, and from the passenger point of view it is a dead loss because it entails the loss of a passenger coach, as an engine cannot pull the weight. The airlines supply magnificent meals which are given by the air hostess. The sleeping car has a cubby-hole and an attendant. When one is booking a sleeper a month ahead, why should one not book one's dinner a month ahead too, and have the dining car attendant serve it on the same lines as the airlines do so successfully? Then they could have another sleeping car for the trip, which would be a fare-paying concern. It seems to me there should be some experiment on those lines. And when are our railways going to produce an observation car or some of our scenic routes? I see no mention of that, but we have in the Highlands scenery well worthy of an observation car which we might fill, in the summer at any rate, with Americans. An amount of £30 million is allowed for increased passengers. Some of these matters will have to be put right before the railways get that £30 million worth of passengers.
599 Turning to freight, I should like to emphasise the point about effective rates on freight in connection with road competition. First, on the desirability of flexibility, I will speak on only one type of traffic about which I have lately had experience—pit-wood. I believe I am right in saying that there is something in the order of 600,000 tons of pit-wood used annually in our mines. I do not pretend that that figure is accurate. I happened to have wood of which I had to dispose—about 1,500 tons of pit-wood. Sending it away in six-ton loads by road, I found that the hire charge for the lorries was 27s. 6d. The cost of loading the lorry was 2s. per ton, the time taken being one hour. These are average figures over a fairly long period. This made the total cost of transporting pit-wood the 100 miles journey into Fife (Bowness) 29s. 6d. per ton. To send it by rail, the wood has first to be loaded on to a lorry. I have to hire the lorry and drive it to the station with my own men, because there is no one at the station to unload the lorry and put the wood into the wagon. Then the lorry has to be driven back with my men. The total cost of doing that works out at 57s. 4d. per ton. If that large amount of traffic is to be secured by the railways they will have to bring their railway charge down, in order to break even, to a figure of 17s. 3d. per ton before I can look at it.
The fact is that wagons are going back empty from coal sidings to the pits, and perhaps something could be done if there was flexibility in rates. Surely, if empty wagons are returning, it is better to fill them with pit-wood, even charging only 10s. a ton. I should have thought that this would illustrate the desirability of flexible rates. What is really outstanding and extremely hard to understand is freight wagon utilisation. So far as these figures go, we are told that a freight wagon makes on an average, thirty-three loaded trips. I know the danger of averages, but here they are all one has to work on. That means, in very round figures, that for eleven months out of twelve a wagon is sitting idle somewhere. I thought I would go into this question at a rather small station. At my local station the coal trade averages 1.000 tons a month and roughly speaking about eighty wagons a month are dealt with there. One has two days to clear the 600 wagon before demurrage is payable. The station master told me that the average demurrage figure paid was between £8 and £10 per month, which means, roughly, that every wagon had one day on demurrage. That may be a very conservative figure; nevertheless, it still leaves 200 days unaccounted for, which is a very high proportion.
Then take the cost of demurrage. To-day the cost and conditions of demurrage are exactly the same as they were when I was a boy: the cost is 3s. a day; yet one pays a man 4s. 6d. or 5s. an hour for his work. We have a coal merchant who works four depots with one lorry because it pays him to do so. Another big consumer in our town, the gasworks, hire a contractor to haul coal to the gasworks; and gasworks do not work on a shovelful—they have a pile. If that contractor gets a remunerative job in the meantime he leaves the coal in the wagons and does the other job because it is worth while. That is what goes on in small sidings, and I do not see how the plan will alter that. I agree that that represents only a proportion of the trade, but it is quite a big proportion.
We come next to the brake-fitting programme, which I found very hard to follow. So far as I have been able to make out from the White Paper, the new building programme on page 37 allows a total of 179.500 wagons to be fitted with continuous brakes. The figures of the wagon-building programme indicated on pages 35 and 36 again are not clear, but, so far as I can see, by the time the 16-ton wagon programme has been finished, in 1957, there will be, in the 21–24 ton range of wagons, something like 95,000, and of general merchandise wagons, 198,000, making a total of 293,000 new wagons. If one subtracts 179,500 from 293,000, it suggests that British Railways are going to build 110,000 wagons not fitted with continuous brakes. They are then going to take them out of service, return them to the shops and have these brakes fitted to them. Surely, if I am right (and I hope I am not) that is an extraordinary way of carrying on. Surely the right thing to do would be to have the wagons turned out with the necessary holes and brackets for the fitting of brakes, and then, if you cannot fit the brakes at the time, do so later on. Surely the production of wagons in an obsolete state—which is certainly 601 happening in the case of the 16-ton wagons, none of which is being fitted with continuous brakes—is quite wrong.
The programme is not finished yet. It does not finish, I think, until the end of 1957. It seems to me that a certain amount of muddle is occurring. Certainly there is no dynamic drive about this business. I may be wrong, but if I am not, and if, in fact, these continuous brakes are not appealing on the 16-ton coal wagons, then here is an extraordinary situation. This White Paper says that the railways are going to scrap the small capacity wooden wagons. Yet a twenty-one year old wooden wagon has been sent into the workshops and fitted with continuous brakes. That wagon was built at Darlington in 1935, and there were about six or eight others in a siding when I looked in—they were all wagons of about the same size, namely, twelve tons—and apparently of about the same age. The whole thing seems to me to be extraordinarily difficult to understand, and it looks as if there is a complete muddle. I am, therefore, very doubtful and anxious about these forecasts which appear in this White Paper. It is an excellent plan, but why do we not ensure that there is real drive behind its execution? At the moment such drive is not there.
I mentioned the matter of the 16-ton wagons to the noble Earl in a recent debate on road transport, and I think he said—he will correct me if I am wrong —that I was right and that there were a few in the pipe-line corning out without brakes. I understood him to suggest that that would be put right. I hope that that is so, because, unless I have completely misunderstood the whole thing this is a matter which it is most important to look into without delay.
§ 5.34 p.m.
§ LORD WISE
My Lords, at this hour I do not propose to speak at any length, and I certainly do not propose to follow the noble Viscount, Lord Stonehaven, who has just sat down, in his many troubles with the railways. There is just this I cart say with regard to the question of delivery of letters; if the noble Viscount lived where I do, his letters would probably be delivered before he gets up in the morning, and not the next day. That is what happens in my part of East Anglia. We have efficient systems, 602 in regard to both the railways and the Post Office.
Many experts have spoken to-day concerning the Commission's Report. I wish to speak only as a passenger. All of us in this House are passengers, and, having regard to the mileage which we cover, I expect that we may be rated as pretty good travelling passengers. Lord Lucas of Chilworth has spoken very effectively from these Benches, and has put to the Government many points upon which they will no doubt wish to reply. He spoke about finance, about capital and about many other matters which are involved. I want to call the attention of noble Lords for a few moments to paragraph 95 of the Commission's Review. Paragraph 95, on page 27, says this:Questions of defence and of general strategy arc involved, and questions of social policy and the public benefit. The economics of a public service are not reflected exclusively in its own particular account of profit and loss.I particularly call the attention of the Government to that passage. I hope that they may be able to revise their suggested figure of £250 million, and that, if the deficiency is greater than that over a period of years, they will find it possible to make some further contribution. I am impressed by the fact that the railways do carry out a great social service day after day. While we can spend, as we do, millions of pounds upon ships of war, upon aircraft, upon guns and things of that sort, which become obsolescent over a short period of years, I think that something which does confer a great social benefit on the whole of the population should receive very good treatment at the hands of the Government.
The noble Lord, Lord Lucas of Chilworth, referred to the question of manpower. I was struck by the fact that the human problems are not covered very extensively in the Commission's Review. There are, according to the figures here, 800,000 employees, and by a rough calculation I work that out as being 4 per cent. of the working population of Great Britain—a considerable proportion. To take it further than that, there are 3 million people dependent, no doubt, upon the earnings of those employees. I therefore hope that, in any schemes brought forward in the future, human relationships with the railways will be seriously considered by the Commission. Many improvements which are overdue are being 603 carried out. Four of the stations to which improvements are being made, and which are mentioned in the review, are stations which I know. I can say from my own experience that improvements are necessary, and I am glad they are to be made.
The rural aspect of the matter was referred to by the noble Lord, Lord Forbes, and I should like to say just a word about that matter also. Paragraph 53 of the Report, on page 21, refers to the closing down of stations in the Eastern Region. It says:In 1948, 905 passenger stations were open; 175 of these have since been closed.That means that roughly 20 per cent. of the stations which were then open have been closed. I am sure noble Lords can well imagine that hardships may have arisen in consequence of the closing of some stations. They may have been stations upon redundant lines; they may have been isolated stations. My hope is that fully adequate arrangements have been made to meet, either by road transport or in some other way, the needs of the members of the rural population who used those stations.
The question of level crossings has not been commented upon during the course of our discussion so far, but I hope that in the years to come there will be a change in the operation of gates at level crossings which are now worked by hand. I trust that that method will be superseded by the use of gates operated by mechanical means by the man in the signal-box. As I have no doubt is well known to many of your Lordships, in some areas the signalman has to leave his box in order to shut the gates against the public; he has to hand the key of the line to the driver of the incoming train, go back to the box, alter his signals, and then go down once again from the box and open the road gates. That involves a considerable amount of labour, and is a slow process. Much of this waste of time and labour could be avoided if the operation of the gates were effected by the turning of a wheel in the signal-box, and a good deal of time would be saved to those who are waiting to go through the gates, particularly on busy roads.
I want to pay tribute to the working of the diesel trains. They are comfortable and warm, and cater for a need 604 which has been felt for a long time on country lines. There is a friendly atmosphere about travelling by diesel train. There is one point which I think the Commission might consider. Diesel trains on these country lines go with speed between stations but stop an undue length of time at the stations. I am struck by the fact that, year after year, certainly in the region in which I live, the timetables do not materially alter. If consideration could be given to the clearing of trains from stations, I think that would be to the advantage of those travelling on railway lines, particularly cross-country.
I should like to make one suggestion which is not included in this programme. In present circumstances, excursion tickets are issued only for second-class travel, and I often notice that the corridors of excursion trains have people standing in the corridors while first-class compartments are almost unoccupied. I wonder whether it would be possible to issue first-class excursion tickets, as well as second-class. I am certain that people who often cannot find seats would take first-class excursion tickets, and there would be more seats available for second-class passengers. There is nothing worse than travelling in a train and seeing a lot of folk having to stand in the corridors because there are no seats for them, often for long journeys. In conclusion, I would say that this is a most interesting Report, which I read through because, as a passenger, I am interested in the progress of the railways. I am particularly anxious that British Railways, owned as they are by the nation, should give the nation excellent service and in the years to come should be known as the finest railways in the world.
§ 5.43 p.m.
My Lords, as the noble Lord, Lord Wise, has said, this is an interesting Report, and in reading the ten paragraphs that deal with passenger traffic one learns much about the proposals for the introduction of the diesel rail-car. I have to go at least once a month to Lincoln, and I looked forward to seeing the operation of the diesel rail-car service which links Lincoln with the main line station, Grantham. I saw it in the early days, and the rail-cars were then very clean and neat. But since then the cleanliness of the windows and floors has gone down and down. The floors are filthy, and one can hardly see 605 out of the windows. It is a deplorable situation. I beg the noble Earl, Lord Selkirk, to draw the attention of the Transport Commission to the lack of the proper appearance of this new equipment, because it is only by having the new equipment clean and on the spot, and everything we desire, that the people, as a whole, will take an interest in this new programme. I cite from my own experience the filthy condition of the diesel trains running between Grantham and Lincoln, and I hope that the noble Earl will say a few words which will result in an improvement.
§ 5.45 p.m.
§ LORD WOLVERTON
My Lords, I shall be brief, because I did not intend to speak, but I want to say just a few words on this important White Paper, and to thank the noble Lord, Lord Lucas of Chilworth, for putting down this Motion. I am sure that he has done the House great service in discussing this all-important problem. The point I want to make is on finance, into which the noble Lord and the noble Lord, Lord Hurcomb, have gone with great care. I am sure that the railways must be given more freedom in their charges schemes, because expenses have gone up enormously during the last two years and they have not been able to catch up with the extra expenses. I know that nationalised industries and all other industries have been asked this year to make a standstill in their charges, and they have done so because it is the policy of the Government; but if that goes on too long they are bound to get further and further into the red. It is disturbing to see the large and continuous losses which will arise on transport in the next five years and which must be covered by loans which the Government are to give the Commission. I am sure that the railways must be given more freedom, because, if they are going to catch up with their arrears next year, they will have to make further charges I say that fully realizing that it be difficult, because of the law of diminishing returns, which fixes a limit to what the public are prepared to pay to the railways in competition with the roads. But I think that the Commission must be allowed this freedom in their charges.
I agree with the noble Viscount, Lord Stonehaven, that we must have greater 606 drive in this programme, and that it must be pushed on with all possible speed. Addressing your Lordships the other day in the debate on technological education, the noble Earl, Lord Halsbury, told us that the Imperial Chemical Industries building in Millbank had been built in eighteen months, and that the same building would probably take two and a half years to build to-day. If that slowing down in construction is general, and we are going to see the fruition of this scheme in the next few years, together with the lowering of the deficit, the scheme must be speeded up with all possible energy.
I believe that the White Paper is extremely good and brings out many important problems which have to be tackled. One final thing I want to say is that I do not understand the point of the noble Lord, Lord Lucas of Chilworth, about the diesel programme on main line railways. He said that 174 diesels were to be forward by 1957, and that there was then to be a halt to see the result of their working. But the diesel engine is nothing new. It has been made in this country and exported all over the world. As has been said, it has been tested in construction, and I cannot sec that it needs much more testing on British Railways. Obviously, the diesel is more economical than steam. The noble Viscount, Lord Falmouth, who is much more experienced than I, has given your Lordships figures to-day, both of diesel and electrical traction. Here, I am afraid, I have to cross swords with the noble Lord, Lord Monkswell. Although we all regret the disappearance of the steam "puffer", we must admit that electric and diesel traction are more efficient, and that their operating costs overall will be less. I hope, therefore, that we shill speed up and order more of these diesel engines, which we have been told arc economical.
I hope, too, that we shall speed up the passenger coach building programme. Recently a leading evening newspaper has brought to our notice some of the congested conditions on the London-Brighton and other lines, and also oil the underground railways. Therefore, if we are to get the confidence of the public, we must speed up this passenger coach building programme so that people may have some comfort, Then they will support the railways.
§ 5.51 p.m.
§ THE EARL OF SELKIRK
My Lords, I am sure my right honourable friend will be glad to have the benefit of the views expressed to-day by your Lordships. Such a wide variety of aspects of transport has been covered that I feel that I must excuse myself from attempting to answer more than a few of the questions raised. On the whole, I think it is fair to say that the House has expressed a view of cautious optimism, though I am afraid the noble Lord, Lord Monkswell, stir looks at the situation as not having one gleam of hope. In that, I feel he is carrying it much too far.
I should like to make this one point on the general history of the railways. I think it is true to say that Parliament has always viewed the railways with a (shall I say?) rather careful suspicion, as to what they were doing, and that is probably because, in the early days, they were up against only horse traffic, which gave them virtually a monopolistic position. The restrictions which it was thought necessary to impose then have relatively small relevance to-day. The first big changes in transport were the amalgamations of 1921, and this was followed by the complete amalgamation of 1947. However, neither of these went to the root of what I suggest is the essential problem of, first of all, doing away with out-of-date restrictions on the charging of fares, and secondly, providing the means of enabling the railways to modernise their plant. Those, I believe. are the two most important steps to be taken.
The noble Lord, Lord Lucas of Chilworth, seemed to be rather unhappy on the matter of whether the railways had sufficient freedom. I think they have a wide measure of freedom under the 1953 Act. They have already been relieved of a number of restrictions, such as undue preferences, equality of charges and things of that character. What I believe the noble Lord had in mind was that they did not entirely get their way when they appeared before the Transport Tribunal. That is a body of great experience who have the opportunity of carrying out most exhaustive studies in the exercise of their duty. I think I can fairly say that they have won the full confidence of traders, as an independent 608 body, and are worthy successors of the Railway Rates Tribunal.
§ LORD LUCAS OF CHILWORTH
As this is an important point, I should like to draw the attention of the noble Earl to what the Commission say. In paragraph 74 of their Memorandum they say:It follows, therefore, that the extent of the commercial freedom for which the Commission had asked has been appreciably restricted by the Tribunal's Interim Decision.My fear is not for the railways, if they are given the freedom. My fear is that they will not get the freedom that they say is fundamental to their success.
§ THE EARL OF SELKIRK
I appreciate what the noble Lord says, but I should like to draw his attention to paragraph 81, on page 25. The Commission say there that though they have not got all the freedom they could wish for, regard has to be had to the rights of other interests and individuals. Therefore, I do not think there is any need at the moment to pretend that the situation is all that the railways want. However, there are always two sides to transport, and I hope that they will be fair to both sides.
The other important factor is modernisation. It is worth recording that although we may have complaints to-day, already the rate of capital investment is more than double the level it was four years ago; and, as your Lordships will see from the White Paper, it should reach three or four times as much in due course. As the noble Lord, Lord Hurcomb, pointed out, many countries took the opportunity of modernising their railways immediately after the war—indeed, a number of firms in this country did a good export trade in supplying the materials with which they were modernised.
I would say only one thing more before coming to the White Paper. We have already discussed modernisation of the railways, and the reorganisation scheme, and I do not think we need discuss it further to-day, although perhaps I may say to the noble Viscount, Lord Falmouth that the whole purpose of the reorganisation scheme was to break down the inflexible barriers which existed between different sections of the British Transport Commission. I am sure that if the noble Viscount were to ask the noble Lord, Lord Hurcomb, he would be told that it was not entirely 609 satisfactory when he was there. Sir Brian Robertson is head of the railways, and the railways are de-centralised into regional boards which are nearer the point of operation. I see no reason why other operations of the Transport Commission should be entirely distinguished from railways and under a separate head. If I may continue on that point for a moment, in answer to the noble Viscount, Lord Stonehaven, I am sure that the Scottish Regional Board will deal with the points he has raised, and that he will find that the improvements which he mentioned, if not already in operation, will be put into operation quite soon.
I now turn to the White Paper. First let us be quite clear that nothing can take the place of the railways for certain functions—for instance, long-distance traffic, heavy suburban traffic and heavy freight traffic. It is for that reason that we think the maintenance of the railways is a vital national necessity. The noble Lord, Lord Lucas of Chilworth, said that the Government have not got a policy for transport. I do not say that we can state that policy in simple words, but really the noble Lord stated it himself the other day when he told us:Do not curb the most economic form of transport, whichever that proves to be.We accept that; but we say that the trader must choose, and he must have the opportunity of choosing between efficient systems of transport. I think that is something which is very near what we are aiming at, and in that we hope to approximate to the right balance.
I should like to say a word about the statement of the Minister in the spring of this year. Your Lordships will remember that at that point it became clear not only that the Commission would have an increased deficit but that they could not meet that deficit simply by putting up fares, because, as has been pointed out, receipts were falling and it would have tended to drive away traffic which they might not be able to recover. It was, therefore, in broad agreement with the Transport Commission that the Government took two actions: first, to stabilise fares for the time being; and secondly, to carry out a thorough review of the financial position. I am glad that, if that review did nothing else, it provided an answer to some of the questions of the noble Lord, Lord Hurcomb. I think that 610 at least shows that the answers were not simple, and they could not be ascertained except in a very full review.
The first point I should like to make is this: the second part of the White Paper consists of the proposals of those who are in charge of the railways. In the first part of the White Paper, the Government have expressed their agreement with these proposals and explained their own proposals for providing the finance required to carry out the Commission's plan. The British Transport Commission could, I suppose, have taken a different course. They could have economised in capital expenditure— which is what some noble Lords have suggested—run the railways at a relatively low level of efficiency, and provided those services which were convenient, even if semi-obsolete. In my view, that is a course which would have led to bankruptcy, not only in the industry itself but in the whole economy of this country.
The only question which has arisen to-day is between those who would like the change to take place more quickly and those who would rather do it a little more slowly. I am not quite certain what the general feeling is with regard to the diesel engines which were referred to, but if noble Lords will look for a moment at Appendix B they will see, roughly, the speed at which different sections of the proposals will be carried forward. There are three different lines on that graph, and it shows in the first place that more than a certain amount cannot be done in any one year, and that some of the work will be done over a longer period of years.
The Government are satisfied that the Commission have put forward a convincing case, but it is equally clear that they cannot show financial results at least for some years. A simple thing for a private company to do would be to pass its dividend, which is what has been done in railway companies before now. That is not possible for a nationalised industry. The only alternative to that would be to subsidise the industry. The noble Lord, Lord Hurcomb, agrees absolutely that subsidy would be wrong. Moreover, the British Transport Commission do not want a subsidy. They say that it would remove the measure of financial control which they consider to be absolutely 611 essential. Accordingly, the proposals which we have put forward are intended to enable the Commission, first, to get through this period; secondly, to get their better equipment, so that they can charge to the limits of what the traffic will bear, bringing into their organisation the proceeds of modern technology, which we were discussing last week; and, thirdly, to carry the traffic which they are best adapted to carry in healthy and fair competition. This, of course, means financing, to some extent, their deficits. That is explained in paragraphs 25 and 26 of the Government statement.
The noble Lord, Lord Lucas of Chilworth, has explained that so well that I do not think I need go into it. I will, however, say this to the noble Lord, Lord Hurcomb. The proposals involving capitalisation of interest relate to capitalising the interest on all new money. It will not mean, of course, money which has been laid aside for depreciation or anything of that sort, which is already within the industry, but only new money which is brought in. As I think has been made clear, at least £400 million will be found from the industry itself for the modernisation plan. This procedure is not new, even in nationalised industries. It is done with the Scottish Hydro-Electric Board, and also with the Port of London Authority.
The second point is the financing of deficits for a limited number of years, and, to a limited sum, by loans from the Exchequer. These will be placed into a special account but, as has been pointed out, there will be no writing off under these provisions except against surpluses.
§ THE EARL OF SELKIRK
What always happens when the surpluses are not there —you have to do without. I do not think there is anything very new about that. There is one point which the noble Lord did not mention but which I should like to touch upon, and that is the emphasis which is laid all through this Report on financial discipline. The British Transport Commission attach considerable importance to that—that there is a limit to what they can do within the time. That applies to all new capital.
612 The question which has caused a good deal of discussion is whether these provisions are over-optimistic, and whether the railways will, in fact, get back the traffic. I should like to say a word or two about that. I think the best assurance is that the British Transport Commission themselves are convinced that they can achieve the results forecast. To my mind, that is of far greater importance than any calculations which anyone else may make because the Commission know the facts of the situation. I should like to mention one or two of the aspects where it seems to me real progress can be made. The other day we discussed freight transport, marshalling yards, conveyors, freight terminals, and so forth. May I ask the noble Viscount, Lord Falmouth, who brought up the question of the type of brake, whether, whatever the benefits of one type or another, he would have deferred the decision? On reflection, I think he would not.
The noble Viscount, Lord Stonehaven, asked whether there had been an increase on receipts from the diesel services shown in this Report. I am glad to say that there have been and they are really quite striking. The original figures are given in paragraph 28, and the latest figures have gone up considerably. For instance, the Bury—Bacup line shows an increase of from 164 per cent. to 238 per cent. The Birmingham—Lichfield line, which is shown as 208 per cent., is now 238 per cent. The King's Lynn—Dereham line, which was 30 per cent., is now 90 per cent. That shows, to my mind, that the railways in this sphere are already getting back the traffic, and I have little doubt that it is coming from the roads.
May I mention the question of utilisation? With the increased speed and braking of vehicles, it should be possible in fifteen years substantially to reduce the number of passenger carriages in use by increasing the utilisation of those which exist. The same applies to wagon stock. That is partly possible through the increase of the average speed. One of the results of increasing the average speed will be a substantial reduction of about 2,000 locomotives. The noble Lord, Lord Monkswell, said that there were no facts or figures produced. I should like him to look at page 29 where it says—… when it is remembered, for example, that a steam stopping train…has a movement cost 613 of approximately ten shillings a mile, whereas in favourable conditions the multiple unit diesel has a movement cost of only a third of this figure, the magnitude of economies derived from modernisation will be understandable.I am saying that only because the noble Lord said that there were no facts or figures to show anything.
§ THE EARL OF SELKIRK
Perhaps the noble Lord will follow me a little further. For instance, perhaps he would acknowledge the situation in Perth, where one marshalling yard will be taking the place of four; where one signal box will be taking the place of thirteen; or in Cowlairs, in Glasgow, where, by the end of this year, one signal box will be taking the place of eight.
§ THE EARL OF SELKIRK
I thank the noble Lord; I am grateful to him for that. We are always pleased when we find anything that gives him delight and pleasure.
I should like now to read a passage (it has already been made public, it is true), which refers to the provision of an assured overnight delivery from thirty-six centres of production to the London docks. This is being developed to meet the ever-increasing importance of export markets. The part of the quotation I want to read says:This action follows a review which the British Transport Commission and the railway regional managements, in conjunction with the Federation of British Industries and the Port of London Authority, have been carrying out of their arrangements for the improvement of export traffic by rail.The noble Lord, Lord Forbes, raised the question of rural services, as did the noble Lord, Lord Wise. The 135 stations which are being closed have all been closed after agreement has been reached with the consultative committee. That obviously means that some alternative form of transport has been provided. Whilst I cannot give figures for the country as a whole, I can tell the noble Lord, Lord Forbes, that 40 per cent. of the bus services provided by the Commission in Scotland are run at a loss. So, quite clearly, there is a good deal of picking up from the richer services by 614 the less rich ones. The question of where the buses go to is, of course, a matter for the licensing authority, and I should not like to comment on the reasons why they did not take the course which seemed sensible as the noble Lord told his story.
I can say to the noble Viscount, Lord Falmouth, that we have no hesitation in getting advice from Holland. In fact, Mr. den Hollaender is now coming over to give advice to the British Transport Commission. I am told he is one of the leading railway engineers in Holland at the present time. As the noble Viscount said, either last year or the year before we had a full examination of the electricity undertaking. It has been discussed from time to time whether there should be a general policy of examining a nationalised industry by an outside body. Possibly that would be a good thing, but I think it would be better to let the big changes which are going forward in the British Transport Commission take some shape before subjecting them to a thorough and exhaustive examination, because there have been considerable changes.
The noble Lord, Lord Wise, raised the question of level crossings. I am able to say that there has been some progress made there which I very much hope will meet what the Commission have in mind. The noble Lord, Lord Hurcomb, raised the question of the upkeep of the surfaces of railway bridges. A grant is now paid on such expenditure by the British Transport Commission at the same rate as that paid to highway authorities. The noble Lord, Lord Teynham, raised the question of whether the new arrangements would give the railways an undue advantage over coastal shipping. All I can say is that the Minister has been in consultation with the Chamber of Shipping and has asked them to make to him any representations they wish on any point which seems to arise on that matter.
Then the noble Lord, Lord Hurcomb, raised the question of the ninety years' amortisation. If it were amortised over a shorter period, it would probably put up the cost; therefore, I am advised that there would be no advantage to the Commission in doing so. The noble Lord asked what the total deficit would amount to. So far as I know, the figure which he mentioned is not very far out, but, of course, the amount of deficit may get less 615 every year; therefore it is impossible to give a definite figure. If the noble Lord looks at the forecast here, he will see that it is the intention that the deficit should get less; so we cannot estimate exactly what the deficit will amount to every year.
I agree it is a very big scheme. It is perhaps one of the most important that have come before this House for some time. It is not only a question of bringing our railways up to modern standards. It is essential that we should create the right psychological impression, not only amongst those working in the industry but amongst the customers themselves. I agree with the noble Lord, Lord Sempill, that it is important that the railways should have a "new look" in themselves; that they should be clean. And I entirely agree with what the noble Lord, Lord Lucas of Chilworth, said, that it is of the utmost importance that the railway employees should feel a real incentive in the work they are carrying out. In this respect, I should like to quote what was stated after a recent British Transport Joint Consultative Council meeting, held to discuss the Commission's proposals:The trade unions agreed to support the efforts of the Commission to see that the affairs of British Transport, and particularly of British Railways, are put on a sound footing. The trade unions congratulated the Commission on the presentation of their case to the Minister and pledged support for the general objectives in mind.I am sure that this is a great opportunity for the railways. It may be the greatest they will have in this century. I will only remind the House of the assumptions on which it is based. The first is that the railways should adjust their charges, as may be necessary, without delay. Secondly, they should have a flexible system of charges. Thirdly, there is the point of availability of resources which I may say, with great respect, is probably one of the most important and one to which this White Paper makes a contribution. Fourthly, the Commission will continue to work within the general framework which exists at the present time. Finally, suitable action should be taken to enable the Commission to preserve a proper financial discipline throughout their affairs. This, I believe, is provided by a Bill which is now before another place. I know that on behalf of 616 the House I can wish those engaged in the Commission every success in their high and important duties, so vital to the basic economy, and indeed the life, of this country.
§ 6.19 p.m.
§ LORD LUCAS OF CHILWORTH
My Lords, I join the noble Earl in wishing the Commission the best of success. We have had a searching debate. I am grateful to the noble Earl for the reply he has given: I could not expect him to go much further. Time will tell. Perhaps it may be, as the noble Lord, Lord Hurcomb, who made a forecast of ninety years, said, that in the years to come some House here will be discussing what to do with the deficit on the railways. I beg leave to withdraw my Motion for Papers.
§ Motion for Papers, by leave, withdrawn.
§ LOCAL GOVERNMENT (QUALIFICATION OF ASSESSORS) (SCOTLAND) REGULATIONS, 1956
§ 6.20 p.m.
§ LORD BURDEN rose to move, That an humble Address be presented to Her Majesty praying that the Local Government (Qualification of Assessors) (Scotland) Regulations, 1956 (S.I. 1956 No. 1594), dated 10th October, 1956, laid before the House under Standing Order 61 on the 17th of October last, be annulled. The noble Lord said: My Lords, I beg to move the Prayer which stands in my name on the Order Paper. May I, in the first place, make it perfectly clear that noble Lords on these Benches are not in any way answerable for this Prayer; I take full responsibility. Secondly, I happen to be an honorary member of the National and Local Government Officers' Association, and in that connection I became aware of the facts of this matter. In addition, I have had the opportunity of discussing the problem fully in Scotland with some of the officers concerned.
§ The facts are relatively simple. May I take a typical instance? Some forty years ago, a youth entered the services of a local authority in Scotland; there was a vacancy in the assessor's department, and he was sent to that office. By hard work and application to his duties, gradually he rose in the department until, five years 617 ago or more, he achieved the goal of his ambition and was appointed the assessor. He had come up the hard way. During the whole of his service there had been no intimation of any kind that it was necessary or even desirable that he should obtain the diploma of an outside body. Now, as the result of the Rating and Valuation (Scotland) Act and the consequent reorganisation of the areas responsible for rating and valuation, in May next he will lose his present employment.
§ But—and this is the crux of the whole matter—although he has been engaged in valuation for the whole of his working life, he is told explicitly that he is unqualified and that he cannot even apply for one of the new posts with the local authorities who will deal with valuation in the future. I want to make it crystal clear that he does not claim that he has a freehold or an intrinsic right to one of the new posts. All that he asks is that he should be free to apply, and, in competition with others who may apply, to be considered simply and solely on his merits. What I have said is also true in similar circumstances of one who holds the post of deputy—or, as I think it is called in Scotland, "the depute."
§ What are the excuses put forward by the Secretary of State for Scotland in an attempt to justify what these men—and I share their views—regard as an injustice? I have a copy of a letter signed by the Secretary of State for Scotland and dated October 19. The first excuse given is that the regulations are in accordance with the advice of the Sorn Committee. That is a possible interpretation of the advice of the Sorn Committee, but I am sure that noble Lords will have noted that it is only when the recommendations of a Committee or Commission happen to coincide with the views of the Department that they are adopted with alacrity; otherwise they are usually pigeonholed and conveniently forgotten.
I have the greatest respect for the eminent men who served on the Sorn Committee, but their recommendations are not sacrosanct. What were their terms of reference? They were as follows:
To review the present system of valuation and rating (other than the de-rating of agricultural, industrial and freight transport lands and heritages) in Scotland; to consider whether any,
and if so, what, changes should be made in the system, and what other action would in consequence of any such change be required, and to report.
The Committee issued an open invitation in the Press to all bodies or interests who might wish to submit written representations. They also addressed an express invitation to the more important organisations concerned with rating and valuation to submit evidence. No intimation was given that the Committee would deal with staff questions; no invitation was given to the men's representatives to give evidence, and it was only when the Report was issued that it was learned that the Committee had made recommendations affecting the staff.
§ On several occasions recently I have ventured to urge that trade unions today, particularly those whose members are engaged in the public service, should take a larger view of their responsibilities and endeavour to serve the community as public servants to the fullest extent possible. In far more eloquent words than mine, the noble Lord, Lord Sõers, recently addressed your Lordships on the same theme. But what hope is there when an important trade union of some 235,000 members—the overwhelming majority of the clerical,, technical and professional staffs employed in local govern-merit within its ranks—is flouted and ignored in this matter when the vital interests, the livelihood, of some of their members, are involved?
§ I pass now to the next excuse—namely, that the Scottish Valuation Advisory Council had before it the draft regulations together with observations made by other bodies, and that the Advisory Council attach great importance to the proposed regulations and approved them. May we for a few moments examine this a little further? The Advisory Council has recently been set up by the Minister. Two of its members sat on the Sorn Committee; two hold diplomas of the Royal Institution of Chartered Surveyors, one of the professional associations mentioned in the draft regulations. But, apart from all this, as I have already mentioned, the Advisory Council has just been constituted. Is it to he expected that, if not the first, one of their first administrative acts would be to turn down draft regulations drawn up by the Minister who has appointed them? Again, the Counties of 619 Cities Association and the Association of County Councils in Scotland, the two representative bodies of local authorities in Scotland, both urged the Minister to insert a saving clause for the existing holders of the posts affected by the operation of the regulations. I have copies of these letters. Why should the opinion of fifteen men be deemed more important than that of the two Associations I have just mentioned?
The final excuse in the letter of the Secretary of State for Scotland is, to quote his actual words:
I realise that the regulations will prevent a number of serving officers obtaining appointments as assessors and depute assessors under the Act. There is, however, nothing in the Act or the regulations to prevent them from being appointed to responsible posts in the new assessors' departments without loss of remuneration or even with higher emoluments. There will certainly be plenty of work for assessors' staffs; and the bigger areas, some of them combinations of counties, should provide scope for senior posts under the assessor and his depute. In any case, where a serving officer does suffer pecuniary loss as a result of anything done under the Act, there is provision for compensation in Section 4.
What is the Minister really saying to these men? What is the effect? It is that pride of achievement is nothing; that dignity and prestige are nothing; but that so long as the dinner-pail is as full as ever, why worry, why bother?
Take the cash and let the credit go.
What an outlook on life! It is in fact the modern philosophy of materialism.
There has been a debate in another place on these draft regulations. Some of the excuses and arguments put forward by the Joint Under-Secretary of State for Scotland are, I regret to say, both inaccurate and misleading. The views of the Sorn Committee and of the Scottish Valuation Council were, of course, trotted out and paraded, but the considered opinions and representations of the two Scottish local government associations were brushed on one side as mere observations. The Joint Under-Secretary of State for Scotland said—and I quote his words [OFFICIAL REPORT (Commons), Vol. 560 (No. 7), col. 906]:
The effect of the proposed Regulations should not be exaggerated.…There are at present twelve unqualified assessors and one unqualified depute.
Surely an injustice is an injustice, whether one, twelve or two hundred suffer from it.
§ THE MINISTER OF STATE, SCOTTISH OFFICE (LORD STRATHCLYDE)
My Lords, if the noble Lord will excuse me for interrupting, I would point out that my right honourable friend did draw attention to the fact that, however small the injustice was, it should be dealt with.
§ LORD BURDEN
Nor can it be glossed over by saying that they are simply adversely affected. Again, to quote the words of the Joint Under-Secretary of State for Scotland [col. 909]:… tenure of an existing appointment does not necessarily prove the ability required to perform this new task.Nor, I suppose, does it necessarily disprove the ability required; nor have the occupants of the existing posts, nor has anyone on their behalf, claimed that they have an intrinsic right to the new posts. All that is asked is that they should have the opportunity to apply for a new post and then "let the best man win."
Another point made by the Minister is so misleading and inaccurate that I hope your Lordships will bear with me if I quote his actual words in full [col. 907]:It is essential to have the same qualifications for assessors in Scotland and in England and Wales, otherwise the prospects of securing comparable valuations in both countries will be greatly weakened.Again [col. 908]:We consider it is essential to do our best to start from the same base line in both countries and thereafter to keep in step.As we are all aware, the purpose of the new Act, broadly speaking, is to bring Scottish valuation into line with that of England and Wales; but when the Board of Inland Revenue took over the work of valuation for this country, conditions similar to those proposed in the Statutory Rule and Order were not required. They apply only to the new entrants in the service. This is precisely what is asked for, so far as the Scottish officers are concerned.
The Sorn Committee, to which apparently so much importance is attached, remarks:We understand that the Board of Inland Revenue, although they are obliged at present to employ some unqualified men as rating valuers, require all new entrants to the professional grades of the Valuation Office to be qualified either as a chartered surveyor or as 621 a member of the Auctioneers' Institute or the Land Agents' Society, as a chartered auctioneer and estate agent or as a chartered land agent.Why cannot this precedent be followed in Scotland? How can it be claimed that by these regulations both countries start from the same base line while so-called unqualified assessors are still employed by the Board of Inland Revenue in this country? If I may say so with respect, the argument by the Joint Under-Secretary of Sate in another place on that point is utter nonsense.
Again, the Scottish Office apparently has no regard for precedents. From the Midwives Act, 1902, right clown to the Act of 1947, the latter dealing with qualifications for chamberlains and treasurers in Scotland, there has always been a saving clause with regard to those engaged in the duties but not complying with the new conditions. In another place the Joint Under-Secretary of State for Scotland rejected the Scottish precedent of 1947. He said [col. 910]:The Government are convinced that this precedent is not a relevant one, since there was then no such major change in the technique of the offices in question. Moreover, assessors do not work under the supervision of either a local authority or—like the Inland Revenue valuers in England—of a Government Department.It may be correct that, notwithstanding the fact that the local valuation committee will appoint the new assessor and presumably pay his salary, the committee will have no direct supervision over his work; but the Joint Under-Secretary is simply playing with words. Local authorities in this country, consisting of laymen, do not directly supervise the work of a medical officer of health. But, waiving that point, it will be the statutory duty of the assessor to send the yearly report of his work to the Scottish Advisory Council. Surely it will be the obvious duty of the Advisory Council to ensure that assessors are working on similar lines and correctly interpreting the new Act; otherwise each assessor would be a law unto himself and there would simply be chaos in the new valuations.
Is it not a plain, straightforward fact that the Advisory Council will perform the work now undertaken by the Board of Inland Revenue in this country? The arguments of the Joint Under-Secretary of State for Scotland, I submit with respect, are again both fallacious and misleading. As I have said, I have met in 622 Scotland some of the men concerned, including some who hold the prescribed qualifications; and I wish it were within my power adequately to convey to your Lordships the shame, the humiliation, they feel at the indignity inflicted on their colleagues. They have asked me to appeal to you. The House of Lords is one of the few remaining bulwarks in this land against bureaucratic tyranny and injustice. If I have spoken strongly, it is because I feel deeply—and I apologise for taking up so much of your Lordships' time. I plead with the Minister; I beg of him to take back these regulations and amend them. There is plenty of time. The new set-up does not come into operation until May next. The Secretary of State for Scotland has taken power tinder the new Act to disapprove—not approve —of any unsatisfactory appointment, but, obviously, he would not do so without sufficient reasons. Is not that a real and effective safeguard against any appointment to which the Minister could reasonably take exception?
Local government has its roots deep in our national life. It is a precious heritage. But if the Minister does not take back these regulations and amend hem, it will be the first time within my knowledge that Parliament has dealt harshly and unjustly with members of the local government service, to whom we owe so much. To the best of my ability I have endeavoured to put this matter before your Lordships in the hope that justice may be done. I beg to move.
§ Moved, That an humble Address be presented to Her Majesty praying that the Local Government (Qualification, of Assessors) (Scotland) Regulations, 1956 (S.I. 1956 No. 1594), dated 10th October, 1956, laid before the House under Standing Order 61 on the 17th of October last, be annulled.—(Lord Burden.)
§ 6.43 p.m.
My Lords, I am a chartered surveyor and therefore naturally glad to learn that the qualifications which we impart to our apprentices are to qualify them for suitable places in the improved organisation for the administration of the country. But, so far as I am aware, neither the Chartered Surveyors' Society nor the Chartered Accountants' Society, of which I am also a member, has ever taken the view that a lifetime's 623 practice and experience in our art without the preliminary qualifications does not qualify a man to practise it.
When we urged our qualifications on the consideration of the Government, I do not think that we ever recommended any measure whereby men who have practised honourably, though without having originally earned our special qualifications, should be displaced from their positions. We have always taken the view that if we could gain this point with those who start, the situation would clarify itself in time, and no injustice would be done. That, so far as I am aware, has been the practice of British Governments in these matters from time immemorial, and it will be all the harder if a change is to be made now, because of the very fact that these men who will necessarily be displaced will have far less chance of profitable employment without the qualifications which are now specified as being necessary. It is to be remarked that the noble Lord, Lord Burden, asks only for these men to be allowed to present themselves and to offer themselves for employment: he does not ask that they should be continued in their employment. That is very important. It may be said that, after all, we are having a change in the whole set-up; offices are declared vacant, and these are new employments and new posts. I think that is rather too delicate a point, and it does not satisfy my feeling of justice.
The noble Lord, Lord Burden, suggested that it had been said (and he did not dispute it) that the Sorn Committee recommended this. So far as I can see, however, they did no such thing. With your Lordships' permission, I will read the relevant passage. In paragraph 84 of their Report the Committee state:We understand that the Board of Inland Revenue, although they are obliged at present to employ some unqualified men as rating valuers, require all new entrants to the professional grades of the Valuation Office to be qualified either as a chartered surveyor, or as a member of the Auctioneers' Institute or the Land Agents' Society, as a chartered auctioneer and estate agent or as a chartered land agent. (These are the only universities at present offering such degrees.) We think that such qualifications might well be adopted in Scotland at any rate in the first instance.I submit that the words "at any rate in the first instance" refer back to those bodies, and that what the Committee are there saying is that those are suitable 624 bodies; they may be extended or diminished, according to the experience of time but, for the moment, the Committee think those are the broad qualifications to be adopted. The Report goes on:It follows that the employment of tax inspectors as assessors, which we think has served its day, should cease.With that statement I am in entire agreement. In any case, it is only part-time work for tax inspectors, and they have their positions in their own service.
These are not the people for whom Lord Burden is now appealing. If we are going to change this time-honoured system of justice, and to make a clean sweep, without giving these men (I understand that there are only thirteen of them) the power to present themselves and offer themselves for possible re-employment, then we are doing grave injustice; and I think that, in that case, as Lord Burden has said, compensation is not an adequate quid pro quo. It is not enough to say that these men will be compensated. I think that if they are going to be compensated, their compensation should be re-assessed on large and generous terms. It is not enough to say that they can find subordinate places in the new organisation. It is very difficult for a man who has been "running his own show" for a long time. Your Lordships know as well as I do that old dogs find it very hard to learn new tricks. I regard this as a matter of justice, and if the noble Lord presses his Prayer I shall feel bound to support him—subject, of course, to anything that may be said by the noble Lord, Lord Strathclyde. I am afraid that I have a weakness, in that I am always greatly influenced by what I may hear in debate. I beg to support the noble Lord, Lord Burden.
§ 6.48 p.m.
§ LORD SILKIN
My Lords, I do not wish to detain the House for any length of time. The noble Lord, Lord Burden, in introducing this subject, explained that he was speaking entirely for himself and for no-one else. He said that simply because we on this side of the House did not wish to treat this as a Party matter. But I think that every one on our side of the House who still remains, as well as a good many who have gone—possibly all of them—deeply sympathise with the point of view which Lord Burden has 625 put forward. I should not like there to be any misunderstanding about that. We think that this Regulation is harsh. It may even be just, but it is harsh, and we feel that account ought to be taken of the position of those who have been doing this job for many years, and presumably doing it satisfactorily.
We are not suggesting—no one is suggesting,east of all Lord Burden—that the men who have been doing the job should automatically be allowed to continue. All that is being asked is that in the new circumstances they should have an opportunity of applying for the job of assessor or depute assessor in competition with the people who are qualified according to the Act. They will inevitably be under a considerable handicap in competing with these people, but at least they should have an opportunity which would make them feel that they have 'had a fair chance in open competition and that, if they are beaten, it is only by somebody who is better qualified to do the job.
I realise the difficulty of the noble Lord who is to reply. He is here to speak on behalf of his Department and is possibly not able to make decisions for himself; but I wish that he could take this back for further consideration. It is not a matter on which we would want to divide the House. It is not a Party issue; it is an issue of compassion, and not even of strict justice. But I feel that, (having heard the views from both sides, he would be well advised to think again. So far as I know, this is the first time in British legislation that we have ignored altogether the claims of people who have been doing the job in the past. In every Bill of this kind, which for the first time lays down qualifications for a job, the people who have been doing the job have been afforded an opportunity of continuing.
I remember well the Dentists Act. If ever there was an Act where this principle might well have been applied, it was the Dentists Act, where it was laid down that before people could attend to teeth they should have specific qualifications. Yet it was provided that those who had been doing the job in the past should be allowed to continue. If that could happen in the case of dentists, who, after all, are more important in the life of human beings than assessors. I submit that it should happen here. We do not 626 want to divide on this matter—if we do divide, we shall certainly be beaten. I would much rather the noble Lord said he would take this back for further consideration and if then, in spite of what has been said, he and his advisers decided to come back with this Regulation as it stands, I myself would accept that position; but 1 hope he will be able to give it further consideration.
§ 6.54 p.m.
§ LORD STRATHCLYDE
My Lords, I want to thank the noble Lord, Lord Burden, for raising this matter and putting his case so clearly before the House, and also the other noble Lords who have spoken in support. I feel that this is a matter on which there shot ld be a full explanation of the procedure which has been followed and the consideration that has been given to the claims of those who might suffer in one way and another, so that the reasons for my right honourable friend's decision may be apparent to everyone. I hope to show at the end of the day that its justice, when considered against the background of public interest, is clearer than it may appear at the present moment.
First of all, there was the Report of the Sorn Committee, which was mentioned by the noble Lord, Lord Burden and quoted by the noble Lord, Lord Saltoun. It is unfortunate that, due to a printing error, paragraph 84 of the Report is not correct. The noble Lord would have noticed, for instance the reference to universities, but there are no universities mentioned in paragraph 84 of the Sorn Committee's recommendations. Perhaps I might be at owed to read out the correct version to your Lordships, or at least that part quoted by the noble Lord, Lord Saltoun:We understand that the Board of Inland Revenue, although they are obliged at present to employ some unqualified men as rating valuers, require all new entrants to the professional grades of the valuation office to be qualified either as a chartered surveyor, as a chartered auctioneer and estate agent or as a chartered land agent, or to have a degree in estate management at London or Cambridge University. These are the only universities at present offering such degrees.
My Lords, I took "universities" to mean something more general, to comprise a general body of learning.
§ LORD STRATHCLYDE
My Lords, the actual reference to universities is to those of London and Cambridge. The paragraph goes on:We think that such qualifications might well be adopted in Scotland, at any rate, in the first instance.
§ LORD STRATHCLYDE
The noble and learned Earl is perfectly correct. The words are "require all new entrants". The Sorn Report and the representations on it were considered in the first instance by the Scottish Valuation Advisory Council and that Council made certain recommendations. They were that the appointment as assessor or depute assessor should be limited to persons qualified by membership of any of the three chartered bodies (these are the bodies listed in the regulations) and that no exception should be made for serving officers. That recommendation was subject to reconsideration in the light of comments on the draft regulations received from interested professional organisations and local authority associations. The draft regulations were prepared on the basis of that advice given by the Scottish Valuation Advisory Committee, and all interested parties were asked if they wished to make observations on them. All of them replied and the Advisory Council were fully informed of their views. Then they considered the matter further, and having done so, they decided to adhere to the original recommendation.
May I suggest to your Lordships that the matters I am now about to mention are relevant to the Advisory Committee's recommendation? What is happening here is that in Scotland we are changing over to a completely different and new system of valuation. Hitherto, the system has been very much simpler than that which is now laid down in the new Act, and it seems certain that the duty of valuing all property on hypothetical or fair market rents will greatly increase the technical difficulties of the assessors' work. I think I ought to explain to your Lordships what the position has been with regard to valuation up to now. In Scotland, the valuation for rating has been the actual rent which is paid, so that really there was not much further to be 628 done: the assessor had the actual rent, and that was the valuation for rating.
§ LORD STRATHCLYDE
Perhaps the noble Lord will allow me to continue. The only place where it seems to me that difficulty arose was in connection with owner-occupied property. There was a very good guide available there, that being the rent that was passing in regard to similar properties in the same valuation area. I think your Lordships will see that a great change is taking place from what has been current up till now. The noble Lord, Lord Burden, made a certain amount of fun, if I may so call it, of the importance of uniformity.
§ LORD BURDEN
No. On the contrary, I made no fun at all with regard to that. I said it was absolutely important that it should be done. I know the point in regard to the equalisation grant.
§ LORD STRATHCLYDE
I am glad that we are both in agreement on that matter. It is of vital importance, both as regards the different valuation areas in Scotland, and as between Scotland and England and Wales. My own view—and I am sure it is the general view—is that, without uniformity, it is impossible that there should be any fair distribution of equalisation grants. It seems to me to follow from that that assessors must have similar qualifications; otherwise there can be little hope of there being uniformity in the valuations.
§ LORD BURDEN
I am sorry to interrupt the noble Lord again, but is it not a fact that valuations have been done in this country right up to date by so-called unqualified officers?
§ LORD STRATHCLYDE
I should not like to speak for England and Wales, if those are the countries to which the noble Lord refers. I hope that the valuations in Scotland hitherto, on the system I have described to the noble Lord, have been done by people capable of doing them competently.
§ LORD BURDEN
The noble Lord is dodging the point. To put it the other way round, have the valuations in England and Wales up to date been done under the control of the Inland Revenue officers by men who held one or other of these certificates, or not?
§ LORD STRATHCLYDE
I will deal with the question of the difference between what we are doing and what the Inland Revenue are doing. It is quite clear that they are two different things. The noble Lord spoke on this subject, as he spoke, also, of the example of the burgh chamberlains and the county treasurers. Perhaps I may deal with them separately. The noble Lord knows that the organisation of the Inland Revenue Department is absolutely different and distinct from that of the valuation service in Scotland. The regulations here apply merely to assessors—that is to say, officers who will enjoy an independent command. Here perhaps I may advise the noble Lord that the assessor in Scotland is responsible only to the courts for the discharge of his statutory responsibilities. I ask the noble Lord to recognise that the Scottish Valuation Advisory Council has no power to issue directions to assessors how they are to carry out any of their functions: they are absolutely independent people. The Inland Revenue, on the other hand, are recruiting at all levels through a centralised Government Department, where local valuation officers can rely on the instructions and advice of higher authority. There is a complete difference between a man acting under higher authority and one acting entirely on his own responsibility.
The same applies, more or less, to the type of work done by financial officers and their relationship with the local authority. There you have to consider that there are statutory provisions regarding both local and central audit of the accounts. These things seem to me to be effective, and to make any comparison with assessors, who, as I say, carry out statutory functions in complete independence of the local authority, is very difficult indeed. Further, I would draw the attention of the noble Lord to the fact that the 1947 Act did not make any major alteration in the duties and functions of chamberlains and treasurers. Here there is a complete difference in the duties that have to be carried out. My right honourable friend has every sympathy with those assessors who have not the prescribed qualifications, but I am sure your Lordships will agree that he must be guided by his Advisory Council. Here he is not only being guided by his Advisory Council, but by an Advisory Council 630 which has considered the matter—and every representation has been made not once, but twice—and come to the same conclusion each time, a conclusion which follows a recommendation from the Sorn Committee to exactly the same effect.
The noble Lord alluded to the composition of the Advisory Council. There are fifteen members of the Committee, as he said, but ten of them are members of the then existing local valuation authorities. Let me tell the noble Lord that two of the members came from valuation areas where the assessors had not the necessary qualifications. I would assume from that—and I think it is a fair assumption—that the case for these assessors was fully explained and fully considered. As the noble Lord said, this matter has been considered in another place, and the Motion to annul the regulations was there withdrawn. My right honourable friend has considered the arguments advanced in another place and he has found nothing in them that would justify him in altering his decision. I would submit to your Lordships that my right honourable friend has acted in accordance with the spirit as well the letter of the law. He has sought the views of all the interested parties, and he has given close consideration to the position of the individuals affected by the recommendations. I might remind your Lordships that the Secretary of State has a general responsibility to ensure that this new system of valuation is given the best chance to be fully effective, and in making these recommendations he has acted on the best objective advice available to him. I trust that, in view of those explanations, the noble Lord may feel that the matter has been properly dealt with, and that against the background of the public interest the fullest possible justice has been done. In these circumstances I hope he may not feel it is necessary to press the matter further.
§ 7.8 p.m.
§ LORD BURDEN
My Lords, I am obliged to the noble Lord, Lord Strathclyde, for his reply, but I must say that he has said in other words precisely what was advanced in another place and has not in any way answered the indictment that 1 put up of the way that this matter has been handled. To say that the opinion of fifteen men counts more than the two representative bodies in 631 Scotland, and to give the excuse—or the reason, if you like—that there is a misprint in the Sorn Committee Report, at this late date, is not at all satisfactory. The noble Lord has not dealt with the ignoring of the association representing these men when the problem of the staff was under consideration.
§ LORD STRATHCLYDE
Really, the noble Lord should not make that point. It is quite a false point to make. The Association have had every opportunity for months and months to make representations. They have made their representations, and they have been fully considered by the body which advises my right honourable friend.
§ LORD BURDEN
With respect, I submit that it is not a false point. The Committee which presumably made the first recommendation was the Sorn Committee. They invited representatives of property owners, but did not invite the human side, the representatives of the men. I know that it is not our 632 practice here, and quite rightly, that we should divide the House on Prayers of this kind. Neither is it right that it should be negatived, as I should prefer. I want to say only that it is probably unwise for a great Association and men in Scotland to be left with a feeling that a gross injustice has been done to a few of their members. I repeat that they regard it as a gross injustice to their members and the breaking down of a bulwark which has been built up over many years so far as the local government service is concerned. Having said that, I have no other alternative but beg leave of the House to withdraw the Prayer.
§ Motion, by leave, withdrawn.
§ Referred to the Joint Committee on Consolidation Bills.
§ House adjourned at ten minutes past seven o'clock.